Techno-Economic Assessment of Biohydrogen Production from Forest Biomass in Western Canada

Abstract

Western Canada is the largest hydrocarbon base in Canada. Oil sands, one of its key crude oil resources, are used for production of bitumen, which is further processed to produce crude oil. Bitumen is upgraded before it is sent to the refinery. The upgrading of bitumen requires hydrogen, most of which is currently produced from natural gas. The recent increase in natural gas prices has made it desirable to obtain hydrogen from other sources. Biomass-based fuels are currently receiving much attention, as these fuels are considered carbon neutral and renewable. Hydrogen (biohydrogen) can be produced from biomass using thermo-chemical processes. Western Canada's potential for forest biomass is large. This article explores the option of producing hydrogen for bitumen upgrading from the forest biomass in western Canada. The production of biohydrogen by thermal gasification of whole-tree forest biomass by a stand-alone 2000 dry tonnes per day plant costs $1.18/kg of H2 (or $9.83/GJ of H2). Capital and operating costs contribute 32% and 26% of the total cost of production, respectively, whereas feedstock delivery cost contributes about 36%. The total cost of delivering biohydrogen by pipeline to a bitumen upgrader located 500 km away from the production plant is $2.20/kg of H2 (or $18.32/GJ of H2). The current cost of delivered biohydrogen is not competitive with natural gas based hydrogen; it can become competitive only with a long-term natural gas cost of about $12/GJ. Carbon credits can make biohydrogen competitive. At a natural gas cost of $5/GJ, the carbon credit required to make biohydrogen competitive with natural gas based hydrogen is about $140 per tonne of CO2 equivalent. The economic optimum size (the size at which the cost of production is minimal) for a biohydrogen plant using whole-tree biomass is more than 5000 dry tonnes per day, but a smaller plant could be built to reduce the risk and minimize the capital cost penalty. Most of the economies of scale are exploited by 2000 dry tonnes per day.