Market Snapshot: Where and how is carbon dioxide stored in Canada?

Release date: 2025-01-08

Greenhouse gas (GHG) emissions can be reduced with carbon management practices, tools and other abatement, strategies^Footnote 1, inlcuding technologies that remove, or re-use carbon dioxide (CO₂).^Footnote 2 CO₂ is stored naturally in many forms (i.e. carbon sink)—in the ocean, in soils, and in trees—however these forms do not necessarily store CO₂ permanently and might not pair directly to a CO₂ production source^Footnote 3. Artificial carbon sinks, like most carbon capture and sequestration (CCS) projects in operation today, inject CO₂ into deep geological formations, which is a long-term, or permanent, way to store large quantities of CO₂, preventing its release into the atmosphere.

Geological carbon storage traps injected CO₂ in a similar way as oil and gas reservoirs. Geological carbon storage reservoirs can include saline (saltwater) aquifers, depleted oil and gas fields, mature oil fields^{Footnote 4Footnote 5} or un-mineable coal seams^Footnote 6 (Figure 1). Globally, most CCS projects are onshore; however, some offshore projects exist, injecting CO₂ into sub-seabed geological formations.

What makes a good CO₂ storage reservoir?

CO₂ storage reservoirs are rock formations with interconnected pores—small holes and voids between mineral grains—that can be filled with CO₂.

Figure 1: Diagram of onshore and offshore CO₂ storage reservoirs

Source and Description

Source: IEA

Description: This infographic shows the structure of CO₂ storage reservoirs in onshore and offshore locations. A CO₂ storage reservoir has layers: the overburden (the top layer of rock and soil over the CO₂ storage formation), the caprock (the layer of impermeable rock that seals the reservoir), the reservoir (a layer of porous and highly permeable rock that stores the CO₂) and the lower caprock layer sealing the bottom of the reservoir. Injector wells inject CO₂ in the reservoir, where the CO₂ is stored permanently.

An ideal CO₂ storage reservoir will have high porosity and high permeability, which will allow large volumes to be injected and stored in the reservoir over time. In addition to these properties, a suitable geological carbon storage reservoir needs to have the following^Footnote 7:

• Normal, or below-normal, reservoir pressure to allow higher CO₂ injection rates.
• Depth greater than 800 meters, where subsurface pressure is high enough to keep CO₂ in its densest and most compressed state (supercritical state).
  • For example, non-EOR CO₂ storage is required at least 1 kilometer below the surface in Alberta^Footnote 8.
• A configuration called “a trap” to contain the CO₂ in the reservoir and prevent it from migrating.
• Enough capacity to receive the planned annual volumes of injected CO₂ over the life of the project (typically 20 years or more).

Since the 1970s, CO₂ has been injected into older oil fields for enhanced oil recovery with CCS (EOR-CCS). In Canada and globally, EOR established the commercial viability of early CCS projects and helped create economic value for CO₂, before carbon pricing policies, enabling some of the world’s first CCS projects. (Table 1)

Canada’s future CO₂ storage potential

Western Canada’s potential for geological CO₂ storage, without EOR, is significant. In a 2015 study by the U.S. Department of Energy (DOE), Alberta has a medium estimate of 78.3 billion tonnes of CO₂ storage, with Saskatchewan having an estimated 286.2 billion tonnes, Manitoba with 13.2 billion tonnes, and British Columbia with an estimated 1.87 billion tonnes^Footnote 9. However, these estimates may be revised as more research is done. For example, a 2022 study by Geoscience BC^Footnote 10 estimates that Northeast B.C. alone has a storage potential of 4.23 billion tonnes of CO₂, more than four times the DOE’s 2015 estimate for the province. There is significant CO₂ storage potential on Canada’s coasts as well: for example, the median estimate of CO₂ storage offshore Nova Scotia is 177 billion tonnes^Footnote 11. Canada’s wealth of CO₂ storage capacity could theoretically store Canada’s annual CO₂ emissions (708 million tonnes in 2022) for hundreds of years.

While EOR continues to offer a viable economic pathway for CCS in Canada, a growing number of projects under development are designed with dedicated geological storage, where CO₂ is injected into a geological formation and stored without the production of oil. Currently, there are 11 CO₂ storage facilities associated with CCS projects under development in western Canada (Table 2). Also, more than 25 new CCS projects were selected for evaluation by the Alberta government in 2022, with all of them either including carbon storage or relying on third party carbon storage.

In Canada, provinces have jurisdiction over their subsurface resources and regulate certain CCS activities, including geological CO₂ storage:

• Alberta has enacted a comprehensive regulatory framework for CCS. The Alberta Energy Regulator (AER) regulates facilities that capture CO₂, CO₂ pipelines, and subsurface operations to store CO₂^Footnote 12.
• Saskatchewan’s Ministry of Energy and Resources regulates the development of CO₂-dedicated underground storage in the province, as well as EOR-CCS^Footnote 13.
• The British Columbia government passed the Energy Statutes Amendment Act in 2022 updating its regulatory framework on CCS^Footnote 14. The B.C. Energy Regulator (BCER) is responsible for the regulation of CCS activity, including CO₂ storage^Footnote 15.
• On 4 June 2024, the Manitoba government passed the Captured Carbon Storage Act establishing a regulatory framework for licensing and operating CCS in the province^Footnote 16.
• Ontario is taking a phased approach to enabling and regulating carbon storage in the province. In March 2023 it removed the prohibition to develop underground carbon storage. In June 2023 the Ontario government enacted an amendment of the Oil, Gas and Salt Resources Act to enable “special projects” for carbon storage demonstration projects, which was followed with its corresponding regulations in January 2024^Footnote 17. As of August 2024, the province is currently working on the design of a regulatory framework for commercial geologic carbon storage projects^Footnote 18.

Date modified:

2025-01-07