Page 5 - NorthAmOil Week 15 2022

NorthAmOil COMMENTARY NorthAmOil

Canada’s oil patch
already has operational
CCUS capacity,
including Shell’s Quest
project.

with early plans involving the establishment of everybody’s economic models, but it doesn’t
a carbon capture network linking more than 20 address every hole in the model,” Enbridge’s
facilities and transporting their emissions to a director for low carbon development, Adam
proposed hub. Chalkley, was quoted by the Financial Post as
The alliance said that based on its initial saying. “[There is] this need for not only upfront
assessment, the government’s proposed tax capital through the [tax credit] but also how
credit represented “a positive step” for efforts to to get some predictability on the back end for
collaborate on climate change goals. the value of offsets and carbon credits in the
“We will be carefully reviewing the imple- market.”
mentation details of the tax credit to learn how
it can be applied to help us advance our unprec- What next?
edented plan to achieve meaningful emissions Canada already has operational CCUS capacity
reductions by 2030 and ultimately our goal – notably Shell’s Quest project, which serves the
of net-zero emissions from oil sands opera- Athabasca Oil Sands Project (AOSP). However,
tions by 2050,” the alliance stated. “Because of the majority of new CCUS proposals for the oil
the amount of long-term capital investment sands region are at the pre-FID stage. The credits make
required to build carbon capture and storage A number of proposals have been
infrastructure, and the speed we need to move announced, especially in the past year or so. it more likely that
at to meet 2030 targets, the countries that are Among these is the Pathways alliance’s plan, at least some of
doing this successfully are all using a collabora- as well as a proposal by Shell for a second
tive model where governments are co-investing CCUS facility, known as Polaris, to serve the these proposals
alongside industry.” super-major’s Scotford complex. And mid-
However, given the high capital costs of large- stream companies have unveiled their own will now advance
scale carbon capture initiatives, it appears likely proposals for CCUS infrastructure.
that Canadian oil and gas producers would con- Earlier in April, the Alberta government to FID.
tinue to look elsewhere for additional financial shortlisted six bidders for the development of
support. CCUS hubs in the province. It will be opening
“This in and of itself probably isn’t enough applications for spots on a second approved
for a final investment decision [FID], but it’s a bidder list between April 25 and May 2, which
very important step. We’re generally pleased,” suggests that it anticipates further interest in the
a senior adviser to the Pathways alliance, Mark development of such hubs. Indeed, it is possible
Cameron, was quoted by Reuters as saying. that the federal tax credits could help encour-
Industry groups will seek additional sup- age companies to apply to build CCUS capacity.
port from programmes including the Canada Certainly, the credits make it more likely that at
Infrastructure Bank and Emissions Reduction least some of these proposals will now advance
Alberta, according to the news service. to FID even if more funding will be needed from
“This definitely fills in the big blank space in other bodies.™

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