In the fourth and final feature in our series The New Elements, writer Hilary Klassen examines carbon capture and what it can offer Saskatchewan.
As the planet pivots toward a massive energy transition, interest in carbon sequestration is climbing. We may assume that global commitments to reduce carbon emissions will gradually push carbon capture into redundancy. But both the federal and Saskatchewan governments have recently signaled they will make significant investments in Carbon Capture Utilization and Storage (CCUS).
“The application of carbon capture to large emitting industries is basically identified as a key strategy that’s going to be required to decarbonize,” says Mark Demchuk, national director, strategy and stakeholder relations at the International CCS Knowledge Centre. Since 2014, the Centre has been sharing its knowledge and experience of large-scale CCS with Saskatchewan’s Boundary Dam 3 and providing advocacy and support for further CCS project deployment in Canada.
The technology is not without detractors. Some activists suggest CCS is just a way to prop up the oil and gas industry. They may have a point. In Weyburn, Whitecap Resources Inc. uses sequestered carbon for its Enhanced Oil Recovery (EOR) process. The process involves injecting CO2 into an oil reservoir and can significantly increase oil production. EOR emits 82 per cent fewer emissions than traditional extraction methods according to Saskatchewan’s energy minister.
Saskatchewan is a recognized leader in CCS development. But Demchuk says, currently the bulk of activity and new projects are happening in Alberta. “There is existing infrastructure in Alberta in the form of the Alberta Carbon Trunk Line, which is already in operation, that would support additional capture projects,” he says. The Alberta Carbon Trunk Line is a 240-kilometre pipeline completed in July 2020, that collects excess carbon dioxide from the province of Alberta and transports it to various oil reservoirs around the province for EOR applications.
“The Alberta government has come out with a program to identify and issue the rights to use pore storage reservoirs to provide the permanent storage that is required for CO2. It’s called the Carbon Sequestration Tenure Management Program,” Demchuk reports. The Saskatchewan government investment into CCS could top $2 billion. Like Alberta, the province has made a commitment to expand the provincial pipeline infrastructure to include CO2 pipeline projects. The infrastructure at the Weyburn project would enable other operators to pursue greenfield CO2 EOR operations in southeast Saskatchewan.
Projects like these may reassure large-scale industries that would have a challenging time pivoting to other energy sources. The cement industry is one of these. “Making cement emits a significant amount of CO2. There currently isn’t an alternative process that’s been proven on an industrial scale to make cement without emitting CO2,” says Demchuk.
The global fertilizer, steel and petrochemical industries are in similar positions. These industries are under pressure to reduce their carbon footprint, particularly in countries that have made a commitment to reduce GHG emissions. Canada has made an international commitment to reduce emissions by 45 per cent by the year 2030.
“Most large-scale companies over the past few years have begun to develop or have developed their own corporate sustainability strategies and, depending on the industry, depending on the company, they will, to a greater or lesser degree, have some component in that strategy that includes reducing emissions,” Demchuk says. “Application of CCS is but one tool to reduce emissions and depending on the industry, it might be the best solution.”
There is increasing motivation within these industries to become responsible corporate citizens of the world. But how do these large industries located in pro-climate change countries that have made emission-reduction commitments compete with countries who have not made such commitments?
“We all have to remember that, for the most part, Canada’s large industries compete in a global market, and if your competitors operate in a jurisdiction where there is no carbon tax or there is no commitment to reduce emissions, any money you have to spend here in Canada to achieve those makes you even less competitive against your global competitors if they’re not having to do that,” Demchuk observes. The risk is that Canada becomes uncompetitive globally and therefore less successful economically. The other risk is that shareholder capital could relocate to countries where emissions targets have not been set and associated costs are not a factor.
More support from the federal government in the form of an investment tax credit could mitigate some of this risk. When the federal budget dropped on April 7, 2022, the single biggest climate item was the carbon capture investment tax credit. This much-anticipated (yet controversial for some) legislation will deliver $2.6 billion in the first five years to projects that permanently store captured carbon dioxide. However, the budget indicates EOR is not an eligible use of captured CO2.
Clearly, we’ve reached a pivotal moment in the history of energy in Canada. The government is riding the razor’s edge between aiming for a zero-carbon future and simultaneously supporting oil and gas development. Unfortunately, no amount of tree planting or consumption of carbonated beverages can deliver us from this moment. Perhaps only hindsight will tell us whether carbon capture is a “dangerous distraction,” as climate activists charge.