FORT SASKATCHEWAN — Ben van Beurden would be the first to admit carbon capture and storage is not the most alluring technology to look at.
But the CEO of European energy giant Royal Dutch Shell Plc wants CCS — unsexy though may be in the public’s eye –to come as readily to mind when thinking about combating climate change as windmills would.
Van Beurden was among the dignitaries to crank a big yellow valve at Shell’s oil processing complex in Fort Saskatchewan northeast of Edmonton last week, officially opening its $1.35-billion Quest project — helped by $745 million from the Alberta government and $120 million from Ottawa.
Quest — a dizzying labyrinth of tubes and pipes — is attached to the Shell’s Scotford upgrader, where oilsands bitumen from its mine some 500 kilometres north is transformed into refinery-ready crude.
The aim of the project is to capture a million tonnes of carbon dioxide annually that would otherwise escape into the atmosphere — about a third of the upgrader’s total emissions — and store it more than two kilometres underground.
“It’s not a very visually stimulating technology,” van Beurden said. “Everyone can sort of look at a windmill or solar panel and immediately associate that with nature providing us with energy.”
But as Shell sees it, CCS is crucial in ensuring the oilsands remain competitive in an increasingly climate-conscious world. Van Beurden said renewables have their place, but given the globe’s population growth trajectory in the coming decades, phasing out fossil fuels entirely is not realistic. That’s where CCS comes in, he said.
“We know that oilsands are more carbon intensive than your average oil project in North America and that gap that exists is going to be significantly closed by a project like Quest,” said van Beurden, adding various efficiency measures will also do much of the heavy lifting.
Though projects like Quest have their societal benefits, they aren’t necessarily commercially viable without some sort of outside incentive, said van Beurden. Straight-up government funding, like what Quest received, is one option. Pricing carbon is another.
Shell was among the big global energy players to push for a broad carbon price ahead in the lead up to the UN climate talks in Paris later this month.
Van Beurden figures a carbon price of between $60 and $80 a tonne would mean “companies like ourselves would feel compelled to capture and store the CO2 rather than emit.”
He isn’t banking on the Paris discussions resulting in a global carbon price that high right off the bat, but he hopes it’s something that can be built up to eventually.
Quest is among the 15 carbon capture and storage projects operating worldwide. Two are in Canada: Quest and one at the Boundary Dam power plant in Saskatchewan, which has had a rocky startup.
As part of its government funding agreements, Shell is sharing its know-how from Quest publicly in the hopes similar projects get off the ground.
Alberta Energy Minister Marg McCuaig-Boyd was another VIP turning the yellow wheel at the Quest opening. She spoke positively about the technology after the event, but said government support for future projects is not in the cards for now.
“I think right now we have other challenges with our budget to get back on track and I think it’s prudent to wait for the climate change plan before we make commitments,” she said, referring to the expert panel weighing Alberta’s overall climate strategy.
The Quest deal was made by Alberta’s previous Progressive Conservative government. The NDP is honouring that contract, but has not been enthusiastic about the concept generally.
“It was very far advanced and to stop it wouldn’t have been fair to the Albertans who had put their money into this and it would have been costly to stop it,” said McCuaig-Boyd. “I think it was the right decision.”