Wildfires are raging in every province and territory across Canada, leaving entire First Nations communities burnt, upending the lives of thousands of evacuees and creating plumes of toxic smoke dirtying the air in major cities like Toronto and New York. 

While some politicians claim the out-of-control wildfires are being primarily caused by improper forest management, scientists agree that climate change, driven by greenhouse gas emissions from fossil fuels, is the main culprit.

To stop contributing to the problem, the Canadian government could be implementing strict limits on the oil and gas industry for their carbon dioxide emissions. But Prime Minister Mark Carney has rejected that idea, opting instead for an unproven technological fix. 

In doing so, The Narwhal reported this week, the prime minister has become the latest in a long line of politicians to make big promises about carbon capture and storage to cut industrial emissions, despite the technology’s meager track record in Canada.

Read on to learn more.

1. Climate change from fossil fuels is making wildfires more severe and more frequent

Climate change is altering rainfall and storm patterns, creating hotter and drier conditions and more lighting strikes, causing fire seasons to start earlier and last longer and making those fires burn hotter, grow bigger and spread quicker. The result: Canada’s most recent fire seasons have been among the worst on record.

There’s only one real way to slow this escalating problem, scientists say: stop using so much coal, oil and natural gas, the fossil fuels that generate the emissions that are trapping heat in the atmosphere, changing the climate and leading to more extreme weather.

In Canada, the oil and gas industry is the country’s largest source of emissions. That’s partly because the type of petroleum in Alberta’s oilsands, the world’s fourth-largest proven oil reserve, requires extra electricity, steam, fuel and machines to turn it into usable products like gasoline compared to some other oil deposits. Oilsands emissions have grown from 41 million tonnes in 2007 to 92 million tonnes in 2024.

2. Carney expects Canada will soon generate more, not less, emissions

As Ontario faces what’s now estimated to be its worst wildfire season on record and other provinces and territories have been similarly devastated in recent years, Carney is focused on coordinating an emergency response with those jurisdictions, including managing the thousands of firefighting personnel and hundreds of aircraft involved. The prime minister says he’s committed to deploying “every resource needed to keep Canadians safe.” 

He also signed a deal with Alberta meant to increase oil production. The deal, which includes a commitment to build a new oil pipeline, is expected to result in more carbon pollution. Carney has admitted his government’s actions will raise emissions. More Canadian emissions means Canada is contributing more to the global problem of climate change that’s making wildfires worse.

Environmental advocate Catherine Abreu, a former member of Canada’s Net-Zero Advisory Body, told MPs in June that Carney’s government has “repealed or weakened virtually every climate policy and regulation that Canada had developed in the last decade.”

3. Instead of capping emissions, Carney is betting on carbon capture technology

Carney’s deal with Alberta promises not to follow through with a proposal, first made during the government of former prime minister Justin Trudeau, to implement an emissions cap on the oil and gas sector. 

A cap is a government mandate to prevent emissions from rising beyond a certain point. It’s something the industry itself previously said was achievable: in 2022 a group of oilsands producers came out with a plan they said could cut 22 million tonnes of annual emissions by 2030. That plan involved carbon capture, a technology that filters out carbon dioxide from industrial exhaust streams and stores it so it doesn’t get released into the air. 

But even though the Trudeau government proposed the emissions cap as a way to ensure the industry followed through with that plan, oil companies fought the cap proposal and Carney eventually agreed not to implement it.

Now, Carney’s deal with Alberta includes an agreement to build a carbon capture and storage network in the province, but the ambition has been dialed back considerably. Five oilsands companies agreed in July to use carbon capture technology to remove just six million tonnes of emissions per year by 2035, and a “range of technologies” to eventually capture 16 million tonnes per year by 2045. 

Compare that with an average of 20 million tonnes a year in new emissions from the oilsands that the Canadian Climate Institute has estimated will result from higher production levels to feed the new oil pipeline in the deal.

4. The track record for carbon capture of industrial emissions in Canada is bleak

Carbon capture and storage is real, and in use at nine commercial operations in Canada. But the technology is expensive and requires lots of new construction to scale up, while globally it has underperformed, according to the International Institute for Sustainable Development.

