Pipe Dream

The failure of Alberta's carbon-capture experiment

By Graham Thomson

Sometime later this year, a consortium of oil companies in Alberta will flip the switch on a first-of-its-kind climate change project in Canada. If it works, the Quest project will capture and bury one million tonnes of carbon dioxide (CO2) emissions every year from Shell Canada’s Scotford upgrader in Fort Saskatchewan. That’s one million tonnes a year for the next 25 years—roughly equivalent to pumping the weight of four Great Pyramids of Giza underground, or, as Shell likes to say, the equivalent of taking 175,000 greenhouse-gas-spewing cars off the road every year.

The task is just as daunting and complicated as it sounds. Not to mention controversial and expensive. Carbon capture and sequestration (CCS) is the official name of the process. It is conversationally known as carbon capture and storage, although “storage” would imply we want to retrieve the CO2 one day, which we don’t. Once the CO2 is locked underground, we want it to stay there forever. At least that’s the idea behind “pure” CCS projects such as the Quest venture, which involves shipping the carbon dioxide through a 60 km pipeline to an injection site where it will be pumped 2 km underground into a saline aquifer, an ancient porous rock formation.

There is no other project like Quest in Canada, and Shell says there is no project approaching its scale in North America. Quest will keep the CO2 underground starting on the first day of sequestration, unlike a relatively more common variation of CCS called enhanced oil recovery (EOR), where the highly pressurized carbon dioxide is pumped into an old oil field to force out otherwise unrecoverable oil. In EOR, not all the injected CO2 stays underground. As much as two-thirds of it is recovered along with the oil and is then reinjected in a recycling loop that continues for years until the project ends and the CO2 is finally sealed underground.

Enhanced Oil Recovery has been used successfully around the world for decades as a way to extract oil, but it was not developed as a way to store CO2. Environmentalists have raised questions about the long-term effectiveness of using old oil fields, punctured by myriad old wells, to sequester highly pressurized carbon dioxide. Critics also note that recovered oil from EOR goes on to be refined into fossil fuel products that are burned, thus creating more CO2 emissions.

Then there’s the issue of capacity. In 2009 an Alberta Carbon Capture and Storage Development Council report said there was enough space in potential EOR projects to sequester 450 million tonnes of CO2 and thereby recover 1.4 billion barrels of oil. All impressive-sounding numbers until you start picking them apart. When Alberta’s government first proposed using CCS to drastically reduce the province’s emissions, it wanted to be trapping 140 million tonnes a year by 2050. That’s per year, forever. With the upper level of EOR being 450 million tonnes—in total—it would account for the equivalent of just three years of reductions.

Also, burning those 1.4 billion barrels of recovered oil from EOR would generate roughly 440 million tonnes of greenhouse gases. EOR wouldn’t even get us off the launching pad.

Canada already has two Enhanced Oil Recovery projects under the CCS banner, both in Saskatchewan: the Boundary Dam project, started in 2014 to remove CO2 emissions from a coal-burning power plant near Estevan, and the Weyburn-Midale project, which has been pumping CO2 through a 323 km pipeline from a gasification plant in Beulah, North Dakota, since 2000. Both projects pump their fluid CO2 into the Weyburn-Midale field to push out more oil.

Alberta hopes to have its own CCS-related EOR project in 2016. Owned by Enhance Energy, the Alberta Carbon Trunk Line will capture CO2 from the Agrium Inc. fertilizer company and the North West upgrader, both located near Redwater. The CO2 will be pumped through a yet-to-be-constructed 240 km pipeline to depleted oil fields in central Alberta. Susan Cole, Enhance Energy’s president, says the goal is to pump 1.9 million tonnes of CO2 underground every year, with the potential to scale up to 14.6 million tonnes annually.

What makes enhanced oil recovery attractive compared to pure CCS is economics. Producing oil is profitable; sequestering CO2 is not. That’s why there is only one “pure” CCS project in Canada and so few worldwide. It’s also why companies look to governments for help—and until now no government has been more helpful than Alberta’s.

Producing oil is profitable; sequestering CO2 is not. Canada has only one “pure” CCS project.

