Tax credit for carbon capture the wrong horse to back in a race against time

Scarcely a year into my first job with now defunct Britoil in 1986, I lost my job like many others as oil prices crashed. Young and optimistic, I went to Africa and applied my skills to building a dam. Eventually, I returned to the oil and gas sector, building a 30-year career, half of those years with Shell. I’m proud of Canada’s energy workers for their technical expertise and for powering our economy for decades. But this week's federal budget will likely include an utterly misguided tax credit for carbon capture, utilization, and storage (CCUS). Subsidizing CCUS won’t prevent layoffs as global oil and gas demand drops, as the world pivots away from high carbon fuels. Europe’s current energy crisis doesn’t change that trajectory. Following Russia's invasion of Ukraine, European countries announced plans to fast-track the phase out of fossil fuels and accelerate scaling up renewables. That’s because it’s faster and cheaper to scale up renewables than building more fossil fuel infrastructure. Bruce Wilson is the former general manager of engineering with Shell, founder of Thor Hydrogen, and board chair of Iron & Earth. Photograph courtesy of Bruce Wilson Despite what some lobbyists claim, CCUS is not the most effective, scaleable tool for cutting our emissions. For all the headlines and dollars poured into CCUS, the Global Institute for Carbon Capture’s 2021 report identifies around only 31 facilities worldwide that are either operational or in construction, collectively accounting for a mere 39.7 million tonnes per annum, less than 0.1 per cent of annual global emissions. That’s assuming they function at nameplate capacity, which is an open question. A report about Shell’s Quest plant found the plant emitted more than it sequestered. We don’t have time for industry to spend decades getting CCUS technology right. As Canadians experience heatwaves, floods, and forest fires, the clock is ticking. Climate impacts are being felt worldwide. The Intergovernmental Panel on Climate Change says we need to cut emissions significantly by 2030. As the Climate Change Committee, an independent body that advises the U.K. government notes “a net-zero target requires deep reductions in emissions, with any remaining sources offset by removals of CO₂ from the atmosphere.” The key is “any remaining sources.” We must start with deep reductions and reserve "negative emissions technologies" for aspects of our economy for which there is no clear zero or low carbon alternative. For oil and gas, the alternatives are clear. At best, CCUS is a complex, expensive technology that aims to maintain the status quo. But our climate can’t afford for us to continue powering up with oil and gas for decades to come. Car companies see the writing on the wall—it’s why GM, Volvo, and Volkswagen are committing to going electric. Yet in Canada, some oil and gas CEOs prefer to imagine that change isn’t coming. If oil and gas executives want to invest in carbon capture they are welcome to. But taxpayer dollars must not be squandered on CCUS when more viable, affordable, scalable solutions exist. There are better horses to back, ones that will take us faster to where we need to get. As our remaining carbon budget runs out, we must switch rapidly to zero emissions forms of energy—wind, solar, geothermal—employing electricity and green hydrogen for energy storage and for powering mobility. We have the solutions, and they are all shovel-ready—unlike CCUS, which is far from proven, requires billions to set up and risks stranding assets when global oil demand declines. Government dollars are needed to scale up renewables, including geothermal. For long-term energy storage and high-grade heat applications, green hydrogen—zero emissions at both source and point of use—is the right horse to back. Allied with battery electric vehicles, fuel cell electric mobility can effectively displace heavy transport. Its high heat of combustion makes it a viable alternative to fire steelmaking, and cement manufacturing. Yet, no tax credits for these technologies are on the table. This is technology available now, scaling fast to meet the challenges and creating jobs. Looking to Europe, the investment in green hydrogen is massive and the growth of electrolysis gigafactories is testament to that increasing demand. Here in Canada, we ignore this at our peril—this is where the jobs will be, where competitiveness lies, and where the race will be won. Where vested interests are being economical with the truth about CCUS, it is workers who will suffer. Carbon capture is a distraction from the reliable and proven renewable technologies that can cut emissions and create jobs for energy workers. By investing in wind, solar, geothermal, and green hydrogen we can make a thriving net-zero economy a reality—not the mirage held up by those who would maintain the status quo. Bruce Wilson is the former general manager of engineering with Shell, founder of Thor Hydrogen, and board chair of Iron & Earth, a not-for-profit driven by the belief that fossil fuel workers can and must play a key role in Canada's energy transition. The Hill Times