Suncor Energy is nearing completion of its upgraded cogeneration project, providing a boost to Alberta’s electrical grid while reducing emissions intensity for the oil sands giant.

The $1.4 billion Coke Boiler Replacement Project is swapping out three aging petroleum coke-fired boilers with two high-efficiency natural gas cogeneration units at Suncor’s Base Plant, 25 kilometres north of Fort McMurray.

Cogeneration units are crucial cog for oil sands operations. They generate heat to extract bitumen while producing electricity and steam.

Announced in 2019, the new units remain on course to begin operations in late 2024. They will produce approximately 800 megawatts to Alberta’s electric grid while reducing the intensity of greenhouse gas (GHG) emissions for both Suncor and the oil sands industry as a whole.

Kevin Birn, a Calgary-based analyst who has tracked GHGs in the energy industry for more than a decade, sees the environmental benefits of moving on from coke boilers, a technology that dates back to the 1960s.

“Petroleum coke is roughly two times as carbon intense as combusting natural gas so this project can drive emissions improvements for both Suncor and the industry,” says Birn, global head for the Center of Emissions Excellence and chief analyst Canadian oil markets for S&P Global.

“This move retires petroleum coke use from one of the two remaining oil sands operations that burn the material.”

Use of petroleum coke, a byproduct from upgrading bitumen to synthetic crude oil, currently accounts for about 11 per cent of the total emissions from the oil sands mining sector. S&P Global Commodity Insights estimates roughly five million megatonnes of CO2 annually, or about 10 kilograms per barrel of marked synthetic crude produced by oil sands miners.

While Suncor’s natural gas consumption will increase when the new units come online in the fourth quarter, they will also turn the company into the third largest power producer in Alberta, supplying approximately seven per cent of the province’s current electricity demand. Suncor’s natural gas cogeneration units will have a lower GHG intensity than the current grid average.

The environmental benefits of “fuel switching” from petroleum coke to natural gas extend beyond reduced GHGs. In a filing with the Canadian Environmental Assessment Agency in December 2017, Suncor estimated its new cogeneration units would reduce sulphur dioxide (SO2) emissions by 46 per cent, nitrogen oxide (NOX) emissions by 17 per cent and particulate matter emissions by 66 per cent. It would also cut freshwater use by 35 per cent.

The unused petroleum coke will likely be stored rather than combusted, Birn says.

“This already happens at integrated oil sands operations which produce petroleum coke,” Birn says. “Operators are required to store petroleum coke as a potential fuel source but the vast majority is not marketed given the distance to market.

“Over the entire life of the oil sands, nearly three quarters of the produced pet coke has been stored. Storing it does allow for more valuable future potential uses, such as being part of the manufacture of carbon fibre.”

Syncrude has also developed a technology using petroleum coke produced at its operation to treat process water. The treatment is similar to using a home water filter. The petroleum coke, which is almost pure carbon, acts as a filter to remove constituents in the water, such as naphthenic acids.

“Technology will continue to play a key role to help the industry meet its environment goals as well as improving production,” Birn says. “This decision by Suncor is a good example of that.”

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Alberta’s Industrial Heartland Association (AIHA) is celebrating its silver anniversary this year.

Over its 25 years, the association has built impressive legacy of attracting more than $45 billion in capital investment and more than 40 companies to the region, providing fuels, fertilizers, power, petrochemicals and more to provincial and global consumers.

The 582-sq.-km. area, just northeast of Edmonton, has become one of the world’s most attractive places for chemical, petrochemical, oil, and gas investment.

And the future for investment continues to be bright.

“I like to call the Alberta Industrial Heartland region the heartbeat of Alberta,” said Dave Diduck, Chair of the AIHA and Reeve of Lamont County, describing the region as a world-class regional cluster of industries.

“It generates significant revenue for the province, creates good-paying, stable jobs for thousands of Albertans, supports local communities, and truly demonstrates the opportunity of the Alberta Advantage. Without the Heartland, the province of Alberta would not be where it is right now.”

Alberta’s Industrial Heartland is a pre-zoned, heavy industrial area, and Canada’s largest hydrocarbon processing region.

Founded in 1999, the AIHA is a non-profit organization created to attract investment to the region. It has five municipal partners with land within the Heartland – City of Fort Saskatchewan, Lamont County, Strathcona County, Sturgeon County and City of Edmonton, as well as associate members including the towns of Bruderheim, Gibbons and Redwater.

Mark Plamondon, executive director of the AIHA for the last seven years, said the region offers opportunity for businesses that prioritize responsible investment.

“The opportunity for companies to meet both their environmental and their economic goals here in the Heartland really positions this region very well from a growth perspective going forward because companies are more and more focused on that,” he said.

“Of course, you need to have a strong economic business case but you also need to be able to either decarbonize your production or produce a product in a more environmentally-sustainable manner than maybe historically.

A key objective for the AIHA is improving the business case for the Industrial Heartland. That means identifying infrastructure pinch points and working with governments to alleviate them. It also includes identifying the competitive landscape from a tax and incentive standpoint compared to other jurisdictions, working with governments to understand where there is a lack of competitiveness.

Plamondon said over the last 10 years about $15 billion in investment has been added.

“Going forward, we’re fortunate that Dow (Chemical) announced the final investment decision of their large-scale, world’s first net zero ethylene manufacturing production here in the Industrial Heartland. They announced a cap number in US dollars, but that excluded some auxiliary sites like hydrogen production, etc., so we think that investment will exceed $10 billion Canadian,” he said.

