Alberta Eyes Federal Support for CCUS

As Canada's government prepares to unveil its federal budget, Alberta’s top energy official says federal support for carbon capture, utilization and storage (CCUS) is going to be key for expanding large-scale deployment. In a budget request, Alberta officials have asked the federal government for roughly C$30 billion (US$24 billion) in financial support for CCUS. The request is significant because Alberta, the home of Canada's oil industry, is seen as a possible future industrial hub for CCUS, similar to regional clusters proposed in the EU and the UK. Federal Support Needed While Alberta has made significant progress in securing commercial-scale funding, regulatory enhancement and information sharing, the province will need federal support to fully realize CCUS opportunities, says Alberta Energy Minister Sonya Savage. Alberta and Canada recently established a working group to explore opportunities in CCUS and determine how the province can play a leadership role in reducing emissions in the oil and gas sector, thus helping Canada reach net-zero by 2050 as pledged. “Continuing to invest in technology, like we are doing in Alberta through the Technology Innovation and Emissions Reduction Fund, is necessary as we look to reduce emissions, protect livelihoods, keep industry competitive and attract investment -- to both Alberta and Canada’s benefit,” Savage said. Seamus O’Regan, Canada's minister of natural resources, told a Bloomberg New Energy Finance forum this week that, like the US, Canada is also looking for foreign investments in CCUS. The CCUS discussion comes as Canada's opposition Conservative Party this week abruptly abandoned its long-held resistance to carbon pricing policy, surprising some observers (OD Mar.25'21). Regional Hubs In Europe, high costs associated with carbon capture -- absent ready conduits for monetization such as enhanced oil recovery -- have made it difficult to get such projects off the ground. The latest thinking suggests a move toward industrial cluster projects, where the emitting facilities have mid-to-high CO2 emission streams and are in a localized area such as an industrial port or cluster on the coast. CO2 can then be piped to nearby depleted oil and gas fields, as planned in the UK and the Netherlands, or shipped in liquid form to offshore depleted fields or saline aquifers, as planned under the Longship CCS-Northern Lights project in Norway. Equinor, Royal Dutch Shell and Total are members of the Northern Lights consortium. “As various countries around the world look to tackle the energy transition in supporting the development of industrial CCUS hubs such as in Australia, Norway, the UK and the Netherlands, we can't help but see central Alberta as a likely future industrial hub similarly with the right coordination between industry and government,” Tudor Pickering Holt said in a note last month. In the US, a handful of bipartisan lawmakers along with Occidental Petroleum are backing legislation known as the Scale Act, aimed at helping to facilitate buildout for networks of carbon-capture facilities, along with increasing the volume and types of companies involved (OD Apr.15'21). Bridget DiCosmo, Washington, and Jay Eden, London