A Shell employee walks past the company's Quest Carbon Capture and Storage (CCS) facility in Fort Saskatchewan, Alta. on Oct. 7, 2021.TODD KOROL/Reuters
Carbon capture and storage in Alberta got a boost Monday, as Shell Canada and ATCO EnPower Ltd. signed a carbon-sequestration agreement with the provincial government.
It’s the first such agreement with industry as the government pursues the development of 25 carbon capture and storage (CCS) hubs across the province. The idea is that the hubs – essentially areas of the geological formations that can store carbon – will be managed by companies to enable the storage of carbon dioxide (CO2) from various emissions sources.
In 2022, the government released a list of 19 projects that would begin exploring how to develop the hubs.
While Energy Minister Brian Jean was enthusiastic Monday about the prospect of more hub agreements being announced over the coming months, Bob Myles, the chief operating officer of ATCO EnPower, said Alberta actually needs fewer than are being proposed.
Mr. Myles told media Monday that industry should work together to shrink the number of proposals, because it doesn’t make economic sense to move forward with so many.
“I think there’s a lot of attention on what we’re doing, and I do hope that we can bring some other hubs together to help the overall economy,” he said.
“But if you look at every industry that’s ever been developed, it starts off with a lot, and then the ones that are the most economic are the ones that are actually going to proceed.”
The agreement between ATCO, Shell and the province for the Atlas Carbon Storage Hub means the companies can now apply for the necessary regulatory approvals to inject and store captured carbon dioxide at the site approximately 45 kilometres east of Edmonton.
Mr. Jean said the fact the province has now fully finalized its regulations and its carbon capture incentive program – which will provide a grant of 12 per cent for new eligible CCS capital costs – will help drive more final investment decisions on CCS hubs.
Shell last month announced the company would go ahead with its Polaris carbon-capture project, which is designed to capture up to 650,000 tonnes of carbon dioxide annually from the Shell-owned Scotford refinery and chemicals complex near Edmonton.
Polaris will connect with the Atlas hub via a 22-kilometre pipeline.
Susannah Pierce, the president and country chair of Shell Canada, said Monday that Alberta’s funding program, along with the federal government’s carbon-capture investment tax credit, were instrumental in Shell’s decision to go ahead with the project.
Shell’s Quest CCS facility at its Scotford refinery has captured and stored more than nine million tonnes of carbon dioxide since 2015. Ms. Pierce said the company would build on that experience to work with more customers to sequester CO2 through the Atlas hub.
Critics of CCS argue that the technology is expensive, ineffective and does little to encourage changes in behaviour that are crucial to reducing emissions and addressing climate change.
Yes, carbon capture is good – but what are we doing with that captured carbon?
Ms. Pierce countered that the technology Shell will use in the new hub is proven, and is a critical part of the company’s decarbonization strategy to get to net zero by 2050.
ATCO EnPower’s Mr. Myles said that CCS project costs have come down over the past decade, and there are opportunities to bring them down even further.
However, Edmonton-based Capital Power Corp. scrapped plans for one of Canada’s largest carbon-capture projects in May, saying that the $2.4-billion project would not work financially.
Mr. Myles said that while the economics don’t work for every company, that’s not the case for all projects.
“We do believe that energy transition will occur,” he said.
“We could sit here and argue at great lengths as to how quickly it will occur, but I think we will agree that it is happening, and we want to be the first to get in front of this.”