By Mike De Souza
CALGARY, Alberta, Nov 5 (Reuters) - Royal Dutch Shell's
RDSa.L launch on Friday of Canada's first oil sands project to
capture and bury carbon emissions - assisted by generous public
subsidies - will likely be the last to get such funding, the
Alberta government said this week.
The left-leaning New Democratic government of the
energy-rich Western Canadian province, home to the country's
controversial oil sands, said it no longer plans to fund future
efforts using the technology.
"We intend to evaluate all options for reducing greenhouse
gases - like transit, energy efficiency ... with an eye to the
greatest return on investment," Energy Minister Marg
McCuaig-Boyd said in an email on Tuesday.
The New Democrats had pledged to improve the province's
climate change record after winning an election in May that
ended 44 years of Conservative rule.
Shell Canada said it completed the C$1.3 billion ($987.92
million) Quest project at its Scotford upgrader under budget and
can now capture about a third of its carbon dioxide emissions,
comparable to the annual emissions from 250,000 cars.
The project, located northeast of the provincial capital of
Edmonton, was built in partnership with Chevron Corp (N:CVX) CVX.N .
The upgrader, which converts bitumen from two oil sands
mines into synthetic crude oil, will now pipe the CO2 through a
65-km (40-mile) route before burying it in saline aquifers more
than 2 km underground.
Environmental groups often criticize the oil sands - natural
deposits of heavy oil - noting the industry is Canada's fasting
growing source of greenhouse gas emissions.
Alberta invested C$745 million in Quest and the Canadian
government put in C$120 million.
Quest project manager Tim Wiwchar said early testing
succeeded at capturing more than 100,000 tonnes of CO2
emissions, and the experience could support another proposal at
Shell's Peterhead power station in Scotland which, if approved,
would store carbon emissions below the North Sea.
"Some people may say it's still not enough, but it's a
start," Wiwchar said.
The launch comes three years after another public and
private partnership canceled similar plans to retrofit a
coal-fired power plant in Alberta, citing the absence of carbon
pricing policies.
Duncan Kenyon, a director at the Pembina Institute, an
environmental group that Shell paid for advice about Quest, said
the government should strengthen existing carbon pricing to
encourage carbon capture.
($1 = 1.3159 Canadian dollars)
(Editing by Paul Simao)