How One Canadian City is Jumpstarting the Hydrogen Economy – Brent Lakeman

Peter Perri 0:04

We are live on Energy Superheroes with Brent Lakeman. He’s the director of the hydrogen initiative for Edmonton global. And they’re looking to capitalize on the economic potential of hydrogen for Edmonton and the broader region. Brent, welcome to the podcast today.

Brent Lakeman 0:23

Thank you for having me.

Peter Perri 0:25

So tell us about the hydrogen initiative. It sounds exciting. And I know the Edmonton region has a lot of particular benefits related to hydrogen, we’d love to hear more about it.

Brent Lakeman 0:37

Ya know, it is definitely is very exciting. And you know, we’ve been involved in hydrogen in our region for quite some time. It’s not new to the Edmonton region, as a major center of the western Canadian oil and gas sector, for example. So hydrogen has been produced here for decades. But what we’re really seeing now is that that focus in the energy transition and the role that hydrogen can play, you know, for industry for other sectors of the economy, and really being able to leverage the strengths that we have here in the Edmonton region. So again, eminent global, we represent 14 municipalities with the makeup Edmonton metropolitan region. And we look at some really exciting opportunities around that both producing hydrogen in a very low carbon low cost manner. Just given some of our low cost feedstocks are things like carbon capture and storage, but as well as some of the use applications across the region. So you know, he’s we see our region’s really being a central point for that growth of the hydrogen economy, certainly for Western Canada, if not for North America.

Peter Perri 1:32

It makes a lot of sense. You mentioned low cost feedstocks. Could you expand on that a little bit? What are some of the advantages that Edmonton has in that regard?

Brent Lakeman 1:41

Yeah, I mean, that the key advantages are access to the natural gas feedstock that’s associated with our industrial activities here. And again, we’ve been able to demonstrate that we are one of the lowest cost producers of hydrogen and now clean hydrogen in north in the world, I should say. So some of the studies that have been done back in 2018, really presented the Edmonton region as without access to natural gas, low cost natural gas, as well as our carbon capture and storage, infrastructure and experience combined with our talent and our ability to execute on projects as being you know, if not the lowest cost producer, you know, in the top two or three globally, so and really only second to places like Russia right now, which is probably not, not on anyone’s list of being the jurisdiction from which they’d like to, to produce hydrogen.

Peter Perri 2:28

Yeah, that sounds about right. So you’re, you’re talking about using low cost natural gas, and then some sort of SMR type technology in order to reform that and then do some sort of related carbon capture is that is that the content essentially, that’s

Brent Lakeman 2:44

right. But it’s really continuing to look at continuous improvement in that technology. You know, I don’t want to refer to color as a whole lot. But, you know, traditionally what they might be talking about is blue hydrogen. But what we’re really seeing is continuing to advance on that. We’ve been producing hydrogen, again, with a early adopter of CCS technologies that projects like Shell quest, probably about six years ago now. So this has been going on in a commercial sense, these are the largest CCS projects in the world combined with things like the Alberta carbon trunk line as well. That’s now moving over a million tons of co2 per year to other parts of the province. But now some of the next projects being contemplated in our region and announced and we’ll be pushing it even further towards Net Zero hydrogen production. So Air Products, you know, world’s largest producer of hydrogen chose Alberta shows Edmonton, I should say, as the location for their first net zero facility. So we’re really excited by that the fact they recognized again, this is the place to launch that first net zero facility. So moving to a new form of hydrogen production using an ATR autothermal, reforming rather than SMR, allowing for a higher percentage of co2 capture from that facility, and then doing some really innovative things to make some internal use of that hydrogen for its own energy needs within that facility. So again, we’re showing we’re continuously improving upon the environmental performance, reducing costs, of course associated with that as well and learning from those projects we’ve seen here in the region in the past, and even some other exciting news, just over the past several weeks in Alberta, around co2 hubs being identified for the region. So now we’ll have identified sites for co2 storage for any companies coming in to look to produce hydrogen, and in fact, six of those sites around the metropolitan Edmonton region, so we’re so excited by that and seeing that as a real driver for continued investment in the hydrogen economy and another decarbonization activities.

