Ottawa says it plans to invest $63 million in Alberta carbon capture project

The Canadian Press ~ The News
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CALGARY - A large-scale carbon capture and storage project planned for Alberta's industrial heartland could be a "bright light" for a region hit hard by woes in the petroleum refining sector, the head of a local economic development group said Tuesday.
"It could become a huge strategic factor in where companies locate their operations," said Neil Shelly, executive director of Alberta's Industrial Heartland Association, which represents four municipalities surrounding Edmonton.
The federal government announced plans Tuesday to invest $63 million in the Alberta Trunk Line project, led by Enhance Energy Inc. in partnership with Northwest Upgrading.
The project is designed to gather carbon dioxide from the area northeast of Edmonton, home to several refineries and petrochemical plants, and then transport the gas via pipeline to mature oilfields in South-Central Alberta.
The gas will then be pumped into the depleted reservoirs as a means to boost oil production in a process called enhanced oil recovery.
In addition to Northwest Upgrading's planned bitumen upgrading and refining complex, a fertilizer plant run by Agrium Inc. (TSX:AGU) in the area will also be among the first to contribute carbon dioxide to the pipeline.
At full capacity, the project will have the potential to store up to two billion tonnes of carbon dioxide, the equivalent of taking 2.6 million cars off the road every year.
"As industry looks for a way to effectively deal with their CO2 emissions by keeping them out of the atmosphere, we are offering a much needed solution - a safe and secure storage destination for CO2," said Susan Cole, president and CEO of Enhance Energy.
Ottawa is funding the project partly through its $1-billion Clean Energy Fund, Natural Resources Minister Lisa Raitt said in a statement.
The Alberta government is expected to announce support for the project in Edmonton later Tuesday.
In the depths of the economic downturn, oil sands companies cancelled or delayed several projects that would process the raw bitumen they produce into higher-value products.
Now that investment in the oil sands is ramping back up again, many big players are opting to send their bitumen to be processed at plants south of the border, where they say the economics are more attractive.
That has prompted fears that jobs lost during the recession may never return once the economy recovers, unless the province takes steps to make Alberta more competitive with other regions.
Investing in carbon capture and storage systems like the Alberta Trunk Line could be a means to accomplish that, given that environmental regulations in the United States and Canada are sure to become more stringent in the years ahead, Shelly said.
"We're probably going to be living in a carbon restrained future, whether it comes this year, next year or five years down the road," he said.
"We'll become one of the few regions, if not the only region in the world, that has basically a plug and play carbon capture and storage system in place."

Organizations: Industrial Heartland Association, Enhance Energy, Agrium Inc. TSX

Geographic location: Alberta, Ottawa, Edmonton Northwest Upgrading CALGARY United States Canada

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