Carbon capture industry has potential
Carbon capture and storage facility construction costs may require the price of carbon taxes to reach around $100 a tonne to be viable.
A CBC news report indicates that in order for the construction of carbon capture and storage (CCS) facilities to become economical and take off the price of carbon taxes will have to reach around $100 a tonne.
The report notes that in the first 13 months of operating, Shell’s Quest project near Edmonton has diverted 1.3 million tonnes of carbon dioxide emissions and stored it two kilometres underground, also noting that the $1.3-billion project was paid for primarily by governments with Alberta kicking in $745-million and Ottawa $120-million.
The CBC quotes Tim Wiwchar, Shell’s oilsands portfolio manager and former Quest project lead, “Internally, we would look at the next one being more commercial and we wouldn’t need government funding. You’re probably looking at five or 10 years until the next one.”
The Quest project reduces Shell’s carbon pricing fees. In 2017 Alberta is charging $20 a tonne and that will increase to $30 a tonne in 2018. The federal government wants a carbon tax of $50 a tonne by 2022.
Kyle Bakx of CBC News writes: “If Quest had been constructed without government funding, Shell says it would have needed a $100 a tonne carbon tax to cover the capital cost of construction and operating expenses. Shell estimates additional facilities will cost 30 per cent less because of efficiencies they’ve identified through the construction and operation of the first project.”
One of the conditions of the government funding for the Quest project was that Shell must share its blueprints, data and other documents publicly to reduce the costs of further projects and promote development of CCS around the world.