On July 8, 2008, Premier Ed Stelmach announced with great fanfare that his government would invest $2-billion in an anticipated half-dozen CCS projects to help Alberta fulfill its new climate change strategy. His plan was bold and optimistic, a reflection of the province’s booming economy. At a record-setting $145 a barrel for oil, the government was anticipating a $12-billion surplus. Spending $2-billion over 15 years on CCS experiments seemed like chump change.

Optimism and money—Alberta had plenty of both. The only cloud on the horizon was concern over climate change. Alberta was a target because environmentalists saw oil sands as high-carbon “dirty oil.” Alberta’s 2008 climate change strategy promised to reduce the province’s emissions: 20 million tonnes a year by 2010, 50 million tonnes a year by 2020, and 200 million tonnes a year by 2050. About 30 per cent of the reductions were to come from conservation and “green” power, but the remaining 70 per cent—140 million tonnes a year starting in 2050—was solely up to CCS.

It was a staggeringly ambitious goal when you consider that the handful of CCS projects around the world at the time were each sequestering about one million tonnes of CO2 per year. But Stelmach knew if he didn’t plug CCS into the equation, there was no way he could even pretend to have a climate change strategy. He was also assuming that other countries, notably the US, would legislate emission reductions, whether by cap-and-trade or with a significant carbon tax.

With that in mind, Stelmach also introduced a levy on industrial emitters, charging them a $15 per tonne carbon tax on all emissions above 100,000 tonnes a year. Environmental groups such as the Pembina Institute complained the levy was too low to encourage industry to reduce emissions significantly. In fact, the levy was never intended to substantially reduce emissions; that was the goal of CCS. By announcing the $2-billion worth of CCS experiments, Stelmach hoped to score points on the world stage, help Alberta’s oil industry prepare for the future and position the province as a world leader in a technology that could be shared with others.

That’s not how events unfolded, though. Not even close. The global financial meltdown that began just a few months after Stelmach’s bold announcement created a financial crisis for governments around the world. In troubled times, economy trumps environment. Governments and industry began to back away from carbon reduction plans, including CCS.

But Alberta did experience a CCS bounce of sorts. Four companies announced they’d like some of the $2-billion in funding, by participating in government–industry CCS partnerships. The government churned out news releases with headlines such as “Alberta surges ahead with climate change action plan” and confidently predicted the projects would be sequestering five million tonnes of CO2 a year by 2015.

The optimism was contagious. Prime Minister Stephen Harper joined Stelmach onstage in 2009 to unveil plans for the holy grail of CCS projects: a $1.4-billion proposal by TransAlta, Enbridge and Capital Power to capture and sequester carbon dioxide from the Keephills 3 coal-fired power plant west of Edmonton. This is what is known as “clean coal” technology—the ability to burn coal to produce cheap electricity but reduce emissions from the plant’s chimney. Because 7,000 coal-fired power plants around the world create a majority of our CO2 emissions, jurisdictions hope the technology can work on a commercial scale, and Alberta wanted to be the first to succeed.

In 2012, however, TransAlta announced that the economics of capturing CO2 from a coal-fired plant’s smokestack and stuffing it underground didn’t add up, even with government offering to pay more than half the cost. In 2013 the province also cancelled $285-million in funding for a CCS project north of Edmonton after the company said it wouldn’t proceed.

By then, questions abounded as to whether Alberta had met its goal of reducing emissions by 20 million tonnes a year by 2010. The provincial government said that it had (by 25 million tonnes) but according to the National Inventory Report that Ottawa sent to the UN, Alberta hadn’t (reducing emissions by only 17 million tonnes).

In 2012 Alberta’s auditor general took his government to task. “Without clear and accurate public reporting,” said Merwan Saher, “Albertans cannot assess whether the government has made progress on achieving the targets it has set or if the monies being spent to achieve these goals are a wise investment that is yielding results.”

This was not a new conclusion. Saher’s predecessor, Fred Dunn, had found in 2008 that despite hoopla over its strategy to reduce greenhouse gases, the province “did not have an implementation plan with specific actions to meet targets and monitor against performance.” In other words, the government’s climate change strategy was itself a source of hot air.

