Pathways President: ‘Ultimately, Everything We’re Doing Here Is To Get Steel In The Ground And Reduce Emissions’

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Pathway's first project is a proposed CCS network in northeast Alberta. At the heart of the network is a transportation line to gather captured CO2 from oilsands facilities and move it to a planned storage hub in the Cold Lake area. Image: Pathways Alliance

Although a final investment decision and green-lighting of the Pathways Alliance’s foundational carbon trunk line and CCS project has yet to occur, the group’s president says progress is being made on many fronts.

And Kendall Dilling expects more clarity on the future of the massive project before year-end 2023.

“Let’s start with what matters the most, which is the actual project because, ultimately, everything we’re doing here is to actually get steel in the ground and reduce emissions, right? So that’s where we try to keep our focus,” he told the DOB.

“The project itself is progressing along nicely. We continue to keep it on a critical path for our 2030 in-service date. Right now that means a lot of engineering and design work. That’s all continuing along apace.”

Dilling said Pathways is still “on track” to submit its regulatory applications by the end of this year.

“So, there’s a ton of work going on associated with that. It’s all air, water, biodiversity and wildlife kind of studies that are going on out in the field, not to mention routing and geotechnical — all that good work you do to put together your regulatory applications.”

That also includes below ground, subsurface evaluations that are a vital component of ensuring the project moves forward.

“Since we last talked, the one thing that has changed is we have now submitted our formal sequestration agreement applications. That required drilling a couple of wells and testing and collecting all that data. So, there was a good and serious body of work there that was completed,” Dilling said.

Consultations with Indigenous and other affected stakeholders, which began early on in the process, are also ongoing and getting far more detailed and intricate, he added.

“We’ve had ongoing discussions with Indigenous and other local communities — literally, hundreds and hundreds of meetings with different communities that get into the technical details of the proposal and the applications and working with those stakeholders,” he said.

“We’ve been talking to them for a long time. But in fairness, we started that when this thing was little more than a line on a map and a concept, because we wanted to engage with them as early as we possibly could,” Dilling added.

“Now, as we get closer to filing our regulatory applications, we’ve got a lot more of that technical detail that they’ve been looking for. I would say it is definitely progressing to that next level, shifting focus from what we would call engagement to true consultation where you’re really working the details.”

How are those consultations being received?

Dilling said that, by-and-large, talks with communities within the project’s proposed footprint have gone well.

“I’d say overall [the proposed project] has been received very, very well. People in that part of the province are very excited for the economic development that will follow a project like this. That area [especially the Cold Lake region] has been depressed economically from around 2014 to early 2015 when oil prices cratered,” he said.

“There’s been a lot of tough times up there in that part of the province and it’s only just started to … recover. So, when you get out and talk to the municipalities, the chambers and, obviously, industry up there, they’re very, very excited,” Dilling added.

“It’s a huge project in terms of the investment it will bring. The CCS project alone is about a $16.5-billion investment. And it’s going to create about 130,000 person years of work during construction. It’s really quite phenomenal.”

Longer-term, Dilling and Pathways believe there will be additional benefits for communities located in the scope of the proposed project.

“In the longer-term, there’s all the spin-off industry that will come and co-locate with CCS. So we’re already seeing it in terms of some of the big petrochemical expansions planned in the province and lots of talk about hydrogen expansions.… There’s all kinds of interest from other heavy industry that wants to come in and co-locate with CCS because that’s a requirement for them to achieve their net zero ambitions,” Dilling said.

Challenges remain, though

That said, Dilling admits much work remains in terms of consulting affected communities and allying concerns.

“We also recognize in talking to those local stakeholders that there are very legitimate concerns, of course, around ensuring that this project is developed safely and that they really want to understand [CCS]. It’s new, at least in that part of the province,” he said.

“Obviously, Quest has been injecting northeast of Edmonton in the Fort Saskatchewan area for seven years and have done so with a great track record. It’s all going very well. That’s a great analogue for us to build on,” Dilling added.

“But, in those communities in the northeast part of the province, CCS is new to them and so they all want to, of course, understand how it all works and be reassured that it’s going to be safe.

“And those are completely reasonable concerns, and we’re putting our best focus on that and working through the technical details and having them understand that this really is standard practice in our business and we inject and store things permanently underground all the time and have been doing so for decades. This is an extension of that. Working through all the details with stakeholder is, of course, very, very important.”

Update on talks with government

Dilling characterized ongoing talks/negotiations with both the federal and provincial governments in a positive light.

“I’m happy to advise that the discussions are going very well. We have always engaged on this project and have had really good access and attention and engagement from key senior officials, both provincially and federally,” he said.

“This is a big deal, right? This is massive on the Canadian landscape in terms of the ability to reduce emission. It’s got massive economic upside, both in terms of investment and the spin-offs we talked about, but also decarbonizing and sustaining one of your key industries and economic contributors to the province and the country,” Dilling noted.

“So, there’s no lack of engagement.… And that formal engagement that’s happening government-to-government is also very encouraging. Obviously, that dialogue is very important and impacts projects like ours, but also many, many other things in terms of that federal-provincial relationship,” he added.

“We’re having what I would call true three-way discussions with the province as the owner of the resource, the federal government in terms of the environmental regulations and industry as the developer of the resource. It’s a really good, quality discussion that’s happening right now. So we’re definitely encouraged.”

Given that, Dilling and Pathways are hopeful that “some kind of agreement” between the parties will be reached before year-end, one that would outline the “regulatory and fiscal frameworks” required to support the project.

“And if we’re successful in achieving that, then that allows us to keep the project on track for 2030 because we actually have to do a pipe order for a very, very significant cost in the first quarter of next year in order to maintain schedule,” he said.

“So, we’re looking for that certainty, obviously, that we need before we can make that kind of a long-lead pipe order commitment. So lots of work to do. But again, lots of reason to be optimistic, too.”

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