Fossil fuel companies in Canada have made carbon capture a key part of their pledges to reduce greenhouse gas emissions.
The idea is to minimize the amount of carbon that ends up in the atmosphere, while continuing to extract more oil and gas.
But is that realistic? And should the federal government be footing the bill, in the form a new multibillion-dollar tax credit and other incentives? The Alberta government also announced a new tax credit that could total as much as $5 billion in taxpayer money.
Here is a closer look at the technology, where it is being used in Canada, and how it could play into the pivotal climate talks that begin Thursday in Dubai.
What is carbon capture?
Carbon capture has become something of an umbrella term applying to any technology that captures carbon dioxide (CO2) and injects it underground. That can mean filtering out carbon dioxide at an emissions source — such as a factory, power plant or oilsands facility — through what’s known as “carbon capture, utilization and storage” (CCUS), or removing carbon dioxide that’s already in the air with a process known as “direct air capture.”
So far, most carbon capture projects around the world have used the CCUS model. Carbon dioxide concentrations are much higher coming out of a source like a furnace, making it cheaper and easier to extract.
Often in these cases, the captured carbon is used to extract more oil and gas from the ground — resulting in more emissions — with a process known as enhanced oil recovery (EOR). Carbon capture technology was originally developed by oil and gas companies for this purpose, and EOR remains its primary application worldwide.
Where is carbon being captured in Canada?
In Canada, there are eight commercial carbon capture facilities in operation, all in Alberta or Saskatchewan, according to Natural Resources Canada. That includes five commercial-scale carbon management projects, along with three carbon transport and storage hubs that service multiple capture projects.
Six of those projects use at least some of the captured carbon for EOR.
More than a dozen additional projects are under construction or in the planning stages, including a proposal by the Pathways Alliance, a group representing major oilsands producers.
Pathways’ $16.5-billion plan would involve building a massive pipeline to transport carbon from roughly 20 carbon capture facilities at oilsands sites in northern Alberta to an underground hub near Cold Lake, Alta., where it will be pumped into the earth and stored underground.
There are also a number of direct air capture projects in the early stages, including one off the coast of British Columbia that would sequester carbon under the ocean, and another in Quebec that received $25 million in provincial government funding.
That equates to roughly 2.7 million tonnes of CO2 equivalent per year — less than three per cent of the reductions needed for the oil and gas sector to contribute a fair share to Canada’s 2030 target of a 40-45 per cent reduction below 2005 levels, the IISD says.
The analysis concluded the technology is “energy intensive, slow to implement, and unproven at scale, making it a poor strategy for decarbonizing oil and gas production.”
In another recent report, the International Energy Agency said oil and gas companies need to start “letting go of the illusion” that “implausibly large” amounts of carbon capture are the solution to the global climate crisis.
There are also questions about whether these projects are safe for surrounding communities and how long they will be monitored — and who will pay for that monitoring.
In addition, the production of oil and gas is just one side of the equation, accounting for only about 15 per cent of the sector’s emissions, according to the International Energy Agency. The bulk of oil and gas emissions come from their end uses, such as driving a car or heating a home.
Angela Carter, an associate professor at Memorial University who studies environmental policies, and one of the authors of the IISD report, said carbon capture should not be considered a “viable solution” for reducing emissions.
“We have a very short supply of public funds to put towards solving the climate crisis, so public money has got to go towards technology that can give us the kinds of emission reductions that we need,” she said in an interview.
A United Nations report released last week said the world needs to cut its projected 2030 emissions by 42 per cent to be on track to limit warming to 1.5 C by the end of the century.
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How much taxpayer money is going into carbon capture?
The federal government committed to eliminating “inefficient” fossil fuel subsidies earlier this year, but that doesn’t include carbon capture projects.
A new carbon capture tax credit, confirmed in last week’s fiscal update, was initially set to be $2.6 billion over five years, but the federal government has since added another $500 million.
Carbon capture projects are also eligible for the Clean Fuels Fund, which totals $1.5 billion over five years, and a host of other subsidy programs.
In a statement, Jane Furlong, a spokesperson for Natural Resources Canada, said carbon capture technology is being used “alongside other tools in the broader climate toolbox to help achieve Canada’s climate objectives.”
“There is no credible path to net-zero emissions without carbon management technologies, and their deployment must be rapid and immense, and requires strong policy support,” Furlong said in an email.
Pathways Alliance is counting on federal money to help bankroll its project.
“We view this as an investment in Canada and the future of the industry and the future of Canada as a green tech technology leader,” president Kendall Dilling said in an interview.
Kendall Dilling, the head of the Pathways Alliance, is seeking funding from the federal government for a $16.5-billion carbon capture project in northern Alberta. (Jeff McIntosh/The Canadian Press)
Despite the industry posting record profits in recent years, Dilling said government money is needed to keep it competitive.
“We sell our product into an international commodity market,” he said. “We’re competing against oil-producing nations around the world who won’t be making similar investments, and we still have to remain an investable proposition for our shareholders.”
Can carbon capture be considered part of the solution?
Despite questions around the effectiveness of carbon capture when implemented on a larger scale, many climate scientists and energy experts say it can be at least part of the solution in reducing greenhouse gas emissions.
In particular, it can be useful in lowering emissions at facilities that produce goods like cement and steel where there aren’t many alternatives, Carter said.
Environmental groups are concerned carbon capture will be used by oil and gas companies at COP28 as a way to defend record levels of production.
A liquified natural gas and carbon capture facility at Barrow Island, Australia. The oil giant Chevron received approval to develop the site into a major liquefied natural gas export facility on the basis it could capture and store 80 per cent of the CO2 mixed in with the fuel, instead of releasing it. (Lisa Maree Williams/Bloomberg)
Sultan Ahmed Al Jaber, the president of this year’s conference, and the head of United Arab Emirates’ state-owned oil company ADNOC, has promoted carbon capture as a way to reduce emissions. An analysis by the U.K.-based environmental group Global Witness found it would take 343 years to remove the carbon his company is projected to produce by 2030.
What questions do you have about how the world will tackle climate change? We want to hear from you ahead of the COP 28 climate meeting. Send an email to ask@cbc.ca.
“My biggest fear is that because of this promise of carbon capture, we lose a decade,” said Julia Levin of the Canadian group Environment Defence.
“Then it’s 2035 and we’re no closer to keeping to eliminating our emissions and we’ve misallocated huge amounts of public dollars towards these projects.”
Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.
The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs
It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.
The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.
Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.
Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.
This report by The Canadian Press was first published Oct. 22, 2024.
