The Athabasca Oil Sands carbon capture and storage project, the first to be associated with an Alberta, Canada, oilsands operation, has been given the go-ahead by majority owner Royal Dutch Shell, creating what the oil and gas major considers a flagship project. It is government-backed and is scheduled to be operational by late 2015
Sanctioning of the $1.35-billion project also relieves some of the embarrassment suffered by Alberta and federal governments after TransAlta Corp and its parters decided in April to abandon the $1.4-billion Pioneer CCS project on economic grounds in spite of nearly $800 million in public finance backing.
The Quest project will be funded with $745 million from the Alberta government over 10 years and $120 million from Ottawa’s Clean Energy fund, with the rest shared by the project partners – operator Shell Canada at 60 per cent, and Chevron Canada and Marathon Oil at 20 per cent each.
The new facility will strip out up to 35 per cent of the carbon dioxide emissions from the project’s Scotford Upgrader northeast of Edmonton, partially liquefy it and pipe it 80 km to be injected underground at a depth of 2 km in an impermeable basal Cambrian sands formation. The project is designed to capture more than one million tonnes per year of CO2 from the upgrader. Nonetheless even at this scale it is only a start. It will however will capture only 15 per cent of current emissions from the entire AOSP operations, which include 250 000 barrels per day of bitumen mining capacity in the Fort McMurray region. There are no plans at present to expand the programme through further funding or regulation, which is seen mainly as a project is designed to advance and prove CCS technology.
Ed Whittingham, executive director of the environmental Pembina Institute, commented "The project is a good first step but not a full solution to curbing greenhouse gas emissions, which are linked to global warming." he said that Shell was doing the right thing in going ahead, but that industry would need to see incentives to follow its lead, suggesting the province should at least double its carbon fee of $15 per tonne, levied on large emitters of greenhouse gases representing 12 per cent of total emissions.
A spokesman for the Shell board said that the company approved the project with no expectation of a profit on its investment but noted that Shell can sell the carbon credits it earns (it gets double credit in Alberta for each tonne sequestered) and may also sell CO2 to oil and gas companies for enhanced recovery projects, although no such agreements have so far been finalised.
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