“There’s a number of companies looking at hydrogen and ammonia production facilities for exports to Asian markets. If one of those goes or two of those go, that brings another amount of capital into this region of an additional $15 or so more billion.”

Plamondon said the surge in investment interest has been driven by the region’s low-cost feed stock competitive advantage in the Industrial Heartland coupled with carbon capture sequestration capability.

“This region really is an economic engine for the region, for the province and for the country,” he said.

In addition to its technical advantages, Lamont County Reeve Diduck noted the Industrial Heartland also offers incentive programs, carbon capture technology, streamlined regulatory approvals, a favourable tax structure and stable and democratic governance.

“The association has evolved into a dedicated and professional team with the knowledge and expertise to converse, negotiate, and attract industry to Alberta’s Industrial Heartland,” he said.

“The availability of carbon capture technology and infrastructure within the Heartland, such as Alberta Carbon Truck Line, is a key tool that AIHA uses to promote future growth and expansion in the region.

“As the Alberta Industrial Heartland continues to expand, the cluster of world-class industries in the region will expand and the industries will be able to draw on each other for support, exchange feed stocks, and create synergies.”

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Protecting Canada’s waterways is a key priority for the Trans Mountain expansion project, which has doubled marine spill response capacity on the west coast.

It’s the largest expansion of oil spill response capability in Canadian history.

The 1,150-kilometre pipeline project, which runs from Edmonton to an export terminal at Burnaby, B.C., went into commercial service on May 1, significantly increasing Canada’s ability to ship oil to global customers.

The Trans Mountain system has operated for over 70 years without a single spill from marine tanker operations. But with an increase in tanker traffic, a main focus of the expansion was enhancing marine safety.

Michael Lowry, spokesman for Western Canada Marine Response Corporation (WCMRC), said everything is in place now and “we’re ready to go” to respond to any incidents, large or small, on the coastline of British Columbia.

The WCMRC’s geographic area of response covers all 27,000 kilometres of western Canada’s coastline, extending to the 200-nautical mile limit.

“We spent a lot of time when we were first doing this expansion going out to the communities – Indigenous communities, coastal communities, Gulf Islands, all those places – and asking people about what their concerns were,” Lowry said.

“We heard that people, communities and First Nations wanted to be more involved in spill response. They wanted to have equipment closer to where their territories and their communities were. And they wanted it to be just a more transparent, inclusive process. I think a number of things have happened since then that have gone a long way to address those concerns.”

The number of WCMRC vessels has doubled from 44 to 88. Today, the organization also employs just over 200 people.

Canada’s largest-ever marine spill response vessel is now on the coast of British Columbia. The vessel – as long as a ten-storey building and as heavy as about 50 Boeing 737 airliners – will reduce response time to within six hours, compared to the current turnaround time of up to three days.

The K.J. Gardner, named after WCMRC president Kevin Gardner, who led the capacity expansion, is based at Beecher Bay on Vancouver Island and is operated in partnership with the Sc’ianew First Nation.

It was one of the final pieces of the $150-million marine spill response expansion program.

Peter Luckham is chair of the Islands Trust Council, a government-mandated organization tasked with preserving and protecting over 450 Islands in the Salish Sea.

He said the amount of work, effort and resources that have come into play through the WCMRC, which is funded by industry, is significant.

“We’re in much better shape than we have been,” he said, adding that the impact on the socioeconomic environment of the southern Gulf Islands would be huge in the unlikely case of a major incident.

“But that said, WCMRC is very well prepared.”

Sc’ianew First Nation (Beecher Bay) chief Russ Chipps, in a video posted by Trans Mountain, said it was important for the Nation to participate as an equal partner in the response plan.

“We started having a growing relationship, sort of a mutual understanding of what’s going on,” he said.

“When we discovered that we were 72 hours away from a spill response, the only thing I had in the toolbox to use to look over the Bay . . . was a phone call. Now we’ve got a full toolbox with ships, trained people, the science around how to protect and I guess the education on how to deploy those booms and when to deploy those booms.”

WCMRC, and its predecessor Burrard Clean, have been around since the mid-1970s.

When Trans Mountain indicated it wanted to expand the existing pipeline, Lowry said one of its first tasks was to determine how best to protect sensitive coastal environments with an increase in tanker traffic.

Lowry said due to the uncertain nature of marine spills, the company dialed in on things it could control and set to improve those.

“And really what that is in our business is your response times, because the quicker you can get to a leaking vessel, the quicker you contain it and the more it can mitigate the damage and the impact,” he said.

“That’s really the name of the game here. It’s minimizing the possible impact and then cleaning it up.”

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While many are celebrating the completion of the Trans Mountain pipeline expansion project for its benefit of delivering better prices for Canadian energy to international markets, it’s important to reflect on how the project demonstrates successful economic reconciliation with Indigenous communities.

It’s easy to forget how we got here.

The history of Trans Mountain has been fraught with obstacles and delays that could have killed the project, but it survived. This stands in contrast to other pipelines such as Energy East and Keystone XL.

Starting in 2012, proponent Kinder Morgan Canada engaged in consultation with multiple parties – including many First Nation and Métis communities – on potential project impacts.

According to Trans Mountain, there have been 73,000 points of contact with Indigenous communities throughout Alberta and British Columbia as the expansion was developed and constructed. The new federal government owners of the pipeline committed to ongoing consultation during early construction and operations phase.

Beyond formal Indigenous engagement, the project proponent conducted numerous environmental and engineering field studies. These included studies drawing on deep Indigenous input, such as traditional ecological knowledge studies, traditional land use studies, and traditional marine land use studies.

