Alberta Premier Danielle Smith has championed carbon capture and storage as an essential technology to decarbonize the production of oil.
Last week, the International Energy Agency warned the oil and gas industry not to pin all its hopes on decarbonization on CCS.
Danielle Smith, however, reiterated her skepticism regarding the IEA's statements. Our geology is one of the three best in the world for CCS, boasted Energy Minister Brian Jean.
The program will not only apply to projects in the oil and gas industry. Other industries such as cement plants, natural gas power plants and blue hydrogen producers have all indicated an interest in developing CCS projects.
The Alberta grant will not be available until federal incentives are in place.
Canada's Finance Minister, Chrystia Freeland, announced that a bill will be tabled before the end of the year to implement the tax credit for carbon capture and storage projects. She also mentioned the implementation of contracts for difference for carbon.
This provincial and federal aid was eagerly awaited by the industry oil and gas, including the six largest tar sands operators. Brought together in a consortium under the name Alliance Nouvelles Voies, they proposed a CCS project valued at $16.5 billion.
This is very important support for our project, says Kendall Dilling, president of the New Ways Alliance. This gives us the confidence necessary to continue spending and developing [our project].
Open in full screen mode
The New Pathways Alliance project aims to sequester 10 to 12 million tonnes of carbon, i.e. quarter of emissions from their installations by 2030.
He adds that the two incentives make it possible to compete with aid offered by other entities. The industry was particularly concerned about being at a disadvantage in Canada compared to the American aid included in the Inflation Reduction Act. The New Pathways Alliance, however, still has questions about the federal proposals.
For its part, the organization Environmental Defense denounced the Alberta announcement. [Alberta] is putting billions of taxpayer dollars on the table for risky, hypothetical and unnecessary technology that has a history of costly failure after costly failure, says program director Keith Brooks.
The organization also emphasizes that the money will be used to help an industry that has reaped excessive profits.
Demand for Canadian oil will plummet this decade, meaning billions of dollars of taxpayer money will end up in abandoned projects.
A quote from Keith Brooks, Director, Environmental Defense
< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">The Alberta government took advantage of this announcement to highlight its record in reducing methane emissions.
Alberta succeeded in meeting its goal of reducing methane emissions from the oil and gas industry by 45% three years ahead of schedule.
We've done things our way, and it's working, says Alberta Minister of Environment and Protected Areas Rebecca Schulz: The federal government has never succeeded in meeting a single target that 'it had settled.
Studies, however, suggested that methane emissions were underestimated.