The results speak for themselves. Over a 24-year period, 68.7 million tonnes of carbon dioxide was captured across Canada, according to Environment and Climate Change Canada. That means the oilsands added more to the atmosphere in one year than carbon capture technology has ever stopped from industrial sources over more than two decades.

While oilsands emissions more than doubled from 2007 to 2024, the cumulative amount of carbon being captured from industrial sources is still “on the order of several [million] tonnes per year,” a Natural Resources Canada spokesperson told The Narwhal.

But that’s relatively tiny, compared to the eye-popping figure of 600 million tonnes a year that a government report had once claimed Canada could theoretically capture.

5. Carney’s support for carbon capture makes him the latest in a long line of politicians to tout its benefits

Despite this underperformance, both Liberal and Conservative federal governments in Canada keep projecting optimism about carbon capture’s prospects, dating back to former prime minister Stephen Harper, who gave a speech in Edmonton in 2007 that sounds strangely familiar now. This week, The Narwhal peered into the historical public record — and the national archives — to show just how real the enthusiasm has been.

In Edmonton, Harper talked about “the exciting new technology called carbon capture and storage.” He told Canadians that, “instead of pumping tonnes of carbon dioxide into the Earth’s atmosphere, we may be able to collect it from our oilsands … and pump it deep underground where it will remain for eternity.” He projected confidence, saying he felt “the era of empty rhetoric on the environment is over” and “we’re taking real action that will produce real, tangible results.”

In 2011, his then-natural resources minister Joe Oliver called Canada “a world leader in carbon capture and storage” and “in an excellent position to use this technology on a wide scale.” (Oliver recently wrote an op-ed opposing the latest carbon capture proposal in the oilsands, in part because of the technology’s spotty track record.)

After Trudeau won power in 2015, his first natural resources minister, Jim Carr, told a ballroom full of people in New York in 2016 that carbon capture is one of “the most pressing issues of the day.” One of Carr’s successors, Seamus O’Regan, would go on to describe carbon capture as “an integral part of lowering emissions” that was part of “how we get to net zero.” In 2021, he said Canada was “on the cusp of doing a lot of these things.”

Last year, Carney’s minister of energy and natural resources, Tim Hodgson, a former oilsands company board member, told a Calgary business crowd that the government, as much as private industry, should be pulling for the carbon capture project in the oilsands. In a faint echo of Harper, he said this government “will not be a government of talk, but a government of action.”

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This is the second installment of a two-part series on carbon capture and storage. Read Part 1, Alberta's Carbon Capture and Storage Plan Stagnate as Carbon Price Lags.

As Alberta falls behind on its goal to capture 30 million tonnes of carbon emissions a year by 2020, hundreds of millions of dollars in government subsidies are being pumped into the carbon capture and storage (CCS) sector.

Enhance Energy’s Alberta Carbon Trunk Line project is receiving $495 million from Alberta and $63.3 million from Ottawa. Enhance says on its website the project would have been much smaller without the government investment.

Shell Canada, with partners Chevron Canada Ltd. and Marathon Oil Corp., is developing Alberta’s only other CCS project, called Quest, with $120 million in federal and $745 million in provincial support. Shell aims to sequester more than one million tonnes of carbon dioxide per year from its Scotford upgrader, starting in late 2015.

Shell told Postmedia it paid $400 million in taxes and royalties in 2012 and the project is requiring the company to share its expertise with other companies.

As part of the agreement for funding Alberta’s two CCS projects, the knowledge gained from developing the projects is being shared with the CCS community at large, says Mike Fernandez, executive director of sustainable energy at Alberta Energy.[view:in_this_series=block_1]

In Saskatchewan, SaskPower hoped to start its $1.3-billion CCS project to capture one million tonnes of carbon dioxide by April 2014, said Tyler Hopson, a SaskPower spokesperson. Although recent delays have postponed the project coming on line.

With $240 million from the federal government and the rest of start-up funding coming from SaskPower, the Crown corporation will use the carbon dioxide from its coal-fired plant at Boundary Bay for enhanced oil recovery operations. SaskPower is also building a $60-million facility to provide firms with space to test their capture technologies.

Even with major government support, projects are not guaranteed.

