The Trudeau government and environmental critics have demanded Canada’s oilsands producers show tangible progress on its colossal carbon capture network in northern Alberta.
Less talk, more action, has been the not-so-subtle message.
On Friday, that’s expected to happen.
The president of the Pathways Alliance group of oilsands producers says it will file an application with the Alberta Energy Regulator (AER) for a 400-kilometre pipeline for the broader $16.5-billion decarbonization development.
“It marks the formal beginning of the official regulatory approval process for the project,” Kendall Dilling said in an interview Thursday.
“That is progress at this stage of a project. We would love to get shovels in the ground — believe me — but, of course, you can’t do that without regulatory approval.”
The pipeline will eventually carry CO2 emissions captured from oilsands facilities to a storage hub near Cold Lake.
It’s the backbone of the transportation network to move emissions captured from each site to the underground sequestration hub for permanent storage, more than one kilometre below ground.
For Canada, the world’s fourth-largest oil producer, this is a critical time and a consequential decision.
Oilsands operators have faced fierce scrutiny over their emissions — the oil and gas industry is the largest emitting sector in Canada — and the project is the foundation of the group’s decarbonization efforts.
The CCUS project’s first phase is expected to store up to 12 megatonnes annually by 2030.
The Pathways Alliance aims to reach net-zero status by 2050. The group represents six of the largest oilsands operators in the country, including Suncor Energy, Canadian Natural Resources, Cenovus Energy and Imperial Oil.
Together, they operate about 95 per cent of the oilsands production in the province.
The regulatory application is expected to take about one year to complete. During that period, the oilsands group will continue with ongoing consultation with Indigenous communities in the region, Dilling said.
In the first phase of the $16.5-billion foundational project, the pipeline will connect to 16 different oilsands facilities.
The pipe has not yet been ordered, but the group has been talking with various mills and an order is expected to cost several hundred millions of dollars.
To date, the group has spent about $100 million on the CCUS project, and upwards of $2 billion on its overall net-zero plans.
Now, it’s making its first major regulatory application, with more to come for the underground storage space.
“This is just that next step in making it a reality,” Dilling said.
“We are really serious and committed. You don’t get to a regulatory application without years of work and significant investment. So, it’s a bit of evidence for those who sometimes doubt our commitment.”
In recent months, the Trudeau government has admonished the group for not making a final investment decision on the project, which was first unveiled in June 2021.
Design and engineering work has been ongoing.
However, much of the public discourse has focused on federal and provincial incentives to turn the multibillion-dollar decarbonization initiative into a reality, particularly with the U.S. offering large subsidies through its Inflation Reduction Act.
The provincial government recently created a program to provide a 12 per cent grant to CCUS developers for their capital expenditures.
Ottawa has promised an investment tax credit of up to 50 per cent for carbon capture and storage projects, although the necessary legislation has not yet been passed.
The Liberal government has also vowed it will offer longer-term certainty on the future price of carbon, developing carbon contracts for difference to help de-risk investment decisions.
But tensions have been building in recent months as the federal government’s 2030 climate target approaches.
In an interview with the Herald last month, federal Natural Resources Minister Jonathan Wilkinson criticized the producers, saying they needed to show signs of progress “and actually put shovels in the ground.”
On Thursday, Alberta Energy Minister Brian Jean said the project is critical to the future of the oilsands sector, and the province, as it looks to decarbonize and meet growing global demand.
The application shows the consortium is serious, as such processes take a lot of time, money “and commitment to get it done,” he added.
“It’s a big deal,” Jean said in an interview.
“If they are putting the application in it means, No. 1, that they’re confident the federal government is going to come and fulfil the promises that they made to them over the past few years.
“And it also means that they’re confident this is actually a game-changer for the oilsands.”
The pressure to keep up the momentum isn’t going to slow down.
“It’s a good step to see these regulatory applications starting to be filed,” said Janetta McKenzie, manager of the oil and gas program at the Pembina Institute.
“But it does highlight that there are a lot of steps still to take before we start to see emissions reductions from this hub, and our 2030 targets are getting closer every day.”
A spokesperson for Wilkinson said the regulatory application is movement toward the group’s broader goal of lowering emissions by 22 megatonnes by the end of the decade.
Wilkinson expects Pathways to take “other necessary steps to move expeditiously to complete their flagship project, including achieving their stated goal of placing first purchase orders for pipe in early 2024,” said Carolyn Svonkin, the minister’s press secretary.
The significance of ordering pipe has become “symbolic,” but it will likely occur toward the end of this year, Dilling said.
For now, it’s progressing on the regulatory front, as well as advancing the necessary engineering work.
“This is the precursor to a final investment decision,” he noted.
“Hopefully in 2025, sometime, we’re in a position to be making final investment decisions on the project.”
Chris Varcoe is a Calgary Herald columnist.
cvarcoe@postmedia.com
Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.
365 Bloor Street East, Toronto, Ontario, M4W 3L4
© 2024 Calgary Herald, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.
This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Service and Privacy Policy.
You can manage saved articles in your account.
and save up to 100 articles!
You can manage your saved articles in your account and clicking the X located at the bottom right of the article.
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Andrew Mitrovica
Mort Laitner
Rami G Khouri
Ali Fathollah-Nejad
Nikkei Editorial
visit website