The Energy Minister in 2013, Ken Hughes, betrayed the government’s befuddlement over its plan: “If there are additional ways we can reduce our greenhouse gas footprint, we’re all ears.” At the same time, Premier Alison Redford suggested money allocated to CCS could be used on “better initiatives and opportunities,” but never said what those might be. The fact was that despite its misgivings about CCS, the government had no Plan B to reduce emissions.

Even the very term “climate change” was becoming taboo in Alberta. In 2011, Climate Change Central, the government-sponsored agency that promoted conservation and efficiency, was quietly renamed “C3.” In 2012, with no real explanation, the government cut C3’s funding. The agency closed in 2014.

The wheels continued to fall off the CCS wagon. By 2015 only two experiments remained: Quest and the Alberta Carbon Trunk Line. Alberta’s $2-billion CCS fund was cut to $1.3-billion, and of that just $285-million has been spent on both projects. Without CCS working as advertised, the Alberta government admitted it could not reduce emissions by 50 million tonnes a year by 2020. In July 2014, Saher, a man not noted for exaggeration, issued another critical report: “We’re in 2014 and there hasn’t yet been a public report on the success or otherwise of the 2008 strategy.” Not only had the PC government failed to meet any of its targets, it also failed to inform the public about how the strategy was working, or rather, wasn’t working. “For the government to essentially remain silent in that period is troubling,” said Saher.

If Alberta can’t meet its relatively modest goals by 2020, it doesn’t stand a chance of even coming close to using CCS to reduce emissions by 140 million tonnes a year by 2050—70 per cent of the 200 million tonne goal. “We’ve learned between 2008 and now that carbon capture and storage isn’t going to produce anything like 70 per cent,” said Saher. “The best estimates are it might produce 10 per cent of what was originally thought. So Albertans deserve to know, if this strategy continues to make sense, what is going to be done to fill that gap?”

In other words, what’s Plan B? Alberta’s last PC premier didn’t seem to know what to think of CCS. During the 2014 PC leadership race, Jim Prentice called CCS a “science experiment.” In early 2015, while in Washington DC trying to convince US politicians that Alberta has a plan to significantly reduce emissions, Prentice suddenly sounded like a CCS believer, declaring it a climate change “game changer.”

Even carbon capture’s staunchest proponents have tempered their expectations. Stefan Bachu, principal scientist for CO2 storage at Alberta Innovates, has spent the past two decades studying CCS, along the way co-sharing a 2007 Nobel Peace Prize awarded to the Intergovernmental Panel on Climate Change. He points out that the International Energy Agency originally hoped CCS would help the world reduce emissions by 19 per cent. “Two years ago that number dropped to 17 per cent and now it is 14 per cent. As time passes and large-scale deployment is delayed, likely CCS will play a lesser role.”

One of the largest impediments to CCS is cost, says Bachu, who adds Alberta should at least be given credit for offering hundreds of millions of dollars to help refine the process.

David Keith, a climate change scientist who left the University of Calgary to become a professor of applied physics at Harvard, is a hard-nosed scientific pragmatist who is as crusty with Greenpeace as he is with global-warming deniers. Before he left for Harvard, Keith penned an op-ed for local newspapers decrying a “culture of climate science denial” in Alberta that is “rooted in the perceived self-interest of a province dominated by oil and gas.” Keith believes CCS can work case by case to help reduce emissions at industrial plants, but not at the levels Alberta plugged into its climate plan in 2008. “I was pretty involved in Alberta politics at that point and I’m pretty confident those numbers were completely made up,” said Keith, who asked officials for details on how they came up with the numbers and never received a response. “Those numbers were a fantasy and still are.”

One of the fiercest critics of the previous government’s CCS plan is new premier Rachel Notley. During this spring’s election campaign her 24-page platform included a promise to “end the PCs’ costly and ineffective CCS experiment.” Journalists asked if she would kill CCS completely and scrap the two projects underway. “No,” she replied; the party’s platform referred to the uncommitted $700-million originally envisioned for CCS. “What we’re saying is that most experts don’t believe this is good value. We can do better. We’d like to see a large chunk of that [funding] go towards supporting urban public transit, because that will do great things for bringing down greenhouse gas emissions.”

