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Despite a pledge of $865-million in public funds, Shell Canada says it's not certain that a planned $1.35-billion carbon capture and storage project near Edmonton will ever go ahead.

The Alberta government has been betting big lately that the controversial and emerging technology, which involves collecting carbon dioxide emission from an oil refinery and then pumping it underground, will help reduce the province's pollution and improve its battered environmental image internationally.

Alberta has created a $2-billion carbon capture and storage fund, and Shell became the first energy company yesterday to receive money from it for its Quest pilot project, which is jointly owned by Shell Canada, Chevron Canada and Marathon Oil Sands.

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The province has signed a letter of intent to provide $745-million in funding for the carbon capture and storage project over the next 15 years. The federal government also promised $120-million.

However, Graham Bojé, a Shell Canada vice-president, told reporters that before a "final investment decision" is made on the project, several steps need to be taken, including public consultation and further technical work. "But today is a very important step. We are on a journey," he said.

If the project goes ahead, likely no earlier than 2015, it's expected it will collect more than one million tonnes of carbon dioxide a year from an oil sands upgrader plant northeast of Edmonton and eventually store it more than two kilometres underground.

While the technology has been used on a small scale, it is still largely experimental in large projects.

Federal Natural Resources Minister Lisa Raitt said the project is a signal to the world that Canada takes environmental issues seriously. She acknowledged that while it is an "expensive mitigation device," governments and industry have "to start somewhere."

"We know we are on the right path," she said, adding that carbon capture and storage technology has the potential to vastly reduce Canada's overall greenhouse-gas emissions in the coming decades.

Alberta Energy Minister Mel Knight said the province is still negotiating carbon-capture deals with other companies, and he is hopeful the Quest project will provide the government with more information about the technology that will help lower costs over time. "Make no mistake - this is the start of something big," he said.

But Alberta Liberal energy critic Kent Hehr said the province can't afford to gamble so much money on "something that is still a bit of an experiment" while it stares down a $6.9-billion projected deficit.

He's concerned the funding announcement was a public-relations move ahead of an international climate-change conference being held in Copenhagen later this year.

Paul Hinman, interim leader of the Alberta Wildrose Alliance Party, fears the Quest project is a future "boondoogle."

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