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Screen Shot 2015-09-17 at 07.55.40DAVID HOWELL, EDMONTON JOURNAL: November 6, 2015

Fort Saskatchewan — Shell and its partners Friday opened the $1.35-billion Quest carbon capture and storage project.

It is designed to capture and store more than one million tonnes of carbon-dioxide emissions a year from the bitumen upgrader at Scotford.

Built with financial help from the Alberta and federal governments, Quest is the world’s first oilsands CCS project. Shell says it can reduce CO2 emissions from the upgrader by up to 35 per cent, an amount equal to the annual emissions of 250,000 cars.

Since startup testing began in September, more than 200,000 tonnes of CO2 has been moved by pipeline to Thorhild County and sequestered in storage wells deep underground.

“Canada and Shell have very good reason to feel some pride in Quest and we invite the world to follow,” Ben van Beurden, chief executive of Royal Dutch Shell, told the opening ceremony at Shell’s Scotford Manufacturing Complex.

Speaking to reporters, van Beurden said CCS “is not a silver bullet” but needs to be part of the solution if the effects of global warming are to be successfully limited.

Despite the increasing impact of wind, solar and other renewable energy sources, global demand for hydrocarbon energy will continue to increase for decades, he said.

“(Quest) is a very important milestone,” van Beurden said. “We’re going to share everything that we have learned here, and I hope there will be many more projects to follow, so that we as an industry and as society can go onto the learning curve and really start using this technology to make a difference in the future.”

Shell Canada president Lorraine Mitchelmore said Quest represents a big step forward for the energy industry.

“Lower-carbon forms of energy will always continue to play a greater role in our lives, but as long as hydrocarbons are demanded, we — you, all of us — have a responsibility to reduce CO2 emissions in our hydrocarbons,” Mitchelmore said. “At Shell, we know that we must play a part.”

The International Energy Agency has said CCS has the potential to deliver 17 per cent of the world’s required CO2 mitigation by 2050. Mitchelmore said that by 2100, the technology could account for half of all needed global emissions reductions.

The Alberta government has committed $745 million for construction and Quest‘s first 10 years of operation. The federal government kicked in $120 million for engineering and design work. Other funding is from Shell (60 per cent) and its Athabasca Oil Sands Project partners Chevron Canada (20 per cent) and Marathon Oil Canada (20 per cent.)

Alberta’s previous Progressive Conservative government committed to funding Quest and another CCS project, the Alberta Carbon Trunk Line. The new NDP government doesn’t plan to fund further CCS projects.

“Right now we’ve got other challenges with our budget, to get back on track, and I think it’s prudent to wait for the climate-change plan before we make commitments,” Energy Minister Marg McCuaig-Boyd said Friday.

Van Beurden said other companies that want to build CCS projects will need incentives, such as direct government support or higher levies on carbon emissions.

A carbon price of $60 to $80 per tonne “would be an economic proposition,” he said. “Companies like ourselves would feel compelled to capture and store the CO2 rather than emit.”

The higher price could be phased in, he said. Any carbon tax would ultimately be passed along to the consumer, “whose behaviour needs to be modified as well,” he added.

Alberta’s current $15-per-tonne levy for large industrial emitters of CO2 is set to rise to $20 per tonne next year and $30 per tonne in 2017.

McCuaig-Boyd said the government’s coming climate-change plan will need to “get that sweet spot for carbon pricing and to drive new technologies.”

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