Public Accounts Committee on Dec. 2nd, 2022

[Greg McLean, Conservative, Calgary Centre, AB]

Okay. That's interesting.

I was at the International Energy Agency, and Andrew Forrest of FFI, who is one of the participants in the Canadian green energy experiment, said it will be 20 to 30 years before it's anywhere near economic as far as green hydrogen is concerned. Are we investing billions of dollars in a technology that might emerge 20 or 30 years down the road?

[John Hannaford]

Mr. Chair, there are current applications of hydrogen—

[Greg McLean, Conservative, Calgary Centre, AB]

No, we're talking about green hydrogen, not hydrogen.

[John Hannaford]

But in a certain sense, hydrogen is hydrogen. There are current applications once one has created the hydrogen that exists right now, and that includes transportation. You're seeing applications in trains, for instance.

[Greg McLean, Conservative, Calgary Centre, AB]

No, Mr. Hannaford, the question is on the inefficiency of the process in green hydrogen. We actually consume more power, if you'll acknowledge that, producing green hydrogen currently than what comes out the other end, so effectively we're energy-negative. Would you agree?

[John Hannaford]

I think the question becomes the manner in which you are generating the energy. One possibility that is being considered very actively right now is using wind on the east coast, where you use wind to generate the electricity that then converts the water into hydrogen. That—

[Greg McLean, Conservative, Calgary Centre, AB]

All of that results in more power consumed than energy produced, at the end of the day. Then there's the shipping of it over...of course, into ammonia or methanol, for a buyer who is not locked up, at this point in time, to pay the exorbitant amount it's going to cost for that energy or hydrogen chemical alternative.

Is this something that you were just hoping would emerge, the different pieces of it, or is there any plan to actually look at what the expectations are, where the market is and what people will pay for this, at the end of the day?

[John Hannaford]

We have active arrangements right now. We have an arrangement with the Germans, which is a structured conversation precisely to determine what that market will look like, and—

[Greg McLean, Conservative, Calgary Centre, AB]

I had a discussion with the Germans last year about taking Canadian LNG. It was too expensive for them. Are you now going to tell me that they've committed to taking the most expensive power on the planet at whatever it costs us to produce it?

[John Hannaford]

Your conversation continues on LNG as well. A number of drivers would lead the Germans to be interested in the conversations we are having right now. One of them is the fact that there is an energy challenge in Europe right now as a result of what's going on in Ukraine. Multiple sources of energy are attractive as a result of that geopolitical reality, but—

[Greg McLean, Conservative, Calgary Centre, AB]

My understanding is that they're going to use the hydrogen they're looking to take from us for chemical processes, not for energy processes.

[John Hannaford]

The other piece of it is that they are looking at alternative energies of a number of different varieties in order to meet their climate objectives. Hydrogen is at least one potential source there, as—

[Greg McLean, Conservative, Calgary Centre, AB]

So the climate objectives—

[The Chair, Conservative, John Williamson]

That is the time, Mr. McLean. We will come back to you, I believe.

Ms. Bradford, you have the floor for five minutes, please.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you, Mr. Chair.

Thank you to all our witnesses today for coming in and discussing this important topic about hydrogen's potential role to reduce greenhouse gas emissions.

Mr. Hannaford, you seem to be the popular witness of the day. Continuing on the line of questioning here, recommendation 3.34 states the following:

Natural Resources Canada should perform a comprehensive bottom-up modelling for the use of hydrogen. This modelling should account for the following:

emission reduction efficiencies by sector (cost of emission reductions per megatonne of carbon dioxide equivalent)

substitutional fuels (for example, biofuel, electrification, credit systems)

feasible deployment of technologies and supporting infrastructure

How feasible would it be to integrate these elements into the department's current modelling systems and practices?

[John Hannaford]

I'm going to diversify witnesses.

[Some hon. members]

Oh, oh!

[Sébastien Labelle]

Thank you, Mr. Chair.

That's a great question, and it's one that we're working on right now. We are currently updating the modelling that we did for the strategy, and we've worked very closely with colleagues at Environment and Climate Change Canada, the Canada Energy Regulator and other departments that are interested in this. We've scoped work, and we've retained an external consultant to do exactly that.

Our plan is to have workshops within our hydrogen strategy working groups. We have 16 working groups with various parts of the private sector that are involved from the provinces and territories in various parts. Then we will validate those early results with them to understand and make sure that the assumptions are correct and realistic.

We expect that to come out in early 2023 as we continue to work on it, and then we'll publish it as we do the annual update for the strategy.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Recommendation 3.35 states, “Based on the updated modelling, Natural Resources Canada, in partnership with interested stakeholders, should publish a hydrogen market development roadmap to track progress and outcomes of the deployment of the hydrogen in Canada.”

Is this approach similar to how other federal organizations address other clean technologies?

[Sébastien Labelle]

Yes, absolutely. As we think about the full potential of hydrogen in this case, we want to develop that in collaboration with people in the sector who are making investments, who are buying hydrogen and who are generating hydrogen. It's absolutely consistent with how we would, I imagine, work with other sectors of the economy and other energy sectors, yes.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Should such a road map also consider including consumer and industry buy-in metrics, like willingness to adopt, implement, support its use, etc.?

[Sébastien Labelle]

Yes, absolutely. In the context of our clean fuels fund, for example, we have an awareness component to that. We provide a little bit of funding to promote that public awareness and confidence in fuels like hydrogen and other clean fuels.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

What is the status of the regional blueprints that you've been developing in partnership with provinces, territories and key stakeholders?

[John Hannaford]

I can take that one.

The whole process was launched last June, and the initial phase was with respect to British Columbia, Newfoundland and Manitoba. Since then, we've launched across the country. There are still a few provinces outstanding, but conversations are well under way.

At this stage, we are working on identification of shared priorities in order to then go to the next stage, which is a very focused conversation, not only with the province or territory but also with indigenous communities, labour movements, local business communities and other experts to basically dig down as to where we can make a real difference here and think about how best to mobilize the resources we have available to us to do so.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

What is the status of the reporting framework for the biannual progress report that will track the progress on the recommendations outlined in the hydrogen strategy for Canada?