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Royal Helium plans to pioneer carbon credits in helium industry

Royal Helium's Ogema-2 drilling operation. (Courtesy Royal Helium)

Royal Helium Ltd., a Saskatoon-headquartered helium explorer and developer, plans to generate carbon credits from its energy-efficient helium plants as part of its ambition to lead the industry in environmental consciousness.

Founded in 2016, Royal Helium controls over one million acres of prospective helium land across southern Saskatchewan and southeastern Alberta. It has drilled 11 wells, with production scheduled to begin in the second quarter of 2023, according to president and CEO Andrew Davidson.

It is transitioning to becoming a pure production company selling helium to the global market, and seeks to generate the credits with the help of Calgary-based carbon credit developer Guardyan Conservation.

“We’ve taken the approach early about taking a more efficient plant approach to our design," Davidson said. "We are not looking to just get rid of some of the by-products.

"Doing that allows you to remove things that would otherwise be vented or just re-injected (into the environment). Fact of the matter is CO2 (carbon dioxide) is vented in certain cases. We wanted no part in that."

How Royal Helium extracts gases

Helium is extracted by drilling through the Earth’s crust to reach a natural gas reserve. A pipeline transfers the natural gas to a cryogenic plant, where very cold temperatures and high pressure liquifies the helium, CO2, methane and nitrogen.

Royal Helium uses the captured gases for various purposes. Helium has a range of uses across technology, industry and medicine. The CO2 is food-grade and can be injected into beverages to add the desired fizz. Methane can be used to turn the company’s plant into a net producer of power. Nitrogen is vented into the air where it does not pose a threat to the climate, environment or people.

Unlike most helium extraction sites, Western Canada’s helium is trapped in nitrogen or inert gas pools with low-carbon products, rather than in oil and gas reservoirs. Helium extracted from wells in Saskatchewan and Alberta can be up to 99 per cent less carbon intensive than helium extracted in other jurisdictions, according to Royal Helium.

“It allows Western Canada to trumpet its production of helium as the greenest in the world because you’re not doing it as a by-product of oil and gas – you’re doing it specifically for the inert gas,” Davidson said.

Emissions from the plant's operations are calculated by Guardyan.

Generating carbon credits

Royal Helium is separating itself from the industry by also generating carbon credits. Rather than employing a series of membranes to capture helium in an energy-intensive process, its much more energy-efficient plant design uses a cryogenic technique.

“It’s marginally more expensive to build a plant like this, but that pays back in terms of end-use products we can sell, as well as generation of carbon credits,” Davidson explained.

Carbon credits are generated by taking the savings in electricity and greenhouse gas emissions, compared to a conventional helium plant, and transforming the difference into the value of power saved. It is converted into a carbon credit per tonne of offset greenhouse gas emissions that is sold to heavy emitters, Jana McDonald, the founder and CEO of Guardyan explained.

Davidson said Royal Helium is “trying to define a new methodology” for helium. “We’re trying to prove there is a major carbon benefit to buying helium that comes from Western Canada as opposed to Qatar or Russia in terms of emissions."

If successful, he believes it will open up carbon markets in the helium patch of Western Canada for companies and end users trying to make a difference on the ESG (environmental, social, governance) front.

Partnership with Guardyan Conservation

Royal Helium didn't set out with carbon credits in mind, but has no desire to contribute to global warming and saw an opportunity to earn some revenue, hence the partnership with Guardyan.

The Steveville Helium Recovery Plant near Brooks, Alta., is a 10- to 15-million-cubic-feet-per-day facility. It will generate the credits, and is the company's first operating plant.

Once the concept is proven, Royal Helium will replicate it at other projects in the Prairies over the coming year.

Guardyan develops carbon credit methodologies and projects from conception to commercialization. McDonald said Guardyan has worked with Shell plc and is developing projects in Canada and Indonesia, with agreements pushing it into Brazil and Mexico. It is developing seven million credits in 2023, she said.

The two companies previously collaborated on plant design and Guardyan helped Royal Helium with the acquisition of Imperial Helium, McDonald said.

A portion of the credits will be sold on the voluntary market for purchasers looking to offset certain scope emissions, while some compliance credits applicable for Alberta's Technology Innovation and Emissions Reduction (TIER) Regulation will be sold in the province to heavy emitters. Voluntary credits can also be sold to companies in California and British Columbia.

“Anywhere there’s clarity and transparency and counterparts willing to recognize the value of credits, we’ll trade with them,” Davidson remarked.

McDonald did not divulge the number of credits it expects to sell, only telling SustainableBiz it will be a "significant amount." Due to the changing price of carbon, it is difficult to give a firm expectation for the price per credit, Davidson said.

Guardyan and Royal Helium will be complying with voluntary registries and a third-party verifier, according to McDonald.

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