TC Energy, Nikola collaboration could see hydrogen coursing through fuel pipelines

Calgary-based TC Energy Corp. announced Thursday it would leverage its vast network of pipelines and natural gas resources to establish hydrogen production hubs near highly-travelled truck corridors in the U.S. and Canada.

The hubs would produce 150 tonnes of hydrogen per day, and TC Energy said it would collaborate on the plan with Nikola Corp., the U.S.-based zero-emission vehicle startup that is looking to produce its first generation of heavy duty hydrogen fuel cell trucks later this year. The companies plan to co-develop, construct, operate and own large-scale hydrogen production facilities in the two countries.

The announcement did not identify the locations of the facilities and also lacked many details, including a timeline for completion or any cost estimates. But the companies said they are committed to reducing the carbon intensity of the hydrogen to net-zero “over time,” saying that it could be produced using natural gas, renewable natural gas and biomass feedstocks in conjunction with carbon capture and storage.

It shows that decarbonization of the economy is likely to occur in stages, rather than all at once, and that even traditional energy companies will see opportunities to leverage existing assets for new purposes during the energy transition.

“By leveraging our natural gas and power operations footprint, we see this new partnership as an important first step in facilitating access to affordable low-carbon production of hydrogen,” Corey Hessen, president of TC Energy’s power and storage division, said in a press release.

We don’t need to wait for the hydrogen to be super duper clean before scaling it up

Matthew Klippenstein

Hessen was not immediately available to comment.

“It’s a great deal for Nikola and it’s a great deal for accelerating the adoption of (hydrogen) fuel cells,” said Pablo Koziner, Nikola’s president of energy, told the Financial Post.

The collaboration with TC Energy would enable production of hydrogen at a cost and in sufficient quantity to support wider adoption of hydrogen technology, he said.

Nikola announced a deal last month in which it would source hydrogen fuel cell modules for its trucks from the industrial giant Bosch Group. It aims to have under five “trial” heavy duty class 8 trucks, with a 500-mile range, in customers’ hands by the end of the year, and begin wider production in 2023.

At least initially, under the collaboration with TC Energy, the hydrogen would likely be produced in a liquefied form and transported by truck, perhaps eventually by rail, to fueling stations, and to other industrial users, Koziner said.

Depending on adoption rates, TC Energy could look to use its existing pipelines to transport hydrogen, or even build new pipelines, he said.

The number of hubs and the proposed locations, were not disclosed, though Nikola has said it would like to produce hydrogen in Arizona.

“That’s the exciting part of the future,” said Koziner. “We have a very significant partner in TC, who has a lot of experience in distribution and allows us to think through how do you move hydrogen from these low cost production areas to stations where customers ultimately are going to fuel up their trucks?”

Of course, he added that the 150 tonnes of hydrogen may exceed transportation needs initially, but could be used by other industrial customers.

TC Energy is one of the largest midstream energy companies in North America, and operates a vast network of natural gas and liquid pipelines, as well as power generation and storage facilities. Its operations span most of Alberta, but also reach across eastern Canada, as well as many parts of the U.S. and Mexico.

It may be best known as the owner of the failed Keystone XL pipeline.

Nikola, headquartered in Phoenix, Arizona, aims to design and manufacture zero-emission battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components.

The company’s shares have plummeted since reaching a high of US$65.90 in June 2020 to US$10.69 as of Thursday afternoon. In July, federal prosecutors in the U.S. unveiled a criminal indictment of the company’s founder and former chief executive and chairman Trevor Milton, saying he made false statements about the company’s technology and prospects. Milton has pleaded not guilty and denied the allegations.

Unlike other automotive companies, it also aims to be involved in energy storage systems and hydrogen station infrastructure.

Nikola as well as Vancouver-based Ballard Power Systems and other companies have said that they hydrogen fuel cell vehicles can play an important role in the energy transition: Although they are not considered as energy efficient as electric battery vehicles, they can operate at greater range, especially under extreme conditions such as when carrying heavy loads.

Meanwhile, also on Thursday, Ballard announced that Hydrogene de France started construction on a US$200 million power plant in French Guiana that will utilize its fuel cell membrane technology for hydrogen storage and regeneration.

Refueling is also more akin to the experience of gasoline and takes less time than charging an electric vehicle battery.

While burning hydrogen does not release any emissions, it is only as clean as the energy used to produce it, which varies depending on whether it’s made with natural gas or renewable energy.

“We don’t need to wait for the hydrogen to be super duper clean before scaling it up,” said Matthew Klippenstein, regional manager for Western Canada of the Canadian Hydrogen and Fuel Cell Association.

Klippenstein said that Alberta’s natural gas is so “amazingly cheap” to produce, that it could be used to make cheap sources of hydrogen. That would enable speed the adoption of hydrogen as an energy source for industry and transportation.

Carbon capture and storage systems could be added to reduce the carbon intensity of the hydrogen until it is eventually replaced by so-called green hydrogen made with renewable resources.

“You can start with natural gas and still end up with a very low emissions hydrogen,” he said. “The thing I would emphasize is that it’s going to be a long time before we can produce all the green hydrogen we need.”

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