Squandering the C$15-billion Canada Growth Fund on carbon capture and storage (CCS) for the oil and gas sector would be a huge mistake, warn experts from the International Institute for Sustainable Development (IISD), arguing that the cash-trapping technology has proved ineffective over decades while better investment options have emerged.
“For too long, Canada has entertained the myth that CCS for oil and gas is a silver-bullet solution in creating a globally competitive, low-carbon oil and gas sector,” write Laura Cameron, senior policy advisor at IISD, and Angela Carter, a professor at the University of Waterloo and IISD energy transition specialist, in a Globe and Mail op-ed.
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“CCS for oil and gas has been promoted by industry as key to Canada’s competitive advantage in a decarbonizing world,” they add, and “despite all the evidence to the contrary, this beguiling myth is perpetuated within industry and has pervaded the conversation around Canada’s energy transition.”
This is why the Public Sector Pension Investment Board (PSP)—as it seeks to earmark money from the $15-billion Canada Growth Fund to attract global investment in Canada’s clean economy—“should not succumb to endorsing CCS for oil and gas.”
As PSP develops its plan for sustainable investing, a fundamental question is which initiatives and technologies it will back, write Cameron and Carter. If the aim is to deliver “the greatest climate benefits over the investment horizon,” they offer three reasons why CCS is not the answer:
• “Despite half a century of global investment, CCS still does not deliver results at scale,” they write, echoing similar assessments that CCS does not effectively reduce emissions despite billions of federal dollars siphoned to the technology. One 2022 study found that 10 out of 13 CCS projects underperform. And Ottawa’s overspending on CCS comes at the cost of funding to train workers with skills for the clean energy transition. (Although Iron & Earth announced major progress on that file this morning.) Plus, the lion’s share of the carbon captured in the oil and gas sector is used predominantly to boost production, resulting in a net increase in emissions.
• CCS is already one of the most costly ways to reduce emissions, and it may become more expensive in future. “Research suggests that, rather than coming down in time, those costs are likely to go up as lower-cost applications are exhausted, leaving only more complex applications of the technology on the table.” Meanwhile, other options for decarbonization, like solar and wind energy, are becoming more affordable and “have much higher potential for delivering the emission cuts we need,” as the Intergovernmental Panel on Climate Change recognized in its latest assessment report.
• Cameron and Carter point out that CCS plants for oil and gas take five to seven years to build and cannot be deployed in time to help the country meet its mid-term emissions targets. The oil and gas sector—a major promoter of CCS—has acknowledged this, but also asks investors to ignore mid-term goals and instead focus on “what it could potentially achieve by 2050,” the two authors write. In April, James Millar, president and CEO of the Regina-based International CCS Knowledge Centre, tried to tell The Canadian Press that 2050 is a more important emission reduction milestone than 2030.
“That is an incredibly risky, not to mention hugely expensive, ask,” Cameron and Carter say. “The opportunity costs alone should give us pause.”
There is another cost that the two IISD experts do not mention: expanded CCS will require the construction of many more pipelines to transport the carbon, which comes with safety risks for communities near the infrastructure. In 2020, a pipeline rupture in Satartia, Mississippi—the world’s first known instance of mass exposure to piped CO2—highlighted this risk when the city was enveloped in the gas and residents across the community suffered carbon dioxide poisoning. Years later, locals are still struggling with the consequences, including headaches and respiratory issues.
The questionable outcomes and certain dangers of CCS—including immediate risks from infrastructure and the looming danger of failing to address climate change—should be enough for PSP to direct investments to more effective strategies, Cameron and Carter say.
“Undoubtedly, PSP’s investment strategy will also, by necessity, include calculated risks—especially as new technologies evolve,” the experts write. “But CCS is not a new technology.” It’s an “old one that’s been tried, tested, and remains unproven when it comes to cutting oil and gas emissions.”
