Canada’s federal government is keeping an eye on recent industry moves to begin exploring for naturally occurring hydrogen and whether anything they find could be a lower-cost and more climate-friendly source of the fuel, according to a recently released internal document.
In early August, Vancouver-based MAX Power Mining Corp. announced it had secured permits to explore 3,356 square kilometres of land in southeast Saskatchewan for naturally occurring underground hydrogen, also known as white, gold or geologic hydrogen. The company said drilling tests at its Rider Natural Hydrogen Project suggest it would be the largest known natural hydrogen target area in Canada.
Hydrogen has been gaining more attention for the role it could play in the global energy transition. It is often produced by using fossil fuels, although the process for creating blue hydrogen with natural gas is designed to capture and store related carbon emissions. Green hydrogen is produced through electrolysis using a renewable electricity source.
Geologic hydrogen is created when high temperatures and pressure cause underground water to react to iron minerals, which means it would have the benefit of being clean like green hydrogen but without having to pay for wind or solar-generated electricity.
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Nearly six months before MAX Power announced its stake, the Department of Natural Resources prepared a memo for Minister Jonathan Wilkinson on whether deposits of geologic hydrogen “could be an economic source of low-carbon hydrogen considering international developments.”
The U.S. Department of Energy had just announced US$20 million for 16 projects across the country to speed up the exploration of geologic hydrogen and learn how to study the carbon intensity of its production. In 2023, a massive potential deposit had been found in France.
The Feb. 26 memo, released through the Access to Information Act, noted that preliminary data from a pilot project by the Geological Survey of Canada — the national organization that provides geoscientific research and information to governments — suggested possible deposits in Labrador, Quebec, Ontario, and northern Saskatchewan. It said further verification is needed.
The memo also identified two other key questions that need more research.
One, is extracting naturally occurring hydrogen in Canada both economically and technically feasible? The memo says: “Exploitation requires removal of the hydrogen from the subsurface and economical storage and transportation to end users, which may be less feasible if deposits are in remote locations.”
And, what are the climate impacts compared to other sources of energy? The memo says extraction “should not be as energy-intensive as current methods of hydrogen production,” but adds that “there could be risks of methane emissions” during extraction.
Meanwhile, the Geological Survey of Canada (GSC) is continuing its work on a hydrogen anomaly map to guide exploration efforts, which is set to be released next year.
“The GSC is currently collecting and verifying suitable hydrocarbon well data from various jurisdictions across Canada that indicate concentrations of hydrogen gas,” Michael MacDonald, a spokesperson for the department, wrote in an emailed statement last week.
The statement said the goal of the research is to “produce a hydrogen anomaly map of Canada that highlights locations and distribution of the anomalies along with their concentrations.”
It also said the GSC is not aware of any discoveries of deposits in Canada at this time.
A spokesperson for Wilkinson directed questions about the memo to the department.
MAX Power is one of the companies hoping to be an early mover in this space. The government memo also says Calgary-based Chapman Hydrogen and Petroleum Engineering Ltd., which is working with MAX Power on the Rider Natural Hydrogen Project, has plans to explore in Ontario. Koloma, based in Denver, Colo., is also looking at the Canadian landscape.
Denis Brière, a petrophysicist and vice-president of engineering for Chapman who is also involved in MAX Power’s exploration efforts, cautions that “it is too early to forecast how much naturally occurring hydrogen is in Saskatchewan.”
Hassan Dehghanpour, an engineering professor at the University of Alberta, said occurrences have been “confirmed in British Columbia and Ontario,” but stressed more research is needed.
“While we understand the underground processes leading to hydrogen production — requiring water flow, temperatures of 200 to 300 C, and olivine-rich rocks — there is a need for exploration to locate potential hydrogen reservoirs,” he said.
The memo prepared for Wilkinson said that naturally occurring hydrogen “can be considered as an innovative production pathway” that has “the potential in the long term to be an at-scale source of hydrogen production.”
The potential of geologic hydrogen as an energy source is shown through the example of Mali’s Bourakébougou village, which has relied on naturally occurring hydrogen since 2014.
“Natural hydrogen provides a non-emissive alternative compared to hydrogen produced from other sources,” said Dehghanpour.
There remain other challenges related to purification, storage and transportation, as well as the money it would take to address them.
Michael Barnard, an energy strategist and commentator, says the lack of a financial case for naturally occurring hydrogen is one of the biggest hurdles to its widespread adoption.
“Eighty-five per cent of hydrogen is manufactured at the point of use because it’s really expensive to store and distribute,” said Barnard.
If geologic hydrogen is found in places with existing industrial demand, he said it could be economically viable. But in areas without such need and infrastructure, the costs might outweigh its benefits.
“Hydrogen is like real estate — location, location, location,” Barnard said.
MAX Power did not respond to a request for comment in time for publication regarding how it plans to work with any deposits it might discover in Saskatchewan. But Brière, who is closely engaged with the project, said: “We imagine not moving any (naturally occurring hydrogen) far from the wellbores but to just use it where it is found.”
David Layzell, who is a Transition Pathway Principal at The Transition Accelerator, a Canadian non-profit focused on energy transition, said sourcing it naturally is still less expensive than electrolysis, where an electrical current splits the water molecule into hydrogen and oxygen.
“We can tap or develop natural hydrogen for somewhere between 50 cents to a dollar a kilogram,” he said, adding that “it could be a 10th the price of making it from electrolysis.”
Layzell, who is also director of the Canadian Energy Systems Analysis Research (CESAR) Initiative at the University of Calgary, said there is “excitement” around the potential.
“If you could get enough volume, a reliable supply, you could make a low, virtually, a very low carbon hydrogen or energy resource that would be very competitive, and you don’t have to use precious electricity to make it,” he said.
Still, technical challenges can be significant.
Some of these challenges include “preventing hydrogen leakage, maintaining wellbore integrity, and developing blowout prevention protocols,” said Dehghanpour. He added these complications are compounded by hydrogen’s high diffusivity and its reactive nature, which necessitate stringent safety measures throughout the extraction and transportation processes.
He said safely storing hydrogen is another challenge. While lessons can be learned from advances in storage operations in salt caverns and depleted hydrocarbon reservoirs, he said current codes and standards need updating.
Scientists and engineers have been “managing hydrogen, pipelines, tanks and systems for (a long time) and can overcome technical challenges,” Layzell noted. “You use the right materials, you make sure you’ve got more precision-machined valves and fittings, and you take the precautions.”
Barnard remains cautious about projects involving geologic hydrogen, whereas Dehghanpour believes its potential to contribute to a diversified energy mix makes it worth exploring.
Layzell thinks Canada could do more.
“My hope is that the government will see the idea of naturally occurring hydrogen as an opportunity,” he said.
“The scale of our energy demand in Canada and around the world is such that it’s hard to imagine that wind and solar are going to meet all of our energy needs.”
Dean Beeby, an Ottawa-based journalist and freedom-of-information specialist, provided Kathari News with the memo released in response to a request he submitted through the Access to Information Act.
Read the full document below.