Peter Perri 4:34

That sounds great. So the hydrogen hubs, there’ll be six hubs in the region. Do you anticipate getting the hydrogen or excuse me, give me the co2 to your to these capture facilities, with pipeline or with trucks or some combination or how do you see that unfolding?

Brent Lakeman 4:51

Yeah, I mean, I think there’ll be strategically located very close to key industrial facilities. So again, we have our Alberta industrial heartland, we already have co2 in To structure looking to move the captured co2 to those locations by pipeline, again, shell quest been doing this for six years, over 6 million tons of co2 already injected into a formation about I think it’s about 20 kilometers away or so from the upgrader site. But other projects like the Alberta carbon trunk line that are moving in a larger distance, but it’s a very large piece of pipe, and it can support probably six times the amount of co2 that’s going through today. So some of these are built to scale and some new facilities as well, in the west of Edmonton, you know, around our power production facilities, a co2 storage site as well, as well as, you know, other proposed facilities really around the entire region, again, looking at some of that prime geology. And again, we’ve got the really the best geology globally for co2 storage projects, combined with the expertise, the talent, the experience that we have in taking on these projects for 36 years at a commercial scale, but really going back 30 years, it’s some of the research projects we’ve been involved in as well.

Peter Perri 5:59

Wow, that sounds great brand. So let’s shift to who buys the hydrogen, who do you think is going to be the big off taker? You know, are groups of off takers or industries that are that are demanding sort of this lower carbon hydrogen product?

Brent Lakeman 6:15

Yeah, I mean, it’s certainly driven today by the the major industry facilities that will have net sorry, greenhouse gas reduction commitments and targets under both provincial and federal regulations. So the Clean Fuel Standard, for example, out of the federal government is really driving some of these investments. So again, we’ll see those refineries, those chemical facilities, looking to make more use of hydrogen to decarbonize. And that’s what’s really exciting as well as you know, just meeting their own internal targets for those facilities, but also corporate targets. Companies like Dell, for example, made an announcement in the fall of 2021. And really looking at this facility in Fort Saskatchewan, just a part of the Edmonton metropolitan region that will be the location for I think about 20% of its overall fleet, decarbonization at that one facility. So again, recognition by these companies that need to meet provincial federal targets and as well as their own corporate targets. And this has been the place for so much of that to occur, again, because of those, those assets we have in place within the region. So the first use are definitely on the industrial side, the refineries, you know, upgrading chemical facilities, but what’s really exciting about our Edmonton region, hydrogen hub that we’ve established about a year old now is less how do we grow it other uses of hydrogen across the economy. So areas like the trucking sector, where again, they know that the economics of hydrogen versus Diesel look very attractive in the next few years. So how do we begin that process of converting trucks over to hydrogen fuel cell vehicles or dual fuel vehicles to build up some additional hydrogen demand, and then going all the way through to the heat and power sector and the residential sector we have a pilot project looking to blend hydrogen in the town of Fort Cisco city of Fort Saskatchewan, I should say, where, again, early early adopters of hydrogen within the residential heating system and learning from that to see if we can grow that out more broadly across the region or across the province. And I think the other exciting thing is once you are showing you can produce low cost low carbon hydrogen in your region, you know, what new industries can you attract that are looking to have access to that type of resource?

Peter Perri 8:19

That sounds really great. Let’s go a little deeper into the fuel cell trucks. So of course, Nikola is a big player in that space that’s kind of had first mover advantage publicly traded company. But you know, now we’re seeing I think some other OEMs have trucks come into the mix. Have you had any experience with OEMs fuel cell truck makers or other people down that value chain, whether its end users of the trucks or OEMs? We’d love to hear any experience you could share?

