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Canada’s Carbon Capture Ambitions Have Hit A Roadblock

A large project for carbon capture and storage (CCS) in Canada’s oil sands is struggling to obtain a contract for difference that would guarantee its developers a minimum carbon price, a representative of the project owners has told Reuters.

Canada’s federal government is looking to support CCS projects to reduce the carbon emissions from the oil sands—one of the most carbon-intensive ways of pumping oil.

The Pathways Alliance, which includes six of the largest oil and gas companies in Canada – Canadian Natural, Cenovus Energy, ConocoPhillips Canada, Imperial, MEG Energy, and Suncor – has proposed a network that would transport and store captured CO2 from oil sands facilities and could expand to serve facilities from other industries in the region.

However, a fund set up by the government has recently told the alliance that their project was too risky and too large to be eligible to obtain a contract for difference that ensures carbon prices in the future, the alliance’s representative told Reuters.  

The Pathways Alliance continues to be in talks with the Canadian government to find a way to reach an agreement on such a contract, the representative added. The contract may not use the government-created Canada Growth Fund, which was set up last year to attract private investment in clean energy technology, the representative noted.   

“We sincerely do want to figure out a path to work with them,” an anonymous official at the Canadian Finance Ministry told Reuters.

Earlier this year, the Pathways Alliance said that an Ipsos study of 28 countries showed Canada is the world’s preferred oil supplier, followed by Norway and the United States.

“Geopolitical instability has many around the world more conscious of where the energy they need comes from,” said Pathways Alliance President Kendall Dilling.


“We’re focused on helping Canada meet its climate goals with an aggressive plan to reduce emissions, while ensuring we play an increasing role in meeting the world’s energy security needs.”

By Tsvetana Paraskova for Oilprice.com

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  • bill vickers on September 05 2023 said:
    You need to understand, the current federal government, the PM, Minister of the Environment, and Minister of Finance(deputy PM) all want to break the pol producing provinces and the oil companies. They do not understand the impact on the country or any thing but political correctness and support for the WEF. That is why we encounter such issues.

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