Pathways Alliance CEO Kendall Dilling is interviewed at the World Petroleum Congress in Calgary, Monday, Sept. 18, 2023. The oilsands industry group that has proposed building what would be one of the world’s largest carbon capture and storage projects says it is more confident than ever it will go ahead with construction. THE CANADIAN PRESS/Jeff McIntosh

The oilsands industry group that has proposed building what would be one of the world’s largest carbon capture and storage projects says it is more confident than ever it will go ahead with construction.

The Pathways Alliance is a consortium of Canada’s largest oilsands companies, which have banded together to propose a $16.5-billion carbon capture and storage network to decrease emissions from oilsands sites in northern Alberta.

The proposed project is the centrepiece of the oilsands’ industry’s pledge to achieve net-zero greenhouse gas emissions by 2050, something it must do if Canada is to meet its international climate commitments. But Pathways has not yet made a final investment decision, a fact that has led some environmental groups to question the industry’s level of commitment.

After last week’s federal fall economic statement, however, Pathways president Kendall Dilling said the likelihood of a positive decision on the project has increased.

In that fiscal update, the federal government provided additional details about its promised carbon capture investment tax credit — including a timeline for its finalization, something oilsands companies had been waiting for.

The industry also received a commitment from the government that up to $7 billion in federal funding will be allocated to special contracts intended to give companies the confidence they need to make major investments to lower their greenhouse gas emissions.

While the details of those so-called “carbon contracts for difference” still have to be hammered out, Dilling said the support received from government thus far has been “more than adequate” for Pathways to continue forging ahead with its project.

“I’m more confident than ever,” Dilling said. “We’re much further along on all these fronts than we were a year ago.”

The Alberta government is expected to announce its own financial support program for carbon capture development this week.

Dilling said Pathways can’t make a final investment decision until its proposed project has been approved by regulators. But the group anticipates filing its regulatory application within the next couple of months, he said.

The approvals process could take at least a year. But Pathways will likely end up placing its first purchase orders for pipe in 2024, Dilling said, so that construction can begin on the proposed 400-km CO2 transportation line as soon as a regulatory permit is granted.

In the meantime, Dilling said, Pathways has already spent $80 million to date on preliminary engineering, design and environmental work — with an expectation that even more money will be spent next year.

“We’ll spend hundreds of millions next year and then into the multiple billions as soon as we get into construction,” he said, adding the organization also started formal consultations this fall with Indigenous groups located along the proposed CO2 pipeline’s route.

“I do think it’s fair to say that as we submit our regulatory application, and as we proceed with the significant spending through 2024, that should be interpreted as our bona fide commitment to this project and moving it forward,” Dilling said.

The Pathways Alliance says its member companies — Suncor Energy Inc., Canadian Natural Resources Ltd., Cenovus Energy Inc., Imperial Oil Ltd., MEG Energy Corp. and ConocoPhillips Canada — have spent a total of $1.8 billion since 2021 on decarbonization efforts.

This figure includes the $80 million spent thus far on the proposed carbon capture and storage network, but also includes investments in cogeneration to replace higher-emitting fuels used to produce electricity and steam, more efficient in situ oilsands recovery techniques, and research and development work.

The oilsands industry currently accounts for about 12 per cent of Canada’s overall greenhouse gas emissions.

Pathways Alliance representatives will be in Dubai next week for the upcoming United Nations COP28 climate talks.

The president of the climate summit, Emirati Sultan Ahmed al-Jaber — who is also CEO of the Abu Dhabi National Oil Company — has urged oil and gas companies to be “central to the solution” to fighting climate change.

This report by The Canadian Press was first published Nov. 27, 2023.

— With files from The Associated Press

News from © The Canadian Press, 2023. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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