Progress on the undertaking is vital for Pathways Alliance to succeed in its beforehand introduced objective of accomplishing net-zero emissions from operations by 2050, and for the provincial and federal governments to succeed in their local weather targets
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Canada’s Pure Sources Minister Jonathan Wilkinson gave the impression to be operating out of persistence with the nation’s largest oilsands producers this spring over the gradual progress on their proposed $16.5-billion carbon seize community in Alberta.
At present, the tone has modified.
In actual fact, Wilkinson hopes an settlement between the Pathways Alliance consortium, Ottawa and Alberta can quickly be reached to get one of many world’s largest carbon seize networks transferring, maybe even by 12 months’s finish.
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On Thursday, Wilkinson and federal Finance Minister Chrystia Freeland met face-to-face in Calgary with members of the oilsands producer group.
Heading into the sit-down, the federal vitality minister sounded upbeat.
“The talks which might be occurring even have been fruitful over the previous few weeks and I’m very hopeful that we’re going to have the ability to transfer this forward within the not-too-distant future,” he mentioned in an interview Thursday.
“I’d most likely be going out on a limb to say this 12 months, however ideally it will be earlier than the tip of the 12 months — however definitely, if not, early within the new 12 months could be my hope.”
After Thursday’s assembly, officers with the Pathways Alliance — the group contains Cenovus Vitality, Imperial Oil, Canadian Pure Sources, Suncor Vitality, MEG Vitality and ConocoPhillips Canada — referred to as it a “constructive dialog” with the 2 federal ministers.
Progress on the undertaking is vital for the group to succeed in its beforehand introduced objective of accomplishing net-zero emissions from operations by 2050, and for the provincial and federal governments to succeed in their local weather targets.
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The carbon seize and storage community would come with a 400-kilometre pipeline connecting greater than 20 oilsands amenities to an underground storage hub close to Chilly Lake.
A last funding resolution (FID) hasn’t been made, though Pathways made a regulatory software in March for the pipeline.
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Talks have continued between the group and the federal and provincial governments over incentives that Pathways officers have mentioned could be wanted for the megaproject to advance.
The Alberta authorities has created a program to supply a 12 per cent grant to carbon seize developments.
The federal authorities has established an funding tax credit score for carbon seize, utilization and storage tasks throughout Canada; it will cowl as much as half of a improvement’s capital bills.
Ottawa can be providing carbon contracts for distinction (CCFDs) to supply longer-term certainty on the long run worth of carbon for such developments.
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Wilkinson mentioned Pathways has been speaking with the Canada Progress Fund, the federal authorities’s cleantech financing company.
“We’ve engaged the Canada Progress Fund to work with Pathways to see if there are some further issues that may be finished to supply consolation to Pathways with a few of the questions that they’ve,” the minister mentioned.
“I believe Alberta is equally having its personal set of conversations about whether or not there are some further issues they will do to make the undertaking work from an financial perspective.”
It’s a shift from Wilkinson’s feedback final February, when he expressed frustration over the gradual tempo of progress on the consortium’s foundational carbon seize undertaking, and the trade group mentioned it wanted to see extra assist from governments.
“We’re engaged with the Canada Progress Fund to find out probably the most applicable solution to assist main decarbonization tasks comparable to ours,” Pathways president Kendall Dilling mentioned Thursday in an announcement.
“It’s encouraging to see Ottawa taking steps to de-risk trade investments in large-scale carbon seize tasks.”
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Canada Progress Fund Funding Administration CEO Patrick Charbonneau mentioned in an announcement it doesn’t touch upon whether or not particular person tasks are into account.
The federal authorities desires to see Pathways place a agency order for the pipe, which might symbolize a serious capital funding.
“What we’re in search of is a tangible dedication by way of cash that may display progress. So it might be the dedication across the pipe, it might be one or two tasks that moved to FID,” Wilkinson mentioned.
“Bear in mind, that is a number of tasks. It’s 12 to 14 totally different tasks which might be bundled collectively. We’re not going to see FIDs for all the tasks straight away however, ideally, it will be the ordering of the pipe.”
Finalizing the talks and seeing the undertaking advance would symbolize a serious step ahead for the oilsands because it seeks to decarbonize. It’s a big supply of greenhouse fuel emissions in Canada, coming from the biggest emitting sector within the nation.
It will additionally assist safe future royalties, taxes, capital funding and jobs for a key a part of the financial system.
“We’re inspired to listen to that Canada Progress Fund and the federal authorities are partaking with Pathways on a undertaking that has significance in Alberta in making certain we will improve oil manufacturing whereas lowering emissions,” provincial Vitality Minister Brian Jean mentioned in an announcement.
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It’s been tough for the events to strike an settlement as a result of some critics will see it as a subsidy, whereas trade sees carbon seize as an added price that doesn’t create financial worth, mentioned Richard Masson, former CEO of the Alberta Petroleum Advertising and marketing Fee.
For the sector to stay viable in the course of the vitality transition, oilsands producers must display they will produce oil in probably the most carbon-efficient method doable, added Masson, an government fellow on the College of Calgary’s College of Public Coverage.
“If we will get this finished, it’s one thing that may unlock a long time of worth for Canadians,” Masson mentioned.
The talks additionally happen as Ottawa is getting ready to launch draft laws on an emissions cap on the oil and fuel trade, and because the subsequent federal election is transferring nearer.
“I hope a deal occurs,” added Heather Exner-Pirot, director of pure sources, vitality and setting on the Macdonald-Laurier Institute.
“It will be nice for Alberta, and for the oilsands, and for the nation’s emissions-reduction targets to get this settled earlier than the subsequent election.”
Chris Varcoe is a Calgary Herald columnist.
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