Cenovus blasts Canadian government for lack of support for carbon capture
BNN Bloomberg
Cenovus Energy Inc. blasted the Canadian government for not providing enough financial support for the oil-sands industry’s proposed C$16.5 billion ($12.2 billion) carbon capture system.
The federal government has proposed tax credits covering about half of the capital costs for the project, and Alberta has offered a 12% subsidy. Canada has also said operating costs for the project can be supported with contracts that guarantee a carbon price high enough to make the system profitable. But those incentives have been accompanied by plans for a cap on emissions, which energy producers have criticized.
“The government-funding partnerships in Canada are not enough for large-scale CCS to proceed in the oil sands,” Rhona DelFrari, Cenovus’s chief sustainability officer, said in an investor day presentation, citing a study by Bank of Montreal. “Canada is employing a complex, multi-layered and evolving stick-based approach with some carrots thrown in. Our closest neighbor to the south is using a straightforward carrot approach that’s far more attractive for CCS projects.”
Canada’s oil-sands producers have banded together to propose a carbon capture system that would help cut emissions from operations by 22 million metric tons by 2030 and help them become carbon neutral by 2050. The submission of regulatory documents for the project is “imminent,” but the draft tax credit regulations lack clarity, and companies need to better understand how the carbon price guarantees will work, she said.
