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These 2 oil companies say they've reached 'net-negative' emissions through carbon capture – CBC.ca

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Banks, grocery stores, pop makers — it seems like every day, another company is pledging to become a “net-zero” emitter of greenhouse gases — at some point years or decades in the future.  

But a pair of Alberta companies say they’ve not only achieved the mark but are actually storing more emissions underground than they are producing from their operations.

Enhance Energy and Whitecap Resources both use carbon capture technology to stash emissions far below the surface.

For Enhance, the company buys the CO2 from a refinery and a fertilizer plant in central Alberta. The CO2 is transported through a pipeline to its facility north of Red Deer, where it is pumped into an old oil reservoir. The CO2 helps to free up more oil and increase the amount of crude produced at the site, a process known as enhanced oil recovery (EOR). 

The private Calgary-based firm began operations last fall. So far, executives say about 4,000 tonnes of CO2 is stored underground every day, which they say is the equivalent of taking 350,000 vehicles off the road — a point of pride for the company. 

Because they’re getting the CO2 from the two large plants but only extracting a small amount of oil at this point, on balance, they say they’re burying more CO2 than their oil will produce.

“I get a warm feeling when I come on site and see that injection well,” said chief executive Kevin Jabusch. “That’s very rewarding. It makes the 10-year effort to put this project together worth it.”

Federal goal is net zero by 2050

Many in the industry, as well as some environmental groups, support the development of carbon capture technology, although there are concerns about how emission reductions are calculated and whether capturing carbon disincentivizes industries from taking action to produce fewer emissions in the first place.

The federal government has set a target of reaching net zero by 2050 and released a blueprint to achieve that goal in December, including hiking the carbon tax from the current price of $30 per tonne to $170 by 2030.

The world should be looking for the cheapest, lowest-carbon source of energy.– Kevin Jabusch, Enhance Energy

Instead of calling Enhance an oil company, Jabusch describes it as a “carbon mitigation company” and said if the carbon tax rises as expected, the day might come when Enhance no longer will need to produce oil anymore to be profitable.

Currently, the company generates revenue from oil production and from selling the carbon credits it gets for sequestering emissions. Alberta charges a carbon tax on heavy industrial emitters, but the province also has a system for companies to earn credits by reducing or storing emissions.

Jabusch said the Alberta government’s carbon tax program for large industrial emitters measures and monitors the carbon they sequester, but that data is not available publicly.

Injecting CO2 to increase output

Production from Enhance’s Clive field is around 200 barrels of oil per day, but with CO2 injection, the company expects output to gradually grow to between 4,000 and 5,000 barrels per day over the next five years.

“We’re very negative today over the full cycle of our of our operation,” said Jabusch, “and in the long term, we think it would be very close to zero.

“Where carbon pricing is headed, we think there’s going to be a strong incentive to maximize the amount of CO2 we put in the ground.”

Enhance Energy is part of the Alberta Carbon Trunk Line project, which takes emissions from the Nutrien Redwater fertilizer factory and the North West Redwater Sturgeon refinery northeast of Edmonton to Enhance’s oil reservoirs near Clive. (CBC News Graphics)

Whitecap has a similar, but much larger, carbon capture project in Saskatchewan. Emissions from a coal power plant in the province and from a coal gasification facility in neighbouring North Dakota are transported to an oilfield near Weyburn, south of Regina.

In each of the last two years, about two million tonnes of CO2 were injected and stored, executives said. The figures are currently being audited. 

The Weyburn facility has operated since 2000 and was acquired by Whitecap in 2017. With growing focus on sustainability and climate change, investor interest in the project has intensified over the last year, said chief executive Grant Fagerheim.

“We’re starting to get some of the bigger funds, not just from Canada, but in the U.S. for sure, and around the world,” he said.

Unlike Enhance, Whitecap does not account for the emissions that will be generated from the eventual use of its oil, saying it has no control over how it is used, making it difficult to calculate.

