In March 2022, on the heels of the Canadian Net-Zero Emission Accountability Act<1, Canada published its 2030 Emissions Reduction Plan (2022)2 which is focused on driving net-zero carbon emissions by 2050. One way in which Alberta has responded to both is by exploring the development of carbon capture, utilization, and storage (CCUS) within the province. To facilitate CCUS development in the province, Alberta has initiated a request for project proposals (RFPP) process for carbon sequestration hubs.
By working with industry proponents of selected RFPP projects, Alberta is seeking to generate investment and develop an alternative for companies faced with paying rising federal carbon taxes by linking CCUS and offset credits. If a CCUS project meets the requirements of the Alberta emission offset system, then the CCUS project will be eligible to earn offset credits. Emission offset credits are earned by projects that have voluntarily reduced greenhouse gas emissions. To qualify for emission offset credits, emission offset projects, such as CCUS projects, must meet the requirements of the Technology Innovation and Emissions Reduction Regulation (TIER)3, the Standard for Greenhouse Gas Emission Offset Project Developers4, and a relevant Alberta-approved quantification protocol, such as the CO2 Capture and Permanent Storage in Deep Saline Aquifers protocol.5
Initial Steps for Pursuing CCUS Projects in Alberta
Alberta has recently issued two RFPP's for CCUS projects. Under the first and second RFPP, proponents of a selected CCUS project must work with Alberta to further evaluate whether the project can provide permanent carbon dioxide storage. Under the Mines and Minerals Act (MMA)6 and the Carbon Sequestration Tenure Regulation7 (the Regulation), Alberta grants an evaluation permit that allows the project proponent to evaluate a subsurface reservoir and to determine that reservoir's suitability for use in a CCUS project. An evaluation permit has a term of five years and may be renewed. The permit does not grant the right to recover minerals, nor does it guarantee that a carbon sequestration lease (Lease) will be granted. The evaluation permit only allows the proponent to gather evidence that a reservoir is suitable for carbon sequestration. If the evidence satisfies Alberta that the reservoir in the Lease application is suitable for CCUS, the Lease may be granted under the Regulation.
A Lease grants the proponent rights to inject carbon dioxide into a subsurface reservoir for sequestration. A Lease has a term of 15 years and can be renewed on application.
Alberta and any successful proponent will jointly determine the terms and conditions of any Lease, including the "hub manager" role.8 If the Lease is granted, the proponent must provide open, affordable use of the sequestration hub to third parties. Reasonable cost recovery for the proponent will be allowed.
Status of the Alberta RFPP Process
After issuing its first RFPP on December 2, 2021, which was limited to project locations in Alberta's industrial heartland region, on March 31, 2022, Alberta selected six projects for further evaluation. Given the high industry interest in the first RFPP, on March 3, 2022, a second RFPP was issued and this second RFPP was not limited to any geographic location.
Six projects from the first RFPP were selected for further evaluation as potential CCUS hubs:
- Meadowbrook Hub Project north of Edmonton, funded by Bison Low Carbon Ventures Inc.
- Open Access Wabamun Carbon Hub west of Edmonton, funded by Enbridge Inc.
- Origins Project south of Edmonton, funded by Enhance Energy Inc.
- Alberta Carbon GridTM north and northeast of Edmonton, funded by Pembina Pipeline Corporation and TC Energy.
- Atlas Carbon Sequestration Hub east of Edmonton, funded by Shell Canada Limited, ATCO Energy Solutions, and Suncor Energy Inc.
- Wolf Midstream and partners east of Edmonton.
The second RFPP was issued to attract proposed sequestration hubs in areas of Alberta outside of the industrial heartland region. More than 40 project proposals have been submitted in the second RFPP. Guidelines9 for the second RFPP include the following:
- Projects should target emissions outside of the industrial heartland region.
- Projects can sequester at multiple facilities if all facilities are within Alberta.
- Only pore space owned by the Alberta government is eligible.
- Projects that inject carbon dioxide for enhanced oil recovery or formation acid gas injection are ineligible.
