Now, for better or worse, Ottawa is coming to the table.
• The subsidy excludes CCUS for use in enhanced oil recovery , a technique that involves injecting captured carbon into depleted wells to extract even more oil.
• When Cenovus CEO Alex Pourbaix and Suncor Energy CEO Mark Little first kicked off the lobby campaign for the tax credit, they said it would cost about $75 billion to decarbonize tar sands/oil sands production by 2050 .
None of which addresses legitimate, evidence-based concerns about whether any subsidy at all was needed or justified.
“We have been hearing for a long time about the oil and gas sector’s capacity for innovation and the extent to which CCUS could put them on a trajectory toward procuring a clean and competitive barrel,” said Polaris Strategy Principal Dan Woynillowicz.
I’ll be curious to see in the coming weeks, months, and years what actually unfolds… Obviously, the next most critical thing is for the federal government to ensure it has a strong stick to accompany the carrot they’ve just offered the sector,” in the form of a serious emissions cap that works.
A lot of that money is going to corporately acceptable uses like share buybacks and shareholder dividends.” But the CCUS investment is “totally doable”, as part of a wider plan that includes reining in methane emissions, zero-venting/zero-flaring laws, and in Hanna’s view, rapid adoption of small modular nuclear reactors and auto thermal reformer technology for hydrogen production.
She cited a Pembina Institute backgrounder last month that calculated 33 megatonnes of potential emission reductions from methane controls, 18 Mt.
“There isn’t anybody in the Alberta government or the opposition in Alberta who is proposing to ramp down oil and gas production to meet Canada’s 2030 Paris target,” and the federal government “can’t directly dictate what happens with production.
“Carbon capture is not like going over to the hardware store to get a new faucet,” said David Schlissel, director of resource planning at the Institute for Energy Economics and Financial Analysis .
If fossil companies miss the deadline, “it’s simple,” Schlissel added.
Jason Maclean, assistant professor in the University of New Brunswick Faculty of Law, said the government’s trajectory on the CCUS tax credit was clear when Freeland’s department refused to even meet with the more than 400 climate scientists and other academics signed a January, 2022 letter urging the government to pick a different pathway.