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Putting green credits in a piggy bank

Smoke and Mirrors: Hundreds of Millions in Bogus Carbon Credits Is One More Reason To Stop Subsidizing Carbon Capture

A recent report reveals how Alberta's Quest Carbon Capture Facility sold over $200 million in carbon credits, half of which were bogus

We have some oceanfront property for sale in Alberta.

Don’t believe us?

You shouldn’t.

You also shouldn’t buy Big Oil’s version of oceanfront property, carbon credits from bogus carbon capture and storage schemes.

For six years, Big Oil sold bogus carbon credits, and the Alberta government allowed it.

The Quest Carbon Capture Facility near Edmonton made more than $200 million selling carbon credits.

The problem is that half of these credits did nothing for global warming, according to a recent report.

Between 2015 and 2021, a provincial government incentive program gave Quest two tonnes of carbon credit for every tonne of carbon stored.

Shell Canada, Chevron Canada and Canadian Natural Resources own the facility. 

Over these six years, the companies sold these phantom credits to other oil sands players.

At the time, Quest was the only operating carbon capture and storage facility in Alberta. 

A 2-for-1 Deal

Freedom of Information documents obtained by Greenpeace show that Shell lobbied for this sweet 2-for-1 deal during 2008 talks with former Premier Ed Stelmach’s PC government.

Greenpeace calls the carbon credit gift a “hidden subsidy.” 

“Selling emissions credits for reductions that never happened is the worst kind of hot air because it literally makes climate change worse,” said Keith Stewart, Greenpeace Canada’s senior energy strategist and author of the Selling Hot Air report, in a media release. 

“The false promises and phantom emissions surrounding this project are a powerful illustration of why Canada needs a legislated cap on greenhouse gas emissions from the oil and gas sector.”

Quest got $777 million in direct subsidies from the Alberta and federal governments. 

Stewart’s research showed that after you add in the value of “phantom credits,” regular Canadians covered 93 percent of the cost of the facility, allowing Quest to make $126 million in profit for the big oil owners as of the end of 2022.

Since 2007, Alberta has run a carbon offset system for large emitters, like oil and gas companies. 

If companies produce more than their allotted levels of planet-warming gas, they must purchase credits on a trading system to offset those emissions.

Quest sold its legitimate and phantom carbon credits on this Alberta government-managed trading system.

The Quest Carbon CApture facility near Edmonton
The Quest facility in 2015 | Jason Franson | Bloomberg

Dependent On Subsidies 

In a CBC story, Alberta Environment Ministry spokesperson Ryan Fournier called the report a “smear job by Greenpeace.”  

A Shell spokesperson, Stephen Doolan, told CBC that Shell did not sell phantom credits to other companies.

He also reiterated that carbon capture is critical if Canada wants to meet international climate targets.

Pierre-Olivier Pineau, a professor and researcher in energy policy at Université de Montréal, disagrees.

He said the Greenpeace report exposes the big problems with carbon capture technology—it’s expensive and depends on subsidies.

“It has to rely on subsidies, which become problematic because the government ends up subsidizing polluters,” he said.

Professor Pineau said the report also highlights the need for a higher carbon price.

Carbon capture isn’t the climate change game changer that the oil and gas industry claims it is. What it does, for sure, is allow big polluters to keep on polluting while tapping public dollars to build feel-good carbon capture projects.  

Recently, Capital Power Corp. bailed on a proposed $2.4 billion carbon capture and storage project at its Genesee natural gas-fired electricity plant southwest of Edmonton.    

The Pathways Alliance consortium, which represents the six largest oil sands companies, has been lobbying hard for its $16.5 billion carbon capture pipeline project, but it wants Canadians to subsidize most of it, roughly $11 billion.

The recent report clearly shows that putting good public money into subsidized carbon capture storage projects lines the pockets of Big Oil while doing very little for climate change. 

“This was all legal, but that doesn’t make it right,” said Greenpeace’s Keith Stewart. “Those who have polluted and profited the most must be held accountable.”  

Now back to that oceanfront property we have for sale.

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