Enhance Energy says it currently produces about 200 barrels of oil per day, but with the help of carbon capture technology, plans to expand to 4,000 or 5,000 barrels a day. (Kyle Bakx/CBC)

Varying definitions of ‘negative’ emissions

How a company determines whether it claims net-zero or net-negative status varies across the industry and can depend on the emissions that a given company is counting, which are often broken into three groups, or scopes:

  • Scope 1 includes direct emissions from the activities of an organization, such as its industrial operations or the heating of its buildings.
  • Scope 2 refers to indirect emissions, such as if the company uses electricity from a CO2-generating source, such as a gas-fired power plant.
  • Scope 3 also includes indirect emissions, but ones that are out of the organization’s control. For an oil company, Scope 3 includes tailpipe emissions from vehicles or when oil is converted into plastics. The combustion of fuel is often the largest source of emissions from a barrel of oil, compared to production, transportation and refinery activity.

For Enhance, the company said it is net negative on Scope 1, 2 and 3 while Whitecap said it’s net negative on Scope 1 and 2.

By that definition, Whitecap expects to remain net negative even as its oil production increases by an estimated 65 per cent this year following deals to acquire Torc Oil & Gas and NAL Resources Management.

“We will still be a net-negative emitter,” he said. “It is nice to be in this position at this particular time.”

Projects can carry hefty price tag

Fagerheim says he would like to build new carbon capture facilities but that they can be complex projects requiring a large capital investment and new infrastructure, including pipelines.

“I believe that people will see the light of day, but ultimately, we’re doing what’s best for ourselves, and carbon capture utilization and storage is potentially a way into the future,” he said.

The two largest carbon capture projects in Alberta, including the Carbon Trunk Line that Enhance is part of, cost more than $1 billion to develop, and both required hundreds of millions of dollars in government support.

There’s growing interest in carbon capture projects. Last week, Tesla chief and billionaire Elon Musk promised a $100 million US prize for development of the “best” technology to capture carbon dioxide emissions.

In Canada, one of the challenges with investing in a carbon capture project is the uncertainty about the level of carbon tax in the future since the approach to carbon pricing varies by political party.

WATCH | Is carbon capture a solution for the oil industry and climate change?

There are differing viewpoints on the technique to capture carbon emissions and use the CO2 to produce more oil from aging reservoirs. 2:50

Environmental concerns 

Environmental leaders have often had mixed feelings about carbon capture facilities because while harmful emissions are stored underground, the technology may just be enabling industries to maintain the status quo and not focus enough on reducing the use of fossil fuels.

“The science is fairly clear: we are going to need carbon capture in order to tackle the climate crisis,” Jan Gorski, an analyst with the Pembina Institute, a non-profit organization that produces research, analysis and recommendations on policies related to Canadian energy.

“Enhanced oil recovery is a way to ramp up carbon capture and drive down the costs and improve the technology as we work to eventually deploy that to tackling these more challenging sources where we really don’t have a great way to deal with the emissions right now.”

Knowledge gained from carbon capture projects operating now could eventually help reduce emissions in tougher-to-tackle industries such as cement plants and steel production, he said.

Jan Gorski with the Pembina Institute sees developing carbon capture and storage technology as beneficial, especially to eventually help with hard-to-decarbonize industries such as cement and steel production. (Kyle Bakx/CBC)

Some environmental groups suggest the investment in carbon capture facilities would be better spent elsewhere, such as building renewable energy projects. For example, a company could slash emissions in producing the oil, but consumers would still pump out emissions when they use it as a fuel for transportation or heating.

‘The devil is really in the details’

There is also the issue of double counting. Experts say it’s important for any action toward reducing emissions to be properly assessed. For instance, if the emissions from a power plant are used by an oil company to increase the production of an oilfield, both companies can’t take credit for the carbon-capture project.

