If Canada’s anticipated floor price on carbon reaches $50 a tonne by 2022, as planned, it will be more than half-way to making carbon capture and sequestration (CCS) technology commercially justifiable without government subsidies, according to the former project lead of Shell Canada’s year-old Quest CCS facility near Edmonton.
In its first 13 months, the plant has removed 1.3 million tonnes of carbon dioxide from Shell’s bitumen upgrader’s emissions, storing them two kilometres beneath the ground, CBC News reports. However “the $1.3-billion project was paid for primarily by governments. Alberta gave $745-million and Ottawa chipped in $120-million.”
Without those contributions, Shell’s oilsands portfolio manager Tim Wiwchar says, the company would have need to steer clear of the technically feasible but economically challenged technology. If Quest had been constructed without government funding, Shell would have had to be facing a $100-a-tonne carbon tax to justify the plant’s expense.
Since opening the facility, Shell estimates it has found ways to cut the cost of its next CCS plant by 30%. “Internally,” Wiwchar said, “we would look at the next one being more commercial, and we wouldn’t need government funding. It all depends on the carbon tax. If you go to $50 per tonne, or more if it escalates, you start to close that gap.”
Canada’s best-known CCS facility, the Boundary Dam plant in Saskatchewan, has come under sustained criticism for its $1.5-billion cost to taxpayers and failure to meet its sequestration targets.