breadcrumb trail link
columnist
Published May 21, 2024 • 3 minute read
Register for free here to save this article. Or sign in if you have an account.
Upstream America, Heavy Oil – Pipeline transports CO2 from Quest equipment to injection site for safe, permanent underground storage – Scotford Upgrader near Fort Saskatchewan, Alberta (northeast of Edmonton), June 2015. When launched in 2015, the Quest Carbon Capture and Storage project will reduce CO2 emissions from Shell's oil sands operations by 1 million tonnes per year by capturing CO2 from the Scotford Upgrader and permanently storing it deep underground. or more. Quest is part of the Athabasca Oil Sands Project, a joint venture between Shell Canada Energy (60%), Marathon Oil Canada Corporation (20%) and Chevron Canada Limited (20%). It is funded by the governments of Alberta and Canada. . HSSE approved. Phillip Chin for AP Images ORG XMIT: 1177061 Photo by Phillip Chin /Phillip Chin for AP Images
Article content
Who should pay to reduce emissions from Canada's oil sands production? For that matter, carbon capture and storage (a proven technology but not yet scaled up)? Who should bear the investment risk?
It depends on why you think the oil sands need to be decarbonized in the first place.
Article content
Over the past three years, oil sands industry association Pathways Alliance has achieved plans to rapidly deploy carbon capture at 12 oil sands facilities connected to a shared carbon pipeline on the path to net zero. We have promoted the possibility. This is a major solution that oil sands companies want to utilize to contribute to Canada's climate goals, and it should be applauded.
Advertisement 2
This ad has not yet loaded, but article continues below.
This content is only for subscribers
Subscribe today to read the latest news in your city and across Canada.
Exclusive articles from David Staples, Keith Gerein and more, Cult of Hockey's Oilers news, Ask EJ Anything feature, Noon News Roundup and Under the Dome newsletter. Get unlimited online access to the Edmonton Journal and his 15 news sites with one account. The Edmonton Journal ePaper, an electronic replica of the print edition that you can view, share, and comment on on any device. Daily puzzles including the New York Times crossword. Support local journalism.
Subscribe to unlock more articles
Subscribe now to read the latest news from your city and across Canada.
Exclusive articles from David Staples, Keith Gerein and more, Cult of Hockey's Oilers news, Ask EJ Anything feature, Noon News Roundup and Under the Dome newsletter. Get unlimited online access to the Edmonton Journal and his 15 news sites with one account. The Edmonton Journal ePaper, an electronic replica of the print edition that you can view, share, and comment on on any device. Daily puzzles including the New York Times crossword. Support local journalism.
Sign up/sign in to unlock more articles
Create an account or sign in to continue your reading experience.
One account gives you access to articles across Canada. Share your thoughts and join the conversation in the comments. Enjoy additional articles every month. Receive email updates from your favorite authors.
Sign in or create an account
or
Article content
The industry also recognizes that there is a strong business case for reducing emissions so that its products can compete in a global market that is increasingly focused on low-carbon energy. As our research shows, oil sands asphalts remain some of the most carbon-intensive to produce and refine in the world. Investing in carbon capture is expensive, but it is an investment in the future of oil sands companies' business models.
So if emissions reduction is a business proposition, you need to think about carbon capture investments like any other large-scale capital investment. Management uses shareholder funds wisely based on what it currently knows about how the policy and economic environment will develop.
What do we know today? In recent years, we have learned that carbon capture investments are supported by a 50 percent investment tax credit from the federal government (with final action in Congress still weeks away) and a 12 percent investment tax credit. I was there. Percentage subsidy from the Government of Alberta.
Furthermore, the increase in the price of a tonne of carbon is fixed until 2030. That means companies know the trajectory of increasing credit value in Alberta's TIER system, which informs the economics of emission reduction projects. To further strengthen these factors, the federal government is working on a cap-and-trade system for oil and gas emissions. This provides greater long-term certainty about what emissions reductions are needed and on what timeline.
Advertisement 3
This ad has not yet loaded, but article continues below.
Article content
This is a good combination of subsidies and regulation, ensuring that taxpayers' money is spent effectively, and that companies are not only incentivized to reduce emissions, but also have the possibility of being penalized if they don't. guarantee that there is. Our research shows that what Canada is offering is even more generous than the 45Q tax credit enhanced by the US Inflation Control Act (which leaves far more public money available for the clean economy). found.
However, it is not up to governments and taxpayers to completely eliminate this risk. Any business owner will tell you there's never a guarantee of a return on the money you spend. Given the momentum of the global energy transition, Alberta's continued dependence on revenues from this sector that it urgently needs to future-proof, and the large role that oil sands plays in Canada's overall emissions. It is therefore reasonable that this department should take on a part of this. the risks and costs of these investments;
In other words, it is time for oil sands companies to accept the significant support that is being offered.
It is therefore surprising to hear Pathways' new executive chairman, Derek Evans, continue to suggest that Pathways is seeking further government support to get the project off the ground. . It's even more surprising to hear him say that capturing low rates of post-combustion carbon dioxide poses challenges for governments.
Heavy industries such as oil and gas have been using carbon capture for decades. The proposed recovery process has previously been described by Pathways as proven and reliable, and is similar to technology already used in this field, for example to remove hydrogen sulfide in processing plants. ing.
Pathways has long argued that policy and regulatory certainty is needed before moving forward. At this late stage, such comments create uncertainty about the technology and plans that oil sands companies have consistently claimed they have the expertise to deploy now, and their net-zero commitments as a company. is raising doubts.
MC Bouchard is the Oil and Gas Program Director at Pembina Research Institute.
Article content
Share this article on your social networks
