September 6, 2023

Defining the Decade and beyond for Canada’s oilsands

By Kendall Dilling, President, Pathways Alliance

Alberta’s oilsands play a critical role in providing secure and affordable energy while contributing $60 billion to Alberta and Canada’s economy annually. At the same time, the sector contributes about 11 per cent of Canada’s total greenhouse gas emissions, making emissions reduction in the oilsands essential for Canada to meet its climate goals.

To ensure long-term and sustainable prosperity for decades to come, Pathways Alliance is spearheading a proposed carbon capture and storage (CCS) project that holds immense promise for Alberta’s oilsands industry and Canada’s climate future.

Listen to Kendall Dilling, President, Pathways Alliance on AlbertaBETTER

The Alliance, comprising Canada’s six largest oilsands companies, intends to implement an ambitious GHG reduction plan to significantly reduce emissions from oilsands operations by 2030 and reach net zero by 2050. CCS forms the cornerstone of Pathways Alliance’s emissions reduction plan.

With more than 50 years of scientific and technical innovation, CCS has been deemed an essential solution to the climate challenge by organizations such as The International Energy Agency, the International Renewable Energy Agency and the UN Intergovernmental Panel on Climate Change. And Alberta is the perfect place to implement this technology at scale. We have the ideal geology for carbon sequestration, world-class regulatory oversight and a highly experienced industry. Already, the province has a strong track record of successfully deploying CCS in the cement, steel, and oil and gas industries. For example, the Quest project and the Alberta Carbon Trunk Line project have safely captured, transported and stored more than 10 million tonnes of CO2.

The Pathways Alliance is seizing the opportunity presented by CCS in Alberta and proposing a project that would be one of the world’s largest. When complete, this project would transport captured CO2 from more than 20 oilsands facilities to a hub in the Cold Lake region for safe, permanent underground storage, reducing net CO2 emissions from operations by 10 million to 12 million tonnes per year in the first phase of the plan alone. The project’s potential for expansion in subsequent phases could capture an additional 30 million tonnes in emissions each year.

Detailed evaluation of the proposed storage reservoir is ongoing, and hundreds of experts are currently working on pre-engineering plans that will be part of the formal application filed with the Alberta Energy Regulator. Pathways Alliance is also initiating consultation with Indigenous groups near the proposed CCS network. These relationships will continue to be important as the project advances to ensure Alberta’s oilsands resources are developed sustainably.

To get this project off the ground, close collaboration between industry and governments is vital. Canada needs to establish appropriate policy that will incentivize the development and deployment of all manners of clean technology, including CCS.

Successful CCS projects in other countries are receiving significant government support. Norway, for example, has investment incentives that cover two-thirds of the upfront cost and 100 per cent of the operating costs for 10 years. Similarly, the United States has recently created generous tax incentives to build major CCS projects through the Inflation Reduction Act. For Canada to be a world leader in CCS, the investment environment here must be competitive.

CCS offers the oilsands industry an opportunity to pave the way for a global low-carbon future while safeguarding energy security. However, the significance of Pathway Alliance’s CCS project extends beyond emissions reductions. This project has the potential to generate more than 100,000 jobs during the multi-year construction period alone. It not only aligns with Canada’s net-zero goals but also promises economic growth and job creation, solidifying the project as a win-win for both the environment and the economy.

The Pathways Alliance’s CCS project has the potential to define the decade for Alberta’s oilsands industry. With the right policy support and collaboration between government, industry and communities, Alberta can position itself as a leader in low-carbon energy and ensure a sustainable future for generations to come.

Kendall Dilling is president of the Pathways Alliance and a contributor to the Business Council of Alberta. This column is part of a discussion paper series by the business council called Missions and Moonshots, which explores how Alberta can reach its full potential in three key areas of the economy: food, health and energy.

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