Carbon Capture Canada Is Coachella for Greenwashing
Or How to Profit from the Climate Crisis While Pretending to Solve It.
A bright Shell logo illuminated the stage at the Carbon Capture Canada conference, held this year at the Edmonton Convention Centre starting on Sept. 12.
Shell’s sponsorship tells you a lot about the product, or rather idea, that’s being sold to attendees. We can continue business as usual and keep drilling unabated while reducing carbon emissions, if only governments will help us get the ball rolling.
Shell, by the way, made $14.7 billion in the first half of 2023. Naturally, they want to continue increasing their profits — as they’re legally obligated to do — while presenting themselves as a modern, progressive oil company whose executives want to be part of the solution.
Government subsidies for carbon capture, utilization and storage (CCUS) technology, which Shell’s Quest facility in Fort Saskatchewan received in abundance before it was fashionable, allow them to have it both ways.
The major thrust of the conference’s first day was that the very actors who caused the climate crisis are going to solve it by doing the very things that created the crisis; they just need more money so they can continue profiting while the world burns.
It was Coachella for government-subsidized greenwashing, with a lineup that included addresses from Premier Danielle Smith, Energy Minister Brian Jean and Environment Minister Rebecca Schulz, and panels featuring heavy hitters from the carbon sequestration industry, as well as a few First Nations leaders.
“This is not about transitioning away from oil and gas. It’s about transitioning away from emissions … while exporting more oil and delivering more energy,” said Premier Smith in her afternoon keynote speech, reflecting the event’s general tenor.
Next door to the conference hall were exhibitors, chief among them the Pathways Alliance, a coalition of six oil and gas companies — Cenovus, Canadian Natural Resources Ltd., ConocoPhillips Canada, Imperial Oil, MEG Energy and Suncor — united in their commitment to reach net zero while somehow continuing to drill until the last drop of oil.
A key component of that plan is a proposed $16.5-billion CCUS project, which would capture emissions from 20 tar sands facilities and ship them in a 400-km pipeline to a hub in Cold Lake.
For the uninitiated, the first part of CCUS involves siphoning carbon dioxide from carbon-intensive facilities, such as power plants and industrial facilities, and storing it underground.
But there’s no money in keeping a bunch of carbon sequestered, which is where the utilization part of the equation comes in.
Disappointingly, the breath mints Pathways gave out at its exhibit stand weren’t made from sequestered carbon.
A 2022 study from the Institute for Energy Economics and Financial Analysis found that 73% of sequestered carbon went towards drilling for more oil, or “enhanced oil recovery” in the industry’s terminology, contradicting its very raison d’être.
To his credit, Prime Minister Justin Trudeau has made companies who use sequestered carbon to drill for oil ineligible for his government’s CCUS tax credit.
Even if companies aren’t using sequestered carbon to fuel further fossil fuel extraction, the study found that 10 of 13 carbon capture projects it examined failed to actually capture carbon at their stated capacity.
One example is the Boundary Dam power plant near Estevan, Sask. In 2014, SaskPower, Saskatchewan’s publicly owned power company, spent $1.5 billion to make the facility the world’s first power plant retrofitted with carbon capture technology. Proponents argued the tech would allow the province to continue using inexpensive coal, with a capture capacity of 90%.
In 2021, the facility captured just 44% of emissions. While it performed better other years, its average over seven years of 66% was nothing to boast about.
For proponents, that’s nothing a little more government money won’t solve.
Throughout the day in the exhibition hall, Pathways, Capital Power, Enbridge and Worley hosted “knowledge bars,” which are more intimate talks than those occurring in the conference room, with attendees actually given the ability to ask questions.
In a morning session at the Worley bar, entitled “Best Practices for Successfully Developing a Capture Technology from Theory to Practice,” Ashutosh Nischal, Worley’s senior director of CCUS for North America, admitted that the scale of CCUS technology needed to serve as the linchpin of decarbonization doesn’t yet exist.
Still, he maintained the CCUS market is “booming” and could be worth upwards of $7 billion by 2028. “Your guess would be as good as anybody else’s,” he cautioned.
Currently, the most widespread form of CCUS removes carbon pre-combustion. The problem is that it’s expensive and its use is limited to combined cycle gas plants, which use a combination of gas and steam to generate power.
What’s needed, Nischal explained, is to adopt post-combustion CCUS, in which carbon is captured from the flue gas that emanates from a chimney or smoke stack, for widespread use in power plants, refineries, boilers, furnaces, power generators, and steel and cement plants, which he acknowledged has thus far had “limited success.”
One example of post-combustion CCUS is the Boundary Dam facility.
“Funding is important,” Nischal noted. The first potential funding source he noted was the government, followed by private investors, whether they’re individual or part of a consortium.
