After nearly four decades in the oil and gas sector, including several years associated with the use of carbon dioxide (CO₂) for enhanced oil recovery (EOR) and developing environmental, social and governance (ESG) initiatives, I recently joined the International CCS Knowledge Centre (Knowledge Centre) as National Director of Strategy and Stakeholder Relations. And I could hardly have chosen a more exciting time to join the Knowledge Centre: this year, Canada is now on the verge of cementing its status as a global carbon capture and storage (CCS/CCUS) frontrunner by making unprecedented investments in the technology. 

In April 2021, Canada submitted an updated version of its Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC), committing to reducing greenhouse gas (GHG) emissions to 40-45% below 2005 levels by 2030 and to reaching net-zero emissions by 2050^.i In June, the government passed the Canadian Net-Zero Emissions Accountability Act, which makes these reduction targets legally binding.ⁱⁱ Canada is not the only country to have adopted legally binding net-zero targets; the European Union and Japan, among others, have done the same. But Canada’s plans for how to get there are different; they include the construction of extensive large-scale  CCS capacity.ⁱⁱⁱ 

The International Energy Agency (IEA), in its ‘Roadmap to Net Zero’ report, projects that fossil fuels will still be needed in 2050 and beyond, “in plants with CCUS, and in sectors where low‐emissions technology options are scarce”. However, it also refers to the future role of CCS as a “key uncertainty”, suggesting that the technology for large-scale CCS is not yet ripe for widespread adoption.^iv 

Why has Canada included ambitious plans for CCS in its NDC?^v 

Canada has a distinct competitive advantage for the development of CCS, thanks to its unique experience, know-how, geology, and regulatory environment. Further investment in large-scale CCS will allow Canada to achieve its ambitious emission reduction targets while, for the moment, preserving the heavy industries that are key to its economy. In other words, with CCS, we can buy more time to develop cleaner ways to run our industries, while honoring our commitments under the Paris Agreement. In addition, as the technical skills for oil and gas extraction are highly transferrable to CCS, Canada’s reputation as a frontrunner can also help to guarantee employment for its oil and gas workers in a net-zero future. 

What makes Canada a CCS frontrunner?  

First, as an early adopter, it has the required know-how and experience. The Weyburn-Midale CO2 Monitoring and Storage Project, which uses captured CO2 for EOR, has been operational since 2000 and is the largest project of its kind in the world. SaskPower’s Boundary Dam Unit 3 (BD3) CCS Facility is the world’s first fully integrated, full-chain CCS facility on a post-combustion coal power plant. These projects have generated significant learnings, and as the IEA states, to achieve the full global potential of CCS, “driving down costs through learning‐by‐doing” will be critical.^vi Both projects receive a steady stream of visitors from around the globe wishing to learn about their design and operation. 

Second, Canada has very favorable geology capable of storing centuries’ worth of Canada’s CO2 emissions. The most propitious sites for CCS are in Western Canada, which is also where most of Canada’s heavy industry is located. This means there is no need for CO2 transport through long-distance pipelines, which reduces total costs. 

Third, Alberta and Canada enjoy some of the most advanced regulatory systems in the world and have developed a reputation for placing a high emphasis on the safety and operating reliability of industrial facilities. This makes it an ideal location for the large-scale testing of new technologies, as public trust is high and the risk of incidents that could harm public perception of CCS not just in Canada, but worldwide, is low. 

Recognizing the opportunities these competitive advantages provide, many companies are already undertaking feasibility studies for large-scale CCS, across all heavy industries, including oil and gas.  

Emerging CCS projects in Canada? 

One example of a large scale decarbonization project in the planning phase is Oil Sands Pathways to Net Zero, an initiative of six companies representing 95% of Alberta’s oil sands production. These companies are collaborating to develop a major CCUS system, with several CO2 capture projects, and a pipeline connecting Alberta’s main oil sands facilities with a joint CO2 storage hub. Any other emitters located in the area will also be able to connect to the pipeline and store their CO2 in the hub. This collective approach takes advantage of economies of scale and will lead to reduced unit costs per Mt of CO2 stored.  

Significant research and development in new capture technology is accelerating across the globe. If any new technologies can be commercialized, this could lead to step changes in the cost of CCS. In Canada, there are companies working on new capture technology that has the potential to reduce costs, and the Alberta Pore Space Tenure program is designed to create open access hubs to provide emitters with a low-cost opportunity to store their CO2.  

Companies and governments around the globe are also investing in R&D for direct air capture. This is currently prohibitively expensive and energy-intensive, but if it can be made cost-effective, Canada has the capacity to become a CO2 storage hub for the world.  

What are the main barriers still standing in the way of the implementation of these projects? 

Firstly, and thankfully, no major technological barriers to the widespread adoption of CCS in Canada remain. The technology has been tested, it works, and the geology offers plenty of permanent storage capacity. Though costs remain high, these will decline as more projects are developed. The key remaining barrier, then, is regulatory uncertainty. The federal and provincial governments are working on policies to de-risk business cases related to CCS. For example, the low-carbon fuel standard and an investment tax credit for CCS are due to be adopted in 2022. Though these developments are highly promising, until industry is provided with clarity on the design, duration and stack-ability of these program, it is almost impossible to make any CCS investment decisions. In addition, CCS is likely to require public financial support as, though it provides enormous climate benefits, outside of EOR opportunities, it currently provides no economic benefits to companies. 

Given the considerable interest industry has shown in the technology, it is likely that once the government is able to provide more clarity on its support for CCS investment, we will see a flurry of activity. And we will need it, because Canada’s NDC and interim target requires the need for several new CCS facilities able to capture and store 15 Mt of CO2 or more per annum by 2030. A CCS facility with an annual capacity of 1 Mt requires an investment of approximately C$ 1 billion and takes 7-10 years to develop, from ideation to operation. Suddenly, 2030 seems just around the corner. 

It is clear that we have set ourselves a massive challenge – but if it can be achieved anywhere, it is here in Canada. We have the technology, the experience, the geology, and the political will. Now all stakeholders will have to come together to make it happen. 

References

ⁱUNFCCC. (2021) “Canada’s 2021 Nationally Determined Contribution Under the Paris Agreement” https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Canada%20First/Canada%27s%20Enhanced%20NDC%20Submission1_FINAL%20EN.pdf 

ⁱⁱGovernment of Canada. (2021) “New Release - Government of Canada legislates climate accountability with first net-zero emissions law.” https://www.canada.ca/en/environment-climate-change/news/2021/06/government-of-canada-legislates-climate-accountability-with-first-net-zero-emissions-law.html  

ⁱⁱⁱUK Parliament (2021) “Global net zero commitments” https://commonslibrary.parliament.uk/global-net-zero-commitments/ 

^ivIEA. (2021) “Net Zero by 2050 A Roadmap for the Global Energy Sector” https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf 

^vEuropean Union (2020) “The Update of the nationally determined contribution of the European Union and its Member States.” https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/European%20Union%20First/EU_NDC_Submission_December%202020.pdf  

^viIEA. (2021) “Net Zero by 2050 A Roadmap for the Global Energy Sector” https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf