LNG vs. hydrogen: Who will win N.B.'s green-energy race?

Two ports on two different New Brunswick shorelines are placing two very different green-energy bets as they look to Europe as a potential export market.

In Saint John there's continued strong political support for the expansion of Repsol's liquefied natural gas terminal to ship LNG across the Atlantic.

But the Port of Belledune on the province's north shore is betting exported hydrogen is more appealing to a continent aggressively trying to reduce greenhouse gas emissions.

Belledune port officials will be in Stephenville, N.L., on Tuesday, along with other companies and organizations to meet German Chancellor Olaf Scholz.

• Wind-to-hydrogen project pitched for Stephenville area
• N.L. may already have a buyer for hydrogen produced by proposed wind farm project 

Scholz is in Canada looking for alternative energy supplies to make up for the loss of Russian natural gas, a consequence of western support for Ukraine in its war with Russia.

No one from Repsol will be in Stephenville, company spokesperson Michael Blackier confirmed.

And there are reports Scholz and Prime Minister Justin Trudeau will sign an agreement on hydrogen, not natural gas.

"The Germans and the Europeans are coming specifically to Newfoundland for hydrogen," says Rishi Jain of Cross River Infrastructure Partners, which is working with Belledune on a plan to export hydrogen.He said the project would create hundreds of construction jobs and 60 to 70 permanent positions. 

• Port of Belledune wants to build hydrogen production plant
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Federal Natural Resources Minister Jonathan Wilkinson told the Reuters news agency last week that "on the East Coast, the big opportunity is hydrogen."

LNG isn't an option for Belledune anyway, because there's no pipeline to get natural gas there for liquefication and shipment.

But hydrogen is also a better fit with port CEO Denis Caron's plan to rebrand the facility as a green-energy hub.

"If you're able to produce clean energy, such as hydrogen, using clean electricity to produce it through the electrolyzers, that demand is growing. We're seeing that consumers are looking for those types of products."

In New Brunswick, most of the bipartisan political rhetoric on energy sales to Europe — from Saint John-Rothesay Liberal MP Wayne Long to Progressive Conservative Premier Blaine Higgs — has focused on LNG shipped via Saint John. 

There's another proposed terminal in Goldboro, N.S.

But German environmentalists are pressuring Scholtz's government coalition, which includes the German Green Party, to reject any Canadian energy that emits carbon dioxide.

LNG would violate Germany's "quite ambitious" climate protection law, says Contantin Zerger of Environment Action Germany.

"If we promote more gas projects we will not be able to achieve our climate goals, nor will the Canadians be able to achieve their climate goals."

A report last week by the Public Policy Forum, however, argues it's too early to write off natural gas.

Global demand for gas is forecast to grow for another couple of decades, and forum president Edward Greenspon said if Germans can't heat their homes and run their industrial plants this winter, "that's a huge political fault line that [Scholz] doesn't want to trip over."

Hydrogen is "enticing," but the technology is still new and untested compared to LNG liquefaction, Greenspon said.

"Gas is in the here and now, and it's proven." Hydrogen "is looked on favourably as a fuel of the future, but it has a lot of hurdles to cross on the way to that future."

Long agrees: hydrogen "is the best option, but there's a short-term and a long-term play," he said.

"There's a short-term shortage of energy supply to Europe and in particular Germany, and I think Repsol LNG is suited better than anybody arguably in North America to export to Europe." 

But Canada also lacks infrastructure for LNG exports through Saint John in the short term, as Prime Minister Justin Trudeau pointed out Monday. 

The port is "a long way" from the source of the gas in Western Canada, he said. 

"There needs to be a business case, it needs to make sense for Germany to be receiving LNG directly from the east coast," he said. "Those are discussions that are ongoing right now."

Political leaders say a Repsol terminal expanded for export in the short term could eventually be converted to ship hydrogen, though that's an expensive proposition, and may not be viable if other hydrogen suppliers lock up European contracts first.

But that doesn't leave Belledune as the clear winner in this province.

German environmentalists are open to Scholz signing deals for hydrogen, but not any hydrogen.

"The chancellor has to make clear that this is about green hydrogen, this is not about so-called 'clean' hydrogen or blue hydrogen," Zerger said.

Those colour labels refer to different methods of splitting hydrogen from other elements.

If hydrogen is derived from natural gas, it produces carbon dioxide. If the CO 2 can be sequestered, the hydrogen is called "blue." If not, it's considered "grey."

In either case, climate-warming methane emissions are a concern.

"Green hydrogen" means splitting hydrogen from water through electrolysis, leaving only oxygen as a byproduct — and no climate impact.

Belledune is calling its plan green because that's the process it will use.

But to be considered truly "green," the electrolysis process itself must be powered exclusively by renewable energy such as wind or solar, Zerger said.

"In our definition, green hydrogen … needs to be produced using 100 per cent renewable energies, he said. "Otherwise the hydrogen can never be climate neutral when the complete supply chain is taken into account."

Jain said a Belledune plant will have to draw on N.B. Power's grid because wind and solar will not reliably generate electricity around the clock to power the electrolysis.,

While most of the utility's electricity comes from renewable hydro power and non-emitting nuclear energy, NB Power still uses natural gas, fuel oil, and — at least  until 2030 — coal.

Zerger said the utility's large share of non-emitting power "seems to be a good start" but his group would want Belledune to push for 100-per cent renewables to power its electrolysis.

Jain said the Belledune plant will maintain its "green" credentials by shutting down during peak cold periods, so it's not drawing electricity from the N.B. Power grid when the utility is burning those fossil fuels.

Whether that satisfies German environmentalists and government leaders may determine if the port wins a spot in the global energy big leagues.