By Marisa Coulton
Financial Post, Jul 15, 2022
Canada should make a “big bet” on carbon capture to lower emissions from the oil and gas sector, Mark Carney, former governor of the Bank of Canada told delegates at the International Economic Forum of the Americas in Montreal, which brought together business leaders from around the world to discuss the green transition in the private sector.
“For Canada as a whole, we need to make a big bet, or I should say investment rather than a bet, in carbon capture in Western Canada to address the 25 per cent of our emissions that come from the oil and gas sector,” he said on Tuesday. “It’s necessary, in and of itself, to address that.”
Carney added that Canada has the opportunity to be “front and centre” in the “reordering and rewiring” of the global economy.
“As the world is being rewired, we’ve got clean energy, we’ve got amazing human capital, we’ve got stability, we’ve got fantastic trading relationships around the world,” he said. “And all of that gets leveraged.”
Over the course of the conference, carbon capture emerged as one of the more promising mitigation methods in the fight against climate change.
The Intergovernmental Panel on Climate Change (IPCC) defines carbon capture as “a process consisting of the separation of (carbon dioxide) from industrial and energy-related sources, transport to a storage location and long-term isolation from the atmosphere.” In other words, instead of releasing CO2 into the atmosphere, energy producers will capture and store it.
The IPCC has said that carbon capture has “considerable” potential, and will likely need to be a part of emissions reductions efforts going forward. The Center for Climate and Energy Solutions, an Arlington, Va.-based environmental non-profit said carbon capture is now “viewed as the only practical way to achieve deep decarbonization in the industrial sector.”
Energy producers are catching on, helped in part by the Canadian government, which committed $10 billion to carbon capture in the 2022 budget. Companies will be able to take advantage of an investment tax credit that will reduce the cost of carbon-capture projects by 50 per cent to 60 per cent.
“We’re working with universities and other companies to pilot a carbon capture from stacks in our refineries,” said Kevin Scott, chief refining and supply officer at Saint John, N.B.-based Irving Oil Ltd. “(It’s) one of the few and first projects of its kind in the world to actually capture the CO2 out of emissions and then work with others to figure out how we’re going to sequester those.”
But carbon capture has its downsides, too. For one, it’s more expensive than releasing CO2 into the atmosphere. It also has environmental risks.
According to an IPCC report, the captured carbon could either be pumped into the ocean or buried underground. Storing the carbon underground would be relatively low risk, but adding CO2 to the ocean will “alter the local chemical environment” and cause “the mortality of ocean organisms.” The pipelines used to transport the CO2 over long distances would also run the risk of leakage.
Critics say that carbon capture will merely prolong oil and gas production in Canada.
At the conference, Carney said he was impressed by the rapid uptake of hydrogen fuel across various industries. Hydrogen does not directly contribute to climate change when released into the atmosphere, but it does compound the impact of other gasses in the atmosphere, thereby contributing to indirect warming.
But until the economy has been appropriately rewired, “we need a system that is focused on transition,” Carney said.