A shift in tone can be subtle, but when it happens in a meaningful way momentum can be gained toward a positive outcome. Such was the case late last week with media reports that Canada’s Natural Resources Minister Jonathan Wilkinson had tempered his feelings toward Alberta’s oilsands producers and their progress, or lack thereof (in his opinion), on a mammoth $16.5-billion carbon capture and storage (CCS) project initiated by the Pathways Alliance, a group representing Alberta’s six largest energy companies.
CCS is the safe, proven process of storing carbon dioxide deep underground instead of releasing it into the air, putting it back into the Earth where Mother Nature made it, thereby lessening global warming in the process. It’s been done for decades, with Canada gaining global recognition for its efforts — through CCS projects such as Shell’s Quest, the Alberta Carbon Trunk Line and Advantage’s Glacier — allowing Alberta CCS projects to capture close to 10 million tonnes of carbon thus far.
Wilkinson is quoted as saying recent talks with Alberta energy producers have been going well, and that he is hopeful an agreement can be reached so decisions can be made to get shovels in the ground. Oilsands producers, who met with Wilkinson in Alberta this past week, apparently said they had a “constructive conversation.”
The project would see major oilsands producers capture and store more than 10 megatonnes of CO2 annually. Further investment in major emissions reduction projects and technologies would boost the total investment to $24.5 billion, with the goal of capturing 22 megatonnes of CO2 by 2030. To put this into perspective: oilsands GHG emissions in 2022 were 70 to 80 megatonnes, the largest emitting sector in our country. Storing 22 million tonnes annually would make a significant difference in helping combat climate change.
So, one would think this is a no-brainer, especially with both federal and provincial CCS fiscal support now on the table.
It’s not that simple.
Lack of true certainty remains the rub. Will boards approve multibillion-dollar projects when the rules of the game could shift if there is a change in government in Ottawa and current legislation is ripped up? Would investors want this sort of volatility associated with their hard-earned retirement funds if a deal falls flat? Likely not — to both.
Then there is the price of carbon. Carbon is currently traded throughout Canada in a variety of ways. The key is knowing what price you’ll get for the carbon to set a proper business model. The Government of Canada has set up the Canada Growth Fund (CGF) to help companies gain that price certainty through a key tool called carbon contracts for difference. Deals have been signed with Alberta companies and projects have received the green light in recent months — Strathcona Resources’ partnership with the CGF, Entropy’s Glacier Phase 2, Dow Chemical’s new petrochemical complex and a pair of Shell Canada CCS initiatives, to name a few.
Good progress, yes, but the real bellwether to achieve the kind of emissions reductions Ottawa is looking for is the Pathways Project if there is any hope of coming close to what was promised by Canada in Paris back in 2015. Then, a fresh-faced Prime Minister Justin Trudeau proudly proclaimed our country would reduce its emissions by 30 per cent from 2005 levels by 2030, later increasing that promise to a 40 to 45 per cent reduction. That commitment seems to be drifting increasingly further away.
So, back to Wilkinson and his recent bullish comments in Alberta. One hopes there is traction here for the Pathways CCS project after more than two years of talks with Ottawa to find a path forward and get a deal done, as the minister says, before Christmas or early in the new year.
This would give the Trudeau government something to hold up in front of all Canadians to demonstrate tangible action against climate change and allow energy companies to display their true commitment in making a difference for future generations.
James Millar is the former president and CEO of the International CCS Knowledge Centre and a communications consultant.