Petro-Canada's Edmonton Refinery and Distribution Centre glows at dusk on Feb. 15, 2009.Dan Riedlhuber/Reuters
Alberta Premier Jason Kenney says Canada risks falling behind as a leader in carbon capture if Ottawa doesn’t make significant strides to increase investment in the emissions-lowering technology.
On Monday, the province and Ottawa announced a joint working group that will develop a carbon capture strategy to expand use of the technology in the oil sector. It came as The Globe and Mail reported Alberta’s intention to seek $30-billion in federal spending or tax incentives over the next decade to spur the building of large-scale industrial carbon capture projects.
Carbon capture, utilization and storage - or CCUS - projects are facilities that force CO2 emissions deep into the ground to keep them out of the atmosphere. Along with oil production, it can be used in other major industrial sectors such as power generation, and manufacturing chemicals, fertilizer and cement.
While Alberta’s United Conservative Party government has often clashed with the federal Liberals over climate and energy policy, industrial emission reduction is an area where they appear to agree.
That shared interest in CCUS was underscored by Monday’s announcement, with Mr. Kenney saying that Ottawa has been receptive to Alberta’s ask of a cash injection for CCUS. The need for a carbon capture strategy is outlined in the federal government’s climate plan, and Mr. Kenney said Ottawa recognizes they need those investments “if they have any hope, realistically, of achieving their emissions targets.”
He also pointed to a CCUS tax credit in the United States as a potential model Canada could adopt to encourage the construction of more projects.
“Where we were a global leader, we’re at risk of falling behind if we don’t up our game,” he said.
A group of 47 environmental, health and human-rights organizations penned a letter to the federal government Monday opposing subsides or any tax credits for CCUS, arguing the technology actually increases oil production, thus increasing the total output of CO2.
That might make business sense for the oil industry, they say, but “it is not a winning strategy for the climate.”
Major players in Alberta’s oil sands have used CCUS for decades. One example is the $1.3-billion Quest facility attached to the Scotford upgrader outside Edmonton.
The project captures CO2 produced when refining crude from the Athabasca oil sands project, 70 per cent owned by Canadian Natural Resources Ltd. Carbon dioxide is then injected about two kilometres below the earth’s surface for permanent storage.
Quest, which received $865-million from the federal and Alberta governments to help fund its construction, is designed to capture up to 1.08 million tonnes of CO2 a year, or about 35 per cent of what’s produced by the upgrader.
In 2020, Quest surpassed five million tonnes in carbon captured since it began commercial operations in 2015. The company says that’s about the same as the annual emissions from one million cars.
Canadian Natural president Tim McKay told The Globe CCUS technology will be key in the energy sector’s goal to reduce its carbon footprint, particularly in the oil sands where long production lives means facilities will remain in operation for decades to come.
Once projects are built, he said, companies can also expand them or allow other producers, or even companies in different sectors, to use the facilities to store the CO2 they produce.
And as companies get more CCUS experience under their belts, he said that helps them “feel more comfortable with carbon capture and storage long-term.”
Alberta Energy Minister Sonya Savage said Monday that breadth of experience with CCUS, along with the province’s unique geology which allows carbon to be stored underground, means Alberta is well positioned to lead the carbon capture sector.
Seamus O’Regan, Canada’s Natural Resources Minister, told an oil and gas conference this month that CCUS technology will play a key role in reducing emissions in the oil sector, and in the development of blue hydrogen – a low-emission fuel derived from natural gas, which the government has recognized as crucial to Canada’s net-zero 2050 goal.
“Carbon capture technology creates jobs, lowers emissions and increases our competitiveness. It’s how we get to net zero,” he said in a statement about the new steering group Monday.
The cost of carbon capture has decreased significantly in recent years, according to the International Energy Agency, a Paris-based organization that advises industrialized countries on energy issues.
It says CCUS technology has been the subject of renewed global interest and attention, and will play a key role in the net-zero 2050 commitments that cover 20 per cent of global oil and gas production.
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