The Province of Alberta is targeting a 200 megatonne reduction in greenhouse gas (GHG) emissions by 2050. Studies by Integrated CO2 Network indicate that, through a phased build-up of CCS, there is the potential to reduce CO2 emissions in Alberta by up to 35 megatonnes per year by the early to mid 2020’s. This represents approximately 5% of all of Canada’s current emissions. Alberta is home to a unique geological formation, known the Western Canadian Sedimentary Basin (WCSB), which it can use to effect large scale CCS. Although the WCSB is the source of significant amounts of CO2 emissions as a function of hydrocarbon development, it also contains natural reservoirs in relative proximity with vast potential to store CO2.
In 2007 the Climate Change Emissions and Management Act and related regulations were enacted, introducing intensity based reduction targets for installations emitting more than 100,000 tonnes of CO2e. Compliance options include purchasing offsets from offset projects located in Alberta and contributing $15/tonne to the Climate Change Emissions Management Fund.
This cap and trade system is only a bridging mechanism until such time as Alberta can deploy CCS technology as this is the long term climate change strategy for the Province. Although conservation, energy efficiency and the greening of energy production are part of the Alberta government’s long term strategy, CCS is intended to provide 70% of GHG emission reductions.
In the spring of 2008, the Alberta government created the Alberta Carbon Capture & Storage Development Council with the mandate to provide recommendations, through comprehensive reports, to facilitate the immediate, medium and long-term implementation of CCS in Alberta.
In July 2008, the Alberta government announced the creation of a separate fund that would provide $2 billion for CCS projects over 5 years. This money has now been fully committed to four projects.
- Coal – In situ gasification project (Swan Hills Synfuels): This project will produce synthetic gas from an unmineable coal bed near Swan Hills to be used in the generation of clean electricity from a combined cycle power generator. The project will also capture a projected 1.3 million tonnes/year of CO2, which will be used for enhanced oil recovery (EOR).
- Pipeline – Alberta Carbon Trunk line: This pipeline will be constructed for the transportation of CO2 from Agrium Redwater (and later from the oilsand bitumen upgrader) to depleting oil fields near Red Deer. It is designed to carry 40,00 tonnes CO2/day – 14 million tonnes/year. The intended use is EOR. Over time other CO2 producers will be able to connect to the pipeline.
- Storage – Quest project (Shell, Chevron and Marathon Oilsands): This project will capture and store 1.2 million tonnes of CO2/year from the Scottford Upgrader. CO2 will be injected and stored 2300 meters below the surface.
- Coal – Retrofit of a coal fired electricity generation plant (Trans Alta -Keephills 3): CO2 capture from this project will be used for EOR or stored.
The Alberta Government will distribute 40% of the dedicated monies during design & construction, 20% on commercial operation and 40% over 10 years as CO2 is captured and stored.
- CCS infrastructure development requires an ongoing collaborative long-term approach between industry and government. There is a need for additional funding from government to support CCS projects beyond the first wave.
- There will be a need for the provincial and federal levels of government to work together to set a harmonized policy and regulatory framework to facilitate an integrated economic model for CCS.
- Capture costs are high (currently estimated at between $50 and $225/tonne) and exceed the price that EOR operators will pay for CO2. New or improved lower cost capture technologies need to be developed and implemented.
- Finally, there is a need for regulatory and policy clarity regarding GHG reduction targets and the mandatory adoption of CCS technology for new projects as well as greater regulatory certainty in relation to the rules for building environmentally appropriate capture, transportation, and injection facilities and long-term storage liabilities.