Alberta details new multibillion-dollar carbon capture support program

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Alberta has doubled-down on its support for carbon capture for emissions reduction with a new multibillion-dollar grant program for heavy industry, as the Premier and Ottawa trade barbs over Canada’s green energy strategy ahead of the COP28 climate summit.

Danielle Smith on Tuesday introduced the program to build new carbon capture, utilization and sequestration (CCUS) projects in the province, including for oil and gas. She said it will have a price tag of between $3.5-billion and $5-billion, depending on the number of projects. It will be partly funded by Alberta’s carbon tax on large emitters and will cover up to 12 per cent of capital costs for new CCUS efforts.

Ms. Smith touted the Alberta Carbon Capture Incentive Program, and the province’s calculation that it has reduced methane emissions from the oil and gas sector by 45 per cent since 2014, as evidence her government can pursue industrial development while protecting the environment. The twin announcements were made just days ahead of the Premier’s trip to COP28, this year’s UN climate change conference in Dubai, United Arab Emirates.

Ms. Smith intends to pitch global players, including investors, on Alberta’s energy and environmental policies at the meeting. Scott Moe, Saskatchewan’s Premier, also plans to attend in hopes of selling the world on his province’s approach. Their version of environmental stewardship, however, clashes with the one put forward by federal Environment Minister Steven Guilbeault, who will also attend the global gathering on behalf of Canada.

Ms. Smith and Mr. Moe this week invoked their province’s respective sovereignty laws to push back against Ottawa’s draft Clean Electricity Regulations (CER), which the federal Liberal government wants to implement in order to create an electricity grid with net-zero greenhouse gas emissions by 2035.

Mr. Guilbeault on Tuesday called Ms. Smith’s decision to deploy the Alberta Sovereignty Within a United Canada Act in an attempt to thwart Ottawa’s 2035 ambitions a “largely symbolic gesture.”

Ms. Smith, in the press conference tied to the CCUS announcement, said the invocation of the sovereignty legislation will be more than symbolic if Ottawa does not back down. Ms. Smith and Mr. Moe believe a 2050 target for their electricity grids, which rely heavily on natural gas to produce power, is more realistic. Mr. Moe’s government on Tuesday said it would use its Saskatchewan First Act to review the economic effects of the proposed CER.

Ms. Smith has long argued that Alberta needs more time to green its electricity grid because technology such as CCUS, that will help it achieve its goals, are still under development.

Ms. Smith said on Tuesday that the new CCUS program would help various industries reduce their emissions by incorporating carbon capture into their operations.

“The simple fact is this: CCUS works, and advancing this technology is critical to the future of our energy industry and to the new industries that we’re attracting to Alberta,” Ms. Smith said.

The program is the latest in a long line of Alberta forays into carbon capture.

Emissions Reduction Alberta and Alberta Innovates, bodies that operate arm’s length from the government, have both invested in various carbon capture and storage (CCS) projects to help support the commercialization of new, innovative technologies.

The province has also encouraged the development of carbon storage hubs, in which operators collect, transport and permanently store captured carbon dioxide from industrial emissions. Last year, the government selected 25 projects to begin exploring how to develop the hubs.

The new CCUS program isn’t specific to oil and gas; it has been designed to assist multiple other industries, including power generation, hydrogen, petrochemicals and cement. But Energy Minister Brian Jean said it would have a “tremendous” impact on emissions reduction in the oil sands region, in the north of the province.

“Alberta is very well positioned to provide the responsibly produced energy the world needs, and CCS will play a key component of that,” he said Tuesday.

The province’s new program is designed to build on the federal government’s planned tax credit for CCS projects, which will cover up to half of capital costs.

Carbon capture, however, is far from universally accepted as a path to net zero.

Keith Brooks with Environmental Defence, a Canadian advocacy organization, said in a statement Tuesday that Alberta’s new CCUS program would put billions of taxpayer dollars on the line for a risky technology.

“Albertans should ask whether they want their tax dollars to go toward supporting unproven technology for oil and gas companies, when these companies continue to rake in excessive profits,” he said.

But the Pathways Alliance, a group of Canada’s largest oil sands companies, says CCS is an important tool in the region, where producers are in close proximity to one another and to the geology required to store captured carbon deep underground.

A massive CCS project to help bring oil sands production to net-zero emissions is on track to begin operating in 2030, according to Pathways.

Pathways president Kendall Dilling said Tuesday that Alberta’s new program is a clear indication of the province’s commitment to responsibly produced Canadian energy.

With reports from Ian Bailey in Ottawa and The Canadian Press