Cancelled CCS projects

TransAlta Corp. announced in 2012 it was abandoning its CCS project connected to its new Keephills 3 coal-fired plant. Despite $342 million from Ottawa and $436 million in funding from Alberta, TransAlta cancelled the project because “the market for CO2 sales and the value of emissions reductions in Alberta and Canada are not sufficient,” according to the project’s final report.

The project would have accounted for about 20 per cent of Alberta’s total carbon dioxide emissions reduction target by 2015. Instead, the company decided to pay the $15-per-tonne penalty for carbon over a certain level.

“What’s really needed, of course, is a regulatory framework on CO2 that puts a value on that CO2. A significant value,” Don Wharton, vice-president of policy and sustainability at TransAlta, told the Globe and Mail.

 “The federal government came out with coal regulations that basically allow all their [TransAlta’s] plants to continue to emit at their current level until the end of their economic life,” Severson-Baker says. “In the meantime, the Alberta government hasn’t followed through with its plan to increase the amount of money it charges on a per-tonne basis for large emitters and it has remained at $15-a-tonne for the last five years.”

With no stronger carbon regulations in sight, fossil fuel companies drop projects to reduce or sequester carbon.

The other cancellation occurred in early 2013. Swan Hills Synfuels deferred building its Synfuels LP gas plant to turn underground coal into synthetic natural gas because of low natural gas prices. As a result, Alberta backed away from providing $285 million in subsidies to help build the carbon capture technology.

“CCS investment is the same as a refinery or power plant, it is a very capital-intensive investment where you need that guaranteed revenue stream over time, so it is not just a question of what the carbon price is today, it’s, ‘Can I lock in that carbon price over the long-term?’ ” said Andrew Leach, energy economist from the University of Alberta.

No GHG Regulations and No New Funding Plans

In a year-end interview, Prime Minister Stephen Harper said federal greenhouse gas regulations for the oil and gas industry are delayed again. Harper said the regulations would have to wait until they can be harmonized with the United States.

With weak coal regulations and no new oil and gas regulations to boost the cost of pumping unabated atmosphere-heating gases, there are also no new funding plans for new CCS projects coming down the pipeline in Alberta.

“There are no plans; no new funding plans for a big CCS funding program,” Fernandez at Alberta Energy said.

A carbon tax would allow companies to make their own decisions, Severson-Baker says, whereas direct funding for CCS puts government in the role of choosing technologies.

Alberta Would Need 25 Quest Projects

According to Alberta’s 2009 climate plan, the province aims to capture 30 million tonnes of carbon emissions annually by 2020. If all goes well, Shell Canada’s Quest and Enhance Energy’s Alberta Carbon Trunk Line will only be sequestering roughly three to four million tonnes by 2020.

In 2012, Simon Dyer, policy director at the Pembina Institute, did the math for the U.S. House Committee on Energy and Commerce:

Alberta’s climate plan states that 30 MT of annual reductions will be derived by CCS by 2020 — the equivalent of building 25 Quest-type projects in the next 8 years. Clearly, this is a fiction.

When Alberta projects to 2050, the province aims to capture and store 139 million tonnes of emissions.

“When I look out to 2050, yes we acknowledge it is an aggressive target and we are going to need to see commercial CCS at dozens of sites, possibly at a hundred sites,” Fernandez said. “I am pretty confident as the price of carbon starts to rise in North America, the cost of this technology will come down and it is very realistic to hit our 2050 CCS targets.”

In mid-December, a Vancouver-area start-up Inventys Thermal Technologies announced former U.S. energy secretary Steven Chu was joining its board. In the announcement, Inventys’ president said its new technology could cut capital and operating expenses to less than a fifth of current processes, reported the Globe and Mail.

As the CCS technology matures, the cost to sequester will drop, but the speed and decrease needed to make CCS a commercial solution can only be achieved via a price on carbon, Severson-Baker says. 

Will the carbon stay put underground?

If the technology became practical and Alberta was somehow sequestering 139 million tonnes of emissions per year by 2050, research has shed light on concerns this could cause earthquakes and ultimately release the trapped carbon dioxide.

A 2012 study published in the Proceedings of the National Academy of Sciences by Mark Zoback and Steven Gorelick of Stanford University reveal there is a “high probability” injecting large amounts of carbon dioxide into brittle rocks will trigger earthquakes and even small quakes could break the seal of the carbon repository.