Brent Lakeman 8:53

Yeah, no, that’s a great question and really timely one. FTE for several years, there’s been a strong focus in our region around this class eight heavy duty trucks. So there’s a project called the as a tech pilot project has been funded through organizations like emissions reductions, Alberta, really working closely with the Alberta Motor Transport Association, to begin to demonstrate for their membership, you know, what does it mean to be moving towards hydrogen fuel cell trucks, so there will be a pilot truck being piloted on the roads between Edmonton and Calgary probably either later this year or next year. And that’s really to again, engage the membership, but then also looking at some of the other providers of these technologies. Just recently, we had the first Canadian hydrogen convention in the region. And as part of that, you know, we had the Nikola truck really on the trade floor. So again, getting some familiarity with that truck for the membership or the public at large for other industries, and also trialing that some of the fleet operators could then start to actually see what it’s like to be to moving that, that truck around the highways of the region. So some really interesting demonstrations going on, but it’s no Not only with the fuel cell trucks, there’s a really strong interest in looking at how do we accelerate hydrogen demand within the trucking sector through things like dual fuel technologies. And we have some really interesting companies, both based in Edmonton, as well as Western Canada that are looking at dual fuel heavy duty trucks. Because what we’ve done within our Edmonton region hydrogen hub is quantify, you know, we potentially have 20,000 trucks that are going to be making that shift to from diesel to hydrogen between now and 2032. And we think a very significant portion of that, you know, could be a dual fuel vehicle that would make some sense, and allow you to grow that infrastructure much more quickly than waiting for the fuel cell trucks to enter the market. So ultimately need both. But you’ll be able to determine some trucks may be a better fit for hydrogen fuel cell technology, and some may be a better fit for a dual fuel technology helping to reduce the cost. And again, increase the penetration of those vehicles into the market and then accelerate the build that infrastructure that will be so important.

Peter Perri 10:57

No, very interesting. And that’s almost like your definition of energy transition, right, where you have that dual fuel setup. You mentioned some companies up there that are involved in the dual fuel technology. Are you able to mention any names of companies that that you’ve seen that are focused in that area?

Brent Lakeman 11:15

Sure. Well, they’ll three come to mind immediately. One is out of Vancouver hydro. And hydro also was part of our recent Canadian hydrogen convention where they there was some projects announced involving hydro and the Edmonton International Airport to make use of that dual fuel technology, you know, around trucks and different airport related applications. And maybe we’ll get into that the airport piece in a moment. But we also have two other local companies in Edmonton innovative fuel systems and DTI, which diesel Technologies Incorporated. So they’re also looking at this technology. And again, lots of experience working with our industrial players are trucking sector and looking to even integrate technologies like artificial intelligence machine learning into these conversion technologies. So we see it, it’s really exciting. We’ve got some good capacity here within the region, to not only contribute to the dual fuel projects that maybe take taking place in the region, but really across western Canada across North America, because you know, the same challenges we’re facing is being be faced really by other many other jurisdictions, we’re just planning to be the early movers and getting these initial projects going.

Peter Perri 12:20

I think that’s right. And so the maybe talk a little of government incentives, you referenced that a little bit, but what do you think is good government policy to help encourage this type of energy transition activity with either within a region or within a nation?

