Geneva-based oil producer International Petroleum Corp could add carbon capture and storage (CCS) procedure to its oil sands project in northern Alberta, Canada, if the government offers additional financial incentives, as reported by Reuters on March 19. The company, together with Canada’s biggest oil producers, has urged policymakers to increase public funding for the costly technology, which is deemed crucial in reducing emissions from the carbon-intensive oil sands industry. The industry believes that CCS projects require increased government support to be financially viable, while Ottawa and the oil-rich province of Alberta disagree on who should provide the increased funding.

There are roughly 170bn barrels of bitumen under boreal forests in Alberta, one of the world’s largest and most environmentally damaging oil patches. The abundant oil sand reserves in the region make Canada the fourth-largest oil reserve in the world. However, the process of extracting petroleum from oil sand is much more expensive and environmentally harmful compared to other methods, such as oil rigs. Due to growing concerns over greenhouse gas (GHG) emissions, the global capital spending in Canada’s oil sands dropped to USD6.2bn in 2021 from a peak of USD26.7bn in 2014. Therefore, CCS projects are a viable option to make the oil sands industry greener and win back foreign investments. According to data from the Canadian Climate Institute, emissions from oil sands projects in Canada reached 48m tons in 2021, representing a surge of 137% from 2005 levels. The institute also called for the development of CCS projects, a cap on oil and gas emissions, and tougher climate legislation by the federal government to curb carbon emissions. 

Sources:

https://www.reuters.com/business/sustainable-business/ipc-ceo-urges-canada-offer-more-funding-build-carbon-capture-2023-03-19/

https://www.wsj.com/articles/oil-sands-canada-dirty-carbon-environment-11642085980

https://www.investopedia.com/terms/o/oilsand.asp