Membertou Megaproject Déjà Vu

Yesterday, in Newfoundland and Labrador, Canadian PM Justin Trudeau and German Chancellor Olaf Scholz signed what was initially billed as an “historic accord” but quickly downgraded to a “non-binding agreement” to encourage the production of green hydrogen in Eastern Canada for shipment to Germany, starting in 2025.

Per the Globe and Mail:

The joint declaration of intent makes clear the agreement is not legally binding and stipulates it will be up to Canada’s Minister of Natural Resources and Germany’s Ministry of Economic Affairs and Climate Action to keep track of whether it’s making progress on its goals.

…The Canadian-German agreement sets no targets for volumes of hydrogen produced and contains no commitments of new money to help commence exports to Europe by 2025.

Instead, the Canadian government said existing programs, such as the $1.5-billion Clean Fuels Fund, and the $8-billion Strategic Innovation Fund’s Net Zero Accelerator Initiative, are being used to help spur hydrogen production.

The two leaders met during the German-Canadian Atlantic Renewable Hydrogen Expo in Stephenville, the site proposed for a green hydrogen plant by World Energy GH2, an outfit involving erstwhile Nova Scotia seafood baron John Risley.

German Chancellor Olaf Scholz and Canadian PM Justin Trudeau

German Chancellor Olaf Scholz and Canadian PM Justin Trudeau at G7 summit in Germany, 26 June 2022. (Photo by Adam Scotti, PMO)

A World Energy GH2 press release about the event check-listed all the would-be green hydrogen developers expected to attend, including the one I’ve been writing about in these pages:

Leaders and proponents of other large-scale renewable hydrogen initiatives in Atlantic Canada including those from Pattern Energy, Northland Power, Brookfield, Belledune, Everwind [emphasis mine], Buckeye, Evolugen, Source3, H2One and Fortescue will also be in attendance. It will be the largest gathering of its type ever assembled and will mark the birth of an important new industry. The Qalipu First Nation, the Miawpukek First Nation and other local Indigenous communities will also be participating.

Right on cue, EverWind announced it had secured deals with two German companies (Uniper Global Commodities and E.ON) ready to buy 1 million tonnes of green ammonia from its  “multi-phase green hydrogen and ammonia production and export facility” in Point Tupper which it claims is in “advanced stages of development,” although it had announced its submission of a project description for an environmental assessment to the provincial government just days earlier.

Before going any further, may I just point out that while we’re talking about this in terms of “Canada” supplying green hydrogen to “Germany” it’s all private companies, meaning that even if something does come of all this (a big “if”), Germans could still end up paying an arm and a leg for their energy?

EverWind CEO Trent Vichie told the Chronicle Herald‘s Aaron Beswick that he expects to produce 200,000 tonnes of green ammonia for shipment in 2025, upping that to 1 million tonnes by 2026.

This tale of a wildly ambitious project expected to launch in 2025 gave me a strong sense of déjà vu, which plagued me until I’d tracked its source, which was this:

Novaporte screen capture, "Beginning Operations in 2025"

Source: Novaporte website

Yes, Albert Barbusci’s deep-water container port is scheduled to open in Sydney the same year EverWind overcomes the myriad financial and technical difficulties it faces and begins shipping green ammonia to Germany.

I’m telling you, 2025 is going to be one for the books.

 

Seven generations

Vichie and Barbusci have something else in common besides out-sized ambition: the support of Membertou CEO Chief Terry Paul. In Barbusci’s case, that support took the form of a $6.8 million investment in his venture (financed through the since-liquidated private lender Bridging Finance). Vichie, so far, has secured only a memorandum of understanding (MoU).

In fact, both Membertou Development Corporation and Paq’tnkek’s Bayside Development Corporation announced MoUs with EverWind yesterday, referring to the company as a “renewable energy leader.”

I would have described EverWind as a handful of Delaware- and Nova Scotia-registered companies, carefully structured for tax  purposes, in possession of an old tank farm and determined to enter the green hydrogen space because the New York-based private equity interests behind it see an opportunity to make money while offloading the risks onto us—but that’s probably why nobody asks me to write press releases.

The release says  EverWind’s “mission” to produce hydrogen and green ammonia:

…supports the green energy transition and strengthens Nova Scotia’s position in reaching net zero emissions. Using cutting edge renewable technology, the Project’s initial phases total an estimated USD $6 billion in capital expenditures and will reduce dependence on fossil fuels and create a sustainable clean energy source for Nova Scotians and the world.

I am seriously not sure what effect this project will have on Nova Scotia’s emissions, given that rather than building a big wind farm to send power to the provincial grid, EverWind intends to build a big wind farm and use the electricity to split water molecules into hydrogen and oxygen, convert the hydrogen into green ammonia, ship the green ammonia to Germany where it may well be converted back to hydrogen.

The process wastes energy and the green ammonia produced will be prohibitively expensive without serious government subsidies. The technology supporting the entire process is so “cutting edge” it doesn’t really exist yet.

As for that USD $6 billion price tag, Vichie has consistently put the costs for the first phase of the project at USD $1 billion and a recent story by the Chronicle Herald‘s Aaron Beswick said the second phase would entail spending of “over” USD $7 billion, but what’s a USD $2 billion discrepancy when you’re saving the world?

Because this is not just business, folks:

Chief Terry Paul, CEO of Membertou, says that EverWind’s potential to change the landscape of how we view and access energy for the next seven generations is crucial. “In Membertou, we want to be part of the solution. Securing clean energy for generations to come is both a strong moral decision, and one that supports economic reconciliation through a meaningful partnership with EverWind,” remarks Chief Paul.

Like the agreement signed between Germany and Canada, the MoUs with the First Nations’ business arms contain nothing of substance, merely a statement that they are “looking at further opportunities to support EverWind.” These documents just give Vichie something to wave around in meetings with government and potential investors.

I think Vichie has access to more money than Barbusci ever had but their approach to doing business in Nova Scotia is so similar—set up a fancy website, issue press releases that reference your project as though it’s already completed, court First Nations, cozy up to governments—that it’s hard not to view them as two of a kind.

Is that a compliment?

Is Novaporte opening in 2025?