Printed Might 21, 2024 • 3 minute learn
Upstream Americas, Heavy Oil – A pipeline transports CO2 from the Quest unit to injection websites for protected and everlasting underground storage – Scotford Upgrader, close to Fort Saskatchewan (northeast of Edmonton), Alberta in June 2015. Upon launching in 2015 Quest Carbon Seize and Storage Venture will scale back CO2 emissions from Shell’s oil sands operations by multiple million tonnes a 12 months by capturing CO2 from the Scotford Upgrader and completely storing it deep underground. Quest is a part of the Athabasca Oil Sands Venture, a three way partnership amongst Shell Canada Power (60%), Marathon Oil Canada Corportation (20%) and Chevron Canada Restricted (20%) and has obtained funding help from the governments of Alberta and Canada. HSSE authorized. Phillip Chin for AP Pictures ORG XMIT: 1177061 Picture by Phillip Chin /Phillip Chin for AP Pictures
Who ought to pay to scale back emissions from Canada’s oilsands manufacturing? Extra to the purpose, when it includes investing in carbon seize and storage — a confirmed know-how that, nonetheless, has but to be scaled up — who ought to tackle that funding threat?
It is determined by why you suppose we have to decarbonize the oilsands within the first place.
For the final three years the oilsands business group, Pathways Alliance, has touted the achievability of its plan for speedy deployment of carbon seize at a dozen oilsands services, linked to a shared carbon pipeline, on their path to net-zero. That is the first answer the oilsands firms need to use to make their contribution to Canada’s local weather targets, and that must be celebrated.
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The business can be conscious there’s a robust enterprise case for decreasing emissions, so their merchandise can compete in a world market that’s turning into ever-more fascinated about low-carbon vitality. As our analysis exhibits, oilsands bitumen remains to be a number of the most carbon-intensive to provide and refine on this planet. Investing in carbon seize, whereas expensive, is an funding in the way forward for oilsands firms’ enterprise fashions.
So, if decreasing emissions is a enterprise proposition, the best way we take into consideration carbon seize investments must be just like some other massive capital funding. Executives spend their shareholders’ cash correctly, primarily based on what they know in the present day about how the coverage and financial setting is prone to unfold.
What do we all know in the present day? For the final couple of years, we’ve identified carbon seize investments will probably be supported by a 50-per-cent funding tax credit score from the federal authorities (which is now a couple of weeks out from being finalized in parliament), and a 12-per-cent grant from the Authorities of Alberta.
As well as, the rising value of a tonne of carbon has been fastened till 2030 — that means firms know the trajectory at which credit score values will improve in Alberta’s TIER system, informing the economics of their emissions discount tasks. To additional cement these parts, the federal authorities is engaged on an oil and gasoline emissions cap-and-trade system, which is able to present further long-term certainty about what emissions reductions are required and on what timeline.
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It is a good combination of subsidies and rules, making certain taxpayers’ {dollars} are properly spent and corporations aren’t solely being incentivized to scale back emissions, however doubtlessly penalized in the event that they don’t. Our analysis has discovered what’s on the desk in Canada is beneficiant, even in contrast with the 45Q tax credit score enhanced within the Inflation Discount Act within the U.S. (the place there’s much more public cash obtainable for the clear economic system).
However it’s less than governments and taxpayers to fully de-risk this. Any enterprise proprietor will let you know there’s by no means a assure on the speed of return of any greenback spent. It’s affordable, given the momentum of the worldwide vitality transition, Alberta’s continued reliance on revenues from this sector that should urgently future-proof itself, and the outsize position that the oilsands play in Canada’s total emissions, that the sector ought to tackle a part of the danger and the price of these investments.
In different phrases: It’s now time for oilsands firms to simply accept the numerous stage of help on supply.
It’s due to this fact shocking to listen to the brand new government chair of Pathways, Derek Evans, proceed to recommend that Pathways is asking for extra authorities help to get their venture off the bottom. It’s much more shocking to listen to him say that capturing post-combustion carbon dioxide in low percentages has created challenges for governments, given this has been a identified facet of
carbon seize for many years in heavy industries like oil and gasoline; the proposed seize course of has beforehand been described as confirmed and dependable by Pathways; and it’s just like the know-how the sector already makes use of to take away hydrogen sulfide at processing crops, for instance.
Pathways has argued for a while they need coverage and regulatory certainty earlier than they’ll transfer ahead. At this late stage, feedback like this throw uncertainty into the combination, a few know-how and a plan that the oilsands firms have constantly stated they’ve the experience to implement proper now, and calls into query their company net-zero pledges.
M.C. Bouchard is oil and gasoline program director on the Pembina Institute.
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…. to be continued
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Copyright for syndicated content material belongs to the linked Supply : Edmonton Journal – https://edmontonjournal.com/opinion/columnists/opinion-taxpayers-shouldnt-foot-whole-bill-for-carbon-capture