Federal tax credit not enough to get carbon capture projects built: Cenovus CEO

CALGARY — The chief executive of Cenovus Energy Inc. sent a blunt message to governments Wednesday when he told analysts on a conference call that a recently unveiled federal tax credit won’t be enough to convince Canada’s major oilsands producers to begin construction on a proposed massive carbon capture and storage transportation line.

Industry will need “more help” than just a tax credit if it’s going to go ahead with large-scale carbon capture and storage and other emissions reduction initiatives like those proposed by the Oil Sands Pathways to Net Zero consortium, said Alex Pourbaix, whose company is part of that alliance of oilsands firms along with Canadian Natural Resources Ltd., ConocoPhillips, Imperial Oil Ltd., MEG Energy Corp., and Suncor Energy Inc.

“These are multibillion-dollar projects. And we have to have certainty that they are investable, and that we can manage those investments over the entire commodity price cycle,” Pourbaix said.

“I suspect, over the long term, much as we’ve seen in other jurisdictions, we’re going to require a real collaboration.”

Carbon capture and storage is a technology that captures greenhouse gas emissions from industrial sources and stores them deep in the ground to prevent them from being released into the atmosphere.

Proponents say a large-scale rollout of carbon capture and storage technology will be necessary if Canada is to meet its climate goals. According to environmental think tank The Pembina Institute, capturing and storing CO2 from oilsands facilities, refineries and gas plants could reduce Canada’s emissions by 15 million tonnes by 2030 — the equivalent to taking 4.6 million passenger vehicles off the road.

But carbon capture technology is expensive and so far, has proved difficult to scale. There are only a handful of carbon capture projects up and running in Canada right now, though many more have been proposed. The Oil Sands Pathways group, for example, has proposed to work together on a project that would capture CO2 from oilsands facilities and transport it to a storage facility near Cold Lake, Alta, delivering about 10 million tonnes of emissions reductions per year from oilsands production.

Oilsands companies have long advocated for some form of tax credit incentive to help industry invest in the technology, saying such an incentive would be critical to getting large-scale projects off the ground.

In last month’s federal budget, the Liberal government announced such an incentive, in spite of opposition from some environmentalists who viewed the move as nothing more than a subsidy for fossil fuel production. Starting this year, companies will be able to claim a tax credit of up to 60 per cent for direct air capture projects and 50 per cent for all other eligible carbon capture projects. A 37.5 per cent tax credit is available for investment in equipment for carbon transportation, storage and use.

While the federal tax credit is a “good start,” Pourbaix said, in some parts of the world, governments have provided up to 60 or 70 per cent of the capital costs of new carbon capture projects, in addition to providing operating support. He said the Pathways alliance will need more detail about what kind of additional support to expect before it can make a final investment decision.

But Warren Mabee — director of the Institute for Energy and Environmental Policy at Queen’s University in Kingston, Ont. — said Pourbaix’s comments make for poor optics, given that they came the same day Cenovus announced a first-quarter profit of $1.6 billion, or 81 cent per share, compared with a profit of $220 million or 10 cents per share in the first quarter of 2021. Revenue totalled $16.2 billion, up from $9.3 billion in the same quarter last year.

Canadian oilsands producers have been posting huge profits and record cash flows against the backdrop of the war in Ukraine, post-pandemic economic recovery, and soaring global energy demand. Cenovus also announced Wednesday the tripling of its quarterly dividend, to 42 cents per share a year, up from 14 cents per share a year.

“Basically the message is, we’ll profiteer today but we aren’t willing to sink our profits into creating a cleaner and greener industry,” Mabee said. “Cenovus would do well to highlight what investments they have made, and how they are reinvesting windfall profits in creating a more sustainable future for their shareholders and their sector.”

During the call, Pourbaix said Cenovus and the rest of the Pathways group — which have jointly set the goal of reducing emissions from oilsands production by 35 per cent by 2035 and to reach net-zero emissions by 2050 — continue to have discussions with both the federal government and the Alberta provincial government. In the meantime, he said preliminary engineering and permit applications for the carbon capture project have already begun.

He also pointed out that oil prices are cyclical, and the industry has only very recently emerged from years of depressed prices. He said when it comes to the construction of the proposed carbon capture and storage transportation line, current oil prices shouldn’t be banked on.

