The Alberta government has signed a multi-million dollar deal with Shell Canada to start work on a carbon capture project.
The plan is to take one million tonnes of carbon dioxide a year from Shell's Scotford upgrader northeast of Edmonton and store it underground.
"By continuing to move CCS technology forward, Alberta is demonstrating its ongoing leadership in realizing the commercial-scale deployment of this technology and greening our energy production," Premier Ed Stelmach said in a release before his announcement at the upgrader site in Fort Saskatchewan.
The province will spend $745 million on the project over 15 years. The federal government is contributing $120 million through its Clean Energy Fund.
The Shell project is part of the province's $2-billion plan to reduce greenhouse gas emissions.
But the leader of the Wildrose Alliance said voters do not support such large amounts of public money going to an energy company.
"They don't want to do things that are costly and stupid. And things like spending $2 billion of taxpayer money on unproven technology to a handful of firms is costly and stupid," said Danielle Smith.
Encouraging greater use of cleaner-burning natural gas and offering incentives to reduce energy consumption would have broader support in Alberta, Smith said.
The Scotford upgrader processes bitumen from the Muskeg River and Jackpine oilsands mines near Fort McMurray.
Carbon capture is a leading-edge technology aimed at reducing carbon dioxide, a major contributor to greenhouse gases. The carbon is taken from smokestack or other industrial source, then liquefied and shipped by pipe to another location. Then it's stored deep underground in porous rock. Alberta has a basin of porous rock considered ideal for carbon capture.
Proponents say the technology is the best way to feed the consumer appetite for fossil fuels while still reducing pollution. But opponents say the technology is expensive and unproven.
They also fear leaks of concentrated carbon dioxide could poison underground water sources or kill people if released to the surface.