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Chasing carbon capture
Canada, Alberta start joint effort to explore methods of storing carbon dioxide Gary Park for Petroleum News
If the current hopes become reality, Alberta will qualify for C$30 billion in federal assistance and incentives to develop carbon capture utilization and storage, CCUS, to boost Canada’s hopes of achieving net-zero greenhouse gas emissions by 2050.
The grand dream got a surprising boost earlier in March when the Canadian and Alberta governments, in a rare show of common purpose, announced the formation of a joint working group to develop a CCUS strategy, with the focus on use of the technology in the petroleum industry.
CCUS projects are seen as the best and probably only chance of Alberta achieving its goal of reducing the province’s carbon dioxide output from its energy, power generation and manufacture of chemicals, fertilizers, steel and cement by 60 million metric tons a year over the next decade.
Half of the total would result from current government incentives, regulations and support programs and half would stem from CCUS initiatives.
“There isn’t a pathway to net-zero without carbon capture … in Canada or anywhere,” said Alberta Energy Minister Sonya Savage. “If we’re going to get to net-zero by 2050 we have to start working now.”
In response to those who have already raised objections to investing an average C$3 billion a year on tax credits, grants, loan guarantees or direct investments, Alberta Premier Jason Kenney noted that the energy sector “contributes hundreds of billions of dollars a year to the national economy. So let’s put that in perspective.”
“I think it’s a no brainer,” he declared.
Alternative could cripple industry Federal Environment Minister Jonathan Wilkinson, without giving an unqualified endorsement of the CCUS initiative, noted that one of the few other alternatives is to put a price on pollution, which some government sources have indicated could reach C$170 per metric ton - a level analysts suggest could permanently cripple the petroleum industry.
“But there are other ways - some of them involve creating the kinds of tax incentives advanced in the United States,” he said.
Even before the CCUS was launched, a coalition of environmentalists and companies representing tough-to-decarbonize sectors, have pressed the Canadian government to follow the U.S. lead and introduce a version of the “45Q” production tax credit which rewards investment in carbon capture.
Members of the coalition have suggested that Canadian Prime Minister Justin Trudeau has shown he is eager to keep pace with the climate-focused U.S. administration of President Joe Biden.
Kenney also pointed to the U.S. tax credit as a potential model Canada could adopt to encourage the construction of more energy projects.
“We claim to be a global leader (in lowering carbon levels), but we’re at risk of falling behind if we don’t up our game,” he said.
History of carbon capture Carbon capture and storage has actually been around for about 25 years as a means of putting carbon back in the ground to reduce damaging emissions from heavy industrial operations.
It was first used on a small scale in Alberta several decades ago until the early years of the century when then-premier Ed Stelmach kick-started what are now two large projects that received a large infusion of government money.
There is the C$1.3 billion Quest facility, 70% owned by Canadian Natural Resources and operated by Shell, attached to an Edmonton-area plant that upgrades oil sands bitumen into synthetic crude for conversion into marketable products.
The upgrading process results in a carbon dioxide byproduct that us stored about 2 miles underground in a saline aquifer.
Since 2015 Shell has stored over 5 million metric tons of CO2 and is applying the lessons it has learned to other large-scale commercial operations around the world.
Separately, Enhance Energy has developed Alberta Carbon Trunk Line, which is rated as the world’s largest capacity pipeline for carrying CO2 representing 20% of all current oil sands emissions to build reservoir pressures and extend the productive life of aging oilfields in central Alberta.
Initially ACTL is expected to capture and sequester up to 1.8 million metric tons a year, the equivalent of taking 339,000 fossil fuel powered vehicles off the road.
In addition to Shell, the technology has seized the attention of BP, Norway’s Equinor, France’s Total and Italy’s Eni, who are all investors in a plan to spend US$5 billion in the United Kingdom to collect carbon pollution from a group of chemical plants in northeast England and inject the CO2 under the North Sea, where it would be pumped into porous rocks.
Interest in technology Lots of interest is being paid to carbon capture as a way to meet the targets of the 2016 Paris climate agreement.
Elon Musk has promised to offer US$100 million for a contest seeking the best carbon capture technology, while ExxonMobil announced in February that it will make a US$3 billion investment in low-carbo n efforts.
But the critics are rallying just as fast as the promoters.
“Carbon capture is being used as a Trojan horse by the fossil fuels industry to keep demand for fossil fuels alive,” said Mike Childs, with Friends of the Earth in the U.K. He suggested it would be better to create processes that don’t create pollution in the first place.”
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