City hands off carbon-capture plans, and costs

By Collin Gallant on February 25, 2025.

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The city will hand off its plans to study and develop a carbon sequestration hub in southeast Alberta to Imperial Oil – and recuperate most of the costs incurred by the municipality, officials told the News on Monday.

The project, dubbed “Clear Horizon,” was first discussed five years ago as a way to help the city’s power company and the area’s major chemical manufacturers traverse to move to a low-carbon economy, as well as attract new carbon intensive investment.

The city’s energy division secured deep geological rights to 15 townships east of the city in 2023, and began initial work with an $11-million budget plus grants, though officials had often said private-sector partners would be sought to progress the project.

On Monday, the city announced that all existing work would pass to Imperial, which will move forward independently.

“It was important to ensure a carbon capture hub was considered in southeast Alberta, and the city took the initiative to secure those rights for the region,” said Rochelle Pancoast, the head of the city’s energy, land and environment division.

She cited the “important economic and environmental role this hub can play in retaining our local emitting industrial partners, bolstering our ability to attract others and maintaining the option to participate with our own carbon-emitting assets.”

Officials say the province has approved a transition to Imperial for the project, which has been promoted under the Alberta carbon sequestration hub program.

Natural Resources Canada, which provided $5 million in development grants, approved the move Feb. 18, according to the city.

Division director Kevin Redden told the News that “very little” of an initial $11 million transferred from the division’s gas exploration budget (now cancelled) was ever spent, but costs would be included in a final agreement now being finalized with Imperial.

Seismic work and some revisiting of the city’s own well logs from the region was undertaken – and will be transferred to Imperial – but the project would move forward without the city’s involvement.

Elected officials did not respond to interview requests Monday.

Administrators said Imperial will continue to evaluate underground feasibility and develop a hub, potentially for development for the two-million tonne annual depository for industrial carbon-dioxide.

The Alberta program requires such hubs be “open access,” meaning the city could negotiate a commercial relationship in the future but avoid development costs, operational requirements and long-term liabilities.

“Should the city decide to do so, we would have the opportunity to contribute (CO2 delivered) to the hub,” said Redden. “We wanted the opportunity to create a hub here in southeast Alberta … when (in 2022) we had the gas production staff to do the early evaluation. Now, with this agreement, the city is protected from any of the direct development costs and risks associated with a newer technology.

“Imperial are the experts in this, and their team is on it.”

Imperial is part of the Pathways Alliance of big oilsands producers that is developing a major CCUS hub for northeast in Alberta. Its parent, Exxon Mobile, is developing a network of CCUS pipelines and storage hubs in Texas, Louisiana and Mississippi.

In 2025 it plans to connect the CF Industry Donaldsonville, La. plant site, and develop a separate hub in Wyoming.

The city also received $2.5 million from Emissions Reductions Alberta to study and design carbon-capture capability at Medicine Hat’s gas-fired power plants.

Those emitted 814,000 tonnes of CO2 in 2022, according to a federal registry, and paid $11 million in provincial TIER levies.

Recent analysis in a third-party energy business report states that will triple by 2030 as rates rise and reduction requirements become more stringent under the provincial program.

Last July, Methanex announced it had signed a development deal with Alberta-firm Entropy to capture plant-site emissions for use to boost production and also access permanent storage at Clear Horizon.

If approved, plant upgrades estimated to cost US$75 million would reduce 150,000 tonnes of CO2 emissions annually, about one-third of that facility’s carbon footprint.

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