Page 5 - NorthAmOil Week 01 2023

NorthAmOil COMMENTARY NorthAmOil

The companies
comprising the
Pathways Alliance have
committed to phasing
out GHG emissions
from their oil sands
production by 2050.

been calling on governments to provide finan- Field work is set to start this winter. Assum-
cial support for these costly schemes. This ing the site is found to meet the alliance and the
is certainly the case in the oil sands, where provincial government’s requirements, a final
the Pathways Alliance companies have been application will be made for a storage agree-
among those counting on financial assistance ment and further regulatory approvals on the
from both the Alberta provincial and Ottawa provincial level.
federal governments. According to Reuters, the Pathways Alliance
Such support is expected to materialise, with intends to file its regulatory application for the
Ottawa announcing CCS-related tax credits last planned CO2 pipeline and storage network in
year. But while the amount of financial support the fourth quarter of 2023. If the scheme pro-
on offer is expected to help reduce the risk asso- ceeds as scheduled, some facilities that do not
ciated with developing CCS projects, it is set to require access to the pipeline in order to reach
be lower than the levels industry groups have the storage hub could be injecting CO2 into the
been calling for. Indeed, when the Canadian facility from 2026.
government unveiled its carbon capture-re- Such a timeline is based on the assumption
lated tax credit plans in April 2022, the Path- that the project would proceed on schedule,
ways Alliance welcomed them as a significant however, whereas in reality major projects in It would not
step forward but also said the credit would not the CCS space could easily run into delays. And
be enough to incentivise a final investment deci- while the Pathways Alliance accounts for the be surprising
sion (FID). Ottawa has indicated that it will offer majority of oil sands production, other compa- if the alliance
50% tax credits for CCS, but negotiations were nies could beat them in the race to build new
ongoing as of December and expected to extend CCS capacity in the oil sands. In December, it continues to push
into 2023. emerged that Athabasca Oil Co., which is Can-
Now, the agreement with the Alberta govern- ada’s tenth largest oil sands producer, intended back against the
ment marks another step forward for the Path- to proceed with a CCS project at its Leismer oil
ways Alliance in particular. sands site in 2023. While smaller in size, this most ambitious
project suggests that other oil sands producers government
What next? are keen to pursue CCS as well.
The proposed CCS hub that the alliance is aim- Despite its decarbonisation push, however, emissions
ing to build is estimated to cost CAD16.5bn the Pathways Alliance continues to clash with
($12.3bn) by 2030, with the Pathways Alliance Ottawa over medium-term emissions targets for targets.
anticipating spending CAD24bn ($17.8bn) on the oil and gas industry. Indeed, in late Decem-
its emissions-reduction initiatives in total by the ber Dilling warned that the federal government’s
same year. In the group’s latest announcement, targets for cutting emissions by 2030 would not
the Pathway Alliance’s president, Kendall Dil- be achievable for the oil and gas industry until
ling, said Alberta’s geology made it “one of the at least 2035. It would not be surprising if the
most ideally suited places in the world to safely alliance continues to push back against the most
inject and permanently store CO2”. ambitious government emissions targets.™

Week 01 05•January•2023 www. NEWSBASE .com P5