Alberta’s Carbon Capture Deployment Plan Criticized by Industry for Transparency and Costs

Industry leaders in Alberta have criticized the government’s rollout of a plan to capture carbon dioxide emissions underground as ineffective and lacking in transparency, saying it has delayed billions of dollars investment and increased costs.

Several oil fields and other industrial players want to reduce their emissions by investing in such facilities in the province, which is considered to have an ideal geology for storing carbon, according to experts, because the gases can be pumped a few kilometers underground in a layer of rock filled with interconnected pores, similar to holes in a sponge.

The Government of Alberta controls the underground space and has started picking projects that can move forward.

So far, the government has approved six proposals near Edmonton and is currently reviewing bids for carbon capture and storage projects across the province. The government wants each project to act as a hub designed to collect emissions from nearby facilities and store gases underground.

Some industry players say the provincial system creates uncertainty since companies don’t know if their project will be approved or when. And, if they have to use a hub operated by another company, there are no rules in place regarding cost or access.

There are also concerns about the lack of transparency as to why some projects are chosen and others are rejected.

A carbon dioxide injection well in central Alberta. (Kyle Bakx/CBC)

“There’s no question it’s retarding,” Craig Golinowski said of the government’s approach to carbon capture. He is the managing partner of Carbon Infrastructure Partners of Calgary, a private equity firm that invests in many projects, including carbon capture and storage.

Alberta Energy Minister Sonya Savage was unavailable for an interview.

As part of the hub application process, companies are encouraged to provide a list third parties who have agreed to use the facility to store the broadcasts.

Some companies claim that their industrial facilities are not located near other polluters, so they just want to be allowed to store their own emissions locally.

It shows how the provincial government’s hub system is too focused on big business and ignores small players, Golinowski said.

“The size of the emissions issues is huge,” he said. “Limiting the number of projects to only major projects will inherently limit the number of tonnes that can be captured and sequestered.”

WATCH | How the US system compares to Alberta’s for carbon capture:

More transparency is needed in how the Alberta government decides which companies can use underground caverns to store carbon emissions

Companies large and small should be allowed to store their emissions, says Craig Golinowski, managing partner of Calgary-based Carbon Infrastructure Partners.

Alex Puddifant, spokesman for Alberta’s Department of Energy, said “the government is prioritizing hub development” because “we believe this approach is the most efficient use of pore space. “.

“Alberta continues to be the leader in CCUS in Canada,” he said of carbon capture, use and storage in a four-sentence email.

New projects in limbo

Calgary-based Inter Pipeline was not chosen in the first round of approvals by the Alberta government; the company later announced a new facility that is dependent on securing the rights to the underground caverns to proceed. The project is valued at over $1 billion and would produce blue ammonia and blue methanol.

“Economic and certain access to adequate pore space for the carbon emissions of this project is a critical part of planning for feasibility,” the company said in a statement. output. The company declined an interview.

Energy Minister Sonya Savage said the government was moving quickly to announce other successful bids for carbon capture projects in the province. (Kyle Bakx/CBC)

Calgary-based Entropy Inc. has more than a dozen proposed carbon capture and storage projects in Alberta of varying sizes and in various stages of development. Several of these projects are now delayed, the company said, because there is no certainty that the government will allow the projects to continue.

“The government has created a kind of land rush,” said Michael Belenkie, president of Entropy.

“Everyone is afraid of missing out on the ability to control the pore space that they need. So everyone gets involved in this process to try to make sure they have at least one application and try to get the [underground space] which they may or may not need to have control in the future,” he said.

Two of the company’s projects are ready for a final investment decision, Belenkie said.

“If you lose six months this year, it’s six months that will be delayed when the project is under construction. So everything is pushed back,” he said.

WATCH | The Government of Alberta still has many questions to answer:

Alberta government has created a ‘land rush’, says carbon capture company

Some proposed projects are being delayed due to uncertainty over how the provincial government decides which companies can use underground caverns to store carbon emissions, said Michael Belenkie, president of Entropy Inc.

Alberta Energy said there would be more consultation with industry. “Our government will continue to engage with stakeholders to ensure Alberta is well positioned to deploy CCUS technologies effectively, equitably and efficiently in the best interests of Albertans,” Puddifant said.

Changes needed, says expert

Carbon capture technology has its critics, both in terms of realistic scaling and financial relevance for governments and industry. The International Energy Agency has Noted carbon capture “has not yet delivered” as it has been slow to develop. But there are more and more investments in the world.

Many companies want to participate in carbon capture as a way to reduce emissions and meet climate goals. The federal government recently announced a new tax credit to further stimulate investment.

Instead of the provincial government choosing which carbon capture projects can be done, there should be more of an entrepreneurial system, said Jackie Forrest, executive director of the ARC Energy Research Institute, an analysis group linked to the industry in Calgary.

Since opening in late 2015, the Shell’s Quest project has captured and stored more than five million tonnes of CO2, which is stored two kilometers underground. (Kyle Bakx/CBC)

“There’s a bureaucratic process for picking winners and losers,” she said, which is too time-consuming and favors bigger companies.

The government should create an open system where any project can go ahead as long as it meets certain rules and regulations, she said, in the same way that new oil and natural gas wells are approved.

“The reality is not that all of these projects will be funded. So by limiting the number of projects, you’re really limiting, I think, the total amount of investment in Alberta,” she said.

The current system is pushing some companies to explore the development of carbon capture and storage projects outside of Alberta, she said, including in the United States.

The Government of Alberta has received more than 40 applications for carbon capture projects and will announce the next round of approvals in the fall.