Royal Dutch Shell (NYSE: RDS.A) will receive C$876 million from both the Canadian federal government and also the Alberta provincial government for its Quest carbon capture and storage project at the company's Scotford Upgrader plant in the Alberta oil sands.
Shell's Quest project would represent the first oil sands operation to sequester carbon from its upgrading facility. The funding will be dispersed over a 15 year period, with the majority, C$745 million, coming from Alberta's provincial government.
Alberta, home to the largest deposit of oil sands in the world, has committed C$2 billion to the development of carbon capture and storage technology. Production of the oil sands has been rising steadily over the last decade. In 2010, production rose 11% to 854,369 barrels per day.
As the amount of petroleum extracted from the oil sands increases, so too has the greenhouse gas emissions. The most recent analysis shows Alberta's oil sands generate 6.5% of Canada's growing greenhouse gas emissions.
Oil industry officials know that energy sources that continue to produce high carbon emissions will increasingly be subjected to intense scrutiny from politicians and environmentalists alike. CCS technology is the industry's answer to the emissions problem. Shell, for example, expects its Quest project to capture and store one million tons of carbon dioxide annually. However, despite generous financial support, the technology has yet to be proven, which leaves many wary about its viability.
Nevertheless, governments across the globe have thrown millions of dollars toward the development of this technology. Canada is a prime example. The federal government will provide $120 million to the Quest project. The funding will come out of the government's Clean Energy Fund, which has been set up to support the research and development of projects that will advance the country's leadership in clean energy. The fund will allocate $795 million to innovative clean energy projects over the next five years; this means the Quest project will receive 15% of this funding.
Joe Oliver, Minister of Natural Resources, says CCS deserves the funding: "Canada is a world leader in carbon capture and storage and we are in an excellent position to use this technology on a wide scale. The Government of Canada is committed to supporting innovative clean energy technologies such as the Shell Quest project which will help to bring high-quality jobs to Alberta while contributing to the responsible development of Canada's energy resources."
Alberta's provincial government believes that by 2015 it can reduce greenhouse gas emissions by five million tons per year through the use of CCS technology.
http://theenergycollective.com/nathanaelbaker/61004/canadian-governments-dish-out-876-million-shells-oil-sands-carbon-capture-proje
No comments:
Post a Comment