The Alberta government kicked off a flurry of activity three years ago when it began awarding the rights to underground caverns for storing carbon emissions.
The gold rush was underway as companies announced dozens of projects and competed to stake their claim for those rights.
The wave of new projects raised expectations that the oilpatch and other heavy-emitting industries were on the precipice of a building boom to jumpstart the carbon-capture industry and significantly cut greenhouse gas emissions from the production of oil and gas and other industrial products.
The majority of proposed carbon capture and storage (CCS) projects are based in Alberta, but there are others planned and being piloted in several other provinces and in a variety of sectors including fertilizer, cement and power plants.
Of the 25 projects announced in the province in recent years, however, only one has so far reached an agreement with the provincial government.
On Monday, Shell Canada and ATCO EnPower formally signed the paperwork to advance the Atlas carbon capture hub, located east of Edmonton. The companies will now apply for permits before looking for industrial players who will want to use the facility to inject their carbon emissions underground.
Progress on the project comes at a time when there is plenty of skepticism surrounding the sector and questions about how many of the proposed facilities will actually be built.
In May, Capital Power pulled the plug on a proposed CCS project at a natural gas fired power plant in Alberta. Last month, a report from Deloitte concluded the cost of CCS projects is so high that in many cases, it is “economically unviable.”
The Pathways Alliance is the largest proposed project and involves several large oilsands companies in northeast Alberta. The companies have yet to make a final investment decision on whether to proceed.
“You have to look at each one of them individually,” said Susannah Pierce, president of Shell Canada, in an interview with CBC News.
“It really depends on the project itself. I think it also would depend on the comfort level that you have with CCS,” she said, pointing to Shell’s experience building the Quest CCS facility in Alberta nearly a decade ago.
The technology has always faced questions about how realistically it can be built on a large scale, whether it makes financial sense for governments to subsidize and whether the money would be better spent on renewable energy.
The federal emissions reduction plan calls for Canada to cut its emissions by 40 to 45 per cent below 2005 levels by 2030 and to reach net-zero emissions by 2050. That plan includes a tripling of CCS capacity by 2030.
Up and running
Quest is one of only a handful of CCS facilities currently operating in Canada.
“That doesn’t seem great,” said Sean McCoy, an assistant professor in…
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