“Oil prices right now are obviously very attractive, but we know probably before that project is ever in service, we’ll probably test the bottom end of those prices again,” he said.

This report by The Canadian Press was first published April 27, 2022.

Companies in this story: (TSX:CVE)

Amanda Stephenson, The Canadian Press

Related Topics:#Cenovus #CarbonCapture feature

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Nugent-Hopkins, Oilers roll past Golden Knights 7-4

Alberta / 4 hours ago

Markstrom reigns over Kings as Flames win 2-1

Alberta

Nugent-Hopkins, Oilers roll past Golden Knights 7-4

Published on March 28, 2023

The Canadian Press

The Edmonton Oilers celebrate a goal against the Vegas Golden Knights during the first period of an NHL hockey game Tuesday, March 28, 2023, in Las Vegas. (AP Photo/Lucas Peltier)

By Mark Anderson in Las Vegas

LAS VEGAS (AP) — Ryan Nugent-Hopkins tied a career high with five points, and Edmonton’s top-ranked power play scored three goals as the Oilers beat the Vegas Golden Knights 7-4 on Tuesday night to tighten the Pacific Division race.

The Oilers, who extended their point streak to eight games, have 95 points and are three behind first-place Vegas. Los Angeles lost 2-1 to Calgary and remains in second place with 96 points.

Edmonton cooled off a Golden Knights team that had won four games in a row and eight of nine. The Oilers also prevented Vegas from clinching a playoff spot.

Nugent-Hopkins helped make sure of it with a goal and four assists. His only other five-point game occurred Nov. 19, 2011, when he had five assists against Chicago.

He was one of three Oilers with multiple points. Connor McDavid had three assists and Leon Draisaitl a goal and an assist. McDavid leads the NHL with 143 points and 83 assists.

The Oilers also got goals from Evan Bouchard, Darnell Nurse, Evander Kane, Zach Hyman and Brett Kulak. Edmonton’s power play went 3-for-3 in just 2:55 of total time, and Stuart Skinner made 19 saves.

Jonathan Marchessault had two goals for the Knights, and William Karlsson and Michael Amadio each scored once. Alex Pietrangelo added two assists.

In the first 10 minutes, the teams combined for five goals, Nugent-Hopkins had three points and a friendly fire puck to the face, the Oilers scored twice on both power-play opportunities and the Knights netted a short-handed goal.

Edmonton broke open a 3-all game in the second with three goals in the final 13:59, dominating the ice with 34 shots on goal through the first two periods compared to 12 for the Knights.

Laurent Brossoit replaced Jonathan Quick in the Knights’ net to open the third period.

Golden Knights defenceman Shea Theodore did not play in the third period. The reason wasn’t immediately provided.

GOING STREAKING

The Oilers built on a number of impressive streaks. Draisaitl and Hyman each extended their goal streaks to three games, and Draisaitl’s point streak reached 10 games (six goals, 14 assists). McDavid (six goals, 13 assists) and Nugent-Hopkins (five goals, 13 assists) have ongoing nine-game streaks, and Nurse (three goals, three assists) is at six games.

Vegas also extended a couple of notable streaks. Marchessault scored for the third game in a row, and Phil Kessel has a five-game point streak (two goals, four assists).

UP NEXT

Oilers: Thursday against Los Angeles in a battle for playoff positioning in the Pacific Division.

Golden Knights: Thursday at San Jose, which is last in the Pacific.

Alberta

Markstrom reigns over Kings as Flames win 2-1

Published on March 28, 2023

The Canadian Press

Los Angeles Kings forward Carl Grundstrom, centre, crashes into Calgary Flames goalie Jacob Markstrom, as forward Trevor Lewis hits the net during third period NHL hockey action in Calgary, Tuesday, March 28, 2023.THE CANADIAN PRESS/Jeff McIntosh

By Darren Haynes in Calgary

When the Calgary Flames needed it most, goaltender Jacob Markstrom stepped up and delivered his best performance of the season.

Markstrom was spectacular on Tuesday making 33 saves to backstop the Calgary Flames to a critical 2-1 victory over the red-hot Los Angeles Kings.

“He was sharp. Made some big stops. He probably stole us two points,” said Flames centre Elias Lindholm.

After rookie Walker Duehr gave Calgary a 2-1 lead at 17:59 of the first period, it was left to Markstrom to make several key stops over the final 40-plus minutes to preserve the victory.

