CCUS Workshop Outlines Opportunities for a Net-Zero Future

SPE Canada held its first carbon capture, utilization, and sequestration (CCUS) workshop on 11–13 May 2021. This workshop was one of five in a Gaia series organized by SPE between September 2020 and May 2021 on CCUS with regional sessions in Brisbane, Australia; Rotterdam, The Netherlands; Dubai; Houston; and Calgary. Calgary’s workshop enabled SPE members, CCUS-focused entrepreneurs, finance providers, and policy makers to share knowledge related to emissions issues, policy, economics, technology development, and geologic considerations.

The workshop also addressed questions such as:

• Where does Canada currently fit in the global plans for decarbonization?
• What CCUS projects are being developed?
• How can we bring them to commercialization or make them cost effective in Canada?
• What will it take for Western Canada to become a carbon hub?
• How do I know whether CCUS is right for my company?
• Do I know enough about CCUS to help my company?
• How does CCUS stack up against other clean energy opportunities?

Because papers are not required for SPE workshops, this article summarizes the main takeaways for those who were not able to attend the 2021 SPE Canada CCUS Workshop.

During the workshop, two big CCUS announcements were made in Alberta. Suncor and ATCO announced their intent to jointly develop a blue hydrogen production/distribution project along with a commitment to capture CO₂ emissions. In addition, the government of Alberta’s Department of Energy issued an information letter stating its intent to actively manage carbon sequestration tenure to maximize economic development of “strategically located carbon storage hubs.”

Although CCUS technologies have been commercialized in Western Canada and around the world for many decades—and recently with increasing momentum—most projects have required incentives to bring them to life. The workshop started with presentations by Christina Staib of the Global CCS Institute and Adam Baylin-Stern of the International Energy Agency setting the scene about the need, applicability, and status of CCUS in the clean-energy landscape. Nick Fulford of Gaffney Cline and Associates kicked off the second session by describing the policy levers available to incentivize CCUS projects, particularly to lower the cost of capture.

While existing projects have lowered the barriers to entry, thinking about carbon-capture developments requires a different approach. Beth Hardy of the International CCS Knowledge Centre described the current state of CCUS projects in Canada and stressed that, although policy certainty is a key requirement, next generation carbon-capture technologies will lower costs and, therefore, reduce the dependency on enhanced oil recovery (EOR) to enable positive economics.

With ever-increasing environmental, social, and governance (ESG) pressures, a new kind of economic analysis is needed for a broader CCUS strategy. Kelly Campbell of Suncor described the considerations required to evaluate a potential CCS project from an operators’ perspective. She estimated that the cost of capture represents about 80% of the total, with transportation and storage taking up the remaining 20%. She further described CCS project challenges in terms of investment risk, technology risk, and project economics and positioned CCS as part of Suncor’s corporate portfolio approach to decarbonization.

Beth Hardy moderated a panel session with Jason Comandante of Capital Power, Jonathan Hackett of BMO, Will Shimer of the Oil and Gas Climate Initiative, and Rob Cumming of Lafarge Canada, in addition to previous speakers Fulford and Campbell. The discussion expanded beyond CCUS for oil and gas operations to include perspectives from the cement and coal-power industries. Regarding carbon utilization, Cumming described how Lafarge is looking at captured CO₂ to manufacture limestone for aggregate sale, while Comandante shared details around Capital Power’s project at the Genesee Carbon Conversion Centre to produce commercial-scale carbon nanotubes.

The race is on to both accelerate efficiency and reduce the costs of carbon capture. Navjot Sandhu of Carbon Engineering, Brent Jacobs of the International CCS Knowledge Centre, Brett Henkel of Svante, and Walid ElMoudir of Delta CleanTech presented the latest updates from their Canadian carbon capture startups.

Adlai Majer of Whitecap Resources gave a thorough technical review of the Weyburn CO₂ EOR project in southeast Saskatchewan, where over 34 million tons of CO₂ have been injected since 2000. CO₂ for this project, the largest anthropogenic CO₂ flood in the world, is captured at the Great Plains Synfuels Plant in Beulah, North Dakota, and SaskPower’s Boundary Dam thermal power plant in Saskatchewan and transported by pipeline to the Weyburn Unit, where it is injected in a CO₂ flood of the Mississippian Midale and Marly beds. Optimization campaigns, conformance issues, and well-surveillance learnings were shared with the audience, as well as plans for the future of the unit and other potential CCUS projects in Alberta and Saskatchewan.

Brendan McGowan of Enhance Energy presented on CCUS challenges and opportunities in Alberta. Their flagship project with partners starts with CO₂ captured at the NWR Sturgeon refinery and the Nutrien fertilizer plant, north of Edmonton, where it is compressed and transported through the Alberta Carbon Trunk Line to an EOR and storage reservoir at Clive, Alberta. In their first calendar year of operation, more than 1 million tons of CO₂ has been injected into a previously depleted Leduc formation reservoir. Reservoir capacity and containment assurance were investigated in detail before the commencement of operations, which are tracked by the project’s measurement, monitoring, and verification (MMV) program. Carbon credits are generated in Alberta by Enhance Energy for this project.

