When the Alberta government announced last week that it would be handing over $745 million to Shell Canada so it could move ahead with its Quest commercial-scale CCS project, and when the federal government said it would chip in another $120 million, it didn’t sit well with environmental and energy think-tank The Pembina Institute.

It’s not that Pembina is against developing this technology. What it doesn’t particularly like, and I can’t help but agree, is the fact that the Alberta and federal governments’ are covering two-thirds of the cost for this $1.35 billion project, which will be designed to capture CO2 from the steam methane units at the Scotford Upgrader in Fort Saskatchewan. It’s part of the Athabasca Oil Sands Project, a joint venture among Shell (60 per cent), Chevron Canada (20 per cent) and Marathon Oil Sands (20 per cent).

Why, Pembina asks, are taxpayers covering the majority of a project’s costs when the companies benefitting from this public freebie are some of the most profitable companies in the country? Pembina is also opposed to the governments being “singularly focused” on end-of-pipe technologies, such as CCS, at the expense of investments in technologies and energy sources that reduce or altogether eliminate carbon emissions at the front of the pipe — renewables, energy efficiency, etc…

Rather than carry the load for the private sector, the government should be moving quickly to establish a cap-and-trade regime that would put a sufficient price on carbon, Pembina argues. Ultimately, polluters should cover the whole cost of CCS deployment and that will only happen when they factor in the cost of not doing so once carbon pricing hits their bottom line. Pembina also argues that the government shouldn’t be so narrowly focused on CCS that it ignores the much broader, and less risky opportunities out there. (more…)