“I think the key thing is to be clear-eyed about the end goal,” said David Keith, a Harvard University professor of applied physics and public policy based in Canmore, Alta.

Keith also founded and sits on the board of Carbon Engineering, which aims to capture emissions directly from the atmosphere. 

“For me anyway, the end goal has to be driving emissions down to zero to protect us from climate disaster and also doing it in a way that does the least damage to our economy and, in Alberta, trying to find a way forward to provide good jobs for people,” he said.

“Enhanced oil recovery can play some role, but I doubt if it’s going to be very big.”

If oil can actually be entirely net neutral or net negative from its production all the way to its end use, such as powering a vehicle, that would truly be fantastic, said Keith, but “whether or not those companies are doing it, I don’t know. The devil is really in the details.” 

Both companies see a strong future for carbon capture and EOR technologies, especially as demand for oil remains robust around the globe.

“The world should be looking for the cheapest, lowest-carbon source of energy, and we believe we compete very well with that,” said Jabusch, with Enhance.

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Oil Prices Rally As Traders Focus On Tight Supply Outlook – OilPrice.com

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Oil Prices Rally As Traders Focus On Tight Supply Outlook | OilPrice.com


Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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  • WTI crude rallied almost 3.5% on Thursday morning.
  • Tight supply and falling U.S. crude oil inventories support prices.
  • U.S. crude oil inventories are now 6% below the 5-year average.

Drilling rig

Crude oil prices resumed their climb on Thursday, reclaiming some of the ground lost over the last month.

At 1:30 p.m. ET, the WTI benchmark was trading at $91.09, a 3.38% gain on the day. WTI prices are still down from the $100+ barrel mark seen last month, as recession fears took hold of the market, threatening to subdue crude demand growth.

Crude oil prices are still nearly $20 over where they were at the start of the year, and roughly $28 per barrel gain over the last 12 months.

While recession fears—and the possible demand destruction that could come with such a recession—has pulled down prices over the last month, market fundamentals continue to be tight, with crude oil inventories in the United States continuing to slide. On Wednesday, the EIA estimated that crude oil inventories had fallen by 7.1 million barrels, on top of millions of barrels of crude oil making its way out of the nation’s Strategic Petroleum Reserves. Gasoline inventories in the United States also fell by another 4.6 million barrels for the week ending August 12, the EIA reported on Wednesday.

U.S. crude oil inventories, excluding those in the SPR, are now just 425 million barrels,–6% below the five year average. Gasoline inventories are 8% below the five-year average, and distillates are 23% below the five-year average.

The EIA data also calmed fears that gasoline demand could be falling, after it showed the four-week average of implied gasoline demand rose to the highest level this year.

Also on Thursday, U.S. economic data saw a stronger labor market, further bolstering crude prices.

Disappointing economic data out of China this week—a predictor of lower crude demand from the world’s largest oil importer, has capped oil’s increase, as has a stronger dollar, which makes crude oil more expensive for foreign buyers.

By Julianne Geiger for Oilprice.com

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TD faces public scrutiny, support, of First Horizon takeover in public meeting – Business News – Castanet.net

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TD Bank Group’s proposed takeover of Memphis-based First Horizon Bank is the issue before a public meeting Thursday where community members are being given a forum to voice their opinions on the deal.

The virtual meeting is being convened jointly by the Federal Reserve Board and the U.S.Office of the Comptroller of the Currency, which are reviewing the proposed US$13.4 billion deal.

The meeting comes as TD has faced renewed criticism in recent months for allegedly aggressive sales tactics in the U.S., including from Senator Elizabeth Warren who has called for the merger to be blocked until the bank is “held responsible for its abusive practices.”

TD agreed to a US$122 million settlement with U.S. regulators in 2021 stemming from illegal overdraft practices, while an investigative report released in May alleged that problematic practices continue at the bank, something the bank had strenuously denied.

