Alberta signs first agreement to licence underground space for CO2 capture

What’s a hole in the ground worth? Or more accurately, a micro orifice capable of storing sequestered CO2 from an oil and gas refinery.That’s the $15 billion question after Alberta became one of the first jurisdictions in North America — and possibly the world — to lease portions of the subsurface for carbon capture and sequestration (CCUS).On Monday, Energy Minister Brian Jean along with representatives from Shell and ATCO signed what they described as a ‘generational agreement’ to allow the companies to store captured CO2 in the ground from the proposed Atlas storage hub..Leasing agreements are common among oil and gas companies to extract minerals like petroleum and natural gas from the subsurface; but now they have the right to put gases back in.“Atlas will now have a right to inject and store captured carbon dioxide at their proposed storage hub location,” Jean said at a formal signing ceremony in Calgary. “I'm confident that we are witnessing the first of what will be many other agreements of this nature.”In late June, Shell Canada announced plans to build the Polaris carbon capture facility at the Scotford refinery near Edmonton, capable of capturing 650,000 tonnes of CO2 per year. In addition, it announced plans to partner with Calgary-based ATCO to build the Atlas storage hub and signed on to become its first customer to store it..“But there is also the other question, what can we do with with this asset that we're storing in the ground,”Brian Jean.The companies envision a full-blown network to capture CO2 from third parties to store it, or alternatively sell it for industrial purposes like enhanced oil recovery or even making cement.Costs weren’t disclosed but Shell has announced plans to spend up to $15 billion by 2025 to decarbonize the refinery and its operations.In that sense, Jean described both the CO2 and the pore space used to store it as an “asset.” Premier Danielle Smith has long boasted that Alberta has the combination of know-how and geology to sequester — literally — the world’s entire emissions.“But there is also the other question, what can we do with with this asset that we're storing in the ground,” Jean said. “I say asset because it is an asset… we see this as a future asset for the people of Alberta and the people of Canada.”.In a news release the Alberta government said CCUS development is expected to generate approximately $35 billion in investment and add up to 21,000 jobs by 2035.Despite criticism — from federal Energy Minister Jonathan Wilkinson — that technology alone won’t address growing emissions from the oil and gas sector, Shell country chair Susannah Pearce said CCUS is not only technically viable, but that the economics would improve over time.“The technology that we're using is proven. It's been proven here also in Alberta. From our perspective, we see it as an important part of our strategy to decarbonize industrial emissions as we see it under the Paris Agreement,” she said. “For Shell it's also something where we see this as something customers which is why we're partnering with ATCO to invite customers sequester air emissions in our hub.”According Bob Myles, ATCO EnPower’s chief operating officer: “This is one component to be able to not only capture CO2, but also to enhance and develop an industry globally. And so when I look at Southeast Asia, there's a lot of interest in what we're doing here. And the economics there do make sense.”

Alberta signs first agreement to licence underground space for CO2 capture

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