Alcoa Corporation's announcement to sell its closed Intalco Works aluminium smelter to Canadian energy company AltaGas Ltd. has sparked interest and speculation about the future of the sprawling complex near Ferndale. The smelter, once a primary aluminium producer, faced closure, and Blue Wolf Capital's attempt to produce "green" aluminium with hydropower fell through in 2022.
Calgary-based AltaGas Ltd. is considering a totalitarian redevelopment of the site to produce "green" hydrogen, a fuel that the government is eager to subsidise for clean production processes. The company envisions a 100-metric-ton-per-day hydrogen production plant, marking a significant step in the green hydrogen landscape. Despite being in the early stages, AltaGas cites access to renewable power, industrial zoning, and existing infrastructure as promising factors.
Local enthusiasm and economic impact
Local, state, and federal officials, along with labour unions, are optimistic about the economic impact and potential job creation. The project, though challenging, aligns with the push for a clean energy transition, especially in hard-to-decarbonise sectors like shipping and steelmaking. The Port of Bellingham Commissioner highlights the need for state support, emphasising the project's magnitude and future implications.
Green hydrogen's versatile applications - Challenges and need for renewable energy
The closed Alcoa smelter's ideal location for green hydrogen production is strategically positioned near major oil refineries, making it suitable for supplying hydrogen to industries like shipping and steelmaking. The report underscores the transition from fossil fuel-derived hydrogen to green hydrogen and its potential to reduce carbon emissions significantly.
While the green hydrogen initiative is gaining momentum, challenges are arising, particularly in securing a reliable, high-volume supplier of renewable electricity. The report from the State Department of Commerce emphasises the need for streamlined siting and permitting for solar and wind farms to address the constraint of renewable energy supply.
Policy considerations and industry developments – other underlying concerns
The potential redevelopment of the closed Alcoa smelter site raises environmental concerns, especially regarding water and electricity supply sustainability. The Lummi Nation Chairman emphasises the need for consultation, expressing caution about potential impacts on tribal lands and opposing additional tanker traffic on the Salish Sea. If you wish to learn more about such sustainable developments in the international aluminium sector, go ahead and book AL Circle's special report, Sustainability in the Global Aluminium Industry.
Lastly, the Biden administration's draft rules for clean hydrogen production tax credits and concerns about potential strings attached were discussed. Senators from the Northwest urge flexibility, considering the low emissions of the Pacific Northwest grid. AltaGas and other producers are closely monitoring the rule drafting process.
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