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Energy

Canada Embracing Carbon Capture and Storage (CCS) to Reduce Emissions and Sustain Energy Industry

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9 minute read

From EnergyNow.ca

Alberta has firmly led the Canadian charge on CCS. It has more CO2 storage capacity than Norway, Korea, India, and double the entire Middle East, according to the Global CCS Institute.

Back in 2007, the Alberta and federal governments established a task force on carbon capture and storage (CCS) as a way of reducing emissions from oil, gas, and energy operations. That led to a report in 2008 that said: “CCS is seen as a technological solution that allows Canada to continue to increase its energy production while reducing (carbon dioxide) emissions from these activities. . . .

“CCS is strategically important to Canada for several reasons. First and foremost, Canada is endowed with an abundance of fossil fuels (including an unparalleled oil sands resource).”

The task force noted that public support for CCS was high, with 64% of the public being open to the idea of government financial support for CCS. All that happened under the Conservative Stephen Harper government, which, in 2015, lost power to the Justin Trudeau Liberals.

Trudeau himself went on to say in 2017 these memorable words: “No country would find 173 billion barrels of oil in the ground and leave them there.”

That’s not a message repeated since, and certainly not by his relentless minister of environment and climate change, Steven Guilbeault. On CCS, Guilbeault maintains that while carbon capture and storage “is happening in Canada,” it is not the “be-all and end-all.”

Much more positively, we now have Jonathan Wilkinson, Canada’s energy and natural resources minister, saying he expects 20 to 25 commercial-scale CCS projects to break ground in Canada within the next decade.

And we finally have what Ottawa first promised in 2021: a system of tax credits for investments in carbon capture — which industry sees as a way to get those 20 to 25 carbon-capture projects built.

The tax incentive covers up to 50 per cent of the capital cost of CCS and CCUS carbon-capture projects. Although energy company Enbridge points out that tax incentives in the U.S. are more attractive than what Canada is offering.

“CCUS” is one of the carbon-capture models. It stands for Carbon Capture Use and Storage or Carbon Capture Utilization and Sequestration. Under CCUS, captured carbon dioxide can be used elsewhere (for example, to increase the flow from an oilfield, or locked into concrete). Or it can be permanently stored underground, held there by rock formations or in deep saltwater reservoirs.

Canada’s climate plan includes this: “Increased use of CCUS features in the mix of every credible path to achieving net zero by 2050.”

As well, the feds have supported a couple of smaller CCS projects through the Canada Growth Fund and its “carbon contract for difference” approach.

To date, Alberta has firmly led the Canadian charge on CCS. It has more CO2 storage capacity than Norway, Korea, India, and double the entire Middle East, according to the Global CCS Institute.

post-image_(1).jpgFrom the Alberta government’s Canadian Energy Centre

In the most recent move in Alberta, Shell Canada announced it is going ahead with its Polaris carbon capture project in Alberta. It is designed to capture up to 650,000 tonnes of carbon dioxide annually from Shell’s Scotford refinery and chemicals complex near Edmonton.

That works out to approximately 40 per cent of Scotford’s direct CO2 emissions from the refinery and 22 per cent of its emissions from the chemicals complex.

Shell’s announcement sparked this from Wilkinson: “The Shell Polaris announcement last week was a direct result of the investment tax credit.”

Also in Alberta, the Alberta government notes: “The Alberta government has invested billions of dollars into carbon capture, utilization and storage (CCUS) projects and programs. . . . The Alberta government is investing $1.24 billion for up to 15 years in the Quest and Alberta Carbon Trunk Line (ACTL) projects.”

Quest is Shell’s earlier Scotford project. “The project is capturing CO2 from oil sands upgrading and transporting it 65 km north for permanent storage approximately 2 km below the earth’s surface. Since commercial operations began in 2015, the Quest Project has captured and stored over 8 million tonnes of CO2.”

The Alberta Carbon Trunk Line is a 240-km pipeline that carries CO2 captured from the Sturgeon Refinery and the Nutrien Redwater fertilizer plant to enhanced oil recovery projects in central Alberta. Since commercial operations began in 2020, the ACTL Project has captured and sequestered over 3.5 million tonnes of CO2.

Shell and partner ATCO EnPower now plan a new CCS project at Scotford. And, on a smaller scale, Entropy Inc. will add a second phase of CCS at its Glacier gas plant near Grande Prairie.

