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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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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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