Other Alberta-Based Projects
The following are other noteworthy proposed CCUS projects in Alberta that have been publicly announced:
The Pathways Alliance is a group of six Canadian oil sands producers working together to address climate change (Canadian Natural Resources, Cenovus Energy, Conoco Phillips, Imperial, Meg Energy, and Suncor). Together, the Pathways Alliance operates 95% of Canada's oil sands production. The Pathways Alliance plans to build a foundational carbon capture and storage network in northern Alberta that boasts a carbon transportation line to gather captured carbon dioxide from more than 20 oilsands facilities. A proposed hub in the Cold Lake area of Alberta is the target carbon sequestration site.
The Hinton Bioenergy Carbon Capture and Sequestration Project Study led by Vault 44.01 in collaboration with West Fraser and TorchLight Bioresources. It is estimated that this project could remove 1.3 million tonnes of carbon dioxide from the atmosphere yearly.
Strathcona Resources Ltd. (SRL) seeks to develop a distributed CCS and sequestration hub in the Cold Lake region. Three SRL thermal operations (Tucker, Orion and Lindbergh), each of which is used daily to produce bitumen using SAGD technology, would collect and dispose of carbon dioxide emissions.
The Quest CCUS facility (Quest) is part of the Athabasca Oilsands Project. Since commencing operation in 2017, Quest has permanently captured and stored 5 million tonnes of carbon dioxide.
Alberta expects to release the results for the second RFPP in the fall of 2022. Canada has committed to cut carbon dioxide emissions below 2005 emissions levels by 2030 and CCUS projects are regarded in Alberta as a leading factor in meeting that commitment.10 The International Energy Agency estimates that 40 million tonnes of CCUS capacity is currently available globally, and that 7.6 billion tonnes of CCUS capacity is required to achieve global carbon neutrality.11 Of the 40 million tonnes of capacity currently in place, nearly three-quarters has been captured by oil and gas operations.12 The opportunity for investment, including Federal funding opportunities, and offset credits to overcome rising carbon taxes is likely to increase interest in new CCUS projects in Alberta.
The authors would like to acknowledge the support and assistance of Bailey Szoke, articling student at law.
1 Canadian Net-Zero Emission Accountability Act, SC 2021, c. 22.
2 The Government of Canada, 2030 Emissions Reduction Plan: Canada's Next Steps to Clean Air and a Strong Economy (March 2022), online: 2030 emissions reduction plan : Canada's next steps to clean air and a strong economy.:En4-460/2022E-PDF - Government of Canada Publications - Canada.ca
3 Technology Innovation and Emissions Reduction Regulation, Alta Reg 133/2019
4 The Government of Alberta, Standard for Greenhouse Gas Emission Offset Project Developers (November 2019), online: Standard for greenhouse gas emission offset project developers. Version 3.0 - Open Government (alberta.ca)
5 The Government of Alberta, Quantification Protocol for CO2 Capture and Permanent Storage in Deep Saline Aquifers (June 2015), online: Quantification Protocol for Co2 Capture and Permanent Storage in Deep Saline Aquifers (alberta.ca)
6 Mines and Minerals Act, RSA 2000, c M-17
7 Carbon Sequestration Tenure Regulation, Alta Reg 68/2011
8 A "hub manager" is the party responsible for maintaining and providing access to the pore space used as a carbon sequestration hub. The proponent of a project granted a Lease is likely to perform the role of hub manager.
9 REQUEST FOR FULL PROJECT PROPOSALS For CARBON SEQUESTRATION HUBS" (March 3, 2022): Energy request for full project proposals rfpp guidelines March 3, 2022 (alberta.ca)
10 The Government of Canada, 2030 Emissions Reduction Plan: Clean Air, Strong Economy (July 2022), online: 2030 Emissions Reduction Plan: Clean Air, Strong Economy - Canada.ca
11 The International Energy Agency, Net Zero by 2050 (May 2021), online: Net Zero by 2050 - A Roadmap for the Global Energy Sector (windows.net)
12 The International Energy Agency, Net Zero by 2050 (May 2021), online: Net Zero by 2050 - A Roadmap for the Global Energy Sector (windows.net)
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