Connect with us
[the_ad id="89560"]

Energy

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

Published

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.

Daily Caller

Trump’s One Big Beautiful Bill Resets The Energy Policy Playing Field

Published on

 

From the Daily Caller News Foundation

By David Blackmon

Make no mistake about it, the One Big Beautiful Bill Act (OBBBA) signed into law on Friday by President Donald Trump falls neatly in line with the Trump energy and climate agenda. Despite complaints by critics of the deal that Majority Leader John Thune struck with Alaska Sen. Lisa Murkowski to soften the bill’s effort to end wind and solar subsidies from the Orwellian 2022 Inflation Reduction Act, the OBBBA continues – indeed, accelerates – the Trumpian energy revolution.

Leaders in the oil and gas industry, hamstrung at every opportunity by the Biden presidency, hailed the bill as a chance to move back into some semblance of boom times. Tim Stewart, President of the U.S. Oil and Gas Association, told his members in a memo that, “For the oil and gas industry, the bill…signals a transformative opportunity to enhance domestic production.”

API CEO Mike Sommers also praised the OBBBA as a positive step for his members: “This historic legislation will help usher in a new era of energy dominance by unlocking opportunities for investment, opening lease sales and expanding access to oil and natural gas development.

While leaders of organizations like those must curb their enthusiasm to some extent in their public statements, they and their peers must be somewhat amazed at how much real substantive change the thin GOP majorities shepherded by Thune and House Speaker Mike Johnson managed to stuff into this bill. This industry, historically an easily demonized bogeyman for Democrats and too often ignored by previous Republican presidents, does not experience days as encouraging as July 3 was in the nation’s capital.

Even so, many Republicans, especially in the House, remained unsatisfied by amendments the Senate made to the bill related to IRA subsidy rollbacks. To help Speaker Johnson hold the party’s narrow House majority together, President Trump committed the executive branch to strict enforcement of the new limitations, and promised the White House will work with congressional allies to move a major deregulation package ahead of the 2026 midterm elections.

But the OBBBA as passed is chock full of energy and environment-related provisions. FTI Consulting, a business consultancy with a major presence in Washington, DC, published a quick analysis Thursday that projects natural gas and nuclear as the biggest winners as the OBBBA’s impacts begin to take hold across the United States. Interestingly, the analysis also projects battery storage to expand more rapidly over the next five years even as wind and solar suffer from the phasing-out of their IRA subsidies.

The side deal struck by Thune and Murkowski is likely to result in significant new investment into wind and solar facilities as developers strive to get as many projects on the books as possible to meet the “commenced construction” requirement by the July 4, 2026 deadline. The bill’s previous language would have required projects to be placed into service by that time. But even that softer requirement will almost certainly cause a flow of capital investment out of wind and solar once that deadline passes, given the reality that many of their projects are not sustainable without constant flows of government subsidies.

What it all means is that the OBBBA, combined with all the administration’s prior moves to radically shift the direction of federal energy and climate policy away from intermittent energy and electric vehicles back to traditional forms of power generation and internal combustion cars, effectively reset the policy playing field back to 2019, prior to the COVID pandemic. That was a time when America had become as energy independent as it had been in well over half a century and was approaching the “Energy Dominance” position so dear to President Trump’s heart.

Trump’s signing of the OBBBA gives the oil and gas, nuclear, and even the coal industry a chance at a do over. It is an opportunity that comes with great pressure, both from government and the public, to perform. That means rapid expansion in gas power generation unseen in 20 years, rapid development of next generation nuclear, and even a probable chance to permit and build new coal capacity in the near future.

Second chances like this do not come around often. If these great industries fail to grab this brass ring and run with it, it may never come around again. Let’s go, folks.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Continue Reading

Carbon Tax

Canada’s Carbon Tax Is A Disaster For Our Economy And Oil Industry

Published on

From the Frontier Centre for Public Policy

By Lee Harding

Lee Harding exposes the truth behind Canada’s sky-high carbon tax—one that’s hurting our oil industry and driving businesses away. With foreign oil paying next to nothing, Harding argues this policy is putting Canada at a major economic disadvantage. It’s time to rethink this costly approach.

Our sky-high carbon tax places Canadian businesses at a huge disadvantage and is pushing investment overseas

No carbon tax will ever satisfy global-warming advocates, but by most measures, Canada’s carbon tax is already too high.

This unfortunate reality was brought to light by Resource Works, a B.C.-based non-profit research and advocacy organization. In March, one of their papers outlined the disproportionate and damaging effects of Canada’s carbon taxes.

The study found that the average carbon tax among the top 20 oil-exporting nations, excluding Canada, was $0.70 per tonne of carbon emissions in fiscal 2023. With Canada included, that average jumps to $6.77 per tonne.

At least Canada demands the same standards for foreign producers as it does for domestic ones, right? Wrong.

Most of Canada’s oil imports come from the U.S., Saudi Arabia, and Nigeria, none of which impose a carbon tax. Only 2.8 per cent of Canada’s oil imports come from the modestly carbon-taxing countries of the U.K. and Colombia.

Canada’s federal consumer carbon tax was $80 per tonne, set to reach $170 by 2030, until Prime Minister Mark Carney reduced it to zero on March 14. However, parallel carbon taxes on industry remain in place and continue to rise.

Resource Works estimates Canada’s effective carbon tax at $58.94 per tonne for fiscal 2023, while foreign oil entering Canada had an effective tax of just $0.30 per tonne.

“This results in a 196-fold disparity, effectively functioning as a domestic tariff against Canadian oil production,” the research memo notes. Forget Donald Trump—Ottawa undermines our country more effectively than anyone else.

Canada is responsible for 1.5 per cent of global CO2 emissions, but the study estimates that Canada paid one-third of all carbon taxes in 2023. Mexico, with nearly the same emissions, paid just $3 billion in carbon taxes for 2023-24, far less than Canada’s $44 billion.

Resource Works also calculated that Canada alone raised the global per-tonne carbon tax average from $1.63 to $2.44. To be Canadian is to be heavily taxed.

Historically, the Canadian dollar and oil and gas investment in Canada tracked the global price of oil, but not anymore. A disconnect began in 2016 when the Trudeau government cancelled the Northern Gateway pipeline and banned tanker traffic on B.C.’s north coast.

The carbon tax was introduced in 2019 at $15 per tonne, a rate that increased annually until this year. The study argues this “economic burden,” not shared by the rest of the world, has placed Canada at “a competitive disadvantage by accelerating capital flight and reinforcing economic headwinds.”

This “erosion of energy-sector investment” has broader economic consequences, including trade balance pressures and increased exchange rate volatility.

According to NASA, Canadian forest fires released 640 million metric tonnes of carbon in 2023, four times the amount from fossil fuel emissions. We should focus on fighting fires, not penalizing our fossil fuel industry.

Carney praised Canada’s carbon tax approach in his 2021 book Value(s), raising questions about how long his reprieve will last. He has suggested raising carbon taxes on industry, which would worsen Canada’s competitive disadvantage.

In contrast, Conservative leader Pierre Poilievre argued that extracting and exporting Canadian oil and gas could displace higher-carbon-emitting energy sources elsewhere, helping to reduce global emissions.

This approach makes more sense than imposing disproportionately high tax burdens on Canadians. Taxes won’t save the world.

Lee Harding is a research fellow for the Frontier Centre for Public Policy.

Continue Reading

Trending

X