The Kings have been the NHL’s hottest team, entering the night on a franchise-record 12-game points streak (10-0-2) in which they outscored the opponent 52-28. Nineteen of those goals came in the last three games, all wins, including an 8-2 thumping of Calgary eight days ago in Los Angeles.

“Obviously, we’re not very happy about the last meeting against these guys and it’s still fresh in the memory. Today I thought we played a better game,” Markstrom said.

The veteran’s biggest stop came in the final minute of the first period, right after the go-ahead goal.

After two Flames got tangled up with one King outside the Calgary blue line, Kevin Fiala had nothing but time and space as he moved in from the centre line on a breakaway. As he skated in, he paused at the top of the crease before shooting with Markstrom kicking out his left pad to deny him.

“It was almost like a penalty shot or shootout,” said Lindholm. “I thought Marky stayed calm in there for a long time and read him pretty well.”

Markstom, who was starting for the 15th time in the last 16 games, said the key is to not think too much.

“Just wait him out because he wasn’t going very fast,” Markstrom said. “Wait to see what he was going to do and not bite on anything before that.”

He also had to be excellent in the second. Markstrom flashed out his glove to deny Adrian Kempe after he broke in alone. Two minutes later when the slot opened up for Matt Roy, Markstrom jabbed out his blocker to make another key stop.

Late in the third, again it was Fiala with a chance, this time set up by Mikey Anderson on a cross-ice feed, but Markstrom sprawled across with a highlight-reel save to again deny him.

“It gives a huge jump to the group, right?” said Duehr. “You see him bailing us out at times and he’s giving his best effort so we can only go out there and do the same for him.”

Andrew Mangiapane also scored for Calgary (34-26-15), which wins its second consecutive game and improves to 7-3-2 in their last dozen outings.

Combined with Winnipeg’s 3-0 loss in San Jose, the Flames have moved to within two points of the Jets, who occupy the final wild-card berth in the NHL’s Western Conference. Each team has seven games remaining including a head-to-head on April 5 at Canada Life Centre.

“It felt like a playoff game. We had our pushes, they had their pushes and I thought Marky stood on his head tonight and gave us a chance to win,” said Duehr, who continues to provide a spark since getting called up from the minors. He’s scored six goals in 21 games.

Sean Durzi had the lone goal for Los Angeles (43-21-10).

The Kings remain two points behind Vegas for first place in the Pacific Division. Edmonton is in third, just one point behind Los Angeles.

“I don’t think it was a lack of effort, certainly today. It was a hard-fought game, a physical game. For the most part we did a good job. Just obviously unfortunately we didn’t convert on a few of our chances,” said Kings captain Anze Kopitar.

Markstrom improves to 21-20-10.

In his sixth start in goal since being acquired by the Kings in a trade with the Columbus Blue Jackets, Joonas Korpisalo, tested 32 times, lost for the first time. He falls to 15-12-4 on the season.

“Both goaltenders were first and second star in whatever order you want to pick,” said Kings coach Todd McLellan. “They both played well. Korpi made some really good saves for us. He gave us a chance to have those good looks at the other end. It’s unfortunate we couldn’t reward him with at least one to get him a point.”

Momentum swung in the Kings favour halfway through the first when Rasmus Andersson’s goal, which would have made it 2-0, was waved off after an offside review. Less than two minutes later, Durzi picked the top corner to tie it.

Calgary also thought they scored in the second but upon video review, but upon video review, the call of no goal stood.

KINGS LINEUP SHUFFLE

Los Angeles made three lineup changes. Returning from a one-game suspension was Blake Lizotte. Not with the Kings to start this road trip after being injured last game was RW Gabe Vilardi (upper body). Arthur Kaliyev also drew in up front with Jaret Anderson-Dolan coming out. On the blue line, Alex Edler replaced Sean Walker.

PRIDE NIGHT AT SADDLEDOME

It was Pride Night at the Saddledome with all Flames wearing custom jerseys for warm-up that were designed by local artist Megan Parker. The Flaming C on the front and the numbers featured a pattern of flora and fauna from Alberta prairies arranged to reflect the rainbow-coloured pride flag.

UP NEXT

Kings: Road trip continues Thursday against the Oilers.

Flames: Head to Vancouver to take on the Canucks on Friday.

This report by The Canadian Press was first published March 28, 2023.