At each stage of consultation, the proponent had to take into consideration this input, and if necessary – which occurred regularly – adjust the pipeline route or change an approach.

With such a large undertaking, Kinder Morgan and later Trans Mountain Corporation as a government entity had to maintain relationships with many Indigenous parties and make sure they got it right.

It was the opposite of the superficial “checklist” form of consultation that companies had long been criticized for.

While most of the First Nation and Métis communities engaged in good faith with Kinder Morgan, and later the federal government, and wanted to maximize environmental protections and ensure they got the best deal for their communities, environmentalist opponents wanted to kill the project outright from the start.

After the government took over the incomplete expansion in 2018, green activists were transparent about using cost overruns as a tactic to scuttle and defeat the project. They tried to make Trans Mountain ground zero for their anti-energy divestment crusade, targeting investors.

It is an amazing testament to importance of Trans Mountain that it survived this bad faith onslaught.

In true eco-colonialist fashion, the non-Indigenous activist community did not care that the consultation process for Trans Mountain project was achieving economic reconciliation in front of their eyes. They were “fair weather friends” who supported Indigenous communities only when they opposed energy projects.

They missed the broad support for the Trans Mountain expansion. As of March 2023, the project had signed agreements with 81 Indigenous communities along the proposed route worth $657 million, and the project has created over $4.8 billion in contracts with Indigenous businesses.

Most importantly, Trans Mountain saw the maturing of Indigenous capital as Indigenous coalitions came together to seek equity stakes in the pipeline. Project Reconciliation, the Alberta-based Iron Coalition and B.C.’s Western Indigenous Pipeline Group all presented detailed proposals to assume ownership.

Although these equity proposals have not yet resulted in a sale agreement, they involved taking that important first step. Trans Mountain showed what was possible for Indigenous ownership, and now with more growth and perhaps legislative help from provincial and federal governments, an Indigenous consortium will be eventually successful when the government looks to sell the project.

If an Indigenous partner ultimately acquires an equity stake in Trans Mountain, observers close to the negotiations are convinced it will be a sizeable stake, well beyond 10 per cent. It will be a transformative venture for many First Nations involved.

Now that the Trans Mountain expansion is finally completed, it will provide trans-generational benefits to First Nations involved, including lasting work for Indigenous companies. It will also demonstrate the victory of good faith Indigenous consultation over bad faith opposition.

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Faced with soaring costs that rippled across economies, governments around the world embraced the critical need for energy security in 2023, adopting a more pragmatic approach to achieving climate goals. 

The world used more crude oil and coal in 2023 than anytime in human history, while global demand for liquefied natural gas (LNG) continued to grow as a vital fuel source, primarily in Europe and Asia. 

Europe in particular stepped back from some of its more aggressive timelines for reducing its reliance on oil and gas, with some nations striking long-term supply deals for LNG, returning to burning coal, or renewing investment in oil and gas exploration. 

Economic powerhouses China and India increasingly turned to coal to power their developing economies, spurring global growth of the most emissions-intensive fuel, while the U.S. maintained its lead as the world’s largest producer of oil and gas, setting new high water marks for both. 

Canada, meanwhile, saw steady progress on some key energy projects, completing construction of the Coastal GasLink pipeline, achieving major milestones on the LNG Canda export terminal, seeing the Trans Mountain pipeline expansion near completion, and the approval of a new major oil sands project for the first time in five years. 

The following is a recap of some of the key events from 2023, outlining how oil and gas have once again taken centre stage in the aftermath of Russia’s 2022 invasion of Ukraine, and the global energy crisis that it made worse: 

January 

• Japanese Prime Minister Fumio Kishida visits Canada to make a personal appeal for more access to LNG. Like German Chancellor Olaf Scholz just five months earlier, Kishida is essentially rebuffed by Prime Minister Justin Trudeau. 
• The International Energy Agency predicts that global oil demand will reach a record high in 2023, an increase of 1.9 million barrels per day from 2022’s previous peak. 
• With LNG emerging as a critical resource to deal with the lingering global energy crisis, the United States catches up to Qatar as the world’s largest exporter.  

February 

• India’s Prime Minister Narendra Modi projects his country will see demand for natural gas rise by 500 per cent while its share of global oil demand will increase from 5 to 11 per cent over the next 20 years. Meanwhile, India begins the search for long-term suppliers of LNG in an effort to reduce its reliance on coal. 
• The bill for the 2022 energy crisis comes due in Europe, where it’s learned European governments shelled out nearly US$900 billion to shield households and businesses from its impacts. Germany, which was a world leader in transitioning to renewable energy led the way in efforts to blunt the energy crisis’ impact, handing out nearly US$300 billion in subsidies. 
• Recognizing the rising global importance of reliable energy, Canadian oil producer IPC greenlights the first major new oil sands project in five years. The C$1.1 billion Blackrod project, which will be built to produce 30,000 barrels per day, is expected to be in operation by 2026. Meanwhile, Cenovus Energy filed an application to extend production at its Christina Lake oil sands project to 2079. 

March 

• China shows signs of economic resurgence after re-opening from its sweeping “zero-Covid” policies. The IEA projects China will account for nearly half of all projected growth in oil demand in 2023. 
• In the U.S., the Biden Administration approves a massive new oil project in Alaska, expected to produce as much as 180,000 barrels per day of crude oil over the course of 30 years. The project is also estimated to create some $17 billion in revenue for the U.S. federal government. 
• A new report by the UK-based Energy Transitions Commission finds that global investments in green energy would need to increase to $3.5 trillion per year in order to reach global net zero targets by 2050. That would add up to $110 trillion in new spending by 2050, more than the world’s current combined GDP. 

