The EU and Canada should work together to bring controversial carbon capture and storage (CCS) technology onto the global marketplace more quickly, according to the director of Canada's flagship CAN$2 billion CCS programme.
Carbon capture and storage is an experimental new technology that aims to sequester carbon at its point of production, isolate it, and transport it to geological formations in which it can be safely stored. Environmentalists claim that it is an expensive diversion from the real tasks needed to fight climate change, and a tool of the fossil fuel industry.
Doug Lammie is the director of CCS projects in Alberta. The province contains almost 85% of the world's bitumen oil sands reserves, which are also known as 'tar sands' due to their appearance.
He was speaking to EURACTIV's Arthur Neslen.
The European Community has given €4 billion of funding to carbon capture and storage (CCS) and renewables, but critics ask why CCS should be given priority over renewables, which can affordably lower emissions on a large scale now?
CCS technology is something that international agencies and scientists have suggested as a safe and effective way of reducing CO2 emissions. The International Energy Agency (IEA) recently released a roadmap study identifying a portfolio of reducing emissions. If you excluded CCS, it would actually increase the costs by about 70%. It also depends on the different jurisdictions.
In Alberta, we have the right geology for CCS. We have large industrial point sources very close to the geology. We have the energy experience in Alberta and we have a world-class regulatory system. We have one post-combustion electricity generation project: the Transalta Pioneer. We also have Swan Hill Synfields, a pre-combustion one where they gassify the coal underground and then separate out the CO2, prior to the hydrogen being consumed for electricity generation.
Will that then be used as liqueified carbon to pump tar sands oil to the surface?
Yes. We have four projects that we are promoting. In three of them, the CO2 will be used for enhanced oil recovery. The fourth one will be stored and sequestered in a deep geological formation.
Doesn't that confirm the environmental critique that CCS is just PR for exploiting bitumen, one of the most polluting fossil fuels, which produces 2-6 times more greenhouse gas emissions than light oil?
The key thing you have to consider is that 80% of the emissions are produced on the consumption side – that's the everyday consumers, you and I. We're consuming fuel, driving to our destinations, flying by plane, that's significant.
When you look at emissions on a wells-to-wheels scenario, you'll find that the oil sands production is just slightly higher [in greenhouse gas emissions] than the North American average right now and it's lower than products such as California heavy [oil] and Venezuelan heavy [oil].
If you apply CCS technology like we're showcasing in the Quest project and the new upgraded refinery in the North West, you'll actually find that the CO2 consumption levels are lower than the average consumed amount in North America.
What percentage of CO2 emissions in Alberta will CCS actually capture and store?
In 2008, the Alberta government set out its climate change strategy. It puts us on a path for achieving large-scale reductions while allowing economic growth and activity in the province. It represents about a 50% reduction from business as usual by 2050. Of that 50% reduction, about 75% will be attributed CCS programmes. The rest will be related to energy efficiency and renewables programmes.
But specifically, what overall percentage of CO2 emissions will actually be captured and stored by this CCS in Alberta?
Oh, I'm trying to do the math. I don't have that number off the top of my head so I can't quite tell you but it would be about 140 million tonnes a year by 2050.
What percentage of CO2 emissions do you expect to capture and store by 2015, when these four projects will be up and running?
At that point, those four projects will be capturing, transporting and storing over five million tonnes of CO2 emissions.
You don't have the percentage figures.
I don't, no.
The federal and Alberta governments are putting up $2.5 billion for this project. How much money have the fossil fuel companies put up?
Our programme will support up to 75% of the incremental costs of incorporating CCS in these first generation projects. The remaining 20% or plus more is being supported by the oil, gas companies or electricity companies that are involved. It is significant dollars but we anticipate that costs will come down as we start commercially developing and testing this technology.
You mentioned the CO2 reductions that CCS could make by 2050 but Greens say that whatever its potential, in the present it is encouraging business as usual. In Canada, that means the tar sands, which has been the reason why Canada couldn't meet its Kyoto obligations. How would you respond?
By saying that CCS is an excellent technology that can be incorporated to include the greenhouse gas emissions impacts associated with oil sands development – as well as electricity sectors, or fertiliser plants or chemical manufacturing facilities. I think it will play a significant role in reducing the environmental footprint from GHGs (greenhouse gases) in Alberta and around the world.
But the counter-argument is that in the here and now it is diverting money from renewables, and encouraging fuel companies to pump every last drop of fossil fuel, and so increasing greenhouse gas emissions.
Look at some of the steps that Alberta has already taken. We were one of the first to regulate and put a price on GHG emissions. We're putting significant dollars into research and development, looking at ways to reduce environmental impacts associated with energy development, and CCS is one of those.
We're also making significant investments in biofuels, and we've made a $2 billion commitment toward Green Trip, which is looking at developing infrastructure – light rail transit, mass transit – to reduce the environmental impact associated with communities in Alberta.
What do you think are the implications of Alberta's CCS plan for Europe?
