Shell plans second carbon capture facility at Alberta refinery site
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Gary Park for Petroleum News
Royal Dutch Shell will decide within two years whether to quiet some of its critics and join an industry push towards net zero carbon emissions by 2050.
It is weighing a proposed Polaris carbon capture and storage, CCS, facility at its large Scotford refinery and petrochemical complex near Edmonton but has yet to put a price tag on the project.
The venture is currently designed to sequester 750,000 metric tons a year from Shell’s own operations and eventually store carbon dioxide on behalf of other industrial emitters.
The company’s existing Quest CCS, also at the Scotford site, has already stored more than 6 million mt during its initial six years, said Shell’s Canadian President Susannah Pierce.
She said the company has “a pretty aggressive goal with respect to (CCS), which is clearly something that we need for projects or investments or assets that really can’t eliminate emissions on their own.”
Pierce acknowledged there is some public cynicism surrounding Shell’s commitment to lowering emissions and tackling climate change.
“There’s always going to be those who will never believe what you say and that’s fair,” she told the Globe and Mail. “We’re an old company that has had a history of producing oil and gas.”
But she insists Shell’s intended transition to a clean energy strategy, which has been demanded by company investors, will be publicly updated every two years.
“If we fail to deliver, then we have to come to terms with that when we meet at our (annual general meetings),” Pierce said.
Under pressure from climate-minded investors, many of whom are unloading their oil sands holdings from the world’s third-largest crude reserves, Polaris would account for only a fraction of emissions from the northern Alberta resource which accounts for an estimated 70 million mt a year of CO2, about 10% of Canada’s total emissions.
C$75 billion Two of Canada’s top oilpatch chief executive officers - Mark Little of Suncor Energy, and Alex Pourbaix of Cenovus Energy - believe it will cost about C$75 billion over the next 29 years to zero out greenhouse gases from the oil sands.
They also warn that a large portion of the costs would have to be carried by taxpayers, while many other loose ends have to be tied up.
Little told Bloomberg that achieving the 2050 target, with about half the emission cuts coming from CCS at the oil sands, could require as much as two-thirds government capital to match the strategy being introduced in Norway.
“We haven’t been able to find any jurisdiction in the world where (CCS) has been implemented, where the national or state governments are not very significant partners in the investment,” said Pourbaix.
“I don’t think any of us would ever be in a position to go at this on our own.”
Little said the Canadian industry can “bury our heads in the sand and become a victim or we can actually deal with it.”
Initial backing The emerging plans to shrink emissions from the oil sands also have the initial backing of companies such as Canadian Natural, Imperial Oil (69.6% owned by ExxonMobil) and MEG Energy (a Chinese state-controlled company).
Little said the heaviest costs of capturing CO2 range from C$50 a metric ton for industries that emit high concentrations to “several hundred dollars a ton” for direct capture from the atmosphere.
And that plan does not account for so-called Scope 3 emissions which are generated by motor vehicles, aircraft, homes and factories, which burn fuels from the oil sands.
Pierce said Shell is aiming to use more renewable energy at Scotford, following its own lead to start up Europe’s largest hydrogen electrolyzer at an energy and chemicals complex in Germany.
“Shell actually sees that the hydrogen market could grow close to 50% of today’s oil demand by 2050, so we see a huge opportunity, primarily by looking at the harder-to-abate sectors,” she said.
- GARY PARK
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