Canada Energy Transition Blog

Alberta selects six proposals for carbon sequestration hubs for further evaluation

Apr 1, 2022 4 MIN READ
Paula Olexiuk

Partner, Energy and Construction, Calgary

Simon C. Baines

Partner, Energy, Calgary

Sander Duncanson

Partner, Regulatory, Indigenous and Environmental, Calgary

Rolls of blueprint paper

On March 31, 2022, the Alberta government released the results of its first request for full project proposals (RFPP) for developing and operating carbon sequestration hubs in the province. The proponents of the six selected proposals will be invited to further evaluate their locations for carbon sequestration in Alberta’s industrial heartland region near Edmonton. The Alberta government’s announcement — along with the recent release of a second RFPP — are the latest steps towards advancing broader deployment of carbon capture, storage, and utilization (CCUS) to decarbonize Alberta’s energy sector.

Results of the first RFPP

The Alberta government issued its first RFPP from companies interested in developing and operating carbon sequestration hubs in Alberta’s industrial heartland region on December 2, 2021. The province issued the RFPP after receiving significant industry enthusiasm in response to its request for expressions of interest which it released three months earlier. The Alberta government has now selected the following six project proposals to move to the next stage for further evaluation:

  • Meadowbrook Hub Project (Bison Low Carbon Ventures Inc.) for a sequestration hub north of Edmonton
  • The Open Access Wabamun Carbon Hub (Enbridge Inc.) for a sequestration hub west of Edmonton
  • The Origins Project (Enhance Energy Inc.) for a sequestration hub south of Edmonton
  • Alberta Carbon Grid™ (Pembina Pipeline Corporation and TC Energy) for a sequestration hub north and northeast of Edmonton
  • Atlas Carbon Sequestration Hub (or Atlas Hub) (Shell Canada Limited, ATCO Energy Solutions Ltd., and Suncor Energy Inc.) for a sequestration hub east of Edmonton
  • Wolf Midstream and partners for a sequestration hub east of Edmonton

The project proponents will be invited to work with the province to further evaluate the identified area of interest (i.e., through an evaluation permit, as supported by a Monitoring, Measurement and Verification Plan). If the evaluation demonstrates that the proposed project(s) can provide permanent storage, the province will then enter into a carbon sequestration agreement (an Agreement) with the successful proponent(s) to establish the boundaries of the area of pore space (i.e., location) and to facilitate the position of hub manager. The intent of the Agreement will be to grant the proponent the right to drill wells, conduct evaluation and testing and inject captured carbon dioxide into deep subsurface formations, while also ensuring open access to affordable use of the hub where appropriate and providing just and reasonable cost recovery to the Agreement holder.

Second RFPP

The government of Alberta issued its second RFPP on March 3, 2022, this time for carbon sequestration hub proposals located outside the province’s industrial heartland region. Similar to the first RFPP, details regarding the RFPP and the Agreement that will be issued to the successful proponent(s) can be found in the RFPP guidelines [PDF] (Guidelines).

Eligibility and exclusion criteria for participating in the second RFPP process are set out in the Guidelines. These criteria include the following:

  • The process is open to proposals that will sequester carbon dioxide emissions from multiple facilities.
  • Proposals should primarily target emissions that are outside the region serviced by the first RFPP (i.e., outside the industrial heartland).
  • Proponents must agree to work with the province to establish terms and conditions of an Agreement, should they be successful.
  • The process is only intended to provide access to pore space owned by the Alberta government, to undertake and enable carbon sequestration activities (as defined in the applicable regulations).
  • Carbon dioxide must be captured from facilities located within Alberta.
  • Projects that inject carbon dioxide as part of enhanced oil recovery or formation acid gas injection are not eligible to participate in the RFPP process.
  • Participation in the request for expressions of interest issued in the fall of 2021 is not a prerequisite for participation in the RFPP process.

Full project proposals must be submitted electronically in accordance with the requirements of the Guidelines and will be accepted from April 25 until 2:00 p.m. (MDT) on May 2, 2022.

The Guidelines require full project proposals to include details of the proposed project’s business model, project configuration and execution, the proposed project location, the proponent’s operational capacity and the proponent’s plan to manage elements of the emission policy environment (e.g., carbon credits, offsets or tax credits).

Next steps

The Alberta government has not published a timeframe for further evaluation of the proposals selected in the first RFPP process, though we expect this will proceed over the coming months. The government intends to announce the results of the second RFPP process by the fall of 2022.

Notably, the RFPP results come just days after the release of the federal 2030 Emissions Reduction Plan, which recognizes CCUS as integral to meeting Canada’s emissions reduction targets. The Plan also expressed the federal government’s commitment to continue advancing CCUS through the development of a federal CCUS strategy, an investment tax credit for capital invested in CCUS projects, and previously announced investments that include $319 million for research and development over seven years. This is likely to spur further optimism for broader deployment of CCUS in Alberta, even though details on a federal CCUS strategy and the investment tax credit have not yet been released.