City poised to be carbon capture hub

By COLLIN GALLANT on January 15, 2022.

cgallant@medicinehatnews.com@CollinGallant

Officials in Medicine Hat said Friday they are in good position to advance a regional carbon capture hub just as the province announced new grants for such projects and laid out a blistering timeline to get initial projects started.

It suggests a local proposal by a partnership led by the city could be determined by the summer.

Mayor Linnsie Clark said work to determine the feasibility and garner support is continuing behind the scenes.

“There is certainly a lot of action happening,” she told the News following announcements by two provincial ministries on Friday.

“We’re confident that we’re in a good position, and we need to be ready when there’s a clear picture to act on the timelines.”

Politicians at all levels of government have said capturing, storing and utilizing carbon dioxide from industrial processes will be key to meeting reduction targets. In Medicine Hat, economic developers and city utility officials say a local project is critical to maintain city electricity profits as well as support local industrial plants as carbon pricing rises.

That was outlined last summer, and Alberta Energy Minister Sonya Savage said Friday that initial high-priority projects could be selected by the end of March, and then others shortly thereafter.

The same day, Environment Minister Jason Nixon announced that $30 million in grant money from the province’s carbon levy on heavy emitters would be spent to “kick start” a carbon capture hub development.

That cash would likely be aligned with winners of a separate concurrent grant process from Natural Resources Canada, which would fund feed stock studies, high level engineering and system design.

Medicine Hat submitted an NRCan application last fall and was shortlisted for among 23 other projects, said Invest Medicine Hat head Eric Van Enk.

He said high level of interest has likely led the province to prioritize an existing carbon capture market near Edmonton and the oilsands operators as first movers. He expects a final package on a local project would be due in the summer.

“It’s logical,” Van Enk told the News, adding that project development has been accompanied with arranging support from regional governments and industrial operators. “We’re feeling very good in what’s a very competitive process.”

Savage told a reporter from Reuters business news that the province would move “very, very” quickly on hub development near Cold Lake, which would receive CO2 from the oilsands region.

Another high-priority project is servicing the Industrial Heartland region near Edmonton, which is home to intensive chemical production. The deadline for that proposal is Feb. 1, and an award is expected in March.

In an response for a request for more information from the News, staff confirmed that southeast Alberta is among consideration, but no final timeline for subsequent projects is settled.

“Once the initial RFP is completed for the Industrial Heartland region we will be moving very quickly moving on RFP for hubs in other areas across the province,” said Savage.

Last week, utility division head Brad Maynes told a council committee he expects final geological pore-space allocations – where the carbon would be pumped – to be decided in the third or fourth quarter of the year.

The 2022 division budget includes $6 million for new drilling, a large portion of which would involve opening up and testing historic deep wells in the city’s portfolio to update assumptions about the geology.

TC Energy, Royal Dutch Shell, Pembina Pipelines, Enbridge, Capital Power and all major oilsands operators have expressed formal interest in the creation and operation of CCUS facilities and transportation networks as a way to cut the amount of carbon dioxide that enters the atmosphere.

Those would involve areas of central or northern Alberta. City officials have said the local project would involve support from local fertilizer and methanol producers CF Industries and Methanex.

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