April 

• Indigenous leaders involved in Canada’s energy industry meet with diplomats from several of Canada’s G7 allies to make the case for being at the table when it comes to helping provide the energy the world needs. With Indigenous communities playing crucial roles in developing Canada’s LNG capacity, participants said diplomats showed significant interest in building economic relationships. 
• Leaders of the G7 meet in Hiroshima, Japan and agree that LNG will play an “important role” in helping navigate the global energy crisis and further investment in the industry is crucial. Despite pressure to agree to a full phase out of coal by 2030, the G7 will only agree to “accelerating the phase out of domestic unabated coal.” 
• A global survey that polled over 24,000 people in 28 countries found that Canada was the number one choice for countries that import oil, citing Canada’s strong record of democracy and environmental safety compared to other major producers like Saudi Arabia and Russia. 

May 

• Recognizing the growing need for energy security across Europe and the world, Norway says oil and gas companies have a “social responsibility” to find more oil and natural gas resources in the northern Barents Sea adding they should “leave no stone unturned” in the pursuit of the critical resources. A month later Norway approves $18.5 billion to develop 19 offshore oil and gas projects. 
• Skyrocketing demand for oil, led primarily by China’s economic surge, forces the IEA to recalculate its predictions for the year, upgrading its demand growth estimate to 2.2 million barrels per day to further increase record usage around the world. 
• Canada’s Public Policy Forum estimates phasing out the country’s oil and gas industry in an effort to reduce emissions will lead to the loss of some $100 billion to the nation’s economy by 2050, with Alberta bearing the brunt of the blow. “This essentially amounts to a deep recession without a recovery ever materializing,” the authors wrote. 

June 

• Qatar signs the first of several long-term LNG deals it will sign in 2023. Staring with two 27-year agreements to supply China with LNG, the Middle East supplier then signs another 15-year agreement with energy-starved Bangladesh. 
• Despite Western sanctions, Russian oil companies see gasoline exports jump 37 per cent compared to 2022 thanks to new customers in Africa and Asia. Meanwhile, China’s crude oil imports from Russia soar to a record high. 
• The annual Statistical Review of World Energy shows that record increases in solar and wind installations in 2022 failed to make a dent in the dominance of oil and gas in the global energy mix. Even with a record increase of 266 gigawatts of new renewable capacity, oil,gas and coal continued to represent 82 per cent of global energy consumption. 

July 

• The U.K. announces it will grant hundreds of new licences for oil and gas exploration in the North Sea in an effort to ensure energy security. Prime Minister Rishi Sunak says even if the U.K. achieves net zero by 2050, oil and gas will still be used for at least a quarter of its energy needs. 
• Japan, one of the world’s largest energy importers, calls for the creation of a global emergency reserve for natural gas to avoid future shortages and price spikes. 
• With rising global demand for LNG, the CEO of QatarEnergy predicts the tiny Middle Eastern nation will supply some 40 per cent of new LNG coming to market by 2029 as the U.S. works to significantly ramp up its industry.  

August 

• Independent researchers announce that China continues to ramp up coal power use, permitting 52 gigawatts of new capacity over the first six months of 2023. The additional plants would increase China’s coal burning capacity by 23 per cent. 
• Independent analysis by S&P Global finds that Canada’s oil sands emissions remained flat in 2022, despite production growth, a positive sign that measures to reduce emissions  are working. 
• For the second year in a row, Pakistan is forced out of the pricey LNG market, putting the impoverished country at high risk of a national energy crisis. 

September 

• Meeting in India, leaders of the G20 highlight the importance of energy security, and while agreeing to triple renewable capacity by 2030 avoid any language calling for a phase out of fossil fuels. Fault lines emerge between the West and developing nations that want to harness oil, natural gas and coal to grow their economies. 
• The IEA releases its updated road map for reaching net zero, suggesting global demand for fossil fuels will peak before 2030. The stance is blasted by OPEC as one that could lead to global “energy chaos” and ignores the IEA’s own acknowledgement that one the world’s current trajectory, oil, gas and coal will still account for 62 per cent of the world’s energy mix in 2050, compared to 78 per cent in 2021. 
• Saudi Aramco, one of the world’s largest oil producers, announces its intention to enter the burgeoning LNG industry, buying a minority stake in MidOcean Energy, which is looking to obtain stakes in four Australian LNG projects. 

October 

• Qatar officially breaks ground on the world’s largest LNG project, which will expand its production capacity from 77 million tonnes per year to 110 million tonnes per year. The groundbreaking coincides with three new 27-year LNG supply agreements with France, Italy and the Netherlands.  
• In its annual World Oil Outlook, OPEC warns the world will need $14 trillion in new investments in the oil sector by 2045 to ensure market stability and reduce the likelihood of energy shortages and economic chaos. 
• The U.S. eases sanctions on Venezuela’s oil sector in exchange for the promise of free and fair elections for the South American dictatorship. Less than two weeks later, Venezuela’s supreme court suspends the results of an opposition party’s primary ahead of a 2024 national election. 

November 

• Three years after shovels first hit the ground, TC Energy announces it has reached mechanical completion of the Coastal GasLink pipeline. The 670-kilometre will be a critical piece of infrastructure for Canada’s developing LNG industry. 
• Despite its earlier World Energy Outlook suggesting a looming peak for oil demand, the IEA revises its prediction for 2024, estimating global demand for oil will reach a new record high of 102.9 million barrels per day next year. A more bullish OPEC predicts oil demand will reach 104.4 million barrels per day in 2024. 
• The U.K. government says it’s working toward legislation that would make annual oil and gas licensing rounds for the North Sea mandatory if the country is set to import more oil and gas than it produces domestically. 

