Yahoo Finance Cenovus chair defends carbon capture as IEA slams 'years of underperformance'
Six of Canada's largest oilsands producers plan to spend $16.5B on a Northern Alta. project by 2030
Cenovus Energy's (CVE.TO)(CVE) executive chair Alex Pourbaix calls carbon capture and storage (CCS) technology "relatively proven" as the technology faces pointed criticism from the International Energy Agency (IEA).
His comments come as the Pathways Alliance, a group of Canada’s largest oilsands producers, prepares to file government applications for a $16.5-billion carbon capture network in northern Alberta in the coming months.
Pathways’ six members include Cenovus, Canadian Natural Resources (CNQ.TO)(CNQ), Suncor Energy (SU.TO)(SU), Imperial Oil (IMO.TO)(IMO), ConocoPhillips Canada (COP), and MEG Energy (MEG.TO). In 2022, the group announced a plan to collect carbon dioxide from up to 20 oilsands facilities into a pipeline to Cold Lake, Alta., where the emissions will be injected more than a kilometre underground.
“If we desire to make a meaningful dent in our CO2 emission in the next 15 years, CCS absolutely has to be part of that," Pourbaix told Yahoo Finance Canada in an interview. "It’s a technology that we have right in front of us right now."
After years of underperformance, [carbon capture utilization and storage] must now show it can deliver.International Energy Agency Net Zero Roadmap report
His assurance follows an IEA report last month downgrading the expected role of CCS in cutting global emissions.
“After years of underperformance, [carbon capture utilization and storage] must now show it can deliver,” the agency stated in its latest Net Zero Roadmap report. “So far, the history of CCS has largely been one of unmet expectations. Progress has been slow and deployment relatively flat for years.”
On its website, Pathways says it could begin injecting and storing CO2 by late 2026, once regulatory approvals are complete.
“We are getting very, very close to filing,” Pourbaix said. “We are moving along the path of sequestering the carbon for the foundation project in that [2026] timeline.”
Pathways president Kendall Dilling has already warned of potential delays, pointing to the Trans Mountain pipeline expansion project's latest regulatory hurdles. Frictions may already be forming with Ottawa. Last month, Reuters reported that Pathways is struggling to lock in future carbon credit prices through a federal government fund.
Globally, there are more than 500 projects at various stages of development, according to Gulf Energy Information’s Global Energy Infrastructure database. However, the IEA says only around 20 CCS projects under development have reached the final investment stage.
Pourbaix points to Saskatchewan’s Boundary Dam Power Station as an example of the technology at work. The SaskPower-operated coal-fired station uses CCS to cut emissions. However, the project has been called “uneconomical” by critics.
"This industry has a track record of incredible innovation. If any industry is going to make CCS more economical, more technologically successful, it's going to be the energy industry," Pourbaix said. “There's a little bit more work that needs to be done.”
Some of that work is underway in the UAE. The country’s state-owned energy company Adnoc recently announced a final investment decision on a facility designed to store 1.5 million tonnes of CO2 per year underground as part of its US$15 billion decarbonization investment program. The project will triple Adnoc’s current CO2 storage capacity.
Pourbaix says he’s anxious to start “putting pipe in the ditch.”
However, his worries about regulatory delays were a common theme among energy industry leaders at last week’s Toronto Global Forum, including those outside the fossil fuel sector.
Ontario nuclear power operator Bruce Power’s chief development officer spoke of decade-long processes keeping shovels out of the ground.
“As long as we allow these regulatory processes to go on 10 years before you build anything, we are not having the right risk-informed view of this,” James Scongack said last Thursday at Toronto’s Royal York Hotel.
Asked if Ottawa and the provinces are properly balancing the need for carbon-cutting projects with their role as regulators, Pourbaix said: “It’s a challenging environment, but we’re moving with all speed.”
“Nobody in my industry is looking for a free ride in the regulatory process,” he added. “The Canada (federal) process, and the Alberta process, are very, very detailed. They’re very rigorous. And we’re happy with that.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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