Brent Lakeman 12:37

Yeah that’s a good question. The you know, we do have some incentives in place. Starting on the production side, the Alberta petrochemical incentive program, or a pip as it’s known, is one of the incentives the province has to catalyze this hydrogen ecosystem on the production side, other federal programs, through the Sustainable Innovation Fund, or I’m sorry, Strategic Innovation Fund of the federal government, as well as the Clean Fuels fund being established will also support aspects of the hydrogen economy. I think what we’re trying to show though, is you need to take a fairly strategic approach to to beginning to build out the hydrogen economy. Often, I think, what we tend to do, not only in Canada, but sometimes around the world is, you know, sprinkle a little bit of incentive money across the entire country, and try and you know, a little bit for everyone. And I think as we start to build out the infrastructure that we’re gonna need, certainly in Canada and North America, you need to take a more strategic approach and look at those hubs, those key clusters that you want to get moving on quickly, and then others can learn from that, but that will really drive the economics and reduce the cost associated with this energy transition. So I think our message is, you know, take a more strategic approach, look at these clusters, look at these hubs, look at what sorts of investments you need to catalyze, you know, particularly on the infrastructure side to reduce the costs of moving hydrogen, let’s say from, from the production site to the end user site, you know, can we accelerate some pipeline infrastructure, both within the region and between regions to really accelerate things? So I think that’s probably the advice. It’s not necessarily, you know, I think we will also need incentives for things like those, those vehicle purchases from the trucking sector, for example. And we’re certainly seeing some steps being taken in Canada, in the province around that. But at the same time, we also want to look at the infrastructure that’s going to be required to support these vehicles as they roll out.

Peter Perri 14:27

That’s, that’s great advice. So if I hear you correctly, and paraphrase, be a little bit more targeted and put more funds into specific targeted locations so that you can get to critical mass and, you know, then allow it to build out from there.

Brent Lakeman 14:40

Yeah, and I think that’s really the government’s are hearing that message we’re hearing the importance of hydrogen hubs Edmonton region, hydrogen hub is the first one in Canada. And really one of the you know, we keep hearing from our participation in events internationally is really one of the leading ones globally. And the approach that’s been taken to really undertake some sound techno economic analysis. As to really show how that vision can be achieved, and what the sensible growth of that infrastructure could look like. And I think governments are hearing about that. And they’re taking that message, also reflected in the Alberta government’s hydrogen roadmap that was released in the fall of 2021, as well. And now even further announcements around the clean hydrogen Center of Excellence in Alberta.

Peter Perri 15:22

Oh, that’s excellent. Bret, I’d like to transition into some more fun questions. But before I do, is there anything on the business side that I that I should have asked or any message that you’d like to get out there?

Brent Lakeman 15:34

Well, I mean, I think the business side, I tend to think about some of the business innovations that are going to be part of this change moving forward. So we often think about as a technology issue, but to be honest, I don’t think it really is a technology issue so much as a, you know, what’s the business model moving forward? What does that future system look like? You know, what are changes in how we look at energy infrastructure taking place? And I certainly don’t have the answers to what it will look like. But I think it’s just as much again, that business piece as it is anything on the technology side. So it’s something that we need to remain focused on, and how we can support some of the companies that need to look at the new business models associated with the energy transition and hydrogen in particular.

Peter Perri 16:12

That sounds that sounds good, it makes a lot of sense. Brent, on a, on a personal note, what drove you into the energy transition area? And what made you decide that you wanted to focus here?

Brent Lakeman 16:23

Well, I think, I’m not sure it was it was driven there, I really started there. To be honest, I don’t want to show my age. But, you know, I’ve been really focused on the climate change issue for pretty much my entire career, which goes back, you know, several decades now. And you know, even all the way back to the first International Convention on Climate Change. So I guess I’ve seen it all, I’ve seen some of the challenges around that. And that’s what I’m so excited about now, because I’ve probably been through some of the slower days on climate change, and trying to, you know, show this is an important topic that needs attention. And it’s certainly getting a lot more attention now than it did you know, when I first started on it, so seeing some of that acceleration of effort now, that’s what’s so exciting for me. And, you know, I spent time working on carbon capture and storage over 15 years ago. And you know, at the time, again, it was, you know, just fairly early, early days and beginning to scale up that technology. And now we see, carbon capture and storage is really being fundamental to accelerating the growth of the hydrogen economy. So really seeing the fruits, I guess, of those earlier years of toiling away on climate change policy or on technology and innovation.

Peter Perri 17:29

That has to be extremely rewarding. You know, having started off I know, going earlier in my career, remembering sort of the clean tech bubble, and, you know, maybe 1015 years ago is a bit of a false start. But the energy this time is so different, it really feels like almost the whole world is focused in this area.

