CCUS
The world needs it.
Alberta can lead it.
As a fossil fuel power, Alberta’s resources face increasing pressure to maintain our market share as both consumers and governments transition to a lower carbon energy mix. Value added manufacturing and other emissions intensive industries also increasingly factor decarbonization strategies into their location and investment decisions. Carbon Capture Utilization and Sequestration (CCUS) is a proven element of large scale industrial emissions mitigation strategies and Alberta has the opportunity to be a global leader and leverage this as part of the ”Alberta advantage”.
The current Storage Hub strategy envisions the utilization of large deep saline aquifers that are centrally located to afford economic access by large CO₂ industrial emitters, for permanent verifiable non EOR storage of CO₂.
On April 1, 2022, the Bison operated Meadowbrook Carbon Storage project consortium was announced as a recipient of one of six Evaluation phase carbon storage tenures for a 70,000ha block north of Morinville, Alberta which will service customers proximal to the Alberta Industrial Heartland. In October 2023 Bison was awarded a second Hub evaluation agreement for the North Drumheller (ND) Carbon Storage project as part of the second round of Hub awards which brought the total number of Hub tenures issued in Alberta to 25. In August 2024 Meadowbrook became the second Hub to receive a commercial sequestration agreement (CSA) from Alberta Energy, and in February 2025 it became the first Hub to receive the Alberta Energy Regulator’s approvals to proceed with a commercial development. Facility construction will commence in July and we expect the facility to be commissioned and injection operations to commence in September 2025.
Alberta has a long history working with CO₂
The Carbon Capture and Storage Process
Provided by the Global CCS Institute
Alberta has a long history and strong regulatory expertise in the management of the subsurface injection, disposal and permanent sequestration of CO₂.
Over 40 acid gas injection (AGI) projects have been licensed in Alberta and BC over the last 30+ years. Acid gas is the term used to describe the portion of a naturally occurring gas stream that is removed during processing to deliver the commercial spec gas we accept from our local gas distribution company. The largest components are hydrogen sulphide (H2S) and CO₂, with CO₂ representing as much as 80% of some acid gas streams. In these applications, the acid gas stream separated from the hydrocarbon stream is then injected into a subsurface aquifer, usually very close to the location of the gas processing plant, into geologic strata where it will not affect any potable water use or hydrocarbon recovery. Phase behaviour, reservoir effects, safety and containment issues, and industrial process design and operations are all very similar between AGI and CO₂ Sequestration. The scale of injected volume over the project life, and injection rate, are the major differences between AGI and commercial scale CCS with CCS being a much larger scale oepration. The Alberta Energy Regulator (AER) has overseen the licensing and operation of all these projects and is recognized to be a global leader in this role.
CO₂ is also utilized to mobilize residual oil saturation in enhanced oil recovery (EOR) projects using exactly the same strategies as are used to effectively deliver CCS.CO₂ is purified, compressed to liquid, injected, and cycled, in select applications (>13) for over 40 years in an attempt to enhance oil recovery (EOR). The AER also oversees the regulatory aspects of these projects.
More recently, and at a much larger scale, two commercial projects have been initiated, Quest (Shell) began sequestering up to 1Mtpa from the Scotford refinery into a deep saline aquifer north of Redwater in 2015 and Enhance/ACTL (target 1.7Mtpa) take CO₂ from the Industrial Heartland area for EOR into the Clive Leduc reef (2019) in central Alberta. These last two projects required a combined $1.2bn in Govt. financial support in part because there was no established ‘price’ or tangible value attributable to the capture and storage of CO₂, or at least not enough in the case of ACTL to justify the project on EOR alone.
This history demonstrates Alberta hosts the understanding, experience, equipment, and services to undertake large scale CCUS with a very high chance of a safe successful outcome. It’s not a given, and not without risk. It will require the same diligence which has enabled Alberta to assume and maintain its leadership position in oil and gas exploration and production operations over the last 75 years.
Given that there is no inherent ‘value’ in CO₂ in the volumes that will need to be sequestered, a synthetic price/value must be created to incentivise its capture and storage. Carbon credits are created, traded, monetized and retired under either a compliance or voluntary carbon credit market regimen and in Alberta the compliance market is the TIER market. An escalating federal industrial carbon price ( targeting $170/t in 2030) sets a cash equivalent penalty paid if a credit is not available to offset an emissions liability, and this is notionally intended to influence the trading value of a credit. The reality is that the trading value of a credit is materially lower than the carbon price and over the last 24 months the market price has disconnected from annual escalations in the posted price. There are considerations of artificially influencing demand for credits (increased stringency) and a sensitivity to balancing any distortions with the US market where the carbon price paid for sequestered CO2 under an approved project approaches $120 CAD/ton. In addition to a carbon market capable of supporting a price above $100 CAD/ton several other elements that have been announced will likely need to be implemented including the investment tax credits and provincial ACCIP program. In our modeling we have assumed that federal carbon pricing will remain enacted at current forecast prices, as will the TIER system (or equivalent), and that the stringency equivalency currently envisioned will be maintained in some fashion.
Given the Alberta energy industries operating experience, our reservoir knowledge, our regulatory history and our emissions heavy starting position, the opportunity to adopt CCS in Alberta presently exceeds 50Mtpa. This will take multiple projects at many locations across the province.
The Edmonton industrial area hosts >60 large emitters with annual CO₂ emissions >35Mtpa. The top 5 oilsands producers have combined emissions >60Mtpa. The ‘hub’ concept seeks to address this concentration of emissions by developing multi-client storage facilities servicing bespoke capture solutions.
To date, the supports that have been announced have not been implemented and there is a lack of confidence that if implemented, they will prove sustainable. An increased level of both visibility and confidence in the financial drivers underpinning CCS will likely be required before project commitments are made and the potential of CCS is realized in Alberta.
The economic benefits that will accrue to Alberta achieving a leadership position in the nascent CCUS industry are substantial
Alberta industries paying TIER tax will have a competitive option, and advantage, in achieving planned and future emissions reductions. These will be increasingly important with the introduction of Low Carbon Fuel Standards.
Bison LCV targets transportation and storage of captured CO₂ at <$20/ton at a commercial scale development. Low-cost compliance options will support future emissions reductions and allow Alberta industry to deliver world class emissions performance in an increasingly emissions sensitive world.
Alberta oilfield service and engineering companies have the experience and expertise in delivering this technology and will increasingly have the opportunity leverage CCUS experience into other jurisdictions.
Our sequestration sites will be innovation hubs where energy transition technologies will be piloted and commercially deployed. We already have ongoing discussions around emerging technologies in biofuels, DAC, modular power generation, small scale CO₂ capture and overland transportation, that would benefit by co-locating with a ‘net zero’ location. Securing energy transition innovation leaders will drive the provinces aspirations for economic diversification.
Our performance will be auditable for our clients use in emissions reduction targets, for investors or for other jurisdictions, thereby commoditizing CO₂ in a manner that will be revenue positive to the Alberta economy.