Shell offers go-ahead to 2 carbon seize and storage initiatives in Alberta

Shell Canada has introduced it’s going to forge forward with a pair of carbon seize initiatives in Alberta, after current setbacks for different proposed initiatives within the sector have solid doubt on the know-how.

The Calgary-based operator stated Wednesday it has made a remaining funding choice for its Polaris carbon seize challenge at its Scotford refinery and chemical substances complicated close to Fort Saskatchewan.

Shell has additionally given the inexperienced mild to proceed with the Atlas Carbon Storage Hub, in 50/50 partnership with Atco EnPower. The primary part of Atlas will completely retailer carbon dioxide captured by the Polaris challenge, which was first proposed in 2021.

Wednesday’s announcement comes amid uncertainty in regards to the monetary viability of carbon seize and storage (CCS) know-how, which traps carbon emissions at their supply and funnels them deep underground.

The know-how is anticipated to play a key function in Canada’s local weather plan, however implementing it has proved difficult.

Different CCS initiatives throughout the nation have been shelved, cancelled or proceed to fall in need of operational targets, regardless of important funding from Ottawa and provincial governments.

The Polaris challenge is designed to seize about 650,000 tonnes of carbon dioxide yearly from the Scotford complicated. That works out to roughly 40 per cent of Scotford’s direct CO2 emissions from the refinery and 22 per cent of its emissions from the chemical substances complicated.

A future part of the Atlas hub, which may probably retailer carbon for Shell, Atco and different firms, stays topic to a future funding choice.

Polaris and the primary part of Atlas are anticipated to start operations towards the tip of 2028 and can support Canada meet its emission targets, firm officers stated. Shell has not disclosed anticipated prices of both challenge.

Shell Canada president Susannah Pierce stated the corporate has the expertise and the monetary backing essential to make the initiatives profitable, at the same time as different firms hand over on their carbon seize proposals. 

Pierce stated each challenge is totally different, however in Shell’s case, Polaris is a “key piece” of the corporate’s total decarbonization technique.

She stated the current approval of the federal carbon seize sequestration tax credit score — meant to assist jump-start carbon seize initiatives — was additionally key of their choice to proceed. 

“It’s now a spot in time the place we really feel like now we have the fitting fiscal incentives,” Pierce stated in an interview Wednesday. 

“We’ve got higher certainty in regards to the challenge. We have performed further design and engineering. And we’re fairly excited to maneuver ahead with it as a result of we see it as a essential know-how to assist us to decarbonize our personal Scotford facility.

“And we definitely consider that it is a essential know-how that is crucial to satisfy Paris commitments.”

Shell’s Quest challenge is a three way partnership with Chevron Canada, Marathon Oil Canada and governments of Alberta and Canada. (CBC)

Pierce stated the initiatives will construct on the success of its Quest CCS operation at Scotford. Shell developed the $1.35-billion Quest challenge with the assistance of $745 million from the Alberta authorities and $120 million from Ottawa.  

Emissions captured by Polaris will probably be despatched to the Atlas Hub through a 22-kilometre pipeline to 2 storage wells.

CO2 will probably be saved there roughly two kilometres underground within the Basal Cambrian Sands, the identical formation of underground sandstone used to retailer CO2 from the Quest CCS facility.

Key to local weather change targets

Carbon seize, utilization and storage has grow to be a key plank of the Canadian oil and fuel sector’s decarbonization targets.

The local weather plan estimates carbon seize will account for as much as 16 million tonnes of emissions reductions by 2030, or about 5 per cent of the extra emissions reductions wanted to satisfy the following goal in 2030.

Critics, nevertheless, have repeatedly cautioned that Canada’s targets mustn’t hinge on a know-how that continues to face critical setbacks.

Edmonton-based Capital Energy Corp. lately pulled the plug on its plans to construct a $2.4-billion CCS challenge at its Genesee pure gas-fired energy plant southwest of Edmonton, asserting the challenge was now not financially possible.

A CCS challenge at Sask Energy’s Boundary Dam has continued to overlook its emission targets.  An unbiased report lately declared the operation an “underperforming failure” after 9 years in operation and $1 billion spent on the know-how. “

Shell’s Quest challenge has saved 9 million tonnes of CO2 at a lower-than-anticipated value because it grew to become operational in 2015. However its seize charge of 77 per cent stays under the 90 per cent initially introduced.

A current report from the Worldwide Power Company stated oil and fuel firms want to start out “letting go of the phantasm” that “implausibly giant” quantities of carbon seize are the answer to the worldwide local weather disaster.

‘There will probably be extra’

Pierce stated the funding local weather is altering. She stated Alberta is on the cusp of a string of renewed investments in carbon seize operations.

A rise in authorities subsidies and the proximity of the Basal Cambrian Sands, the sandstone formation the place carbon could be trapped, offers the province a bonus in turning into a frontrunner in implementation of the know-how, she stated.

“I believe the fitting conditions are coming into place,” she stated. “This can be the primary [project] of this scale that is transferring ahead within the province at the moment, however there will probably be extra.”

In a report Wednesday, international consultancy Wooden Mackenzie stated it initiatives carbon seize and storage will symbolize a $196-billion US funding alternative worldwide over the following decade.

About 70 per cent of that funding will happen in North America and Europe, Wooden Mackenzie stated.

“The anticipated tempo of … deployment will probably be pushed by the extent of regulation and help in numerous international locations,” the report stated, including the U.S. and Canada have “sturdy” regulatory and funding mechanisms in place to drive implementation.

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