And those are just two of Alberta’s coming CCS projects. That province is working on at least 11 more that could lead to over $20 billion in capital expenditures and reduce about 24 million tonnes of emissions annually — the equivalent of reducing Alberta’s annual industrial emissions by almost 10 per cent.

And then there’s the giant CCS project proposed by the Pathways Alliance, a partnership representing about 95% of Canada’s oil sands production.

“The project would see CO2 captured from more than 20 oil sands facilities and transported 400 kilometers by pipeline to a terminal in the Cold Lake area, where it will be stored underground in a joint carbon-storage hub. . . . A final investment decision is expected in 2025.”

Alberta alone has more CO2 storage capacity than Norway, Korea, India, and double the entire Middle East, according to the Global CCS Institute.

When Wilkinson spoke in favor of CCS, Capital Power had just backed away from building a carbon-capture facility at its Genesee power plant in Alberta. But Enbridge, which would have built the associated storage hub, is still “strongly interested.”

In Saskatchewan, which also offers government support for CCS, more than 5 million tonnes of CO2 have been captured at SaskPower’s Boundary Dam 3 power plant. “Someone would have to plant more than 69 million trees and let them grow for 10 years to match that.”

In B.C., natural gas company FortisBC offers small-scale carbon-capture technology to help businesses that use natural gas to save energy and decrease greenhouse gas emissions.

And the B.C. government says that, potentially, two to six large-scale CCS projects could be developed in northeast B.C. over the next decade.

“Small-scale operations currently exist in B.C. that inject a mixture of CO2 and H2S (hydrogen sulfide) deep into underground formations. This process, which is referred to as acid-gas disposal, already occurs at 12 sites.”

Elsewhere, CCS projects are operating or being developed around the world, including in Australia, Denmark, and the U.S. A CCS project in Norway has been in operation for 28 years.

It took a while to get the ball rolling in Canada, but CCS/CCUS is here to stay, reducing emissions and keeping industries alive to contribute to the economy.

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Premiers fight to lower gas taxes as Trudeau hikes pump costs

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From the Canadian Taxpayers Federation

By Jay Goldberg 

Thirty-nine hundred dollars – that’s how much the typical two-car Ontario family is spending on gas taxes at the pump this year.

You read that right. That’s not the overall fuel bill. That’s just taxes.

Prime Minister Justin Trudeau keeps increasing your gas bill, while Premier Doug Ford is lowering it.

Ford’s latest gas tax cut extension is music to taxpayers’ ears. Ford’s 6.4 cent per litre gas tax cut, temporarily introduced in July 2022, is here to stay until at least next June.

Because of the cut, a two-car family has saved more than $1,000 so far. And that’s welcome news for Ontario taxpayers, because Trudeau is planning yet another carbon tax hike next April.

Trudeau has raised the overall tax burden at the pumps every April for the past five years. Next spring, he plans to raise gas taxes by another three cents per litre, bringing the overall gas tax burden for Ontarians to almost 60 cents per litre.

While Trudeau keeps hiking costs for taxpayers at the pumps, premiers of all stripes have been stepping up to the plate to blunt the impact of his punitive carbon tax.

Obviously, Ford has stepped up to the plate and has lowered gas taxes. But he’s not alone.

In Manitoba, NDP Premier Wab Kinew fully suspended the province’s 14 cent per litre gas tax for a year. And in Newfoundland, Liberal Premier Andrew Furey cut the gas tax by 8.05 cents per litre for nearly two-and-a-half years.

It’s a tale of two approaches: the Trudeau government keeps making life more expensive at the pumps, while premiers of all stripes are fighting to get costs down.

Families still have to get to work, get the kids to school and make it to hockey practice. And they can’t afford increasingly high gas taxes. Common sense premiers seem to get it, while Ottawa has its head in the clouds.

When Ford announced his gas tax cut extension, he took aim at the Liberal carbon tax mandated by the Trudeau government in Ottawa.

Ford noted the carbon tax is set to rise to 20.9 cents per litre next April, “bumping up the cost of everything once again and it’s absolutely ridiculous.”

“Our government will always fight against it,” Ford said.

But there’s some good news for taxpayers: reprieve may be on the horizon.

Federal Conservative leader Pierre Poilievre’s promises to axe the carbon tax as soon as he takes office.

