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.
I love the positivity Ken. I enjoy reading blog posts that talk about possibilities. Unfortunately the vast majority just complain and fail to offer alternative solutions.
ReplyDeleteThanks
Jarritto
Appreciate your optimism, Ken, but I'm still not sold on CCS being the golden nugget that will save Alberta from environmental disaster (or worth a blind $2 billion investment).
ReplyDeleteIt was a shame that while the AB Govt kept the $2 billion in CCS, they cancelled the $2 billion Green Transit Incentives Program for Alberta municipalities. As sprawl continues, urban public transit is becoming an increasingly critical part of making smarter cities in Alberta.
Thanks for this post, Ken. I agree that the $2 billion investment is to Alberta's credit. That recognition, however, should not deter us from a hard-headed ananlysis of CCS in Alberta and elsewhere.
ReplyDeleteWhile I am all in favour of proceeding with CCS projects ASAP, I hear of two significant challenges. The first is the question of fnding enough receptacle pools to store the CO2. There may be fewer appropriate Enhanced Oil Recovery (EOR) projects available than have the caapcity to hold all the carbon we will be seeking to store. If that is so (and I hear argument on both sides) we will not have a market to purchase carbon, and so will have to seek to buy secure geological storage.
That brings me to the second major challenge: the cost. I have heard estimates from industry experts that CCS may cost as much as $100 - $120/tonne of carbon when all factors are taken into account. For all the talk about different pricing schemes for carbon, Alberta is only committed to a price of $15/tonne. The obvious question this raises is , after the $2 billion is spent, how are any operators going to possibly continue this activity economically, unless we see a clear movement to a graduated price of carbon. To be effective, that carbon price will have to start to really bite both industry and consumers, to lead them to new ways of operating, and do so on or before the date the $2 billion runs out.
This is an important project, and I would hate to see it become a white elephant.
Dave - CCS is no golden nugget taht will save the planet. But it is one viable and smart contribution to a suite of approaches for CO2 reduction that must be taken. Other tools include including conservation offsets, inprovde building codes, enabling alternative sources and yes pubic transportation solutions too.
ReplyDeleteI am a big fan of High Speed Rail between Edmonton and Calgary and have done some work in the area. That will cost more cash up front than two more lanes on the QE2 but not that much more and will cost a whole lot less on a full cost life-sycle account approach.
I think regional public transit is a critical component too and it will have to be done over time due to the wipe out of GOA revenue surpluses, the economic meltdown and the collapse of commodity prices. It will take a littel longer but it will happen.
The province is showing some laudable fiscal prudence of deferring the Green Transit Incentives and still pushing industry to invest to deal with new approaches to reduce their CO2 emissions. Taxpayers only invest in those private sector projects that and done, operating and have proven to work.
We need to be econmically realistic but still environmentally rigorous. I think this policy approach strikes the right balance right now.
"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. "
ReplyDeleteI was not aware of that. This is an important qualifier. Serious applicants only need apply.
I'm interested to see which projects qualify. If there was one which could marry in-province upgrading or refining with CCS, that would kill two birds...
daveberta,
ReplyDeleteCanceling the GREEN TRIP program was a disappointment to me as well....
...but recently I have been doing some volunteering on an ECO MOBILITY project which has brought me into close contact with a bunch of transit/ transportation planning bureaucrats they are very nice people....
...but they do not have a clue about non vehicle transportation...
...everything in their world has to move FAST and have a huge right of way, with safety barriers .... does not feel like a safe community building strategy to me.
PLUS, they had no evaluation component... [at least that I could find] that would ensure that cars were removed from the streets/ roads.
In fact they felt it was necessary to provide incentives to cars "until transit and walking had demonstrated sufficient demand"
That was a very long way to say I am getting over my disappointment in the Stelmach crew for shelving the GREEN TRIP program FOR NOW.
greengirl
All stepsthat reduces CO2 are great. However, until we, as a society, are ready to take the final step not much will happen. The step I am refering to is stringint conservation of fossil fuels through reduced consumtion at all levels.
