Developing and implementing strategies to reduce greenhouse gases (GHG) and carbon emissions remains a top priority in both Canada and the United States. Although technology and the development of renewable sources represent part of the solution to reducing greenhouse gas emissions, both countries are decades away from abandoning fossil fuels as their primary source of energy. What is needed, therefore, is an interim solution that would allow Canada and the United States to continue to use fossil fuels—both conventional and unconventional—while advancing necessary environmental and energy security goals.
The Canada Institute's ninth Cross-Border Forums on Energy Issues, held in collaboration with the Canadian Centre for Energy Information, explored the potential of carbon capture and storage (CCS) to serve as the interim solution to reduce GHG emissions that both countries are currently seeking. More than 65 senior level Canadian and U.S. government officials, industry representatives, and energy policy experts met at the Woodrow Wilson Center on March 6, 2008 to discuss the current initiatives, challenges, and potential bilateral opportunities to further the development and implementation of CCS. The Forum began with a keynote breakfast featuring Saskatchewan Premier Brad Wall, followed by panelist presentations and a closed door dialogue session, and concluded with a keynote luncheon with remarks from the Wyoming Governor David Freudenthal. The Forum was sponsored by ARC Energy Trust, EnCana, the Canadian Embassy, and the Canadian Energy Pipeline Association.
Addressing One of the Greatest Challenges of our Time
Climate change has forced the global community to rethink our entire energy system, noted Jane Long of Lawrence Livermore National Laboratory. She described climate change as "one of the largest challenges that mankind has ever faced," and said that the effects of global warming have occurred at a rate faster than originally predicted, in part because of the rapid increase in fossil fuel use in countries such as China and India. The consequences of inaction against global warming—including increased temperatures, as well as severe droughts and flooding—are becoming more widely known and accepted among policymakers and those in the energy industry, she said.
The challenge for policymakers and industry officials is to develop resources and energy infrastructure in a manner that reflects the urgent need to reduce carbon emissions. In doing so, Long recommended that policymakers and those in the energy sector ask themselves key questions when contemplating how to develop resources in a fashion that balances energy needs and environmental goals. What would it take, for instance, to develop Alberta's oil sands in a way that produces zero emissions? According to Long, answering this question requires a vision and creative thinking. She stressed that while CCS cannot solve the carbon problem on its own, it does represent part of the solution toward the sustainable development of North American resources.
Assessing the Potential of Carbon Capture and Storage
Developing a North American energy strategy will be crucial to meet Canada's and the United States' future energy needs and the shared goal of reducing carbon emissions, said Eddy Isaacs, executive director of the Alberta Energy Research Institute. Isaacs noted that there are several options available to reduce CO2 emissions including CCS, nuclear power, geothermal energy, and the implementation of process development technologies—such as combustion and electrical heating—that would enable fossil fuels to burn more cleanly. While all of these options have potential, Isaacs described CCS as the "ready-to-go option" technologically. This point was reinforced by the promising carbon capture and storage test projects that were subsequently highlighted by several panelists.
EnCana's Weyburn site, located in Weyburn, Saskatchewan, represents a prominent example of carbon sequestration's potential to reduce greenhouse gas emissions. The project, noted Mark Demchuk, Encana Corporation's team lead for Weyburn, not only represents the largest enhanced oil recovery (EOR) project in Canada, but is also the largest CCS project in the world. By injecting CO2 underground as opposed to using conventional waterflood techniques as a means of extracting oil, EnCana has been able to increase its recovery rate from Weyburn's oil fields from 30 to 45 percent. Once injected, the carbon dioxide remains stored underground, a process that has removed nearly 10 million tons of CO2 from the atmosphere since 2000, which is equivalent to removing roughly two million cars off the road for a year. Demchuk also highlighted EnCana's participation in a world-scale research initiative led by the International Energy Agency. The results of the study determined Weyburn's reservoir to be a safe and suitable location for long-term storage of CO2.
