
Patrick Lennox: A surefire way to increase oil production and lower emissions
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The Trudeau government's Bill C-59 received royal assent just before the Calgary Stampede kicked off last summer. It included the government's signature decarbonization policy initiative: a massive set of tax credits designed to reduce the upfront costs of investments in carbon-capture equipment. Over $12 billion has been earmarked to pay for these credits, making it one of the country's largest decarbonization outlays.
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Remarkably, one of the distinctive features of Bill C-59 was that it took pains to specifically exclude a tested and proven method of carbon sequestration that has the added benefit of extracting hard-to-reach oil and delivering it to the surface in a way that's significantly cleaner than oilsands development.
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The Trudeau government chose to exclude CO2-enhanced oil recovery (EOR), a process in which CO2 is pumped into oil reservoirs to increase production, from being eligible for its Carbon Capture Utilization and Storage Investment Tax Credit scheme because it did not want to support increased oil production with tax credits designed to incentivize emissions reductions.
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In the oil and gas industry in western Canada, this approach is seen as the application of a 'purity test' against an industry that, while responsible for roughly a third of Canada's greenhouse gas emissions, remains vital to the Canadian economy.
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The Carney government could easily remove this small exclusionary clause, which could unleash billions in investments in EOR and contribute massively to its energy superpower ambitions. For now, though, this potential capital — both foreign and domestic — is sitting on the sidelines.
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As an example of how EOR could help Canada reach both its climate and economic goals, consider that Saskatchewan's Weyburn-Midale fields stores an estimated three-million tonnes of CO2 annually from upstream emitters.
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Canada not only has the know-how and wherewithal to use these complex carbon-sequestration methods to further exploit depleted reservoirs, it is also home to some of the world's most amenable geology for it. According to the Canada Energy Regulator, it's theoretically possible to store hundreds of years' worth of the country's annual emissions using geological storage techniques.
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Incentivizing carbon capture and storage across a range of energy sectors — including oil, gas, lithium and geothermal — would accordingly make a lot of pragmatic sense. Especially considering that EOR leverages existing wells, roads and infrastructure connected to legacy oil reservoirs and delivers low-carbon oil. Yet the current legislation allows for none of this.
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Global News
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National Post
21 minutes ago
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CTV News
21 minutes ago
- CTV News
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