March 31, 2009 is the final day for Alberta companies to file details plans on what they would do to reduce CO2 emission if they were funded as part of the $2B Carbon Capture and Storage (CCS) program of the Stelmach government.
This $B is an impressive financial commitment by 3.3 million Albertans into CCS technology. This is particularly impressive when you consider the U.S. was only investing $B and China was in for $6B for CCS technology and they are significantly bigger players than little ol' Alberta. Alberta is obviously serious about capturing and storing CO2 and this investment is a strong signal about the level of engagement from the province.
The CCS program was the only budget item that was NOT under reconsideration in the Alberta government's revisit of its budget with the economic meltdown that hit the world in September 2008. There was considerable private sector interest in the opportunity with over 50 initial indications of Expressions of Interest in the project. Over 20 proposals made it through the initial evaluation process and they were invited to submit details project plans by March 31, 2009.
Indications are that all 20+ proposals will make details submissions which will be evaluated by a committee of Deputy Ministers to whittle them down to between 3 to 5 accepted projects. What happens then is the proponents must actually develop and deliver on their proposals at their own expense. Once the projects are up and running and proven to reduce the CO2 as promised, only then will they get reimbursed from the $2B fund.
The Group of 20+ Proponents has been made public and I know of a number of project proponents and they are all proceeding very diligently on preparing their details submissions. That can only auger well for them, Alberta and our government’s efforts to reduce GHGs and deliver on it Climate Change policy. I hope there is a release of the Group of 20 who actually submit detailed project plans and a brief description of what they intent to do and how much they will reduce CO2 emissions.
This is all good news but there are some who are very suspicious about the effectiveness of CCS and say it is unproven technology. It is technology in progress for sure but it is far from unproven as the Weyburn CCS project has proven over the past number of years.
There is one persistent matter of confusion around the intent and outcomes of Alberta’s CCS efforts. The CCS project has been positioned as a solution to the CO2 emissions from the oil sands. It is not but that messaging still persists from some politicians and some government officials. The open pit mining of oil sands CO2 emissions will not be easily captured given the nature of the open pit mining process. However that process represents about 20% of overall oil sand development over time. Some 80% of total oil sands exploitation and almost all of future development with be using a drilling techniques, not open pit mining,
Drilling for oil sands is the future of the resource and most of the CO2 can be captured in those processes. The bitumen upgrading process also emits CO2 that and that can be captured too. That is all significant but the real payoffs for the Alberta CCS project will come from the reduced emissions from coal-fed electricity generation. Alberta uses a lot of coal to produce electricity and needs a great deal more electricity to keep pace with growth demands.
At a recent dinner meeting I had with the Premier I asked him about where the CO2 emission benefits would come from with the CCS project investment. He was quick to point out some benefits would be from oil sands development now and much more in the future. He noted the big payoff would be in coal based power generation.
The Premier had the facts right and the message clear but the impression left in the public and the media is Alberta is investing $2B in CO2 emission reductions from the oil sands. That mistake in messaging is going to cause more heat than light and increased mistrust over the intentions and actions of the GOA on delivering responsible oil sands development. We have had too much of that already so I hope the Premier and Ministers make it clear and transparent what the $2B CCS project is intending to do. I hope the clarity and transparency starts this week with some information on the 20+ project proposals that are applying for consideration for a share of the $2B of Alberta taxpayer money to reduce the Alberta carbon footprint.
As an Albertan I want to be proud of how we are developing the oil sands resources in a responsible and sustainable manner. I look forward to being proud of how we respond to CO2 emission reductions, still sustain growth and create green jobs in the process. $2B of investment in CCS is a great start.