Panelists also highlighted the potential of deep saline aquifers to store CO2. According to Chuck Szmurlo, vice president of Energy Technology and Power Generation at Enbridge Inc., deep saline aquifers have the potential to sequester all CO2 emissions worldwide for 800 years. As a first step in realizing this potential, Szmurlo described Enbridge's collaboration with nearly two dozen other members of the energy industry to develop a pilot project in the province of Alberta that would demonstrate the potential and safety of sequestering CO2 in aquifers throughout the province. If the pilot project proves successful, plans are in place to implement the technology on a commercial scale in Alberta beginning in 2013, which could reduce the province's CO2 emissions by up to 20,000 tons a day. Doug Bonner, senior vice president of corporate development for ARC Energy Trust, also acknowledged deep saline aquifers as having enormous potential to reduce carbon emissions. In his presentation, Bonner described ARC's current research project to explore the prospects of Alberta's Redwater Reef as an area that could store vast amounts of carbon dioxide. Initial results from the study indicate that the reef could hold up to one billion tons of CO2—an amount that could retain existing and projected oil sands emissions for a period of 20 years.
Bringing Carbon Capture and Storage to the Next Level
David Lewin, senior vice president of EPCOR Utilities' Integrated Gasification Combined Cycle Development, highlighted some of the primary barriers to implementing the process of gasification into EPCOR's operations. Lewin explained that while EPCOR has actively sought to reduce carbon emissions through such initiatives as its Genesee 3 power plant (Canada's most advanced clean coal-fired generator located in Leduc County, Alberta), gasification presents the opportunity to reduce emissions further by capturing and sequestering CO2. Achieving this goal, he stressed, will remain dependent on creating a comprehensive legal and regulatory framework to govern the operation and construction of CCS sites. In addition, those in the industry should remain conscious of the often overlooked challenge of training the necessary workforce to operate and maintain plants with CCS capabilities. Demchuk echoed Lewin's recommendations but added that it was crucial for industry and government to help build public confidence in the realm of the energy industry's ability to operate and maintain CCS technology "safely and effectively."
An additional barrier to implementing CCS on a commercial scale revolves around the uncertainty associated with the costs of investing in the technology, maintained Adam Sieminski, chief energy economist for Deutsche Bank. Sieminski noted that cost estimates for the capture, transportation, and storage of CO2 have varied widely—between $100 to $300 per ton of CO2—due to continued ambiguity around CCS's precise capital costs, future costs of energy, the possible introduction of carbon taxes in North America, and unresolved liability issues surrounding the technology. The current gap in expected costs must be narrowed to attract the investment needed to implement CCS on the scale necessary to significantly reduce CO2 emissions. In addition, noted Sieminski, governments can play a significant role in encouraging investors to finance the development and implementation of CCS through research and development subsidies, low cost loans, and buying out those plants that cannot be fitted with the technology.
Progress through Dialogue
Following panelist presentations, participants engaged in a closed-door discussion. A key issue highlighted was the necessity of introducing a carbon price in order for CCS and other renewable energy projects to move forward. An ongoing challenge for policymakers in this area is to determine a price that would not cause the rapid escalation of energy prices, but would be high enough to send a market signal to investors to finance CCS and other renewable energy projects. One participant raised the idea of creating clean coal savings bonds as a means of financing CCS projects. A third issue that figured prominently in the discussion was how to increase public acceptance of CCS. Participants noted that some environmental groups have not endorsed CCS because the technology would not deter future use of fossil fuels and may also pull investment and funding away from developing renewable sources of energy. Participants agreed that improving the public's perception of CCS will require consistent and honest information from both industry and government regarding the safety and reliability of the technology.
Carbon capture and storage's potential was also highlighted during the Forum's two keynote addresses. Saskatchewan Premier Brad Wall noted that enhanced oil recovery and CCS must play an integral role in developing the province's natural resources. He explained that Saskatchewan's oil is extremely difficult to access and noted that a modest five percent increase in recovery from its oil fields would effectively double the province's oil production. Governor David Freudenthal, State of Wyoming and chair of the Western Governor's Association, stressed that advancing CCS beyond pilot projects will require setting a price for carbon, as well as a strong regulatory and legal framework. Until this is established, he noted, the degree of uncertainty in the energy market will remain significant enough to deter investors from financing CCS and other renewable energy projects.
Drafted by Ken Crist, Program Associate, Canada Institute
David Biette, Director, Canada Institute