ALBERTA, CANADA
SAVE TAXPAYERS $$$ FROM CCS FOR FRACKING
January 09, 2025
CALGARY — The fate of Canada’s largest proposed carbon capture and storage project is even more uncertain after Prime Minister Justin Trudeau’s resignation announcement this week amplified existing unknowns around the future of energy and climate policy in Canada, experts say.
The $16.5-billion high-profile project in question would capture harmful carbon dioxide emissions from the oilsands, Canada’s heaviest-emitting sector.
It would be built by the Pathways Alliance, a consortium whose members include some of Canada’s largest energy companies.
But industry watchers say the project’s future is cloudy due to current political turmoil and the likelihood that a new federal government will be elected this year.
“I can’t imagine a huge project like that could really move forward in a time like right now,” said Michael Bernstein, executive director of the non-profit group Clean Prosperity.
“When you’re looking at a project that has at least a 15-year time horizon, you want as much certainty as possible. And there’s just more uncertainty than I can remember in my whole time doing this work right now.”
The Pathways Alliance is made up of six oilsands companies that have jointly committed to achieving net-zero greenhouse gas emissions from oilsands production by 2050.
Their proposed project, the centrepiece of that commitment, would capture carbon dioxide emissions from more than 20 oilsands facilities in northern Alberta and transport them 400 kilometres away by pipeline to a terminal in the Cold Lake area, where they would be stored in an underground hub to prevent them from entering the atmosphere.
The project would be one of the largest carbon capture and storage projects in the world, if it came to fruition. But while the companies first proposed the joint project in 2022, they have not yet made the final investment decision required to proceed.
Pathways has spent much of the time since then lobbying for federal and provincial support.
A spokeswoman for the Pathways Alliance declined to comment Monday when asked about the current Canadian political situation.
Scott Crockatt — spokesperson for the Business Council of Alberta, a group whose membership includes major oilsands companies — said while an extended period of political uncertainty poses challenges for businesses overall, the Alberta companies that have proposed decarbonization projects in recent years remain committed to that goal.
“Most businesses who were looking at decarbonization projects and other types of sustainability projects were doing it for sincere business reasons, like generating value and reducing long-term risk,” Crockatt said.
“So I actually don’t think that underlying motivation is going to change with political cycles.”
But the oil industry has also repeatedly said that investing in carbon capture, which remains a hugely expensive technology, cannot happen without significant levels of government support.
The federal Liberal government, which has publicly called on the oil industry to move faster on its emissions-reduction promises, created an investment tax credit for carbon capture and storage projects in an effort to get companies to move ahead.
The Liberal government has also promised a mechanism to backstop the price of carbon in order to give certainty to companies considering investing in emissions-reducing technology. But while the federal Canada Growth Fund has been in talks with the Pathways Alliance on this topic, details of a project-specific agreement have yet to be hammered out.
The Canada Growth Fund did not reply to a request for comment.
Heather Exner-Pirot, special advisor on energy to the Business Council of Canada, said the problem for Pathways is that with polls showing the Conservatives are likely to win an upcoming federal election, it’s unclear how far a Pierre Poilievre government would go to financially support the group’s flagship project.
While Poilievre has been clear on his desire to do away with the consumer carbon tax, he has not said what will he do about Canada’s industrial carbon pricing system and will likely have less of a climate-oriented agenda than the present Liberal government.
“It doesn’t sound, from everything they (the Conservatives) have been saying, like they would support what you would need to do to get Pathways Alliance over the hump in the time frame we’ve been looking at,” Exner-Pirot said.
“They don’t seem to be very keen on it. It’s just very expensive.”
Andrew Botterill — energy, resources and industrials partner at Deloitte Canada — said any future weakening of the industrial carbon pricing system or emissions allowances would damage the business case to invest in decarbonization technology. That’s why a looming election on the horizon could delay or prevent final investment decisions, he said.
“Companies are looking for long-term certainty and an understanding on what the market’s going to look like for the next 10 years, and 20 years and 30 years,” Botterill said.
“When they see things on the horizon that are uncertain I think it slows the big capital spends.”
The current federal emissions reduction plan — which 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 — envisions national carbon capture and storage capacity more than tripling by 2030.
The Pathways Alliance itself had originally set 2030 as the date it hoped its project would be sequestering carbon.
But Clean Prosperity’s Bernstein said it’s very difficult to see how that time frame could be met at this point.
“These projects take the better part of a decade to complete, and we just don’t have that time available,” he said. He added getting the Pathways project off the ground was always going to require the companies, the province of Alberta and the federal government to co-operate and compromise — and those goals seem farther away than ever.
“What we know at this point right now is there is no deal that works for all the parties,” he said.
“It’s too bad that we don’t have one today, and that we lack clarity on whether there will ever be one.”