“Overseas investors are showing interest in the North American market because they believe that there is funding available and [that] with their money, they can have some returns in the future.”
Back in April, the federal government announced it was partnering with German company Heidelberg Materials for a $1.4-billion CCUS retrofit of its Edmonton cement plant, which is expected to be operational before the end of 2026. It’s unclear how much of that money will be paid by the feds.
The CCUS tech will supposedly make the Edmonton facility the world’s first carbon-neutral cement plant, with the carbon stored underground in a facility west of Edmonton.
That is, of course, if everything goes according to plan. With CCUS’s track record, I wouldn’t bet on it.
The main event, of course, was Premier Smith’s keynote speech, which was followed by a friendly “fireside chat” with conference chair Breanne Fox of Capital Power and then a media scrum.
The contrast between Smith’s embrace of the “game-changing technologies” of CCUS and the hard pause she imposed on renewable energy approvals couldn’t have been sharper.
“This is a field which is sometimes judged, disparaged and dismissed out of hand, like so many emerging technologies,” she said, referring to CCUS.
Smith naturally seized the opportunity to present herself as the guardian of “Alberta’s entrepreneurial spirit” in the face of an overbearing federal government.
“Some of us are not hobbled by all federal policy decisions,” Smith said, reiterating Alberta’s commitment to carbon neutrality by 2050, noting that the European Union, Australia and South Africa “share this goal.”
So too does the federal government. Her disagreement is with the feds’ mandate that the country’s energy grid be net zero by 2035 as a step towards full neutrality by 2050. Canada’s power grid is already 80% of the way towards that target, yet Alberta’s is only 10% there.
Environment Minister Steven Guilbeault has said that CCUS will play a major role in getting there for provinces, such as Alberta, who continue to rely on natural gas for electricity, as long as it captures 95% of emissions.
Suddenly Smith’s confidence in the power of CCUS subsides, conceding that she’s not “hopeful that we’ll be able to be that good and be able to get to that level of abatement.”
“I don't want to prejudge technology and the speed with which technology moves and we're not there yet, but no one is going to invest if 13 years from now, their chief executive officers are going to be thrown in jail, which is the consequence of violating the Clean Electricity Act,” she added in a wild pivot, ignoring the far likelier outcome of paying a fine.
Perhaps Smith should institute a moratorium on CCUS technology to get clarity on how effective it is and assess the risks of CEOs being incarcerated by Guilbeault.
On the other hand, she could just give companies more money.
With limited options for carbon utilization, industry is keen on getting a carbon credit incentive structure in place so those who have invested in CCUS tech can be paid an indulgence from those who haven’t.
Smith said that the plan will be in place before she goes to Dubai for the COP28 climate conference in December, which will take the form of tax credits.
This, she maintained, is not a subsidy:
I look at it as allowing a company to keep more of what they earn. And when we look at the long term investment, or how much those companies returned to us in increased corporate income taxes, increased personal income taxes — all of the other ways in which they contributed — it becomes pretty much even at 10 years.
Pretty much even, if you exclude the $260 billion in environmental liabilities.
The conference got some free advertising the day before it kicked off, courtesy of a presser from Alberta NDP energy critic Kathleen Ganley.
Demonstrating the Official Opposition has learned nothing from its defeat in May’s provincial election, Ganley positioned her party as the authentic ally of the fossil fuel industry’s efforts to extract subsidies for carbon capture technology, triangulating the federal Liberals and UCP’s “empty promises.”
Ganley repeatedly invoked the authority of the Pathways Alliance, regurgitating the group’s claim that they need support by the end of the year to reach their climate targets and that its plans will create 100,000 jobs “during the multi-year construction period alone.”
“There’s so much opportunity. We absolutely must act and we must act now,” she said.
I couldn’t help but wonder who this messaging is for. I’m no big shot political strategist, but I strongly suspect the idea of giving free money to fossil fuel companies who’ve been raking in the dough since Russia’s invasion of Ukraine — and to do so without hesitation — isn’t exactly a popular idea.
Ganley, in another context, understood this. She starred in an NDP ad about the UCP’s preposterous plan to subsidize environmental liabilities cleanup for oil and gas companies, likening it to a parent paying their kid billions of dollars to clean up after dinner.
How is subsidizing carbon capture any different from that? In both cases, you’re rewarding the exact same people who created this mess.
For all her glaring flaws, at least Smith is consistent in rewarding the fossil fuel industry for its failures, whether it’s burning the planet through its emissions or polluting the landscape with its environmental liabilities.
Tomorrow’s dispatch from the second day of the Carbon Capture Canada conference will be for paid subscribers only. If you liked this piece and want to read more, you know what to do.