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    Canadian oil sands producers commit to net-zero

Summary

Plans include CCUS deployment, electrification and possible modular nuclear reactors.

by: Dale Lunan

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Canadian oil sands producers commit to net-zero

Five of Canada’s largest oil sands producers said June 9 they would embark on a path to net-zero by 2050, utilising a range of technologies to slash greenhouse gas (GHG) emissions.

The Oil Sands Pathways to Net Zero initiative is a collaboration of Canadian Natural Resources Limited (CNRL), Cenovus Energy, ExxonMobil affiliate Imperial, MEG Energy and Suncor Energy, which collectively account for 90% of Canada’s oil sands production and contribute about 68mn mt/yr of CO2 to Canadas GHG inventory. Under the Pathways initiative, they plan to lower their overall emissions by 22mn mt/yr by 2030 and cut another 25mn mt by 2040 before reaching net-zero by 2050.

Alberta’s oil sands are Canada’s single largest source of natural gas demand, accounting for about half the gas used in the province year-round. Gas is consumed in thermal operations to raise steam and for power co-generation.

“This collaborative effort follows welcome announcements from the government of Canada and the government of Alberta of important support programs for emissions-reduction projects and infrastructure,” the alliance said in a statement. “Collaboration between industry and government will be critical to progressing the Oil Sands Pathways to Net Zero vision and achieving Canada’s climate goals.”

The Pathways vision is anchored by a major carbon capture, utilisation and storage (CCUS) trunkline that would link CO2 emission sources to a sequestration hub. Emitters outside the alliance would be able to link to the trunkline to drive even greater emission reductions.

“The proposed CCUS system is similar to the multi-billion dollar Longship/Northern Lights project in Norway as well as other CCUS projects in the Netherlands, UK and US, all of which involve significant collaboration between industry and government,” the alliance said.

Governments, the alliance said, need to develop policies, fiscal programmes and regulations that will provide certainty to the long-term, large-scale investments required to advance the Pathways initiative. Included, it said, are access to long-term sequestration rights, emissions reductions credits and ongoing investment tax credits, a structure for which the federal government is now discussing with stakeholders, including the oil sands sector.

“We look forward to continued collaboration with both the federal and Alberta governments to create the regulatory and policy certainty and fiscal framework needed to ensure the economic viability of this initiative,” the alliance said.

Although cost estimates for achieving carbon neutrality in the oil sands were not provided, the alliance said the initiative was “ambitious” and would require “significant investment” from both industry and government to advance new and emerging technologies.

The Oil Sands Pathways to Net Zero initiative is an industry driven, made-in-Alberta solution which will strengthen our position as global ESG leaders,” Alberta energy minister Sonya Savage said. “Every credible energy forecast indicates that oil will be a major contributor to the energy mix in the decades ahead and even beyond 2050, and Alberta is uniquely positioned and ready to meet that demand.”

Beyond creating the CO2 trunkline, which would sequester emissions from the Fort McMurray and Cold Lake regions in the sequestration hub near Cold Lake, the alliance sees additional parallel pathways to address emissions, including clean hydrogen, process improvements, energy efficiency, fuel switching and electrification.

And it could also involve evaluating, piloting and accelerating the commercialisation of emerging emission reduction technologies such as direct air capture, next-generation recovery technologies and small modular nuclear reactors.

Canada has an opportunity to lead on climate change by delivering meaningful emissions reductions as well as balancing sustainable economic development,” CNRL president Tim McKay said. “Canadian ingenuity has enabled oil sands development and with continued innovation, positions Canada to be the ESG-leading barrel to meet global energy demand.”