December 

• World leaders leave COP28 in Dubai agreeing to eventually transition away from fossil fuels, aiming to reach carbon neutrality by 2050. But a key inclusion calls for the acceleration of low- and zero-emission technology like carbon capture and storage, an innovation in which Canada is a global leader. 
• Fresh off the U.S. lifting sanctions on its oil industry, Venezuela claims sovereignty over an oil-rich region of neighbouring Guyana – accounting for about two-thirds of its territory – after ignoring ongoing proceedings in the International Court of Justice to settle the long-standing dispute. 
• Russia says its crude oil exports will be seven per cent higher than in 2021 despite ongoing sanctions from the West. After losing most of its European customers, Russia reports that China and India now account for more than 90 per cent of its crude oil exports.  

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In the middle of rolling central Alberta farmland just a few minutes’ drive northeast of Red Deer, a solitary pumpjack sits in the middle of a grain field. But rather than extracting oil, this well pumps important data on the geology underneath the field and the permanently stored carbon it holds. 

Enhance Energy, one of Canada’s first carbon management companies, is using that data to help it advance its carbon capture, utilization and storage (CCUS) operations.  

For Candice Paton, Enhance’s vice-president of corporate affairs, that repurposed pumpjack, covered with instruments to provide information about the formation beneath it, represents how Canada can maintain its leadership in the burgeoning CCUS industry. 

“Canada was at the forefront of this industry when Enhance Energy was formed in 2008.  We are still leaders in this space and there are things we can learn from others,” says Paton.  

“Continuing to do CCUS right ensures Canadians will continue to thrive with our economy and climate.” 

Since 2000, carbon capture and storage projects in Canada (including Enhance Energy’s operation at the end of the Alberta Carbon Trunk Line) have sequestered more than 48 million tonnes of CO2, or the equivalent of taking more than 10 million cars off the road.  

Canada’s early leadership in the industry stems from early regulatory clarity and clear rules on pore space, the underground formations used to store captured carbon emissions, Paton says. 

 The Alberta government treats pore spaces as Crown assets, allowing companies that want to sequester carbon in the province to deal directly with the government rather than individual landowners, as is the case in other countries. 

Alberta’s management of pore spaces is also designed to provide benefits for Indigenous partnerships. 

“Right off the hop, you are welcome at the ownership table. Now let’s go to work,” says Chief Billy Morin, managing director of Axxcellus Capital and former chief of the Enoch Cree Nation.  

“It’s not a silver bullet in terms of consultation in getting the project off the ground but it does change the responsibility for First Nations to look for solutions as opposed to just saying ‘no.’” 

The Nation is one of four Indigenous communities partnered with Enbridge on the proposed Open Access Wabamun Carbon Hub. 

Canadian CCUS operators also have operational experience from the early projects that is valued by other countries. 

For example, Norway’s Northern Lights project incorporates learnings from the Quest project in central Alberta.   

“[Another] great example is the Geological Survey of Denmark came to Enhance’s sequestration facility at Clive to learn from us,” says Paton.  

“How do we manage this safely hand in hand with landowners and the regulator? How do we manage our measurement monitoring verification system so we can provide confidence to the public as well as the landowners, regulator and our customers in industry?” 

But Canada can also take some lessons from other countries developing their own CCUS industry. The federal government’s CCUS investment tax credit is in sharp contrast to the steps taken by governments in the United States and Europe, she says. 

“The U.S. Inflation Reduction Act was put in place quickly and clearly. And it really pushed companies to get across the final investment decision line,” Paton says.  

“Canada has worked on an investment tax credit to balance incentives to keep projects here, but we have a long way to go before it’s in place. It’s been under discussion for a very long time, and it excludes technologies that would act as stepping stones to even better technologies.” 

Morin shares concerns about the federal government’s delay in implementing a tax credit but has worked to find other avenues to help bring financing to projects. 

“We are looking for certainty out of Ottawa in terms of incentives. When international companies come here to invest in CCUS, the margins are thin so some level of government support is needed,” he says.  

The governments of Canada and Alberta have previously supported CCUS projects. Alberta is investing $1.24 billion for up to 15 years in the Quest and Alberta Carbon Trunk Line projects. 

Despite some challenges, both Paton and Morin are positive about the future of CCUS and Canada’s role as a major player. 

“I’m optimistic we can do this right, and it will benefit all of us as Canadians,” Morin says. “We have some specifics to work on, but we are headed in the right direction.”  

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Five northern Alberta First Nation and Metis communities have acquired a 43 per cent interest in the Wolf Midstream Access NGL pipeline system. The transaction was facilitated by the Alberta Indigenous Opportunities Corporation (AIOC), a provincial crown corporation that provided a $103 million loan guarantee. 

Participating communities are the Buffalo Lake Métis Settlement, Kikino Métis Settlement, Heart Lake First Nation #469, Saddle Lake Cree Nation #125, and Whitefish Lake First Nation #128. 

“We’ve become very focused and sophisticated in our economic development portfolios,” says Tony Bagga, a Heart Lake First Nation executive and president of the Northern Lakeland Indigenous Alliance – a recently created entity that will manage the ownership on behalf of the bands.  