With a federal election scheduled for next fall, the federal carbon tax’s days may very well be numbered.

Scrapping the carbon tax would make a huge difference in the lives of everyday Canadians.

Right now, the carbon tax costs 17.6 cents per litre. For a family filling up two cars once a week, that’s nearly $24 a week in carbon taxes at the pump.

Scrapping the carbon tax could save families more than $1,200 a year at the pumps. Plus, there would be savings on the cost of home heating, food, and virtually everything else.

While the Trudeau government likes to argue that the carbon tax rebates make up for all these additional costs, the Parliamentary Budget Officer says it’s not so.

The PBO has shown that the typical Ontario family will lose nearly $400 this year due to the carbon tax, even after the rebates.

That’s why premiers like Ford, Kinew and Furey have stepped up to the plate.

Canadians pay far too much at the pumps in taxes. While Trudeau hikes the carbon tax year after year, provincial leaders like Ford are keeping costs down and delivering meaningful relief for struggling families.

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Economy

Gas prices plummet in BC thanks to TMX pipeline expansion

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From Resource Works

By more than doubling capacity and cutting down the costs, the benefits of the TMX expansion are keeping more money in consumer pockets. 

Just months after the Trans Mountain Expansion (TMX) project was completed last year, Canadians, especially British Columbians, are experiencing the benefits promised by this once-maligned but invaluable piece of infrastructure. As prices fall when people gas up their cars, the effects are evident for all to see.

This drop in gasoline prices is a welcome new reality for consumers across B.C. and a long-overdue relief given the painful inflation of the past few years.

TMX has helped broaden Canadian oil’s access to world markets like never before, improve supply chains, and boost regional fuel supplies—all of which are helping keep money in the pockets of the middle class.

When TMX was approaching the finish line after the new year, it was praised for promising to ease long-standing capacity issues and help eliminate less efficient, pricier methods of shipping oil. By mid-May, TMX was completed and in full swing, with early data suggesting that gas prices in Vancouver were slackening compared to other cities in Canada.

Kent Fellows, an assistant professor of Economics and the Director of Graduate Programs for the School of Public Policy at the University of Calgary, noted that wholesale prices in Vancouver fell by roughly 28 cents per litre compared to the typically lower prices in Edmonton, thanks to the expanded capacity of TMX. Consequently, the actual price at the gas pump in the Lower Mainland fell too, providing relief to a part of Canada that traditionally suffers from high fuel costs.

In large part due to limited pipeline capacity, Vancouver’s gas prices have been higher than the rest of the country. From at least 2008 to this year, TMX’s capacity was unable to accommodate demand, leading to the generational issue of “apportionment,” which meant rationing pipeline space to manage excess demand.

Under the apportionment regime, customers received less fuel than they requested, which increased costs. With the expansion of TMX now complete, the pipeline’s capacity has more than doubled from 350,000 barrels per day to 890,000, effectively neutralizing the apportionment problem for now.

Since May, TMX has operated at 80 percent capacity, with no apportionment affecting customers or consumers.

Before the TMX expansion was completed, a litre of gas in Vancouver cost 45 cents more than a litre in Edmonton. By August, it was just 17 cents—a remarkable drop that underscores why it’s crucial to expand B.C.’s capacity to move energy sources like oil without the need for costly alternatives, allowing consumers to enjoy savings at the pump.

More than doubling TMX’s capacity has rapidly reshaped B.C.’s energy landscape. Despite tensions in the Middle East, per-litre gas prices in Vancouver have fallen from about $2.30 per litre to $1.54 this month. Even when there was a slight disruption in October, the price only rose to about $1.80, far below its earlier peaks.

As Kent Fellows noted, the only real change during this entire timeline has been the completion of the TMX expansion, and the benefits extend far beyond the province’s shores.

With TMX moving over 500,000 barrels more per day than it did previously, Canadian oil is now far more plentiful on the international market. Tankers routinely depart Burrard Inlet loaded with oil bound for destinations in South Korea and Japan.

In this uncertain world, where oil markets remain volatile, TMX serves as a stabilizing force for both Canada and the world. People in B.C. can rest easier with TMX acting as a barrier against sharp shifts in supply and demand.

For critics who argue that the $31 billion invested in the project is short-sighted, the benefits for everyday people are becoming increasingly evident in a province where families have endured high gas prices for years.

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