It appears CCS will survive under the new NDP government—but it won’t thrive. Besides the astronomical cost, there are safety concerns about pumping hundreds of millions of tonnes of a highly pressurized fluid underground. Fluid CO2 is lighter than water and will rise to the top of a saline aquifer, looking, so to speak, for a way out. It will also react with the water to form carbonic acid—a weak acid but an acid nonetheless. Researchers warn the acid could leach elements such as arsenic from mineral formations. That would create serious problems if CCS projects leak into underground sources of drinking water.

This is not to say all carbon capture projects are doomed. Shell’s Quest project is an ideal CCS model. It is well funded, moderately scaled, carefully selected, closely monitored and will inject the CO2 deep underground into a geological formation unmolested by a drill bit. If you’re going to capture and sequester CO2 underground, this is how to do it.

The Quest project is also the first CCS project to sequester CO2 in the saline aquifers of the porous basal Cambrian sands, a promising cemetery for carbon. Located deep underground and sealed by impermeable cap rock, the saline aquifers across North America have sequestering potential measured in the thousands of billions of tonnes. From the same geology that gave us oil, gas and coal, Alberta’s saline aquifers have a potential capacity of up to 76 billion tonnes.

An often-overlooked obstacle to CCS projects is public opinion. Already, CCS projects in Europe have succumbed to NUMBY (Not Under My Backyard) protests from people afraid of leaks destroying their property values. With that in mind, Shell has held 20 open houses to consult with people in the Fort Saskatchewan area. “This is the flagship project within Shell’s global CCS portfolio,” says company spokesperson Cameron Yost. “It’s something we’re really proud of. We are able to demonstrate leadership right here in Alberta that can be exported globally and will hopefully help drive down the cost of future projects around the world.”

But even if corporations such as Shell can win over the public, fine-tune the technology and drive down the cost, CCS still has limited value in fighting climate change because of the massive scale needed to make a significant dent in emissions.

Vaclav Smil, a distinguished professor emeritus at the University of Manitoba, has estimated that capturing a fraction of global emissions and sequestering them in one year would require moving volumes of fluid CO2 on a scale similar to the worldwide transportation of oil. Such an enterprise would require tens of years and trillions of dollars. “Beware of the scale,” he said. “Sequestering a mere one-tenth of today’s global CO2 emissions (about three billion tonnes) would call for putting in place an industry that would have to force underground every year a volume of compressed gas larger than or equal to the volume of crude oil extracted globally by the petroleum industry. Such a technical feat could not be accomplished within a single generation.”

If governments around the world want to continue with CCS, the financial outlay will require major resources—and change. “We would need a carbon tax in the $80 or $100 per tonne range to start to create the right kind of economic incentive,” says Chris Severson-Baker, managing director of the Pembina Institute. He adds that to significantly reduce emissions, Alberta should shut down its coal-fired power plants, increase renewable energy generation and improve the energy efficiency of buildings, transportation and industry. “We agreed with the investment of public monies in CCS when the announcement was first made, but what we said is you should put as much or even more money into realistic reductions that we can achieve in our economy today.”

CCS would need massive scale to make a significant dent in climate-changing emissions.

Severson-Baker and Pembina have high hopes Notley will find those “realistic reductions.” The trouble is finding enough of them to reduce emissions not just by a few million tonnes but by tens of millions of tonnes a year.

As the past seven years of inaction have shown, Alberta needs a better Plan A or a workable Plan B to meet its most modest emission-reduction targets. Having neither, the province under the previous government left itself open to attacks from critics who called its climate change plan “smoke and mirrors,” a political strategy less about reducing emissions and more about using government subsidies to help energy companies duck their environmental responsibility.

Later this year, when Shell and its partners flick the switch on the Quest CCS project, it will likely work. But nobody can say it will be a game changer for the world, or even Alberta.

Alberta’s PC premiers over the past decade made exorbitant claims about the province’s climate change strategy, but, sad to say, the carbon capture and sequestration effort to date, with all its fantasy goals, has achieved little. The big question now is whether a New Democratic government will be any more successful at scrubbing clean the province’s reputation for producing “dirty oil.”

Graham Thomson is a journalist with the Edmonton Journal and the author of a paper on carbon capture and sequestration.


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