The Energy Department announced plans to partner with Shell on a carbon capture project in Canada while scrapping a similar project at home.
The department will collaborate with Shell on field tests to improve the capture and storage of carbon dioxide in the oil sands.
Canadian Natural Resources Minister Greg Rickford praised DOE for the new partnership on Wednesday.
"Today’s announcement is welcome news for North American energy cooperation and integration,” Rickford said. “Canada is a world leader in carbon capture and storage, and our government welcomes this collaboration as the latest important step in the development of this technology.”
Canada's government has poured $120 million into Shell's Quest project since 2011.
The DOE will invest roughly $500,000 in carbon capture test to improve advanced monitoring, verification and accounting (MVA) technologies, which are key during the lifecycle of a large-scale carbon capture and storage project.
More details on the partnership are expected to be finalized early this year.