City gets $2.5M from province for carbon capture strategy

By COLLIN GALLANT on July 14, 2022.

cgallant@medicinehatnews.com@CollinGallant

Medicine Hat will receive $2.5 million in cash from the province to advance its carbon capture strategy and evaluate how to best reduce power plant emissions, it was announced Wednesday.

And a further grant from Ottawa is likely on the way.

The provincial TIER program charges a carbon levy on the largest industrial emitters – including the city’s power plant complexes – and this week, $40 million is going to 11 projects which aim to capture, use or sequester carbon (CCUS).

Electricity producers Enmax, Capital Power and Heartland Generation also received grants, as well as oilsands operations Canadian Natural Resources, fertilizer company Nutrien – recipients which will use funds to examine and test potential for upgrades at their own facilities.

Local funding of $2.5 million will fold into the initial budget for complete planning of the system which would capture CO2, then process it and carry it to underground caverns for permanent disposal, city officials said Monday. The focus could be on the feasibility of power plant upgrades.

If it progresses, that would eventually lower the city’s undisclosed TIER levy costs.

“We certainly are exposed to rising carbon compliance costs, and we think it’s our responsibility to mitigate both to hit our targets on climate change and our customers in terms of price impacts,” said Rochelle Pancoast, managing director of the city’s strategic management and analysis office.

Last week, council approved early-stage work reallocating up to $11 million from cancelled or no-longer-needed gas well and oilfield work in the energy divisions toward completing pre-engineering and feasibility work on the local CCUS strategy, known as project clear horizon.

“We are really excited to be working with the province through Emissions Reduction Alberta (agency) to be able to access the funds that aligns with the strategic priority.

“It’s early-stage due diligence and further understanding of our technology options ahead of a final (project funding) decision.”

The early goal is outlined as processing about 2 million tonnes of CO2 annually – roughly equal to four times the city’s natural gas-fuelled power plant output – on an open system that could take CO2 from private sector partners and other clients.

Mayor Linnsie Clark said in a statement, it’s “one element of our dedication to business retention, expansion and attraction in Medicine Hat, as well as our dedication towards reducing risk through the low-carbon transition for both existing and future industry.”

City officials attended the press conference announcing the grants at the Enmax Shepard power plant in Calgary.

A total of $40 million was allocated to projects from 11 companies, which will present results to the province’s Emission Reductions Alberta office, and could be completed after 2024, Environment Minister Whitney Issik says.

If all are scalable, the result could be $20 billion in investment, she added.

“It’s another exciting announcement that’s accelerating Alberta’s transitioning to a lower emissions future,” said Issik. “It ensures the resilience of Alberta’s heavy industrial sectors.”

She said 40 applications for pore-space sequestration rights in the province were now being evaluated and could be decided this fall.

Provincial release also states that Natural Resources Canada is preparing to announce Ottawa’s own $50-million FEED fund for carbon capture projects, and an NRCan release last week notes the City of Medicine Hat, but without details.

Neither the city nor federal ministry provided further information when contacted by the News.