Shell Scotford ponders biofuels investment

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The possible investment into biofuels is Shell Scotford’s latest energy project of note.

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While it’s still in the development stages, the company is keen to get close to its goal to be net-zero by 2050 by integrating biofuel technology.

Shell Scotford completed a pilot project in summer of 2021 that processed 1.5 million litres of canola oil and tallow in its refinery.

Mark Pattenden, senior vice president with Shell Canada, told Strathcona County council during the March 8 priorities committee meeting, that the pilot provided proof of concept for how Shell can produce biofuels at the local site.

“We would call these first-generation biofuels, but it’s very important stepping stone,” Pattenden stated. “At this point in time, as we work up to the opportunity, we are considering a final investment decision, but that has not yet been taken, all of the stars need to align.

“I would actually call this the next generation of Alberta’s prosperity and of the Heartland’s prosperity, is actually natural resources that the province is blessed with. When you think about agriculture and forestry, and municipal waste, we call those bio-feedstocks, which are going to be a part of the energy transition,” he added.

A final investment decision is expected later this year.

“The successful pilot has supported the development of a renewable diesel project at Scotford as we continue to transform Scotford into an Energy and Chemicals Park that will produce the clean fuels of tomorrow,” explained Shell Scotford senior advisor Conal MacMillian.

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Scotford will also break ground on its $100 million solar farm project this summer. As previously reported, in partnership with Tennessee-based partner Silicon Ranch, the 58-megawatt solar farm is expected to provide 20 per cent of the refinery’s energy needs. It’s expected to be operational by 2023.

The company will also continue to grow its green energy portfolio by purchasing energy produced by a wind farm in Drumheller, which it will build with a partner. Of the 100 megawatts generated, half will be sold to Shell Scotford to be used at the site. That project is expected to be up and running by 2023.

Shell’s proposed Polaris CCS, a carbon capture and storage project that would trap 800,000 tonnes annually from Scotford refinery and chemicals, is awaiting government approval. If approved, Pattenden confirmed that work would begin immediately.

Shell divesting from Russia

News of the new local biofuels project came as Shell announced earlier that same morning that it was closing operations in Russia — service stations, aviation fuels and lubricants operations — as well as halting all purchases of Russian oil and gas “in a phased manner.”

On March 8, the company admitted that purchasing a cargo of Russian crude the week prior was wrong. Shell’s CEO Ben van Beurden apologized for the move.

“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel — despite being made with security of supplies at the forefront of our thinking — was not the right one and we are sorry,” Beurden said in a statement.

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“As we have already said, we will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund. We will work with aid partners and humanitarian agencies over the coming days and weeks to determine where the monies from this fund are best placed to alleviate the terrible consequences that this war is having on the people of Ukraine,” he added.

Pattenden noted many employees have Ukrainian roots or have ties to the country, especially ones who live in the Heartland.

“I can say as an individual, as well as on behalf of Shell, that we are appalled by the situation in Ukraine,” the VP told council. “We currently are working on exiting all of our positions. We have long-term contracts, obviously like many of the major oil companies have around hydrocarbon purchases from Russia, and we are working to exit those positions as fast as possible.”

“It’s a very distressing situation. I’ve talked to many Ukrainian staff and my colleagues on the leadership team at Scotford, and they have many connections with families and friends who are in the country. It’s just an awful, terrible situation.”

Major turnaround activity is also on the horizon for Shell Scotford. Expected to start at the end of this month, routine site maintenance on one of the upgraders will be attract thousands of workers to the site. At its peak in April, about 2,400 workers will be involved.

lmorey@postmedia.com

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