Brent Lakeman 17:51

I think it comes back to your comment earlier about the business side is, you know, what are the changes are we seeing now from ESG commitments? You know, the expectations from the financial sector, the insurance sector, and how that’s starting to drive forward, the change. So again, we’re certainly on that. That rapid scale up slope now, so Well, let’s make sure we can do it effectively.

Peter Perri 18:11

Absolutely. And I think bringing up the ESG is great. The financial sector has a key role to play. What, if anything, have you seen in Canada more broadly, in in Edmonton in terms of investors, whether they’re early stage venture capitalists or larger stage asset based investors? What have you seen in terms of investor specific activity?

Brent Lakeman 18:33

Well, I mean, they’re definitely interested in you know, what are those investable opportunities here? I think one of the challenges I see is, you know, we have some, you know, some existing systems in place around investments from our oil and gas economy, and what pivots, you know, can be made there, I think many of these companies are already making those pivots. Certainly those major projects in our region, you know, led by many of the same players that have been in this region for a long period of time. But I think what we’re seeing now is on the international side, you know, many jurisdictions and investors around the world beginning to take a much harder look at our region in particular, again, as a low cost low carbon provider of hydrogen. So if it’s the Japanese market, or the Korean market, you know, beginning to really lay it, lay down some serious messages that we think it’s really critical that you’re part of your energy storyline. And again, we just had a major hydrogen convention with 4000 attendees, including many from around the world, including the United Arab Emirates, for example, including Japan, including parts of Europe. So again, that message is loud and clear that you know, we play a major role in their energy futures as well. So how do we make those early investments to establish that infrastructure that they’re looking for as well?

Peter Perri 19:44

That is amazing. It’s one of the most incredible things about the energy market is that it is a global industry and that advances made in one country can easily be applied to other countries. Because at the end, it comes down to science. So it’s really a an exciting market to be a part of. And it’s so cool that you’ve been in the market for so long, it makes me think of young people that are just now coming out of school that might want to get into the industry. What advice would you have for people that are trying to come into the industry now say younger people? What areas of for jobs? Should they be focused on? What should they be trying to do to be able to participate in this market?

Brent Lakeman 20:24

Well, I think, you know, the first recommendation just being open to the changes that we’re seeing, I think, sometimes, you know, and I’ve got kids as well that are in their 20s. And you kind of talk about oil and gas. And some people think, well, that’s kind of yesterday’s sector, I want to be focused on something new and exciting. And they don’t realize that, you know, some of this work going on in hydrogen by these exact same companies, as they make those transitions and pivots is they can be on the cutting edge of some of these largest projects in the world. So I think one, just making sure there’s that message that, you know, it’s really a very wide range of companies, including many that, you know, traditionally have been in the oil and gas, the energy sector that are part of the hydrogen economy. So making sure they’re aware of those opportunities. But then thinking about, you know, how other technology applications can also apply here. So I mentioned earlier, artificial intelligence, you know, we think there’s actually ways to combine, you know, the artificial intelligence expertise that we have in our region is one of three Canadian centers, and really one of the largest ones globally, and the most, you know, long term investments in this expertise that we’ve been making in Edmonton, you know, around industrial applications for artificial intelligence. So as you look to hydrogen, you look at things like pipeline applications, dual fuel truck applications, you know, you can see those technologies really combining in an exciting way. So I think that, you know, create that recognition that there’s some massive global challenges that we’re working on, and we’re going to be leaders on. And we know, we can apply that expertise, whether it’s your you know, your machine learning expert, or your engineering expert, or you know, somebody in the trades as well as working on some of these leading projects. Again, I mentioned their products earlier, this is, you know, going to be, you know, that one of the leading projects in the world for Net Zero hydrogen production, and you can be part of that right here in Edmonton.

