(Calgary) The oil sands industry group that has proposed building what would be one of the world’s largest carbon capture and storage projects says it is more optimistic than ever that it will come to fruition.
The New Pathways Alliance is a consortium of Canada’s largest oil sands companies, which have come together to deliver a $16.5 billion carbon capture and storage network to reduce emissions from oil sands sites. tar sands in northern Alberta.
The project is the centerpiece of the oil sands industry’s commitment to reduce its greenhouse gas emissions to zero by 2050, which it must do if Canada is to meet its international commitments in terms of climate. But the alliance has yet to make a final investment decision, leading some environmental groups to question the industry’s level of commitment.
However, after last week’s federal fall economic update, New Pathways Alliance President Kendall Dilling said the likelihood of a positive decision on the project had increased.
In its economic update, the federal government provided additional details on the carbon capture investment tax credit it had promised, including a timeline for its finalization, something companies in tar sands were waiting.
He also promised that up to $7 billion would be allocated for special contracts designed to give businesses the confidence they need to make major investments to reduce their greenhouse gas emissions.
Although the details of these “carbon contracts for difference” are yet to be worked out, Mr Dilling said the support received from the Government so far was “more than sufficient” to enable the alliance to continue moving forward. moving forward with his project.
“I am more confident than ever,” Mr. Dilling said. We are much further along on all these fronts than we were a year ago. »
The Alberta government is expected to announce its own financial support package for carbon capture development this week.
According to Dilling, the New Ways Alliance cannot make a final investment decision until its project has been approved by regulators. But the group plans to file its regulatory application within the next two months.
The approval process could take at least a year. But the alliance will likely end up placing its first pipe orders in 2024, Dilling said, so construction of the 400km CO2 transmission line can begin as soon as regulatory approval is granted.
Meanwhile, Dilling added, the alliance has already spent $80 million on preliminary engineering, design and environmental work, and plans to spend even more money next year.
“We will spend hundreds of millions next year and then several billion once we begin construction,” he said, adding that the organization also began formal consultations this fall with indigenous groups along of the proposed route for the CO2 pipeline.
“I think it’s fair to say that by submitting our regulatory application and making significant expenditures through 2024, we are making a good faith commitment to moving this project forward,” Dilling said.
The New Pathways Alliance says its member companies — Suncor Energy, Canadian Natural Resources, Cenovus Energy, Imperial Oil, MEG Energy and ConocoPhillips Canada — have spent a total of $1.8 billion since 2021 on decarbonization efforts.
This figure includes the 80 million spent so far on the proposed carbon capture and storage network, but also investments in cogeneration to replace dirtier fuels used to produce electricity and steam, techniques more effective in situ recovery of oil sands as well as research and development work.
The oil sands industry currently accounts for approximately 12% of Canada’s overall greenhouse gas emissions.
Representatives from the alliance will travel to Dubai next week to participate in climate negotiations at the United Nations COP28.
Climate summit chairman Emirati Sultan Ahmed al-Jaber — who is also chief executive of the Abu Dhabi National Oil Company — urged oil and gas companies to be “at the heart of the solution” to fight against climate change.