This report by The Canadian Press was first published Jan. 9, 2025.
Amanda Stephenson, The Canadian Press
CALGARY — The fate of Canada’s largest proposed carbon capture and storage project is even more uncertain after Prime Minister Justin Trudeau’s resignation announcement this week amplified existing unknowns around the future of energy and climate policy in Canada, experts say.
The $16.5-billion high-profile project in question would capture harmful carbon dioxide emissions from the oilsands, Canada’s heaviest-emitting sector.
It would be built by the Pathways Alliance, a consortium whose members include some of Canada’s largest energy companies.
But industry watchers say the project’s future is cloudy due to current political turmoil and the likelihood that a new federal government will be elected this year.
“I can’t imagine a huge project like that could really move forward in a time like right now,” said Michael Bernstein, executive director of the non-profit group Clean Prosperity.
“When you’re looking at a project that has at least a 15-year time horizon, you want as much certainty as possible. And there’s just more uncertainty than I can remember in my whole time doing this work right now.”
The Pathways Alliance is made up of six oilsands companies that have jointly committed to achieving net-zero greenhouse gas emissions from oilsands production by 2050.
Their proposed project, the centrepiece of that commitment, would capture carbon dioxide emissions from more than 20 oilsands facilities in northern Alberta and transport them 400 kilometres away by pipeline to a terminal in the Cold Lake area, where they would be stored in an underground hub to prevent them from entering the atmosphere.
The project would be one of the largest carbon capture and storage projects in the world, if it came to fruition. But while the companies first proposed the joint project in 2022, they have not yet made the final investment decision required to proceed.
Pathways has spent much of the time since then lobbying for federal and provincial support.
A spokeswoman for the Pathways Alliance declined to comment Monday when asked about the current Canadian political situation.
Scott Crockatt — spokesperson for the Business Council of Alberta, a group whose membership includes major oilsands companies — said while an extended period of political uncertainty poses challenges for businesses overall, the Alberta companies that have proposed decarbonization projects in recent years remain committed to that goal.
“Most businesses who were looking at decarbonization projects and other types of sustainability projects were doing it for sincere business reasons, like generating value and reducing long-term risk,” Crockatt said.
“So I actually don’t think that underlying motivation is going to change with political cycles.”
But the oil industry has also repeatedly said that investing in carbon capture, which remains a hugely expensive technology, cannot happen without significant levels of government support.
The federal Liberal government, which has publicly called on the oil industry to move faster on its emissions-reduction promises, created an investment tax credit for carbon capture and storage projects in an effort to get companies to move ahead.
The Liberal government has also promised a mechanism to backstop the price of carbon in order to give certainty to companies considering investing in emissions-reducing technology. But while the federal Canada Growth Fund has been in talks with the Pathways Alliance on this topic, details of a project-specific agreement have yet to be hammered out.
The Canada Growth Fund did not reply to a request for comment.
Heather Exner-Pirot, special advisor on energy to the Business Council of Canada, said the problem for Pathways is that with polls showing the Conservatives are likely to win an upcoming federal election, it’s unclear how far a Pierre Poilievre government would go to financially support the group’s flagship project.
While Poilievre has been clear on his desire to do away with the consumer carbon tax, he has not said what will he do about Canada’s industrial carbon pricing system and will likely have less of a climate-oriented agenda than the present Liberal government.
“It doesn’t sound, from everything they (the Conservatives) have been saying, like they would support what you would need to do to get Pathways Alliance over the hump in the time frame we’ve been looking at,” Exner-Pirot said.
“They don’t seem to be very keen on it. It’s just very expensive.”
Andrew Botterill — energy, resources and industrials partner at Deloitte Canada — said any future weakening of the industrial carbon pricing system or emissions allowances would damage the business case to invest in decarbonization technology. That’s why a looming election on the horizon could delay or prevent final investment decisions, he said.
“Companies are looking for long-term certainty and an understanding on what the market’s going to look like for the next 10 years, and 20 years and 30 years,” Botterill said.
“When they see things on the horizon that are uncertain I think it slows the big capital spends.”
The current federal emissions reduction plan — which 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 — envisions national carbon capture and storage capacity more than tripling by 2030.
The Pathways Alliance itself had originally set 2030 as the date it hoped its project would be sequestering carbon.
But Clean Prosperity’s Bernstein said it’s very difficult to see how that time frame could be met at this point.
“These projects take the better part of a decade to complete, and we just don’t have that time available,” he said. He added getting the Pathways project off the ground was always going to require the companies, the province of Alberta and the federal government to co-operate and compromise — and those goals seem farther away than ever.
“What we know at this point right now is there is no deal that works for all the parties,” he said.
