In order for Canada to become a worldwide leader in the shift to a hydrogen economy, a number of actions must be taken by Canadian hydrogen stakeholders and governments, according to a new energy prediction from Deloitte Canada.
According to Deloitte, Canada has a chance to emerge as a leader in the hydrogen economy on a worldwide scale. Governments must do more, according to a projection from Deloitte Canada’s Resource Evaluation and Advisory division, to derisk hydrogen projects and release private-sector money. The development of a hydrogen-based economy will be dependent on improved water management, availability, and infrastructure due to the connection between water and the future of energy systems, according to a release.
For Canada to reach its decarbonization goals for 2030 and 2050, there isn’t a lot of time, according to Andrew Botterill, national leader for oil, gas, and chemicals at Deloitte Canada. Governments must make investments to find methods to reduce the cost of technology and boost demand for hydrogen in order to help private sector companies as they transition to a net-zero future.
The prediction also observed that despite dropping global crude oil prices and a widening gap between the U.S. oil market and the Middle East, European, and African oil markets, Canadian oil producers are reaching all-time production highs and producing record cash flow.
However, the position for Canada’s natural gas producers is more precarious since production levels run the risk of exceeding demand, which would lead to sharply reduced prices and a growing price difference from U.S. prices.
Even while increasing interest rates and ongoing COVID-19 lockdowns in China are causing worry about a potential recession and decreased demand for oil, Canadian crude oil output is still at all-time highs, according to Botterill. “As long as global prices stay exceptionally high, natural gas output in Canada is also expanding, but Canadian producers aren’t benefiting as much as others around the world; some have even announced production shutdowns due to the lower prices they’re receiving.”
According to Botterill, the demand for liquified natural gas grew as a result of European efforts to replace Russian natural gas supplies and stockpile gas ahead of the coming winter (LNG). Around 20% of the nation’s LNG exports were stopped at the same time by an explosion at the Freeport LNG facility in the US. Global LNG prices have been steadily climbing during the summer, even though it is anticipated that the Freeport facility would only partially begin operations this month.