Carbon capture tax credit plan is progress but has a vital flaw: Brad Wall
Canada’s largest oil sands producers have reached an agreement with Alberta to evaluate a proposed carbon storage hub in the northeastern part of the province.
The consortium of six companies known as the Pathways Alliance announced the news Wednesday, saying it would allow work to begin this winter on assessing geological properties and the feasibility of the underground CO2 storage project.
Kendall Dilling, president of the group, said the agreement marks a “significant milestone” for the carbon capture and storage project that’s being billed by the companies involved as one of the largest in the world, and crucial to reducing greenhouse gas emissions in the sector.
“With this agreement in place, we can continue to progress this ambitious project that will help position Canada as one of the world’s most advanced nations in decarbonizing its energy production,” Dilling said in a written statement.
The proposed hub near Cold Lake, Alta., would store carbon emissions captured from 14 oil sands facilities around Fort McMurray, Christina Lake and Cold Lake, with a goal to expand the transportation network to include more than 20 facilities, the Pathways Alliance said.
The group wants to eventually open the facility to other industries interested in carbon capture and storage technology.
It has billed the plan as “critical” to reducing CO2 emissions in the sector, though the companies have not made a final investment decision on the project.
The latest development in the plan comes as environmentalists and the federal government have pressured oil companies to explain how they plan to apply their profits to decarbonisation efforts.
Last year, the federal government announced a tax credit plan valued at 50 to 60 per cent for carbon capture and storage projects, but the industry has asked for more money to support the technology. Some scientists, meanwhile, have remained skeptical of the technology’s effectiveness at reducing harmful emissions and have argued that money would be better spent on renewable energy projects and other measures to fight climate change.
Canadian Natural Resources Ltd., Cenovus Energy Inc., ConocoPhillips Canada Resources Corp, Imperial Oil Ltd., MEG Energy Corp. and Suncor Energy Inc. launched the Pathways Alliance group in 2021. Together, the companies make up about 95 per cent of oil sands production in Canada.
With files from The Canadian Press and Bloomberg News.