“It’s too bad that we don’t have one today, and that we lack clarity on whether there will ever be one.”
This report by The Canadian Press was first published Jan. 9, 2025.
Amanda Stephenson, The Canadian Press
Trudeau's Exit Sparks Oil Industry Optimism in Canada
By Felicity Bradstock - Jan 09, 2025
Alberta's government is signing new deals and expanding pipelines to boost oil production and exports.
The resignation of Prime Minister Justin Trudeau, who championed green energy initiatives, may lead to a more favorable policy environment for the oil industry.
The expansion of the Trans Mountain pipeline has increased Canadian oil exports to the US, but proposed US tariffs threaten to disrupt this trade.
Canada is expected to continue growing as an oil power in the coming years as the Alberta government signs new expansion deals, a new tanker terminal is opened in Vancouver, and Prime Minister Justin Trudeau resigns. The government of the major oil-producing province of Alberta signed a new agreement with Calgary-based pipeline company Enbridge this January aimed at increasing oil exports to the U.S. The deal will establish a working group with the Alberta Petroleum Marketing Commission (APMC), which will be tasked with evaluating future egress, transport, storage, terminaling, and market access opportunities. The team will support plans to increase Alberta’s oil production in line with Enbridge’s planned pipeline expansion projects.
Alberta’s Premier Danielle Smith stated, “[It] aligns with Enbridge's plans to enhance its existing pipeline systems, and we look forward to partnering with them to enhance cross-border transport solutions. This will also allow us to play a role in supporting the United States in its energy security and affordability goals.”
The group’s work is also expected to improve bureaucratic procedures and streamline regulations and permitting approvals for Enbridge and other companies. “We're prepared – and exceptionally well-positioned – to work with producers and governments to deliver capacity as production ramps up, providing cost-effective, scalable, executable solutions now and through the decade that support North American energy security, reliability and affordability,” Enbridge’s CEO Greg Ebel stated.
At the beginning of 2024, Smith outlined plans to double Alberta’s oil and gas production. “America has become the largest producer of oil and gas for export…while all the politicians have said they’re going in the opposite direction,” Smith said. “I think we should just double down and decide we’re going to double our oil and gas production because truly, where else does America want to get its oil from?” she added.
Smith emphasized this month that the U.S. produces 13 million bpd of oil and consumes 20 million. The U.S. has long relied on its North American neighbor to provide this additional crude. However, President-elect Donald Trump has stated his intention to impose new 25 percent tariffs on Canadian imports once in office. This is aimed at encouraging U.S. companies to produce more oil and gas domestically and reduce the country’s reliance on foreign powers.
The premier is currently in talks with several pipeline companies to encourage greater expansion in the oil and gas industry in the coming years. Smith expects the expansion of pipelines to support the anticipated growth in Alberta’s oil and gas production in the coming years, providing market access to safeguard the province’s oil export potential.
Washington has recently increased its imports of Canadian crude thanks to the launch of a newly expanded tanker terminal just across the border near Vancouver. The increased shipments of Canadian oil to the U.S. state have displaced imports from Latin America according to recent reports.
The Trans Mountain Expansion (TMX) pipeline and pier project came online in May last year, tripling its capacity and increasing U.S. oil imports from Canada. The project was aimed at enhancing export routes from land-locked Alberta establishing a connection with Vancouver harbour. The U.S. Energy Information Administration stated, “Since TMX came online in May, early data indicate that refiners on the U.S. West Coast have been key buyers of the new export volumes. Between June and September, the U.S. West Coast accounted for just over half of all maritime crude oil exports out of Western Canada, with the rest going to destinations in Asia.”
This week, Canadian oil and gas stocks rose following news of Prime Minister Justin Trudeau's resignation. Trudeau’s government was often seen as being at odds with Canada’s oil industry and the Alberta government, as the Prime Minister pursued a green transition. The introduction of several climate pledges in recent years and support for more renewable energy projects made Alberta’s oil outlook look increasingly uncertain.
In 2023, Alberta’s government introduced a seven-month moratorium on green energy projects, to focus on agricultural growth. Smith said the government would be putting “agriculture first”, as well as restricting the development of renewable energy projects. The move was heavily criticized by environmentalists who said the government’s decision had little to do with environmental concerns and more to do with the desire to continue bringing in oil and gas revenues. This is just one of the examples in which Alberta’s policies did not align with overarching federal aims for a green transition.
While Trudeau’s Liberal Party of Canada will remain in office under a new leader – who has yet to be chosen – the next federal election must take place by October. This means that the future of Canada’s oil and gas will largely lie in the hands of the new government, although Alberta is expected to continue staunchly supporting the expansion of the province’s oil and gas industry in the coming years.
By Felicity Bradstock for Oilprice.com
No comments:
Post a Comment