The federal agencies also held a public meeting in mid-July for BMO’s proposed US$16.3 billion takeover of Bank of the West, where numerous community groups urged the deal be blocked until a strong community benefits agreement can be reached.

The bank also faced criticism for the proportionately low number of mortgages granted to Black and Latino borrowers, while numerous community groups that have received funding from BMO voiced their support of the deal.

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Judge sides with Enbridge Inc. in Michigan’s latest effort to halt Line 5 pipeline

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WASHINGTON — The international dispute over Line 5 belongs in federal court, a Michigan judge declared Thursday, dealing a critical blow to Gov. Gretchen Whitmer’s bid to shut down the controversial cross-border pipeline.

It’s the second time in nine months that District Court Judge Janet Neff ruled in favour of pipeline owner Enbridge Inc., which wanted the dispute elevated to the federal level.

That first decision prompted Michigan Attorney General Dana Nessel — believing her only path to victory to be in state court — to abandon the original case, turning instead to a separate, dormant, nearly identical circuit court case to try again.

Neff’s disdain for that tactic was palpable throughout Thursday’s ruling.

“The court concludes that (the) plaintiff’s motion must fail, based on …(the) plaintiff’s attempt to gain an unfair advantage through the improper use of judicial machinery,” Neff wrote.

“The court’s decision … is undergirded by (the) plaintiff’s desire to engage in procedural fencing and forum manipulation.”

A spokesperson for Nessel did not immediately respond to media inquiries.

Whitmer is a Democrat and close ally of President Joe Biden whose political fortunes depending on the support of environmental groups in the state. She ordered the shutdown of Line 5 in November 2020.

She cited the risk of an ecological disaster in the Straits of Mackinac, the environmentally sensitive passage between Lake Michigan and Lake Huron where the pipeline runs underwater between the state’s upper and lower peninsulas.

They went to circuit court, where Enbridge pushed back hard, arguing that Whitmer and Nessel had overstepped their jurisdiction and that the case needed to be heard in federal court.

Late last year, Neff sided with Enbridge, prompting Whitmer and Nessel to abandon the complaint and try again, this time with a similar circuit court case that had been dormant since 2019.

Nessel had hoped to head off Enbridge’s jurisdictional argument on a technicality: that under federal law, cases can only be removed to federal jurisdiction within 30 days of a complaint being filed.

But Neff wasn’t buying it, citing the precedent she herself established in 2021 when she ruled for Enbridge the first time.

“It would be an absurd result for the court to remand the present case and sanction a forum battle,” Neff wrote.

“The 30-day rule in the removal statute is intended to assist in the equitable administration of justice and prevent gamesmanship over federal jurisdiction, but here, it is clear to the court that (the) plaintiff is the one engaging in gamesmanship.”

The Line 5 pipeline ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U. S. border and the Great Lakes by way of a twin line that runs along the lake bed.

Critics want the line shut down, arguing it’s only a matter of time before an anchor strike or technical failure triggers a catastrophe in one of the area’s most important watersheds.

Proponents of Line 5 call it a vital and indispensable source of energy, especially propane, for several Midwestern states, including Michigan, Ohio and Pennsylvania. It is also a key source of feedstock for refineries in Canada, including those that supply jet fuel to some of Canada’s busiest airports.

In a statement, Enbridge described Thursday’s decision as “consistent with the court’s November 2021 ruling that the state’s prior suit against Line 5 belonged in federal court.”

That, the company said, is the correct forum for “important federal questions” about interstate commerce, pipeline safety, energy security and foreign relations.

The statement goes on to say that shutting down Line 5 would “defy an international treaty with Canada that has been in place since 1977.”

Line 5 talks between the two countries under that treaty, which deals specifically with the question of cross-border pipelines, have been ongoing since late last year.

“Enbridge looks forward to a prompt resolution of this case in federal court.”

This report by The Canadian Press was first published Aug. 18, 2022.

 

James McCarten, The Canadian Press

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