The destiny of Canada’s largest proposed carbon capture and storage venture is much more unsure after Prime Minister Justin Trudeau’s resignation announcement this week amplified current unknowns round the way forward for vitality and local weather coverage in Canada, consultants say.
The $16.5-billion high-profile venture in query would seize dangerous carbon dioxide emissions from the oilsands, Canada’s heaviest-emitting sector.
It will be constructed by the Pathways Alliance, a consortium whose members embody a few of Canada’s largest vitality corporations.
However trade watchers say the venture’s future is cloudy attributable to present political turmoil and the chance {that a} new federal authorities can be elected this yr.
“I can’t think about an enormous venture like that might actually transfer ahead in a time like proper now,” mentioned Michael Bernstein, government director of the non-profit group Clear Prosperity.
“If you’re taking a look at a venture that has at the very least a 15-year time horizon, you need as a lot certainty as potential. And there’s simply extra uncertainty than I can keep in mind in my entire time doing this work proper now.”
The Pathways Alliance is made up of six oilsands corporations which have collectively dedicated to attaining net-zero greenhouse fuel emissions from oilsands manufacturing by 2050.
Their proposed venture, the centrepiece of that dedication, would seize carbon dioxide emissions from greater than 20 oilsands services in northern Alberta and transport them 400 kilometres away by pipeline to a terminal within the Chilly Lake space, the place they might be saved in an underground hub to forestall them from getting into the ambiance.
The venture could be one of many largest carbon seize and storage tasks on the planet, if it got here to fruition. However whereas the businesses first proposed the joint venture in 2022, they haven’t but made the ultimate funding determination required to proceed.
Pathways has spent a lot of the time since then lobbying for federal and provincial assist.
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A spokeswoman for the Pathways Alliance declined to remark Monday when requested concerning the present Canadian political state of affairs.
Scott Crockatt — spokesperson for the Enterprise Council of Alberta, a gaggle whose membership contains main oilsands corporations — mentioned whereas an prolonged interval of political uncertainty poses challenges for companies general, the Alberta corporations which have proposed decarbonization tasks in recent times stay dedicated to that objective.
“Most companies who have been taking a look at decarbonization tasks and different forms of sustainability tasks have been doing it for honest enterprise causes, like producing worth and decreasing long-term threat,” Crockatt mentioned.
“So I really don’t suppose that underlying motivation goes to alter with political cycles.”
However the oil trade has additionally repeatedly mentioned that investing in carbon seize, which stays a vastly costly know-how, can not occur with out vital ranges of presidency assist.
The federal Liberal authorities, which has publicly referred to as on the oil trade to maneuver sooner on its emissions-reduction guarantees, created an funding tax credit score for carbon seize and storage tasks in an effort to get corporations to maneuver forward.
The Liberal authorities has additionally promised a mechanism to backstop the worth of carbon as a way to give certainty to corporations contemplating investing in emissions-reducing know-how. However whereas the federal Canada Progress Fund has been in talks with the Pathways Alliance on this subject, particulars of a project-specific settlement have but to be hammered out.
The Canada Progress Fund didn’t reply to a request for remark.
Heather Exner-Pirot, particular advisor on vitality to the Enterprise Council of Canada, mentioned the issue for Pathways is that with polls exhibiting the Conservatives are more likely to win an upcoming federal election, it’s unclear how far a Pierre Poilievre authorities would go to financially assist the group’s flagship venture.
Whereas Poilievre has been clear on his need to eliminate the patron carbon tax, he has not mentioned what’s going to he do about Canada’s industrial carbon pricing system and can seemingly have much less of a climate-oriented agenda than the current Liberal authorities.
“It doesn’t sound, from every part they (the Conservatives) have been saying, like they might assist what you would want to do to get Pathways Alliance over the hump in the timeframe we’ve been taking a look at,” Exner-Pirot mentioned.
“They don’t appear to be very eager on it. It’s simply very costly.”
Andrew Botterill — vitality, sources and industrials associate at Deloitte Canada — mentioned any future weakening of the commercial carbon pricing system or emissions allowances would injury the enterprise case to spend money on decarbonization know-how. That’s why a looming election on the horizon may delay or stop ultimate funding selections, he mentioned.
“Corporations are searching for long-term certainty and an understanding on what the market’s going to appear to be for the following 10 years, and 20 years and 30 years,” Botterill mentioned.
“After they see issues on the horizon which are unsure I feel it slows the massive capital spends.”
The present federal emissions discount plan — which requires Canada to chop its emissions by 40 to 45 per cent beneath 2005 ranges by 2030 and to achieve net-zero emissions by 2050 — envisions nationwide carbon seize and storage capability greater than tripling by 2030.
The Pathways Alliance itself had initially set 2030 because the date it hoped its venture could be sequestering carbon.
However Clear Prosperity’s Bernstein mentioned it’s very troublesome to see how that time-frame might be met at this level.
“These tasks take the higher a part of a decade to finish, and we simply don’t have that point accessible,” he mentioned. He added getting the Pathways venture off the bottom was at all times going to require the businesses, the province of Alberta and the federal authorities to co-operate and compromise — and people objectives appear farther away than ever.
“What we all know at this level proper now’s there isn’t a deal that works for all of the events,” he mentioned.
“It’s too dangerous that we don’t have one right now, and that we lack readability on whether or not there’ll ever be one.”
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