December 2022, Vol. 249, No. 12

Spotlight on Utilities

FERC Rejects Environmental Concerns About Gas Pipeline Projects

Special to PGJ 

(P&GJ) — TCO Gas and Pipelines (ATCO) continually innovates to reduce emissions and provide clean energy to its customers. In 2018, the company kicked off its decarbonization plan in a review of its different business units to understand where opportunities existed to reduce emissions across their operations to meet their ambitious environmental, social, and governance (ESG) targets.   

In addition, it was equally important to provide a solution for their customers to use gas more efficiently and support the reduction of their customer’s global emissions footprint by 2 million tons (1.8 million metric tons) by 2030.  

Given the current economic climate and the market’s substantial reliance on energy infrastructure to transport gas, it was vital the company looked for new ways to diversify how energy is delivered through their existing natural gas networks while reducing emissions.   

Hydrogen Blending   

To achieve the net-zero targets set by the government and industry agencies alike, energy systems of the future will not include the greenhouse gas–producing methods used today. As hydrogen becomes a key element in decarbonization plans worldwide, hydrogen blending is the first step in that transition pathway toward tomorrow’s world.   

In 2020, ATCO proposed hydrogen blending as an initial step in moving toward a low-carbon future. They see hydrogen playing a central role in emissions reduction across their domestic, commercial and industrial service lines.  

Blending hydrogen into natural gas is not a new idea — there are several systems already in operation in Canada, Europe, Australia and the United States. Hydrogen blending involves the introduction of hydrogen into the natural gas stream resulting in a blended fuel mixture. The addition of hydrogen reduces the greenhouse gas intensity of the burned natural gas stream by reducing the amount of carbon dioxide (CO2) produced in the exhaust. Hydrogen blending is an optimal solution to begin reducing CO2 emissions while still maintaining existing transportation methods to meet energy demands.  

With an abundant natural gas supply, low-cost hydrogen production and carbon capture assets, and a large industrial demand, Alberta is a logical hydrogen hub in Canada. Emissions Reduction Alberta awarded the company funding of $2.8 million as part of the organization’s Natural Gas Challenge, which supported the development of the Fort Saskatchewan Hydrogen Blending Pilot Project.  

Pilot Project  

ATCO’s Fort Saskatchewan Hydrogen Blending Project will see 5% hydrogen by volume blended into a portion of the Fort Saskatchewan natural gas system to about 2,100 customers, making it the highest blend rate in Canada to date. Once ATCO has completed 5% hydrogen blending in 2022, they plan increase the hydrogen blend percentage to up to 20% by volume in 2023.  

The chosen site for the pilot project had several important success criteria. Additionally, being in Alberta’s industrial heartland, it has a very energy-focused community and is extremely supportive of investment opportunities from energy transition projects. This location made sense from a public acceptance standpoint.   

Furthermore, Fort Saskatchewan is one of ATCO’s newer natural gas distribution pipeline networks. This provides an ideal location for the pilot, leveraging relatively modern design, construction and record management standards to determine and apply any required upgrades. It is a viable site that offers adequate space for large-scale infrastructure.  

Near the end of 2021, ATCO had identified the technical, organizational and regulatory milestones for a successful pilot, which included risk assessments to evaluate the effect of delivering the blended fuel mix to their customers.   

Risk assessments will be used to demonstrate design safety and potential impact to the community, including the identification of any concerns to address during design with proposed risk reduction techniques. The independent risk assessments were also prepared for future potential regulatory reviews. However, since hydrogen was relatively new to the market, there was limited regulatory guidance and protocol in place for the proposed infrastructure.   

ATCO approached Dynamic Risk near the end of 2021 to discuss working together to complete a risk assessment of the hydrogen blending facility.    

The company had completed three previous risk assessments for ATCO’s Urban Pipeline Replacement Project, all of which were tested heavily by the Alberta Utilities Commission.   

“Given the fact that hydrogen is new to the energy transportation industry, with fewer prescribed regulations in place, it was critical to work alongside an industry partner with the domain expertise to support a defendable case while demonstrating that ATCO has completed our due diligence from a risk threshold perspective,” said Patrick Bain, manager of Hydrogen Projects for ATCO.  

Project Outcome   

The Hydrogen Blending Pilot Project risk assessment was completed in June and considered a success by both partners, with respect to adhering to the defined project scope and staying on schedule and on budget.  

Starting in the third quarter, ATCO began blending a small amount of hydrogen (5%) by volume initially, with a planned increase to 20% over time, into a portion of Fort Saskatchewan’s natural gas distribution system, which will be delivered to about 2,100 customers through new and existing pipelines. This project is the first of its kind to use blended hydrogen in Alberta.   

Benefits of Hydrogen  

  • Initiative-taking approach for regulatory compliance on new and conversion of existing infrastructure  
  • Due diligence to highlight the safety of hydrogen blending  
  • Meet corporate ESG and sustainability targets    
  • Environmental stewardship through emissions reduction   
  • Facilitate community investment in energy transition   

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