Massive carbon-capture project announced for oilsands
Joe Oliver (Toronto Sun files)
CALGARY — The Alberta oilsands' first carbon-capture project will be pumped up with $865 million in government cash.
The $1.35-billion Shell-Chevron-Marathon Oil program to store C02 emissions from the Scotford upgrader is set to commence in 2015.
It's estimated the Quest project to inject CO2 emissions 2.3 km underground will sequester 35% of the greenhouse gases produced by the facility.
The province will kick in $745 million, the federal government $120 million and a consortium led by Shell will pay for the rest.
Ian Silk, Quest project manager, said groundwork and some preliminary construction for the project will begin this fall with the bulk of construction taking place in 2013. The project will peak at about 500 jobs before it is completed at the end of 2014.
Half the project's material will be assembled at an off-site construction yard in the Edmonton area, which has yet to be selected, and then shipped to the Scotford refinery for inclusion in the facility.
Critics of government funding of carbon capture projects say they amount to massive taxpayer subsidies to hugely profitable energy companies for unproven technology.
But Alberta Energy Minister Ken Hughes says governments have a vital role to play in launching major projects that involve new technologies.
"This is early in the history of this technology — sometimes public policy requires involvement to ensure initiatives go forward," he said.
Government and industry working together to address climate change from the oilsands also sends a message to the international community, Hughes said.
"The world is watching...I'm glad the international community is interested in what we're doing in Alberta," he said.
"This is a potential game-changer."
John Abbott, Shell's executive vice-president of heavy oil, said know-how derived from Quest will contribute to environmental progress internationally.
"It will provide the ability to accelerate the development of this technology throughout the world," Abbott said, adding the work won't add to his company's bottom line.
"We're not seeing a return on this particular investment, this is about environmental management."
Federal Natural Resources Minister Joe Oliver said his government's investment shows a commitment to preserving the environment and jobs.
"It'll allow us to take advantage of our abundant resources while protecting the environment," he said.
"We're committed to taking concrete steps in reducing greenhouse gas emissions."
Ultimately, the environmental impact of Quest will equal taking 175,000 vehicles off North America's roads, Oliver said.
Alberta's portion of the funding is part of its $2-billion commitment to carbon storage, of which $1.5 billion has now been committed.