Erik Nickel of the Petroleum Technology and Research Centre (PTRC) in Regina, Saskatchewan, presented a detailed look at MMV operations at Aquistore, an experimental CCS project developed to store a portion of the CO₂ captured at SaskPower’s Boundary Dam power plant. PTRC and its partners have been conducting research on geological storage at Aquistore since 2011, before the start of CO₂ injection in April 2015. Novel monitoring of the fate of injected CO₂ has included distributed temperature sensing/distributed acoustic sensing, bubble tube pressure monitoring, and repeated 3D seismic surveys. Learnings at Aquistore are helping guide the industry in the selection of the most cost-effective and robust MMV strategies for future CCUS operations.

Simon O’Brien of Shell Canada presented a great overview of Shell’s Quest project, which was followed by a panel with John Zhou of Alberta Innovates, Rick Chalaturnyk of the University of Alberta, and Matt McCullough of Exergy Solutions. Government and industry both know there already is a successful blue hydrogen project in the Fort Saskatchewan area—Shell’s Quest project. Shell received over $865 million in federal and provincial funding to spur development, a sequestration license area, and generous carbon credits to store 27 million tons of CO₂ in the Basal Cambrian Sands (BCS) saline aquifer. Workshop participants saw Shell present the pressure performance of the BCS in response to the injection of almost 5 million tons of CO₂ since project startup in 2015—over a million tons per year. Shell’s ability to secure carbon credits at Quest and contemplate expanded storage relies upon the success of its MMV program. Shell took more than 4 years from 2008, with government (read investor) engagement, to reach a final investment decision in 2012. The Suncor/ATCO venture hopes to do that in 3 years.

Several speakers also were selected to represent a range of development stages and roles in the technology development ecosystem. The intent was to provide an introduction to some of the resources to support CCUS development and to showcase some promising new technologies that can address CCUS issues in the near future.

Tom McDonald of Mosaic Materials, Richard Adamson of Industrial Climate Solution, and Aref Najafi of Innotech Alberta described various new CCUS technologies and touched on a number of points that set up the following session focused on “costs, benefits, returns, and values” including investment, market demand, supportive policy environments, and cost reductions.

To address the question of “carrots and sticks” for financing CCUS and innovations that would reduce its costs, another panel with Marty Reed of Evok Innovations, Yrjo Koskinen of the University of Calgary, Susan Rohac of BDC, and Waqar Syed of ATB Capital Markets brought a diverse set of perspectives together: sustainable finance, investment funds for early-stage and late-stage technologies, and equity markets, all with experience and focus on the energy and clean-tech sectors.

To wrap up the 3-day workshop, a final panel with Jennifer Winter of the University of Calgary, Drew Leyburne of Natural Resources Canada, Marla Orenstein of the Canada West Foundation, Christine Lazaruk of the Government of Alberta, and Gary Millard of Suncor discussed the implications of the Canadian public policy on CCUS. The overarching topic of discussion was based on how current federal and provincial policies are incentivizing the commercialization of CCUS technologies in Canada.

Closing remarks homed in on the fact that no single policy will be the silver bullet to drive increased CCUS adoption over the next 10 years. Instead, a combination of strategies will be required, including the escalating carbon tax, the clean fuel standard, investable tax credits, and Canada’s commitment to achieving net-zero emissions by 2050. An important next step for increased capital investment in the CCUS space will be certainty on policy and economics so that project evaluations and decisions can be made.

There was notable consensus that now is the time for operating companies to start deploying CCUS and for entrepreneurs and inventors to commercialize innovations for carbon capture. Markets are looking for positive actions, and investors are shunning emitters without abatement plans.

Panelists also sounded a note of caution for CO₂ EOR proponents: For the purposes of attracting investment, storage associated with oil production should be de-emphasized. On the other hand, the emergence of a CCS-as-a-service sector could attract a great deal of investment.

The CCUS landscape has already been changing considerably in the months since the 2021 SPE Canada Workshop. The next SPE CCUS workshops are going to be even more interesting, with a focus on energy balances, volume-accounting standards such as the Storage Resources Management System, unitization with MMV, and specific project examples. We are looking forward to seeing you there.

Authors

Silviu Livescu, SPE, The University of Texas at Austin

David Langille, SPE, Shell Canada

Jodi Anhorn, SPE, GLJ

Steven Bryant, SPE, University of Calgary

Erin Madro, Cenovus/Evok Innovations

Glen McCrimmon, Alberta Innovates/McCrimmon Innovation Consulting

Don McClatchie, SPE, Computer Modelling Group

Pat McLellan, SPE, McLellan Energy Advisors

Gary Millard, Suncor

Simon O’Brien, Shell Canada

Jim Stirling, SPE, Fleming and Muir

David Van Den Assem, Alberta Innovates

Christine Zarowny-Rooke, SPE, Energy Transfer Canada;

Xin Zhang, SPE, Cenovus