“We are looking to advance our vision of self-sustainability and prosperity. Transactions such as this will bring multigenerational revenue to the communities involved which we can put to use in underfunded community initiatives such as infrastructure, healthy living, cultural events, etcetera.” 

The Access NGL pipeline system connects Wolf Midstream’s recently constructed natural gas liquids (NGL) recovery facility near Mariana Lake southwest of Fort McMurray to its NGL separation facility north of Edmonton.  

Location map of Wolf Midstream Access NGL pipeline system. Image courtesy Wolf Midstream

NGLs like ethane, propane and butane are recovered during oil and gas processing. They have a variety of uses including as a petrochemical feedstock for generating everyday products, as well as heating, cooking and blending for vehicle fuel. 

Acquiring an ownership stake in the Wolf Midstream NGL system “will help support the foundation of our Nations,” Bagga says. 

“The proceeds from this transaction will support our pillars such as promotion and retention of Indigenous culture, education, recreation, health, and promoting programming for our youth and Elders,” he says.   

“We a see this as a step in the right direction to economic reconciliation. Our communities will see direct benefits from the proceeds of this project, which will uplift our communities and support future generations. We are in hopes that this will inspire future participation for us and others.” 

The Indigenous Resource Network (IRN) is calling for a national loan guarantee program like want is offered by the AIOC to help more communities take ownership of resource projects. This would help address what the IRN calls a “crisis-level lack of opportunity” for Indigenous communities across Canada. 

“We’re incredibly excited and pleased that there’s another investment, another opportunity, and more communities brought in,” says IRN executive director John Desjarlais.  

“The loan guarantee program works; it helps to de-risk. It’s governments engaging and facilitating good, affordable access to capital that helps to drive economic reconciliation. It’s very much a success in terms of what we hope to see on a national level.” 

The AIOC was created in 2019 to cultivate Indigenous prosperity through investment in Alberta’s natural resource, agriculture, telecommunication, and transportation sectors. The organization mandate is to deliver up to $1 billion in investment support for qualified Indigenous communities that make a minimum $20 million investment. 

So far, the AIOC has delivered $513 million in loan guarantees through five transactions – with the Cascade Power Project, Northern Courier Pipeline, Lindbergh Cogeneration Facility, Enbridge oil sands pipeline system, and the Wolf Midstream Access NGL pipeline system. 

Twenty-seven Indigenous communities have developed project ownership through the AIOC, including 17 Alberta First Nations and 10 Métis communities. 

“Stronger Indigenous communities make for a stronger Alberta and a stronger Canada,” says Chana Martineau, CEO of the AIOC.  

“If you think about the ripple effect in a pond, as those communities strengthen, they then grow and invest and impact all the communities around them.”    

AIOC projects are creating consistent, multigenerational revenue streams, she says. In addition to local projects and infrastructure, Indigenous communities can invest funds to pursue additional profit-generating ventures, says Martineau, who is from the Frog Lake First Nation. 

“To build whatever the community most needs enables them to achieve their own goals,” she says. “All of our projects are designed to provide immediate return to Indigenous communities and Canadian corporations are increasingly valuing these partnerships.” 

Indigenous ownership of major energy projects is also ramping up in British Columbia. 

The proposed $3 billion Cedar LNG facility in Kitimat, 50 per cent owned by the Haisla Nation, would be the first Indigenous-owned LNG terminal in the world and could be in operation by 2027. The project holds significant potential for economic and social transformation in the region, say stakeholders.   

Also on the west coast, the Nisga’a Nation near Prince Rupert and its partners have proposed the $10 billion Ksi Lisims LNG terminal on Pearse Island – the project has entered B.C.’s environmental review process.  

Sixteen Indigenous communities along the $14.5 billion Coastal GasLink pipeline, which will feed natural gas from northeast B.C. to LNG Canada and Cedar LNG, have signed a 10 per cent ownership stake once the project is completed in 2023. 

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Canada’s carbon capture and storage (CCS) industry is an important tool in the global quest to reduce emissions, says an industry expert who was among 40 researchers who recently participated in a CCS summer school in Regina. 

In July, Eadbhard Pernot, and colleagues from 29 countries participated in the International Energy Agency Greenhouse Gas R&D Programme CCS Summer School in Regina. The draw to Saskatchewan’s capital – the fourth such event – was the International CCS Knowledge Centre and an opportunity to obtain hands-on CCS experience with experts at SaskPower’s Boundary Dam Carbon Capture Project near Estevan, Saskatchewan. 

Canada has five of the world’s 30 commercial CCS operations, including at the coal-fired Boundary Dam Power Station. It’s the world’s first and only CCS facility operating in tandem with a commercial power plant – which has captured and stored over 5 million tonnes of carbon dioxide (CO2) since 2014. 

“The lessons learned from the Boundary Dam facility are going to be really important for countries that have recently built coal power plants,” says Pernot, a policy manager with Boston-based Clean Air Task Force, which promotes zero-emissions technology and policies.  

“The project has consistently performed at its capacity. And I think that’s really something Canada should be proud of.” 

Eadbhard Pernot at SaskPower’s Boundary Dam Carbon Capture Project near Estevan, Sask. Photo courtesy the International CCS Knowledge Centre

Summer school participants studied all aspect of CCS, including the capture, transportation and storage of CO2, industrial uses of CO2, costs and economic potential of CCS, regulations, policy and GHG accounting, public communication and health and safety. 

“As far as storage, we’ve been injecting fluids and gases into the subsurface for decades,” says Eadbhard. 

“So, the science is pretty clear in the sense that we can put all of these things together. We can capture emissions and transport and store them permanently in the subsurface.” 