The authors concluded, “large-scale CCS is a risky, and likely unsuccessful, strategy for significantly reducing greenhouse gas emissions.”

With the carbon needing to be stored underground forever, will the oil companies of today be around in a hundred years to monitor their oceans of carbon dioxide sitting under the surface?

Read part 1, here.

Image Credit: Pembina Institute via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Last Tuesday, Shell Canada’s president earned praise when she said her company would welcome federal greenhouse gas regulations on the oil and gas sector. Then on Friday, Shell had its controversial Jackpine oilsands mine expansion plans approved by Ottawa.

With fears riding high over landlocked western oil blocked by limited pipeline capacity, it is somewhat surprising to hear a major oil company come out in support of increasing costs. However, interviews with experts and Shell Canada reveal Shell’s expansion plans will likely not be hindered by federal carbon prices — and they may just benefit.

Oilsands Operators Can Afford Carbon Prices

Andrew Leach, energy economist at the University of Alberta, has done some simple calculations on what a carbon price would mean for oil companies. If a company were to pay a $30 to $50 price on a tonne of carbon emissions, they would subtract it from roughly $400 to $500 worth of profit, Leach wrote on his blog.

“The realization people need to have is these (oilsands) projects would probably be more resilient to carbon pricing than most people think,” Leach said in an interview with DeSmog Canada.

$200 a Tonne and Oilsands Growth?

In 2009, M.K. Jaccard and Associates conducted economic modelling for the Pembina Institute and David Suzuki Foundation on the impact of carbon pricing on the Canadian economy. The models showed the federal government needed a carbon price of $100 by 2020 to meet their Copenhagen Accord emissions targets of a 17 per cent reduction from 2005 levels by 2020. Going one step further, for Canada to do its part to help keep global temperature rise below of an average of 2 degrees, the models showed Canada needed a $200 carbon price by 2020.  

Even with a $200 carbon price, there is “continued expansion of oilsands operations in Alberta, but it occurs with large-scale use of carbon capture and storage,” said the report, Climate Leadership, Economic Prosperity.

Shell’s Carbon Capture Dreams

In her speech to the Economic Club of Canada, Lorraine Mitchelmore, president of Shell Canada said:

“Federal CO2 regulations will add to the pressure to innovate and will signal to the world that Canada is stepping up to do its part."

Shell is building the first carbon capture and sequestration project in the oilsands for its upgrader near Fort Saskatchewan, Alta.

The company has received federal and provincial money and will also be able to resell the captured C02 for enhanced oil recovery operations. But with a stronger price on carbon emissions, their Quest carbon capture project will yield a greater return on their $1.35-billion investment and could position them to resell their technology if demand for it increases.

A Shell Price?

By introducing new federal regulations to increase the price on carbon emissions, the federal government would be playing catch up to Shell’s established business planning.

Royal Dutch Shell PLC, Shell Canada’s parent company, has for roughly a decade been using a carbon price of $40 a tonne when sizing up potential projects, as a precautionary step to make sure projects make long-term economic sense.

“It’s one of the lenses we would use to stress test a project,” David Williams, Shell Canada spokesperson, said.

Shell joins a growing list of major oil companies and corporations incorporating a carbon price into their long-term planning.

It is likely any starting federal price on carbon emissions aligns with Shell’s planning. The last public announcement by the Alberta government looked to bump their carbon levy up to $40 a tonne for heavy emitters.

The federal government has been promising new regulations since pulling out of the Kyoto Accord in 2012. Back then, they promised to be “working toward draft regulations for 2013.” As 2013 comes to a close, new regulations still have not been introduced.

Kudos For Now

In the polarized conversation around climate policy, Ed Whittingham, executive director of sustainable energy think tank the Pembina Institute, says Shell should be congratulated for welcoming federal carbon pricing.

Shell’s $40-a-tonne carbon price aligns with Pembina’s starting point for carbon pricing, Whittingham said.

“Although Pembina and Shell might not agree on all the points we want in the regulations, the important thing is for the federal government to move forward and introduce these long overdue regs,” he said.

Image Credit: Pembina Institute via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.