“We haven’t been able to find any jurisdiction in the world where carbon capture has been implemented, where the national government or the state governments are not very significant partners in that investment,” Alexander Pourbaix, CEO of Cenovus Energy Inc., said in the same interview “I don’t think any of us would ever be in a position to go at this on our own. It’s just too significant an undertaking.”
The initiative follows mounting pressure from large, climate-minded investors, many of which have ditched their oil sands holdings. Sitting atop the world’s third-largest crude reserves, the Canadian industry uses carbon-intensive extraction methods that have made it a target of environmentalists. Also at stake are jobs and tax revenues from an industry that represents about 10% of the Canadian economy.
“We have one Achilles heel: It’s greenhouse gas emissions,” Little said. “We can bury our heads in the sand and become a victim, or we can actually deal with it.”
The oil sands industry emits almost 70 million metric tons a year of carbon dioxide, about 10% of Canada’s emissions, “so we are a big emitter for sure,” Little said.
The plan to cut those emissions– which also has the support of Canadian Natural Resources Ltd., Exxon Mobil Corp.’s Imperial Oil and MEG Energy Corp. — will include measures like switching the fuels used at oil sands operations and using solvents to haul crude more efficiently. Later on, the industry might employ small nuclear reactors to make steam, Pourbaix said.
One of the group’s first big project is to build a carbon dioxide-carrying trunk line along a corridor that links oil sands facilities in the Fort McMurray area and Cold Lake regions of Northern Alberta to a nearby carbon sequestration hub. The trunk line will likely cost C$1 billion to C$2 billion, and could be in operation by the middle of the decade. But the biggest costs are associated with capturing the CO2, ranging from about C$50 a ton for industries that emit high concentrations to “several hundred dollars a ton” for direct capture from the air, Little said.
The plan doesn’t include so-called Scope 3 emissions, the ones generated by cars, aircraft, homes and factories when the fossil fuels produced in the oil sands are burned by the end consumers.