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Carbon capture Alberta’s key element Province hitches success of new climate change plan to capture and storage technology, Stelmach says there’s enough ‘hot air’ about climate change, his goal is ‘realistic’ and free of political rhetoric and will strike balance between environment, economy Gary Park For Petroleum News
Having ruffled Alberta’s oil and gas industry with North America’s first mandatory greenhouse gas emission targets and infuriated the sector with a new royalty framework, Premier Ed Stelmach has apparently decided it’s time to go soft.
On the eve of an election call, and facing voters who are increasingly unhappy with 37 years of rule by the Conservative party, Stelmach rolled out the next phase of his “long-term climate change plan” on Jan. 24.
He said the strategy, in shifting the focus from the energy industry and requiring consumers “to do their bit,” will strike the right balance between environmental action and protecting jobs.
“It ensures environmental protection while allowing for continued economic growth,” Stelmach said. “This delivers real measurable reduction in greenhouse gas emissions while maintaining (Albertans’) quality of life. It encourages innovation and sets realistic goals for industry.”
In a nutshell, he promised Alberta will freeze GHGs by 2020 and reduce them by 14 percent from 2005 levels by 2050.
That left Stelmach far behind Prime Minister Stephen Harper’s pledge to reduce emissions by 65 percent by 2050 and British Columbia Premier Gordon Campbell’s more ambitious goal of an 80 percent reduction over the same period.
Not only that, but fossil fuel producers such as the United States, Britain, Norway and Australia are aiming for reductions of 50 percent to 80 percent.
Alberta: one-third of country’s GHGs Alberta is responsible for one-third of Canada’s GHGs, with coal-fired electricity plants accounting for 47 percent of the province’s emissions and GHGs from the oil sands, currently 19 percent, are forecast to double between 2004 and 2015 unless actions are taken.
Because of that, Alberta is being accused of offloading its responsibilities on other provinces if Harper’s goal is to be achieved.
Dan Woynillowicz, a senior climate change analyst with the Pembina Institute, said the new Alberta plan means “other areas of Canada will have to bear an unequal burden of reducing emissions while Alberta continues to entrench itself as a laggard.”
The Pembina Institute said the plan is “shockingly irresponsible,” partly because it will allow overall GHGs to rise for another 12 years without laying out specific actions to achieve cuts.
But a spokesman for federal Environment Minister John Baird insisted federal regulations coming out this year are separate from any actions taken by the provinces.
Under regulations that took effect July 1, 2007, Alberta’s 100 largest industrial facilities must reduce annual emissions by 12 percent for every unit of production.
Those who exceed their limit of 100,000 metric tons per year must pay C$15 per metric ton into a fund to develop new technologies for tackling GHGs or buy credits from other companies.
Stelmach: strategy will make province GHG leader Stelmach said the new strategy will make Alberta an international leader in tackling GHGs.
“There’s already more than enough hot air surrounding the issue of climate change,” he told a news conference. “I’m not going to add to it with empty political rhetoric and targets I know we can’t achieve.”
The key element involves carbon capture and storage which the government estimates will account for 70 percent of its total 2050 reductions.
Green energy initiatives, such as investment in clean energy technologies to support carbon capture and storage and research into new oil sands extraction processes that use less energy and water, will account for an estimated 18 percent, while 12 percent will come from conservation and energy efficiency measures, including new standards for residential and commercial building codes.
Committing up to C$500 million to the carbon capture and storage initiative, the government has effectively conceded it has a long way to go to develop the required technologies to capture carbon and store it underground, using the carbon dioxide to rebuild reservoir pressures for enhanced oil recovery projects.
‘Made-in-Alberta’ plan A government-industry council will be established to develop a “made-in-Alberta” plan for carbon capture and storage.
“Leading Canadian experts, economists and policy analysts support CCS as the most promising means of reducing our GHGs,” said Environment Minister Rob Renner. “Alberta has three Nobel Prize-winning scientists already working in this area, which shows we have the capacity to be a world leader.”
Stefan Bachau, a senior advisor with the Alberta Geological Survey and the Alberta Energy Resources Conservation Board, said introducing a carbon capture and storage system is vital to head off mounting provincial, national and international criticism of the increase in GHGs from the oil sands.
He doubts new technology could be developed and introduced before 2010 or 2011 and would take until 2015 to yield significant results.
CAPP: targets ‘aggressive and a challenge’ David Pryce, vice president of Western Canadian operations for the Canadian Association of Petroleum Producers, describing the government targets as “aggressive and a challenge,” said the industry is aware that it must play a significant role.
He told reporters that implementing technologies needed for large-scale carbon capture and storage will pose financial, technical and timing problems.
But CAPP is encouraged by the focus on carbon capture and storage, which is the key component to reducing petroleum-sector emissions, Pryce said.
Calgary Chamber of Commerce President Heather Douglas said her organization has strongly advocated the plan’s key elements, but “recognizes that moving towards a lower emission future will require long capital investment timelines.”
She said the chamber believes Alberta could become a “silicon Valley” of innovation in developing carbon capture and storage and clean-coal technologies that could have a significant impact on lowering worldwide emissions.
But Douglas added her voice to a growing concern over an emerging patchwork of federal and provincial policies at a time when the petroleum industry is under pressure with new royalties, a weak U.S. dollar and increasing costs related to climate change regulation.
Pryce said the two levels of government must come together with “some kind of common approach,” noting that oil and gas companies remain uncertain about whose rules they should follow.
U.S. could adopt tougher strategy Jeff Rubin, chief economist at CIBC World Markets, suggested that whatever steps the federal and provincial governments take may soon be irrelevant because the U.S. seems ready to adopt a tougher climate change strategy that Canada would be forced to copy if it hoped to continue oil and gas exports to the U.S.
Brian Mason, leader of the Alberta New Democratic Party, said Stelmach is “gambling” potentially billions of public dollars on unproven carbon capture and storage technology and is worried that will divert money away from renewable energy and efficiency efforts.
Underscoring that gamble, Renner conceded in March last year that the costs of delivering and storing carbon dioxide could run to C$5 billion — a cost the government would expect the industry to play a major role in funding.
That has already put the industry and government on a collision course.
ARC Energy Trust, which is working on its own CO2 pilot project, is willing to pay for supplies to improve oil recovery from its fields, but believes construction of a pipeline from the oil sands is a government responsibility, Chief Executive Officer John Dielwart has said.
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