By Colleen Collins
Published in the Hill Times

July 12, 2021

An economically viable path to decarbonize Alberta’s oil and gas sector is starting to look much less like fantasy and a whole lot more feasible.

Five recent announcements show that the pieces are coming together: plans for a new $1.3-billion net zero hydrogen plant in Edmonton; an announcement from Alberta Energy to facilitate creation of carbon storage hubs; a net zero alliance of Canada’s largest oilsands producers; a major carbon dioxide pipeline proposal; and commercialization support for carbon utilization innovations.

Together, they show investment, infrastructure, innovation and—most importantly—the will to move to a lower-emissions future. There’s clearly still plenty more work to do in areas such as regulatory risk on policies like carbon pricing. We aren’t there yet. But we are suddenly moving a whole lot faster with specific pieces of the plan on how the energy transition will take place for a much-needed dose of both optimism and realism that there is an alternative beyond simply “keep it in the ground.”

A major new hydrogen facility in Edmonton announced by Air Products and Chemicals Inc. in June is set to leapfrog Alberta and Canada to the forefront of the global hydrogen economy. The plant would produce “blue hydrogen,” capturing and storing carbon dioxide generated in the production process. For all the buzz around hydrogen to decarbonize energy systems, the plant is a “money where your mouth is” moment for industry and government. The plant would capture three million tonnes of CO2 yearly and produce 1,500 tonnes of hydrogen per day—or enough liquid hydrogen capacity to fuel every transit agency across Alberta. Both the federal and provincial governments have signed an MOU with the company for potential support and incentives. The Alberta government, through Emissions Reduction Alberta, has provided $15-million to the project, paid for out of the carbon price paid by large emitters.

On the same day as the June 9 announcement, Alberta’s largest oilsands producers unveiled a new alliance to achieve greenhouse gas emissions reductions: the Oil Sands Pathways to Net Zero. What is remarkable about the collaboration—which includes Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy, which together operate about 90 per cent of Canada’s oil sands production—is that it is an acknowledgement from industry that a low-carbon world requires both the will to change and investment to find innovative ways to produce petroleum in a decarbonized future. Success of the plan will depend not only on proving new technology, but also access to investment for future fit hydrocarbons and policy certainty for big investments in emissions reduction.

Another tangible piece of action: Alberta Energy shared plans to create carbon storage hubs that will allow carbon capture in the province to dramatically increase by dealing with everything from safety, long-term storage, and regional sequestration needs. These hubs will make CCUS (carbon capture, utilization, and storage) investments more certain in terms of not only access to sequestration but also the cost of sequestration and available transportation of CO2—bringing CCUS closer to reality both technologically and economically.

Also on the CCUS front, industry partners Pembina and TC Energy announced plans to create the Alberta Carbon Grid, essentially a CO2 pipeline to connect carbon captured from multiple industries in the oilsands, the Industrial Heartland and Drayton Valley region to sequestration sites across the province.

And there is one other piece of news that received little attention outside of the carbon capture and utilization innovation world. Canada is generally very good at invention—developing new technologies both inside and outside universities and polytechnical institutes. But we struggle to get them over the finish line to commercial adoption. One success story is Carbon Cure, a Halifax startup. Its technology embeds CO2 in cement to sequester it and improve the cement mix at an affordable cost. Significantly, it has already been deployed in almost 1.4-million truckloads of cement sequestering more than 100 thousand tonnes of CO2 (the equivalent of five million trees growing for one year). That commercial success, including winning the $20-million Carbon X Prize, was enabled by access to the Shepard CCS facility in Calgary to develop the technology and demonstrate that carbon can be captured and used to create value in use on a commercial scale. That is, out of the lab and into production.

For an industry and a government that has been roundly, and in some cases, rightly, criticized for greenhouse gas emissions, industry and the province of Alberta, with federal support, are putting together all the pieces to offer a pragmatic—and positive—view of a decarbonized future.

Colleen Collins is vice-president at the Canada West Foundation.