ReplyDeleteIt is good to hear that people are concerned about GHG. There is a very simple, proven, reliable, and cost effective method already known to capture and contain CO2 - plant trees. A young healthy forest captures more CO2 than a mature or even an old growth forest, much more than most people are aware. I wonder how many of the 20 companies plan to include this in their methods or are they just going for an industrialized method?
ReplyDeleteKirt
I too, was unaware of the fact that the projects will only be reimbursed when up and running. Our elected officials seem to be woefully unaware of how to communicate environmental initiatives. I recently (2 weeks ago) asked Len Weber, AB Energy's Parliamentary Assistant if industry was contributing to the $2 billion carbon capture fund. He did not explain that the procedure was as you have stated, but seemed confused.
ReplyDeleteKen - you state in your blog that the list of 20 companies invited to submit detailed proposals. With respect you need to do some better research than that - the list is on the Alberta Energy's CCS web site in PDF and has been since January ... here's the direct link: http://www.energy.alberta.ca/Org/pdfs/CCSFPPlist.pdf.
ReplyDeleteThx Anon at 1:37 pm for the info on the proponents. I have added the link to the list and amended this blog post.
ReplyDeleteForked tongues at work here Ken. The first proposal which I supported were workable. Into the saline aquifer which is capped both sides with bedrock and at a depth of 3000 to 6000 feet.
ReplyDeleteCarbon dioxide becomes critical (liquid form) at 2600 feet which, is very marginal. A fraction of a degree warming (which is the trend) will turn it into gas again.
The latest monies have been given to companies to harvest mature oil reservoirs. That puts it at the same depth as Weyburn and, 90% is known to come back to the surface and a projected 10% is though to be absorbed in the oil.
The carbon dioxide is being used as a solvent and has nothing to do with sequestering it.
The problem with carbon sequestration in the oil sands area is that the oil formation is not deep as in central Alberta. Recent studies have raised the question of buried river channels and glacial outwash channels under the oil sands. These channels may allow steam, solvents or CO2 to migrate into the Athabasca River or into regional aquifers. Also, with thousands of uncased holes drilled in the tar sands area, maybe the CO2 will simply spew out of the ground. I remain skeptical about carbon capture in the oil sands area.
ReplyDeleteRe: One Alberta Voter
ReplyDeleteFrom what I understand the problems with ccs are not technical issues nor are they cost issues - coal is so cheap relative to other fuels that estimates I have seen show power produced from ccs equipped plants to still be competitively priced. Furthermore, costs of these types of initiatives should ultimately be passed onto the consumer rather than the taxpayer in order to punish waste and reward conservation. The initial investment is needed for research and development and pilot projects which can then be used as prototypes.
The main problem with CCS is that getting the carbon dioxide at a high enough pressure to put into a pipe will take between 30 to 40 per cent of a power generation plant's energy. Aside from the huge cost, this brings up the issue that while we will be reducing emissions, we will be burning through a much higher rate of our fossil fuel endowment. This issue has yet to be addressed.
We are all cheering on the initiative - finally the provincial Tories are getting serious about climate change. Nothing could be further from the truth, however. CCS is a make work project with insignificant benefit to the planet and may cause greater damage to our ecology than it purports to alleviate. How many Kms of new pipelines; how much fossil fuel energy to pump and pressurize the stuff to get it to it's dubious destination; will it stay there when it gets there, the experst are still out on that one; the reductions are miniscule and only affect a certain portion of industry (where it can be easily captured).
ReplyDeleteIt is like biofuels in that it is simply another method of diverting public funds to corporate interests without actually achieving what it purports to do.
Lastly, the $2B wold be much better spent on conservation and renewables, which both produce jobs and profits but for environmental entrepreneurs, not the old school of oil barons.
