The Alberta government is pitching for a 10-year, C$30-billion federal budget commitment to subsidize large-scale carbon capture, storage and utilization (CCUS) projects, even as the federal and provincial governments form a joint working group to develop CCS strategy for the fossil sector.

The two governments announced the working group Monday, just a day after the Globe and Mail broke the story on Alberta’s subsidy demand.

“There isn’t a pathway to net-zero without carbon capture—globally or in Canada, or anywhere,” Alberta Energy Minister and former pipeline executive Sonya Savage told the paper. “And if we’re going to hope to get to net-zero by 2050 we’re going to have to start working on it now.”

“The government of Canada has, of course, committed to very ambitious emissions reduction targets, and it’s our view that there’s no feasible way for Canada to achieve those targets within the stated timelines without a widespread application of game-changing technology like CCUS,” Kenney agreed at a news conference Monday.

The Globe reported on the subsidy demand based on a discussion document it obtained ahead of the federal budget that Finance Minister Chrystia Freeland is expected to unveil next month. It shows the $30-billion federal subsidy enabling Alberta industries to reduce their greenhouse gas (GHG) emissions by 30 megatonnes over the next decade. 

(That would add up to a subsidy cost of $1 billion per megatonne, or $1,000 per tonne, proposed by the same provincial government that led the legal assault on a carbon price that was set to top out at $50 per tonne at the time the lawsuits were launched. In fairness, Alberta would expect the CCUS technology to remain in operation beyond that first decade, presuming that competing technologies and growing alarm about climate impacts haven’t tanked oil demand by then.)

“The document argues the Alberta industrial sector’s contribution to the national economy warrants the long-term investment from the federal government, and the country could become a global leader in the technology,” the Globe writes. “CCUS, the report said, would protect high-value, difficult-to-replace industrial jobs while also ‘greening’ them and ‘preserving valuable exports’” of Alberta oil.

Earlier this month, Natural Resources Minister Seamus O’Regan told the annual CERAWeek fossil industry conference that CCUS is essential to drive down oil sector emissions and support the development of “blue” hydrogen, the Globe writes. In contrast to “green” techniques that produce hydrogen from renewable electricity, “blue” hydrogen is derived from fossil fuels, with the resulting carbon emissions buried deep in the ground—then usually used to produce more oil through a process known as enhanced oil recovery.

“We’ve got decades of experience in CCUS and some real leadership in technology and innovation that we’re going to need,” O’Regan said. “We also have an abundance of the suitable geology that we need for CCUS for permanent storage, especially in the Western Canadian Sedimentary Basin.” With workers moving out of the oil and gas sector, he added, “we think that lowering emissions by having them work on CCUS projects is going to be really important.”

The Globe coverage traces the history of CCUS in Canada to date and acknowledges longstanding concerns about its high cost and limited benefit.

“Environmental groups have expressed concern a reliance on carbon capture is a means for extending the use of fossil fuel production, and say the money would be better spent on other renewable forms of energy,” the paper writes. “However, Alberta officials argue the process will be an important tool for reducing GHGs from the oil and gas industry—likely to be in business for decades more—and other major industrial sectors such as power generation, and chemical, fertilizer, and cement manufacturing.”