“Capping” oil sands emissions: relying on CCUS technology is not a solution

Part 9 in a series of 18 discussion papers

Promises by Canada’s oil sands industry to deploy Carbon Capture and Storage (CCUS) technology at bitumen extraction sites and production-related operations in Alberta will not significantly curb the rising volume of greenhouse gas emissions contributed by Canada’s oil production if we continue expanding production to 2030 and 2040.

Very recently, on October 14, 2022, a consortium of the largest nine oil sands producers (an industry group who call themselves the “Pathway Alliance” and account for 90% of Canada’s oil sands production) announced that a total of $24.1 billion will be spent between now and 2030 on emissions reduction projects in the oil sands: see https://pathwaysalliance.ca/news-release-22oct14. Of that amount, the largest share of $16.5 billion will be allocated to the deployment of carbon capture and storage (CCUS) technology at production sites (almost half of which, $7.1 billion, will in fact be funded by Canadian taxpayers through subsidies paid by the Federal Government). The companies promise they will spend another $7.6 billion on the development of other technologies.

At present, the only existing technology that can separate and remove CO2 gas at industrial sites and prevent it from entering the atmosphere, albeit at enormous cost, is carbon capture and storage (CCUS). In the case of the oil sands, CCUS would capture CO2 emissions from the flue gases where the fuel for the extraction process is combusted (at bitumen sites and at processing facilities where natural gas is burned to generate heat and steam) and thus prevent the gases from being released into the atmosphere. The captured CO2 is compressed into an almost liquid form, then transported by pipeline and injected deep underground for permanent storage. The technology is very costly. The process itself is energy intensive.

Today in the oil sands there are only two existing CCUS projects. One is the “Quest Project”, located at Shell Canada’s Scotford Upgrader near Edmonton, which was designed to capture and inject underground 1.2 million tonnes (Mt) of CO2 every year. The Quest Project became operational in November 2015. That amount represents 35% of the total volume of CO2 emitted annually from the upgrader’s steam methane units that produce hydrogen for upgrading bitumen. The capital cost was about $1.35 billion, two-thirds of which was paid for by the Canadian and Alberta governments.

To place the Quest Project in context, in 2019 total oil sands production process emissions in reached 83 Mt (in addition to which conventional oil production in Canada accounted for another 35 Mt of emissions that year). 

Ambitious plans in the past to deploy CCUS on a very large scale in Alberta’s have failed. The Alberta government announced a major scheme in 2008 to install enough CCUS to achieve a 30 Mt cut in the provinces annual level of emissions by 2020. To meet that goal, the province would have needed to complete about 25 Quest-sized installations, all by 2020. The scheme was abandoned in 2014.

More than a year ago, in 2021, the “Pathways Alliance” producers declared that they would reduce their aggregate upstream emissions by 22 Mt of CO2eq annually by 2030. That 22 Mt number has not been substantiated by any detailed studies and only a portion of that promised cut relies on CCUS. Nor has the Federal Government for its part released any analysis or data showing the magnitude of the emissions reductions that CCUS technology might achieve by 2030 (the government’s recent 2030 Emissions Reduction Plan (ERP) published March 29, 2022, offers no details).

A recent analysis  by the Pembina Institute concluded that CCUS could possibly achieve annual emissions reductions of 7 Mt – 15 Mt  in the oil sands sub-sector by 2030: “Getting on Track: a primer on challenges to reducing carbon emissions in Canada’s oil sands: https://www.pembina.org/reports/getting-on-track.pdf ; and “Decarbonizing Canada’s oil and gas supply”, March 21, 2022: https://www.pembina.org/reports/decarbonizing-canadas-oil-and-gas-supply.pdf.

The industry relies on a combination of CCUS and other promised innovations in technology and production methods to achieve an overall 22 Mt reduction of oil sands emissions by 2030. However, even capturing as much as 15 Mt annually by 2030 by rapid and large-scale adoption of CCUS would have no appreciable impact on the overall magnitude of the emissions released into the atmosphere by our oil production.*

The problem is that emissions at oil sands production sites in Canada account for less than 15% of the total well-to-wheels emissions released by each barrel of oil from Canada’s oil sands and ultimately burned as fuel. Over 85% of the total emissions from every barrel we produce occur after we export our oil, when it is combusted as fuel in vehicle engines in the U.S and in other foreign markets and released into the atmosphere as tailpipe emissions. Those downstream emission will continue to rise in step with our production.

At best, even if adoption of CCUS and other technologies achieve a 22 Mt reduction of oil sands emissions by 2030, that would cut the overall emissions (total life-cycle emissions per barrel) of our exported oil by about 4%. But if Canada’s oil production continues to expand to 2030, as the government confirms and the industry plans to do, there will be no overall emissions reduction at all. The volume of the “exported emissions” (downstream emissions) from our expanding production will continue to grow. The substantial rise in the downstream emissions by 2030 (in the range of an additional 100 – 150 Mt) from the expanding volume of our oil exports will more than offset the promised 22 Mt cut in extraction emissions in Canada.   

These downstream emissions do not get counted in our national emissions, and we do not include them in setting Canada’s emissions reduction targets. Yet the scientific evidence is clear that cumulative global emissions are driving the warming of the atmosphere, and that includes the downstream emissions. Reliance on CCUS and other technologies to reduce domestic emissions from oil production activities within Canada by 2030 will not do anything to curb or reduce the massive global footprint of our downstream emissions – which will continue to grow as our oil production rises over the next eight years.

If we continue to increase oil production, capping emissions released during the oil production process in Canada will do nothing to divert us from a catastrophic pathway. It was clear well before construction of the Trans Mountain Pipeline Expansion Project (TMX) was approved in 2016 that CCUS does not offer a solution to the emissions problem posed by the continued expansion of emissions-intensive oil sands production in Alberta. Included below is a link to an essay, Carbon Capture and Storage (CCS): Technological Promises, Oil Sands Growth, and Carbon Reduction, prepared in November 2017. It gives a detailed account of the failed scheme in 2008-2014 to deploy CCUS technology on a very large scale in Alberta, and why that plan failed. The circumstances now are no better, except that the deadline for achieving rapid and deep cuts in oil production on a global scale is now much more pressing. The argument that deploying CCUS offers a way to continue expanding Canada’s oil production consistent with climate goals was untenable ten years ago, and it is not tenable now.

* On March 6, 2023, the CEO of Cenovus, one of Canada’s major oil sands producers who comprise the “Pathways Alliance” industry group, repeated in a statement on CBC Radio the industry’s promise that by 2030 the industry will reduce the annual level of GHG emissions at their production sites in Alberta by 22 Mt. He stated that installation of CCUS would account for “a little over half of that” reduction, which would be a cut of a little more than 11 Mt. We still have no government analysis that substantiates that promise. The Pembina Institute’s report published a year ago giving an estimated reduction of 7 – 15 Mt appears to be a realistic assessment of the very limited scale of the reduction that can be achieved by 2030 using CCUS technology: https://www.cbc.ca/radio/thecurrent/monday-march-6-2023-episode-transcript-1.6770155