"Lastly, the $2B would be much better spent on conservation and renewables, which both produce jobs and profits but for environmental entrepreneurs, not the old school of oil barons."
ReplyDeleteA. how does conservation create jobs? It may be a laudable goal, but is not a job creator.
B. Renewables, such as solar or wind will require a huge network of transmission lines, so there is an analogy there to your "how many kms of pipelines" comment. Given the propensity of NIMBY in this province (and other places) with respect to transmission, good luck.
Nobody, not the government, not industry, is saying CCS is a silver bullet. It is but one tool in the toolbox
Thanks for addressing this issue, Ken; I'm sorry I haven't had time to get back to you on that yet.
ReplyDeleteI attended a major CCS conference sponsored by the EU in Beijing recently where they had discussions about Futuregen (now Greengen), and other work being supported by the EU and US on this work in China.
Projects in the EU, US and China were discussed, and particularly policy development in Australia was discussed. Consensus seems to be that Australia has some of the most comprehensive policy in the world on CCS, and boy is it a kettle of fish.
Has Alberta started to address the issue of underground storage rights? right-of-way for CO2 pipelines? Pipeline safety issues? How about environmental impacts of carbon capture systems - post-combustion systems use amines as a solvent that can have high environmental impacts. Not many people at the conference seemed to know much about anything going on in Alberta, which was a surprise to me.
Re: premier's comment on coal power generation: Of course, the real benefits of CCS can be seen in coal IGCC power plant technologies - but to date, nobody has built one. And this kind of power plant still doesn't deal with the 10-25% energy losses as mentioned above in CO2 compression. It's for this reason that lead ministries in China don't support CCS technology. Ministry of Science and Technology supports this development, but they are not a decision-making ministry.
If Alberta has been doing thinking about this, they need to be way more vocal. $2billion is a lot of money, and can be leveraged to get a lot of work done in coordination with other countries.
Anyhow, I will post on my blog soon about this, just kinda crazy over here right now.
This is a huge opportunity for Alberta. While everybody needs to keep their eyes on renewables and energy efficiency, the fact is that coal is not going away, and in the long-term, CCS is an essential technology for dealing with GHGs. The EU and US cannot go it alone on this, nor can Alberta - so I hope Alberta starts reaching out and communicating internationally on this issue!
Ken, great post and great comments.
ReplyDeleteBoth you and your audience have brought up some excellent concerns and issues for the average Albertan like myself to consider. Specifically, with respect to the potential success of the CCS program in terms of capacity, technology and potential geological issues underground, which despite having good alternatives in the geological modeling space, this still may not tell us all we need to know.
I agree with you that this is only one of many solutions that needs to be pursued and I applaud the GOA for taking this on. Yet there is a definite informational gap (as highlighted above) that I think isn't being addressed all that well right now. Obviously there's still much to consider and talk about...
Thanks Ken for addressing the CCS issue, I don't know anything about it and wondered if we really understand all the ramifications of this method. The above comments were very informative but still leave me wondering about how safe and what the long term effects might be.
ReplyDeleteThe extent and thoughtfulness of this discussion is an indication of how important Albertans see this subject to be. Thanks for kicking it off, Ken. Since your original post, a couple of new things have come up on the CCS issue, which might spur further thoughts.
ReplyDeleteFirst, several of he major tarsands operators have declined to proceed with proposals: http://www.calgaryherald.com/entertainment/giants+pull+bids+Alberta+carbon+capture+funding/1455369/story.html. It appears that this is mainly due to the current economics of tarsands operations. That in itself, however, is an indication of how important it is that the technical job of CCS mesh with real world economics.
On that note, I refer all interested to the recent article in Alberta Venture magazine outlining Dr. David Keith's misgivings about Alberta CCS scheme. The article can be found online at http://www.albertaventure.com/?p=3112&year=2009. David's a very bright guy who has spent a lot of time thinking about this issue, even before most of us had heard of the concept. I take his thoughts very seriously.