Our plan is significant because it is one of the largest dollars-per-capita investments in a jurisdiction with about three million people. We can learn a lot from the European situation and I think the Europeans can learn a lot from ours.
Together we can leverage the investment that has been made on these first generations and hopefully speed up their commercial-scale development and make sure that they are being done in a safe and responsible manner.
The EU has signed up to build 12 large-scale CCS demonstration plants by 2015, and to fit all new coal-fired plants with CCS by 2020. Do you think that's enough?
You know, it's really hard to make a judgement call on that scenario unless you've looked into all the details and done the analysis.
Do you think that the EU should spend more on subsidising CCS?
I think that we need to work together and recognise that CCS is going to be a global industry and that [for] North America, the Europeans, and other jurisdictions like Australia, a lot can gained by coming together and working together to advance CCS development.
Would you like to see more EU-transatlantic partnerships?
Any opportunity to increase knowledge-sharing and work together towards advancing this would be significant in the deployment of this technology, and achieving reductions sooner rather than later.
Do you think that non-CCS plants should be subsidised?
In Alberta that's not the case. We have a deregulated wholesale electricity market and coal producers compete with natural gas producers and renewables producers in the same market place.
Does CCS help move Canada further towards meeting its Kyoto obligations?
CCS is a key component, especially for Alberta, in achieving our reductions. It's a great fit for our province because we have the right industrial point sources, geology, and experience to get it done safely and environmentally responsibly.
What about the risk of underground or underwater carbon leakage?
When you look at the development, you look at proper site selection – identifying an excellent site for storage – and the measurement, monitoring and verification procedures that are in place.
What in your estimation is the risk of carbon leakage?
CCS has gotten worldwide recognition from energy agencies as well as scientists around the world, suggesting that it is a safe and responsible way to store CO2 on a long-term basis.
Who should pay if there's a leak?
In Alberta, in our situation, the companies are responsible for making sure that the CO2 is stored safely in the ground and that they're monitoring it appropriately. If there was some type of leakage, then that company would be responsible for the reclamation of that.
Do you know how much money has been spent on monitoring for CCS environmental risks?
You know, I don't know that number off the top of my head. We do put significant dollars into research and development in Alberta. We've recently created Alberta Innovates, which looks at supporting investment in research and development, and that's one key component.
We've also had the climate change emissions management plan, which is helping support R&D projects which are associated with energy efficiency, renewables and CCS.
Do you know who was consulted in the commissioning of the CCS environmental risks programme for storing carbon?
Alberta has a world class regulatory framework in place right now. Over the next year we'll be reviewing the existing regulations and rules to ensure that they are thorough and extensive enough. This review is going to include participation from international scientists and energy agencies around the world so we can leverage their learnings.
Out of that review, we will be developing any necessary refinements or improvements and those recommendations will be implemented well before the first four projects come online in 2015.
The IEA (International Energy Agency) suggests that every tonne of CO2 captured and stored through CCS would cost $40-90 a tonne. Yet its current price is $15 a tonne. Can you see any way of making it a profitable, self-financing technology that doesn't depend on state subsidies before 2030?
Initially you're going to see that with the first generation technologies there is an economic gap. That is where governments can step in and contribute dollars to bridge that. It's important because we want to be able to demonstrate these projects.
As we do, we're going to learn from them. We're going to identify ways to increase efficiencies and bring down the cost of this technology. It's no different than when you look at other technologies such as computers, which were very costly initially but have come down significantly in cost.
Environmentalists would say the difference is that computers weren't racing against the clock. We could have runaway global warming by the time these technologies have increased their efficiencies and reduced their costs.
I'd respond by saying that it's important to take action now. The sooner we take action, the sooner we can start reducing our emissions using CCS technology and the sooner we can start driving down those costs associated with the next generation of projects.
But not by taking action through renewables?
Alberta is looking at a portfolio approach so we do have a piece that's looking at supporting renewable energy. We also have a piece that's looking at supporting energy efficiency and our third prong is CCS technology.
How much government money is being put up to support renewables in Alberta?
Significant dollars have been put up for renewables through our biofuels renewable initiative. We also have a renewable fuel standard and we also have the industry actually taking steps towards developing alternative forms of energy.
Alberta, with its competitive wholesale energy market, has encouraged a significant amount of wind power generation. It's almost one of the largest wind power generators in Canada.
Do you know exactly how much money?
I don't know. But when you look at it, the good comparison I think you should look at is that we've made a $2 billion commitment towards CCS but we've also made a $2 billion commitment towards Green Trip.
One final question: do you see the big oil companies as allies in the fight against global warming?
I think we all have a part to play in the fight against global warming from our energy consumption habits, all the way up to how we produce and use energy and electricity today.
So you see them as partners?
I think everybody is a partner. The energy sector needs to be a partner in addressing climate change but also consumers need to realise the impacts of the decisions that they're making on the products and energies that they're consuming.
And in terms of responsibilities, you'd say it's about equal between consumers and energy companies?
You know, I wouldn't want to put a number on that, but it's important for everybody in society to be aware of the decisions that they make and the impacts that those decisions have.