Oil and gas drillers in Canada convened at the Hyatt Regency hotel in downtown Calgary on Monday after experiencing a challenging year. Despite this, there was a sense of cautious optimism among the attendees.
The energy agreement recently reached between Alberta and Ottawa was seen as a significant positive development by industry leaders, with some calling it a “game changer.” Another game-changing technology discussed was Enhanced Oil Recovery (EOR), a process involving capturing carbon dioxide from industrial emissions and injecting it underground to extract more oil from reservoirs.
Mark Scholz, the president of the Canadian Association of Energy Contractors, highlighted the significance of EOR for the conventional oil business. He emphasized how EOR could enhance Canada’s competitiveness compared to the United States, where a tax credit for EOR already exists.
However, some in the industry expressed frustration over Ottawa’s initial decision not to include EOR in its investment tax credit for carbon capture projects. Environmental advocates raised concerns about subsidizing fossil fuel production and its impact on emissions.
The recent memorandum of understanding between Alberta and Ottawa now includes tax credits and policy support for large-scale carbon capture projects, including those related to EOR. This move was welcomed by industry representatives as a step towards environmental benefits and enhanced oil extraction capabilities.
Green Party Leader Elizabeth May criticized the agreement, viewing it as a betrayal and reversal of commitments made regarding EOR tax credits. She emphasized the need to move away from subsidizing fossil fuel production.
The inclusion of tax credits for EOR in the memorandum was defended by Federal Energy and Natural Resources Minister Tim Hodgson, highlighting the importance of carbon sequestration for Alberta. The agreement also paves the way for a new bitumen pipeline through British Columbia, contingent on advancing the Pathways Plus project for carbon capture near Cold Lake, Alberta.
