Varcoe: Cease 'ragging the puck' on a federal-provincial deal to kick-start carbon seize initiatives in Alberta

Varcoe: Cease 'ragging the puck' on a federal-provincial deal to kick-start carbon seize initiatives in Alberta

It’s necessary to get funding flowing to create jobs and to decarbonize business, the 2023 Alberta Local weather Summit heard

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Sufficient dithering, it’s time Ottawa and Alberta strike a ceasefire — even a brief one — to succeed in an accord within the coming weeks on a long-awaited incentive package deal for carbon seize and storage initiatives.

The federal and provincial governments have continued to shell one another previously month over power and environmental points, together with the oilpatch emissions cap, rules for a net-zero electrical energy grid and a current courtroom choice that undercut Ottawa’s Affect Evaluation Act.

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In the meantime, the clock continues to tick for the 2 ranges of presidency to succeed in an accord on offering incentives for carbon seize, utilization and storage (CCUS).

After talking Thursday to the 2023 Alberta Local weather Summit held by the Pembina Institute, Premier Danielle Smith reiterated she needs to succeed in an settlement with Ottawa and roll out a provincial incentive package deal on the upcoming COP28 United Nations Local weather Convention.

The worldwide gathering, which takes place in Dubai, begins Nov. 30.

For these maintaining observe, that’s simply 5 weeks away.

And a few proposed carbon seize initiatives had been first unveiled a few years in the past.

“I can be asserting one thing previous to COP on what our portion can be. Nevertheless it must clearly be contingent on the federal authorities matching us, as a result of the lion’s share of company taxes are paid on the federal degree,” Smith instructed reporters.

“To ensure that us to have a program that’s going to work for the business, they must be in sync with us . . . We hope that they arrive along with one thing for the tip of November.”

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The Trudeau authorities first introduced its intentions within the April 2021 price range that it could put an funding tax credit score on the desk for such developments, which seize carbon dioxide emissions from business after which retailer them deep underground.

The federal credit score is about at 50 per cent for investments in tools to seize CO2, and 37.5 per cent credit score for spending directed to transportation and storage for such developments.

The Liberal authorities has additionally referred to as on Alberta to step up with its personal help package deal.

In an interview final month, Smith indicated the provincial program may have a price ticket that approaches $2 billion over a decade for the nation’s largest oilsands producers. She referred to as it a “small worth to pay” to set off business funding, create jobs and authorities revenues, and to decarbonize the oilsands.

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After talking on the Alberta Local weather Summit, federal Pure Sources Minister Jonathan Wilkinson instructed journalists a deal between the 2 sides hasn’t been reached. He additionally recommended Ottawa wouldn’t bolster its funding tax credit score.

“We’re working actively on that with the federal government of Alberta . . . We’ve been very public about our funding tax credit score. It can have to be coupled with the cash that Alberta is directing towards this,” he stated.

“The (federal) funding tax credit are fairly strong. They really cowl a good portion of the capital prices of those initiatives. I don’t assume we’re really augmenting that.”

Minister of Energy and Natural Resources Jonathan Wilkinson
Federal Minister of Vitality and Pure Sources Jonathan Wilkinson speaks to a media scrum following a midday hour occasion on the Pembina Institute in Calgary on Thursday, October 26, 2023. Jim Wells/Postmedia

A number of giant proposed initiatives haven’t but acquired closing funding selections, as proponents have been awaiting particulars of the joint incentive package deal.

The Pathways Alliance group of main oilsands producers has proposed establishing a $16.5-billion carbon seize community within the province. It features a CO2 trunk line that will join a number of oilsands amenities to an underground storage hub close to Chilly Lake.

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It’s anticipated a regulatory utility can be required for the event’s pipeline and the varied seize amenities; the group has beforehand stated it’s hoping to begin development by 2026.

Final month, Pathways Alliance president Kendall Dilling instructed Reuters that the group nonetheless wanted to see Ottawa set up a contract that may lock in a nationwide carbon worth into the longer term.

Incentives have to be in place by subsequent 12 months if the huge improvement is to start working in 2030, he instructed the information outlet.

Nevertheless it’s not simply oilsands producers which are proposing big-ticket CCUS initiatives.

Carbon capture map

Edmonton-based Capital Energy is growing a carbon seize and storage venture close to its Genesee Producing Station west of Edmonton. It has but to make a closing funding choice on the proposed $2.3-billion improvement.

From the federal perspective, Ottawa has stated it could proceed with the carbon contract for distinction, which ought to lock sooner or later worth for carbon or hydrogen.

Wilkinson stated the matter continues to be being mentioned with the oilsands group.

Nevertheless, Pembina Institute deputy govt director Simon Dyer stated the prevailing federal funding tax credit score for CCUS is sufficient to get main initiatives shifting. Firms want to begin making funding selections to satisfy their decarbonization commitments.

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“It’s time to get some metal within the floor and begin constructing,” he stated.

It’s necessary to get funding flowing to create jobs and to decarbonize business, the convention heard.

As Janet Annesley, chief sustainability officer with Kiwetinohk Vitality, identified: “If cash is just not flowing, there’s one thing flawed within the system.”

Annesley, who beforehand served because the chief of workers to former pure sources minister Jim Carr — he was the primary Liberal MP within the Trudeau authorities to carry the publish — stated governments want to maneuver sooner.

As Canada delays, the U.S. Funding Discount Act is drawing funding south of the border into decarbonization initiatives, together with CCUS.

“We may miss the window of alternative if we proceed to rag the puck on incentives. And that view, I consider, is broadly shared in Alberta within the business,” Annesley stated in an interview.

“We will all lock them in a room and say, ‘You aren’t popping out till that is finished.’ ”

Which may work, though there ought to be a better approach to finish the stalemate — merely put aside the variations, attain a deal and get the onerous work began.

Chris Varcoe is a Calgary Herald columnist.

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