The project was intended to include: a carbon capture facility
that would have removed CO2 from a portion of the Keephills 3 flue
gas, a pipeline to transport CO2 to a sequestration site
approximately 6 kilometers from the power plant, and a second
pipeline to transport CO2 to an existing oil production facility in
the Pembina oil field, approximately 75 kilometers from the
plant. CO2 from the second pipeline, which would have carried
the majority of the captured gas, was to have been used for
enhanced oil recovery. Project Pioneer was intended to
demonstrate the commercial scale-viability of carbon capture and
The federal government had committed $342.8 million to the
project. These funds were to have come from its $1 billion Clean Energy Fund and its ecoENERGY Technology
Initiative. The Province of Alberta had agreed to
invest an additional $436 million from the Alberta CCS Fund, a $2 billion
program announced in 2008 to advance carbon capture and storage
A feasibility study conducted for Project Pioneer determined the
technology was viable and that capital costs would be consistent
with expectations. However, reports suggest that even with the
committed government funding, the project would not have been
economically viable because of two factors. First, because of
the relatively low cost of carbon under Alberta's carbon
pricing scheme, the project would have generated insufficient
savings on carbon offsets or carbon charges under that
scheme. Second, the project was not able to secure sufficient
guarantees of revenue from the sale of CO2 for enhanced oil
These two factors are at play in the broader project development
sector in Canada. Low or non-existent carbon prices across
Canada make carbon-reduction projects (including non-carbon based
power generation, energy storage, and CCS projects) less
financially attractive, particularly in an era of already low
natural gas prices. At the same time, a variety of energy (and
non-energy) projects are challenged by an inability to secure
bankable off-take agreements. For example, development of a
number of renewable generating projects in Alberta is being slowed
by a scarcity of opportunities to obtain long-term power purchase
The federal and Alberta provincial governments have focused
their carbon strategies on capture and storage, rather than
reduction. The failure of Project Pioneer, despite large
amounts of government financial support, may force a rethink in
tactics (although likely not in strategies).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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