Alberta carbon plan loses half of bidders

Carbon capture and storage targeted for 70 percent of province’s greenhouse gas reductions; 4 major oil sands players withdraw

Gary Park

For Petroleum News

Ten are in and 10 are out of the bidding for a chunk of C$2 billion in Alberta government money to advance technology in carbon capture and storage.

But even from those who have agreed to submit further plans for projects there is a clear warning that financial backing is the key to their continued involvement when the government selects three to five proposals.

The bidding round is part of Alberta’s objective to have complete carbon capture and storage projects operational by 2015 and make a significant contribution to the government’s goal of eliminating 5 million metric tons of carbon dioxide emissions annually.

The province is targeting carbon capture and storage for 70 percent of its greenhouse gas reductions, which are expected to lower 2005 levels by 14 percent over the next 40 years.

What troubles observers is the withdrawal from the running of four major oil sands players — Syncrude Canada, Suncor Energy, Petro-Canada, ConocoPhillips and StatoilHydro Canada.

However, the line-up retains some high-profile companies, including pipeline giant Enbridge in partnership with EPCOR Utilities; Calgary-based utility TransAlta; Shell Canada; and a partnership of Enhance Energy and North West Upgrading.

Concern about public reaction

He noted that carbon capture and storage tends to favor larger, more concentrated sources of GHG emissions, such as Alberta’s coal-fired electricity plants.

Syncrude has opted to concentrate on reducing its energy consumption and sulfur emissions, as well as reclaiming land from its mining operations, while Petro-Canada said its decision to stall development of a heavy oil upgrader near Edmonton eliminated its best chance of building a CCS storage facility.

The utilities sector is estimated to account for more than 40 percent of Alberta’s GHG emissions, while the oil sands contribute less than 25 percent, although that share would rapidly increase if planned expansions proceed.

Of those who remain in the running, there is a mood of caution, with TransAlta and Enbridge indicating they will likely re-evaluate their plans if they don’t get government funding.

Enbridge Senior Vice President Jim Schultz said the proposed joint ventures with EPCOR are a chance to “thoroughly test our technology, share our knowledge with the industry and help the Alberta government meet its target.”

The two projects are aimed at providing cleaner electricity from existing and new plants, with captured CO2 being piped off-site for use in enhanced oil recovery or stored in saline aquifers.

A project involving the Genesee power plant in central Alberta has the potential to capture more than 3,300 metric tons per day, while a related facility is designed to capture 3,000 metric tons per day from conventional power plants.

TransAlta is one of eight Western Canadian companies to receive a portion of C$140 million from a federal fund to develop technology and remove 1 million metric tons per year from its Keephills coal-burning generation plant north of Edmonton.

CO2 potential revenue source

In addition, he said it lowers the risk for industry of government-imposed emissions standards.

The North West upgrader has incorporated carbon capture and storage technology from the outset, although the project is on hold during the economic downturn.

While blaming the current economic climate for the loss of some proposals, the Alberta government is anxious to see its plan succeed, deflecting some of the criticism it faces over its climate-change policies.

Premier Ed Stelmach has urged the Canadian government to ensure Alberta’s C$2 billion commitment is highlighted in talks with the United States over joint efforts to tackle climate change.

“Our nation’s future prosperity and its potential as a clean-energy superpower are at stake,” he said in a letter to Prime Minister Stephen Harper.