A map of deep geology exploration rights held by the City of Medicine Hat, granted by the provincial government under a regional development program for carbon capture and sequestration hubs.--Supplied image courtesy Govt. of Alberta
cgallant@medicinehatnews.com@CollinGallant
A partnership to advance a regional carbon capture and sequestration hub near Medicine Hat could be moving toward a formal commercial agreement.
With few details discussed, city council approved 8-0 on Monday giving senior staff the authority to finalize a deal that conforms to terms discussed in a closed meeting of council on May 21.
A second part of the motion calls for communications staff to be prepared to outline the pending deal with the unnamed commercial developer.
Council’s strategic plan states that developing the underground storage facility is a high priority toward retaining and building the city’s industrial base.
The province has also promoted the technology around Alberta and the city, which began studying the issue in 2019.
Evaluation work has advanced to the point where the City of Medicine Hat is contemplating entering into a potential transaction (or transactions) in regard to the Project,” reads the decision item that was approved Monday.
Known as “Project Clear Horizon,” it would potentially store more than 2 million tonnes of carbon dioxide each year on an “open system” that would allow the private sector in the region to pay for access.
The city has previously said a partnership with the private sector, or a consortium approach might be needed.
The hub could reduce expenses compared to paying carbon-emission compliance levies by federal and provincial governments, and could, theoretically, be a draw for new industrial investment.
Monday’s motion directs the city manager and city solicitor to review and finalize an agreement.
As well, more would be publicized about the project, and stakeholder and public engagement would commence after the deal is finalized.
The city’s natural gas-fired power plant produced more than 800,000 tonnes of carbon dioxide in 2022, according to federal reports, and in 2024 paid $8.5 million in compliance costs to the provincial TIER levy fund for heavy polluters.
The two other large emitters in the region, CF Industries (1.6 million tonnes annually) and Methanex (400,000 tonnes) have also stated support in principle for the project.
In 2022, the city was one of 19 projects across Alberta awarded the right to study the deep geology to determine if it would be suitable for long-term sequestration of carbonite, a slurry of concentrated CO2 that would be pumped deep underground.
At that time the city was awarded $2.5 million from Emission Reduction Alberta to move ahead with engineering and feasibility work at local power plants. In early 2023, the federal government contributed $5 million from the Natural Resources Canada “Energy Innovation Fund” for hub development.
About $11 million from cancelled oil and gas exploration projects was repurposed to the exploratory work.
Seismic testing took place near the southwest corner of CFB Suffield, west of Redcliff.
Last month, Capital Power announced it would halt work on a proposed CCUS hub near its gas power plants near Edmonton, stating the work was technically possible, but the economics were not there for the $2.5-billion facility.
Major oil sands operators are contemplating a $16-billion hub in northeast Alberta, but have argued government financial support is needed.
