Canada To Provide C$63 Million Funding For Carbon Capture Pipeline

The Canadian government said Tuesday it will provide C$63 million (US$59.6 million) in funding for a carbon capture and storage system near Edmonton, Alberta, that will capture carbon dioxide emissions for use in enhanced oil recovery in the province.

The Alberta Carbon Trunk Line project will capture carbon dioxide emissions created by the process of upgrading heavy oil produced in western Canada to lighter petroleum products, and then store and transport emissions for use in improving oil recovery at declining fields. The emissions will be pumped underground for the dual purpose of extracting more oil and for keeping the emissions, seen as a key contributor to global warming, from entering the atmosphere.

The project will be operated in a partnership between Enhance Energy Inc., a carbon capture technology company, and North West Upgrading Inc., an oil upgrading company, according to a release by Canada's Natural Resources department. Both companies are privately owned and based in Calgary. The project will capture carbon from North West's facilities near Edmonton and transport it south for enhanced oil recovery in fields near Red Deer, Alberta, according to a spokesman for the Alberta government.

The Carbon Trunk Line is the third major carbon capture initiative announced in Alberta, which has set aside C$2 billion in funds for carbon capture and storage projects in the province. Last month, the Canadian and Alberta governments announced their intent to award C$865 million in funding for a carbon capture system at a Royal Dutch Shell PLC (RDSA, RDSB) refinery near Edmonton, and C$774 million in funding for a similar system at a power generation plant owned by TransAlta Corp. (TAC).

Alberta is also the main source of Canada's oil sands industry, which has been criticized by environmentalists for its relatively high levels of carbon emissions.

-By Edward Welsch, Dow Jones Newswires; 613-237-0669; [e-mail]