More CCS projects are being developed in Canada, including through Pathways Alliance, a group comprised of the six largest oil sands producers representing 95 per cent of production that plans to spend around $24 billion on a CCS network and other technologies to achieve net zero emissions in the oil sands by 2050.  

The industry coalition has already begun design work on what will be the backbone of one the world’s largest CCS projects, a 400-kilometre pipeline connecting an initial 14 oil sands facilities to a storage hub in northern Alberta. The project is expected to remove up to 12 million tonnes of emissions annually by 2030.   

Does CO2 stay underground once injected deep into geologic formations?  

Yes, says Pernot, noting the gas originates in many subsurface structures – approximately 1.845 billion-billion tonnes of carbon are contained in Earth’s mantle and crust, while 43,500 billion tonnes are found at the surface.  

“I think it’s also important to recognize that when we are talking about putting CO2 back in the ground, it’s not under someone’s house,” says Pernot.  

“We are talking about depths between one and three kilometres. We’ve been injecting fluids and other gases for decades without any incident of leakage in terms of storage.” 

Since 2000, Alberta and Saskatchewan have safely stored 47 million tonnes of emissions – the equivalent of removing 10 million cars from the road – says James Millar, CEO of the International CCS Knowledge Centre, noting Canada’s sector is an example to the world. 

Canada accounts for approximately 15 per cent of current global CCS capacity even though it generates less than two per cent of global CO2 emissions, he says.  

“We demand, and we rely on, these [oil and gas] products every day,” says Millar. “We don’t want to be without them. I’ve never heard anyone who is against CCS, say ‘I will go back to living in a cave and reading by lamplight and driving horses and buggies.’ Isn’t it better for industries that manufacture these products to do something about the issue?” 

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Federal Environment and Climate Change Minister Steven Guilbeault is continuing to plot a painful course toward a short-sighted phase out of Canada’s world class oil and gas sector based on an unrealistic view of world’s future energy mix. 

In an interview with Euractiv, Guilbeault said he supports the phase out of unabated fossil fuels, those without the technology to minimize emissions, by 2050 to align with the International Energy Agency’s Net Zero Scenario, a path that is largely out of touch with the current global reality. 

Based on that increasingly unlikely scenario, the minister said he anticipates Canada’s oil and gas sector will follow suit with a 50% to 75% reduction in the production of oil and gas by 2050, which would be devastating for our economy, hurt our economic allies, and make little to no progress towards reducing global emissions. 

Here are the facts. 

Fact: The IEA’s Net Zero Scenario is largely aspirational, not practical 

Guilbeault’s vision of a massive global reduction of fossil fuel usage is growing even less likely amid a lingering energy crisis prompted by several years of declining investment in oil and gas followed by Russia’s invasion of Ukraine. 

The fact is, this year the world will use more oil and more coal than any time in human history. 

According to the IEA’s latest short-term outlook, global oil use will hit a record high of 102 million barrels per day this year and is expected to grow to 106 million barrels per day by 2028. Last week, OPEC forecasted that by 2045, global oil demand will reach 110 million barrels per day.  

Meanwhile, demand for natural gas, particularly liquefied natural gas (LNG) is soaring. 

By 2040, global LNG demand – driven primarily by growing Asian economies – is expected to reach 700 million tonnes, a more than 75 per cent increase from 2022. Demand for LNG is expected to outpace supply by the middle of this decade. 

Relying on the IEA’s Net Zero scenario, Guilbeault said he believes oil use will decline to between 25-30 million barrels per day, a 75 per cent reduction. Rapid deployment of renewables, he said, would fill that void despite some significant hurdles that could hinder a sweeping transition.  

The bottom line is pretty clear. In the IEA’s most likely scenario, oil and gas will still account for 47 per cent of the global energy mix in 2050, a reduction of 5 per cent from 2021. While the share of renewables will more than double, it is still expected only to account for 29 per cent of the world’s energy mix in 2050. 

Fact: A rapid phase out of oil and gas would hurt Canada and its allies 

Canada’s oil and gas sector is a critical part of our economy, supporting hundreds of thousands of jobs from coast-to-coast, including thousands of jobs in manufacturing, environmental, and financial services tied to the industry, especially in Ontario and Quebec. 

A recent analysis by commodity data firm S&P Global focused specifically on the oil sands suggests that efforts to meet federal emissions targets for 2030 would likely force the industry to slash production by up to 1.3 million barrels per day. 

According to the analysis, that could result in the elimination of between 5,400 and 9,500 jobs. With just over 54,000 oil and gas extraction jobs in Canada, that would mean the elimination of as much as 17% of the workforce. 

In addition to jobs, the industry is also an economic bulwark, generating $168 billion in GDP in 2021, about 7.2 per cent of Canada’s economic activity. Oil and gas also accounted for nearly a third of Canada’s exports in 2021, injecting $140 billon into the economy. 

Amid the ongoing global energy crisis, some of Canada’s international allies have turned to Canada to be a potential key supplier as they look for stable and responsible suppliers to replace Russian oil and gas. 

The leaders of Germany and Japan made direct appeals to Canada to supply more LNG to help meet their energy needs. 

Yamanouchi Kanji, Japan’s ambassador to Canada, made it clear that some of our Asian allies see Canada as a key player in the world’s future energy, particularly when it comes to LNG. 

“The world is waiting for Canada,” he said earlier this year. “Canada can and should play a very important role to support the energy situation not only in Japan and South Korea, but the world.” 

