The Alberta Carbon Grid partnership

June 18, 2021  |  James Lin

Image by jotoya from Pixabay

Image by jotoya from Pixabay

On June 17, 2021 the Calgary-based pipeline companies Pembina Pipeline and TC Energy announced a partnership to develop a major carbon transportation and sequestration system. Dubbed the Alberta Carbon Grid, it involves using both new and existing pipelines to link emissions sources to sequestration locations across the province.

The system is scheduled to be fully operational in 2027, and will transport and sequester 20 million tonnes of carbon emissions per year (about 10% of Alberta’s annual industrial emissions). It is privately-funded, and is intended to provide emitting companies with a lower-cost alternative to the federal carbon tax.

Canada’s Minister of Natural Resources along with Alberta’s Ministers of Environment & Parks and Energy have officially endorsed the project. Of note, Minister Seamus O’Regan Jr. from Natural Resources Canada said, in reference to carbon transportation and storage, that “[t]his is how we get to net zero” (see news release linked above).

This project uses carbon capture utilization and storage (CCUS) technology. The oil industry is heavily relying on it to meet climate objectives, including achieving net zero by 2050 and 40% to 45% emissions reductions below 2005 levels by 2030. There are skeptics, however, who say that CCUS is simply prolonging the use of fossil fuels instead of promoting alternatives such as renewables. Such initiatives are therefore also controversial, with some environmentally-minded people and organizations opposing CCUS development.

The announcement comes shortly after the alliance of oil companies on achieving net zero (see our article on the subject), and similarly aims to signal the participants’ commitment to environmental and social governance (ESG) values. Failing to do so could make it difficult for companies to obtain financing, as many investors are now considering divesting from oil companies, including those working in the Alberta oil sands.

As with the oil alliance, it remains to be seen how effective the Alberta Carbon Grid will be. Still, seeing companies that normally make money through carbon-intense activities coming together and committing to environmental objectives would have been unthinkable until recently. At the very least it strongly suggests that these companies are serious about ESG values and Canada’s net zero ambitions.

We will be following the Alberta Carbon Grid’s developments. Stay tuned for more.

James Lin

James is the son of INZ founder Charles. He has a PhD in economics from the University of Alberta.

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