Federal funding for local carbon capture will total $5 million

By COLLIN GALLANT on October 5, 2023.

cgallant@medicinehatnews.com@CollinGallant

A federal grant announced but not detailed in 2022 to help the city develop carbon capture project will be worth $5 million, according to Natural Resources Canada and City of Medicine Hat energy department officials.

“Project Clear Horizon” was one of nine projects to garner support from the Ottawa’s Carbon Management Strategy fund, which was released last week in Paris.

Money will go toward front-end engineering and design costs for an underground storage facility northwest of the city, where early outlines estimate 3 million tonnes of carbon dioxide per year could be sequestered.

It was one of nine proposals to be awarded funding out of nearly 100 applications.

“This funding represents an important contribution on our journey to a prosperous net-zero economy,” said energy committee chair, Coun. Alison Van Dyke. “As we move through the transition to a sustainable low-carbon future, it is critical that we explore CCS as a way to support existing industry while adding to the region’s toolbox to attract further investment.”

In June 2022, the province’s Alberta Emissions Reduction office provided a $2.5-million grant for the initial project, which is expected to cost $13 million. The remainder involves funds reallocated from the city’s natural gas capital budget after exploration projects were mostly cancelled several years ago.

The design phase will include drilling to determine geological suitability for storage, as well as design a pipeline route and initial processing of CO2.

Prospective suppliers – CF Industries, Methanex and the city’s power plant – produce about 2 million tonnes of CO2 per year, cumulatively.

The city is one of dozens of proposals in Alberta for regional hubs, as outlined by the province.

Local officials have previously stated that private industry partnerships may be needed to complete the entire project, which would operate as an open-access system under provincial regulations.

Energy officials said the initial work will help develop final budget estimates and technical plans.

“Carbon management technology is largely in its infancy at a large scale and requires significant up-front investment to evaluate,” said Rochelle Pancoast, managing director of the city’s energy division. “CCS is part of a broader set of studies and analysis in decarbonization that the city is exploring to support net-zero climate change targets.”

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