Peter Perri 22:06

That’s, that’s great advice for young people, I too, have a son that’s in college about the same age, you know, just turned 20 hours about two. And so it is very interesting, I know that when I first came into the market, I really approached it from a spirit of humility, I come from a digital media background, and then moved into the energy sector in 2009. And I was blown away by the level of intellectual rigor and depth that exists with the, you know, call them the legacy companies and the amount of engineering talent that they have. And so that’s when I realized that if we’re going to get to net zero, that a lot of that innovation and work is going to come out of the legacy companies, because of the level of depth in intellectual rigor that they have.

Brent Lakeman 22:49

Yeah, and I think what we’re trying to also take put some intellectual rigor around how we look at this topic as well. So that’s one of the things we’re doing at MF Global, is looking at the labor force associated with the hydrogen economy to make sure we’ve got the programming the skill base in place that will be so needed by these companies, whether it’s these construction projects, you know, we’ve got potentially $30 billion worth of production projects lined up in this region. So we want to make sure we’ve got the talent base here, but all the way through to, you know, the heavy duty trucking sector and what they will need to have as well to ensure those trucks are going to be operating effectively. So we’ve launched a study with the provincial government to really map out what will be the labor needs over the coming, you know, several years, and what programming if any, we can start to put in place to respond to that to ensure we remain, you know, really the most investable location around the hydrogen economy?

Peter Perri 23:39

For sure you absolutely have to have that talent base in order to attract the best company. So I think that’s a great strategy. Well, we’re getting close to time here. Brent, before we go there, what do you do for fun up there in Edmonton? I know I’m down here in Florida, and it’s warm. It’s almost the opposite of the climate up there. What are the fun activities to do in Edmonton?

Brent Lakeman 24:00

Oh, there’s a lot of fun things to do in Edmonton. I think we’re really blessed by being a great location. You know, people tend to you know, jump all immediately to the northern climates. But you know, what’s exciting is, you know, in summertime right now we’re getting daylight that goes pretty much till 930 If not, you know, 1030 as we get into June, so it provides so many opportunities and whether you want to be in the outdoors, we have an incredible river valley here. That’s I think we use here about 10 or 12 times the size of Central Park. I think it’s actually much larger than that and really the largest urban park in North America when you look at that entire space that we have within the Edmonton region. So you know, for myself, it’s just getting outdoors and getting on the trails, you can just go on for hours and hours and lots of fun and in wintertime, the same thing with the trails and getting out to the mountains quite easily. So the quality of life in Edmonton is just incredible. And again, the cost associated with that quality of light is very good in comparison to other parts of Canada, other parts of the world. So again, we kind of feel we’ve got the best of everything here.

Peter Perri 24:56

I can say that some of the best campsites I’ve ever been to in the rolled have been in Canada it’s really beautiful up there and culture of outdoor activities is amazing. I

Brent Lakeman 25:07

just don’t want to tell too many people about that. I gotta keep getting the good campsite.

Peter Perri 25:11

Yeah, you gotta keep it a secret. We unfortunately down in here in Florida the word is out. So we’re very overcrowded, you have to search for really good spots in order to get outdoors. But there certainly are. And I’m not even going to say where they’re located because we want to keep it under wraps.

Brent Lakeman 25:29

You know, are we certainly, you know, that’s part of our role that I’m in a globalist to make sure the world does know about all the great, great things we do have in this region as a place to invest a place to grow your family and, and pursue your all your economic ambitions and do it in a environmentally sensitive manner as well.

Peter Perri 25:47

I look forward to getting up there myself. I’ve never been physically in Edmonton. I’ve been in a couple of the other provinces. So I’m excited. We’re we’ve been in discussions with some companies in Edmonton, for exactly what you’ve been talking about a lot of the innovation around the new energy economy. Brent, it’s really been a pleasure to have you appreciated having you on the podcast. This has been Brent Lakeman. He’s the director of the hydrogen initiative for Edmonton Global, and they’re doing some really amazing things in the hydrogen economy. Thanks for being on Brent.

Brent Lakeman 26:19

Thank you, Peter. Really appreciate it.