Fact: Reducing global emissions starts with Canadian natural gas 

If Canada is truly serious about tackling global greenhouse gas emissions, we could make a much bigger impact by supplying energy-hungry Asian countries with some of the cleanest LNG on the planet to replace coal. 

Climate change is a global issue, not a local one. 

Despite being one of the world’s largest energy producers, Canada is still only responsible for about 1.6 per cent of total global emissions.  

Developing Asian counties, particularly China, have turned to coal to help power their growing economies. A switch to natural gas to generate power reduces emissions by 50 per cent on average, according to the IEA. Canadian natural gas shipped as LNG could perform even better, reducing emissions from coal by about 65 per cent, according to Energy for a Secure Future. 

With analysts expecting world LNG demand to double over the next two decades, Canada could make a real measurable impact on lowering global emissions by unlocking its LNG potential. 

A recent study by Wood Mackenzie found that Canadian LNG exports could reduce net emissions in Asia by 188 million tonnes per year through 2050. Put another way, that would be the annual equivalent of removing the emissions of all vehicles on Canadian roads, or wiping out nearly three time’s B.C.’s total emissions. 

Meanwhile, a coalition of six companies representing 95 per cent of Canada’s oil sand production have jointly committed to achieve net zero emissions by 2050. The Pathways Alliance is looking to harness emerging technology like carbon capture and storage as well as small modular nuclear reactors to reach that target. 

The reality is that if Canada significantly curtails its oil and gas industry, other national producers, some of which lack Canada’s commitment to democratic ideals and the environment, will fill that void. This could see bad actors like Russia continue to maintain a strategic and economic advantage over Europe by maintaining European reliance on its energy. 

Fact: Phasing out oil and gas would hurt Indigenous communities 

Over the last decade, Indigenous communities have emerged as key players in Canada’s energy sector, allowing First Nations in many cases to create intergenerational opportunity for their people. 

From pipelines to LNG terminals, dozens of Indigenous communities have entered into ownership agreements on major oil and gas projects. 

In B.C., 16 First Nations will acquire a 10 per cent stake in the Coastal GasLink pipeline once it’s completed later this year. In Alberta, another 23 First Nation and and Métis communities are now approximately 12 per cent owners of seven operating Enbridge oil sands pipelines, the largest Indigenous energy transaction ever in North America. 

And in northwest B.C., the Haisla Nation is 50 per cent owner of the proposed Cedar LNG project, which would be the first Indigenous-owned LNG terminal in the world. 

“When Europeans, Asians and Americans think of Canada’s Indigenous peoples, they often think we oppose all energy development. We aren’t victims of development. Increasingly we are partners and even owners in major projects,” Haisla Nation Chief Councillor Crystal Smith said during an April press conference after leading a delegation of Indigenous leaders to meet key international diplomats. 

Indigenous employment in Canada’s oil and gas sector has continued to grow, rising by more than 20 per cent since 2014 to reach an estimated 10,400 jobs in 2020. 

Indigenous-owned businesses also benefit from the industry, with three major projects – the Trans Mountain Expansion, Coastal GasLink, and LNG Canada – spending some $9 billion with Indigenous- and locally-owned businesses.   

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Stereotypes can be found in strange places. For Indigenous leader Joe Bevan, the most recent was in a Vancouver taxi. While speaking of his support for the energy sector, the driver said, “Oh, you’re First Nations. I thought you guys don’t like oil and gas.”  

“I thought, oh goodness, really?” says Bevan, CEO of Gitga’at Development Corporation in Prince Rupert, B.C. “That narrative is still spinning in peoples’ heads. Well, I’ll tell you, that’s not us.”  

Even though many Indigenous people in northwest B.C. support LNG development, there’s a need for more education about the industry in Indigenous communities more used to 100-year-old forestry and fishing economies, Bevan says.  

“We know little about gas and oil even though it’s happening right in our own backyard,” says the former chief councillor of the Kitselas First Nation. “We’ll still have forestry and fishing, just to a lesser extent. We now have a new economy right in front of us and that’s LNG, logistics and mining.”  

The opportunity for LNG development on the west coast is ramping up thanks in part to Indigenous leadership. The $18 billion LNG Canada export terminal in Kitimat – supported by the Haisla Nation – will start operating in 2025.   

The proposed $3 billion Cedar LNG facility, also in Kitimat, is 50 per cent owned by the Haisla Nation and would be the first Indigenous-owned LNG terminal in the world. It could be in operation by 2027. The project holds significant potential for economic and social transformation in the region, the community says.    

Also on the west coast, the Nisga’a Nation near Prince Rupert and its partners have proposed the $10 billion Ksi Lisims LNG terminal on Pearse Island – the project has entered B.C.’s environmental review process.   

Woodfibre LNG near Vancouver, which could start operating in 2027, is the only major project in Canada with an Indigenous issued environmental assessment certificate.   

Sixteen Indigenous communities along the $14.5 billion Coastal GasLink pipeline, which will feed natural gas from northeast B.C. to LNG Canada and Cedar LNG, have signed a 10 per cent ownership stake once the project is completed in 2023.   

“Some people don’t understand the economy has changed and we need to change with it,” says Bevan. “There needs to be that change – to start biting into the oil and gas industry, saying, ‘What is my role now and how do I fit into this?’”  

Energy companies must understand that young Indigenous people in B.C. need support building their industry knowledge in order to participate in development, he says.   

“They have to start helping us and educating us.”  

In the end, many Indigenous people have bypassed dreams of working in the energy sector, says Bevan. The slow pace of development has forced them to move on.  

“Some people say, ‘I died on the vine waiting for it to happen.’”   

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