When Prime Minister Mark Carney speaks of "decarbonised oil," it seems like a contradiction in terms. But, there they were in Saskatoon June 2nd, the premiers along with Mr. Carney, talking about a laundry list of nation building projects to enhance Canadian economic sovereignty. And stunningly for many Western Canadians who know what oil is, the take away was Carney's open-ness to another oil pipeline to the West Coast — as long as it transported "decarbonised oil."What? According to DeSmog and other left-of-centre news agencies, decarbonised oil is about as legit as vitaminized cigarettes — nothing more than marketing talk.Meanwhile, to Alberta engineers and scientists, we know that decarbonised hydrocarbons is technically the same as hydrogen. Given Alberta is already the largest producer of hydrogen in Canada, surely Mr. Carney is making reference to something altogether different..On the other hand, Premier Danielle Smith interpreted Mr. Carney’s reference to decarbonised oil as a vague reference to Alberta heavy crude produced by facilities that have access to a highly contentious and energy hog of a process called carbon capture and sequestration (CCS.)Most likely this reference is to a $16-billion-plus, yet-to-be-sanctioned CCS project called Pathways. If built, it will sequester upwards of 14 million tonnes per year of CO2 below ground. As the upstream emission intensity of this sector is currently around 58 kg CO2 per barrel, this massive investment would in essence 'decarbonise' approximately 660,000 barrels per day of new production.Note that on a well-to-wheels basis, the average CO2 emission intensity for a barrel of Western Canadian heavy crude is around 130 to 140 kg per barrel..Of course, neither Mr. Carney nor Premier Smith will argue that the downstream combustion of this barrel of decarbonised oil will have been rendered free of subsequent CO2 emissions, but the point is the federal and provincial governments will be guilt-free, for sequestering their portion of the total emission profile of a barrel of heavy crude.So says the science.We all know that Alberta’s heavy crude industry consumes a lot of natural gas to produce steam and to produce the four million barrels per day.The idea behind CCS, is to capture much of the CO2 exhaust and transport it to deep down hole injection sites, where it will be pumped under intense pressures to thousands of meters beneath the surface into ancient saline aquifers for permanent storage.Currently, more than half of Alberta’s total CO2 emission or 158 million tonnes per year, is produced by its oil and gas sector..Premier Danielle Smith and other premiers going back to Premier Ed Stelmach have been huge proponents of CCS, and have invested well over a billion Albertan taxpayer dollars in joint projects with industry, to build out this nascent, social licence-assuring infrastructure.Coincidentally, Albertans were also told by Premier Rachel Notley that if we demolished our affordable coal power plants 15 years ahead of the schedule so graciously imposed on us by former Prime Minister Stephen Harper, this too would buy us social licence to do what Albertans do best.Yet, 15 years after Premier Ed Stelmach and many billions spent in an attempt to demonstrate our climate progressiveness, we still find ourselves faced with intense political pressures to keep our natural resources in the ground and to accept a constipated vision of the not so distant future where our hydrocarbon treasures will be of little to no value.So the science says..So here are some things to consider folks, as we continue to hope for a positive turn in the national discussions about true nation-building projects that enhance our sovereignty and lessen our dependency on the US.The first thing is the oil and gas sector is not willing to invest billions in a large scale CCS without investment tax credits and public sector co-investments.As I view CO2 emissions as fertilizer and not a pollutant and as I do not find consensus in the scientific literature on the idea that our CO2 emissions are causing measurable reductions in heat flux out the top of the atmosphere, I can not say I blame this industrial sector for their hesitation in investing their capital in a further attempts to buy social licence..While the new Liberal Government has yet to formally endorse investment tax credits for CCS, there has been talk of upwards of 50% at the federal level.Yes folks, you heard that right.Upwards of 50% of the capital cost to construct CCS infrastructure may be directly reimbursed by Canadians.Of course, a million barrels of decarbonized crude oil sold to Asian markets could return over $20 billion per year to the national GDP. But 50%?Finally, CCS is extremely energy intensive. Therefore, the amount of natural gas consumed per barrel of oil will increase with expanding CCS in Western Canada. With continued pressure to expand LNG exports and talks of massive investments in natural gas-fired data centres in Alberta, we can see a significant demand growth for natural gas in Western Canada if all these stars align over the next 4 years..Thus, while CCS investments may decrease the CO2 emission intensity of our heavy crude, they will also increase the natural gas consumption intensity. In other words, we will generate less net energy per unit of energy consumed in the production of heavy crude.Isn’t that the very definition of an inflationary public policy?
