Fate of giant carbon capture project still uncertain, but oilsands consortium hopes for deal with feds | CBC News

Canada’s Oilsands Companies Optimistic About Carbon Capture Pipeline Project

Despite frustrations and prolonged negotiations with the federal government, a consortium of Canada’s largest oilsands companies, known as the Pathways Alliance, remains optimistic about securing the certainty it needs from Ottawa to advance its proposed $16.5-billion carbon capture pipeline project. The project aligns with the Sustainable Development Goals (SDGs), particularly Goal 13: Climate Action.

Working Towards Certainty

The Pathways Alliance is currently working through the details of what has already been announced by the federal government to support the development of carbon capture and storage projects. Although no new commitments are expected in the upcoming federal budget, the consortium believes that the existing instruments proposed can create a package that will work. However, they emphasize the need to remove uncertainty surrounding certain elements that are still in the early stages of development.

Importance of Certainty

Uncertainty from Ottawa has hindered the consortium’s ability to make a firm investment in the project. The oilsands industry is responsible for a significant share of greenhouse gas emissions in Canada, making the Pathways project crucial for achieving the industry’s goal of a 32% reduction in emissions by 2030. The project would also be one of the largest carbon capture projects globally.

Timeline and Frustrations

Pathways president Kendall Dilling is confident that the project can be operational by 2030 if talks with the federal government conclude by the end of this year. However, frustrations have grown due to prolonged negotiations and perceived partisanship from both sides. Critics argue that more action is needed to decarbonize the oilsands and help Canada reach its climate targets.

Investment and Legislative Support

The federal government has proposed an investment tax credit for carbon capture projects, but the legislation is yet to be passed. Additionally, carbon contracts for difference, supported by taxpayers, are being offered to guarantee a carbon tax for heavy-emitting industries. These measures aim to provide certainty on the future price of carbon and encourage investment in emission reduction facilities.

Regulatory Progress

Pathways has taken steps towards regulatory approval by submitting an application for permits for a carbon dioxide pipeline and a sequestration facility in Northern Alberta. Indigenous consultation and engineering work are ongoing. The regulatory filing is seen as a positive step by the federal government, demonstrating the consortium’s commitment to the project.

Collaboration and Moving Forward

While frustrations have been aired by both sides, there is mutual respect between the government and Pathways. Talks are progressing positively, and the 2030 timeline remains realistic. However, continued steps forward are necessary to ensure progress towards decarbonization and productivity.

Risk of Falling Behind

The oilsands industry needs to act quickly as the world increasingly focuses on low-carbon energy sources. Without carbon capture facilities, Canada risks falling behind its peers in decarbonization and productivity. The proposed Pathways project is relatively expensive due to the remote location of the oilsands, but it is crucial for achieving climate targets.

Contracts for Difference

The critical need for contracts for difference is highlighted in a report by Clean Prosperity and Navius Research. These contracts provide certainty and guarantee revenue for companies that reduce emissions below their allocated limits. Carbon markets are uncertain, and contracts for difference ensure bankable revenue for emission reduction projects.

Next Steps

The oilsands group plans to make an investment decision on whether to proceed with the Pathways project next year. The initial goal is to capture and sequester 8.5 million tonnes of carbon emissions annually by 2030. The project has the potential to include over 20 facilities and store 40 million tonnes of emissions per year, contributing significantly to emissions reduction in the oilsands industry.

SDGs, Targets, and Indicators

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: Increase the share of renewable energy in the global energy mix
   • Indicator: The article discusses the need for low-carbon sources of energy and the focus on decarbonization in the oil sands sector.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable
   • Indicator: The article mentions the proposed $16.5-billion carbon capture pipeline project, which aims to reduce emissions in the oil sands sector.

3. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning
   • Indicator: The article discusses the need for certainty on the future price of carbon and the importance of passing tax credit legislation to incentivize carbon capture projects.

4. SDG 17: Partnerships for the Goals

   • Target 17.16: Enhance the global partnership for sustainable development
   • Indicator: The article highlights the need for collaboration between governments and producers to address uncertainty and create a fiscal regime that supports investable projects.

Table: SDGs, Targets, and Indicators

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Source: cbc.ca

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