Is Carbon Capture Technology Doomed in Canada?

James Wilt

Alberta has been capturing carbon for three decades. Yet, ask anyone who spends their days contemplating carbon capture and storage (CCS) about its future in the province and you’re likely to get similar responses from each: a small sigh, followed by descriptors like “disappointing” and “not good.” It wasn’t supposed to be like this.

The sighing is no doubt related to the high ambitions for CCS under the Alberta government’s climate change plan of 2008.

A gargantuan 139 megatons of emissions – over two-thirds of projected reductions – were to be cut from Alberta’s projected “business-as-usual” emissions by 2050, mostly by way of CCS technology. David Keith, professor of public policy and applied physics at Harvard University, says it was “an ill-informed claim by a government that lacked analytical capabilities or any serious interest in tackling climate.”

Before the release of the Alberta NDP’s new environmental policies in late 2015, CCS was the closest thing the province ever had to a tangible plan on climate change. A $2-billion carbon capture fund was set aside by Alberta’s previous government, which included funding for Shell Canada’s Quest project, located near the Scotford Upgrader north of Edmonton.

For its part, Quest is solely a CCS project: the offtake CO2 is buried without any value-added use first. The funding also included Enhance Energy’s Alberta Carbon Trunk Line (ACTL) – a “super highway,” in the words of company chair Ian McGregor – which would transport CO2 captured near Fort Saskatchewan to oil fields in the Lacombe area for enhanced oil recovery (EOR). They got $745 million and $495 million from the province, respectively.

Quest came online in November and will house one million tons of CO2 underground per year. ACTL will direct almost 15 million tons per year to various EOR projects, and is scheduled for completion in 2017. It will source CO2 from North West Redwater’s refinery in the Industrial Heartland, north of Edmonton, which will eventually be stored in depleted oil fields. However, two additional Alberta projects — Swan Hills Synfuels LP and TransAlta’s Project Pioneer — were abandoned, joining the almost two-dozen CCS endeavors around the world that were cancelled in recent years.

Critics say carbon capture technology is too energy-intensive and expensive, carbon isn’t priced high enough, and public support has vanished. Such a trio can cripple even the most well-designed projects. Duncan Kenyon, program director of unconventional oil and gas at the Pembina Institute, says too much expectation was placed upon CCS from the outset. “CCS was sold as a silver bullet to get us market access, to make the oil sands look great and dramatically reduce emissions. From day one, there was a fishy smell to that. It created a lot of skepticism about CCS, which continued to grow and grow. Eventually, it’s very easy [for the public] to say it’s very stupid.”

Wishy-washy messaging from a succession of premiers hasn’t helped CCS’s cause. In 2011, then-premier Alison Redford hinted at diverting the remaining money from the program elsewhere, a scheme Jim Prentice revisited when he briefly replaced her as the Progressive Conservative leader. The Alberta NDP, which defeated Prentice’s government last year, pledged in its election platform to “end the PCs’ costly and ineffective carbon capture and storage experiment.” Since then, it has continued funding Quest and the ACTL despite the campaign commitment, perhaps due to a possibility of legal action had the government cancelled funding for the projects.

Carbon capture has a long history in Alberta. Nova Chemical’s much lower profile project has been successfully and commercially capturing carbon in the province since 1984, at its petrochemical plant in Joffre for EOR purposes, long before climate change concerns were as acute as they are today.

Yet the future of carbon capture – especially pure CCS – is still unclear. Enhance’s McGregor believes that Alberta is the best place in the world to implement CCS. “It’s really hard to replicate the factors that are here,” he says. Alberta’s deep saline aquifers can serve as storage, and its EOR can rejuvenate aging oil wells (some 1.4 billion barrels worth, according to a 2009 report). Taking full advantage, however, will require significantly increased investment, as was the case with fracking technology and the growth in renewable energies. “It’s the same thing for carbon capture, and the same thing for [carbon] utilization,” Pembina Institute’s Kenyon says. Potentially, captured carbon can be turned into products from concrete to polymer chemicals and algae cultivation. “If we really want to get serious about this as a solution for our carbon emissions, it’s going to have to take that kind of strategic investment,” he says.

Such innovation is encouraged by Alberta’s Climate Change and Emissions Management Corporation (CCEMC). It gets carbon tax money from big CO2 producers and invests it in green technology. Last year CCEMC awarded the first tranche of its $35-million international Grand Challenge: Innovative Carbon Uses. Some of the final products winners aim to create include a fuel cell, fertilizers, concrete, a wastewater treatment product, graphene and chemicals that are used to produce consumer goods like ski boots, fishing rods, and fleece jackets. CCS technology itself is also progressing. John Zhou, chief technical officer at Alberta Innovates, says his organization is funding a dozen “second-generation” technologies. He says three or four of those have the potential to cut the cost of actually capturing the carbon – which constitutes around 80 percent of total cost – by half or more. Montreal’s CO2 Solutions has also gained some attention in its quest to replace amine solvents (currently used to scrub the CO2) with an enzyme called carbonic anhydrase, which could dramatically cut the cost of CCS if successful.

Another potential source of carbon capture inspiration for Alberta comes from the next province over. Since 2014, SaskPower has boasted the world’s only coal power plant post-combustion CCS makeover near Estevan, Saskatchewan.

The $1.4-billion project will reduce emissions by 90 percent and sell one million tons of captured CO2 to Cenvous Energy for EOR. Mike Monea, SaskPower’s president of CCS, says he’s confident the next project the company embarks on will be at least 25 percent cheaper due to technological advances and lessons learned. “Nobody’s ever put all this equipment together before,” he says. “Now [that] it has, engineers are saying, ‘We’d change this, or we wouldn’t do this next time.’” Since the SaskPower facility opened, Monea says that some 1,500 people from 30 countries have visited to learn about the design and process. “It’s something that people can come and see, and actually trust,” he says.

The same Cenovus oil fields have been receiving EOR CO2 from Dakota Gas’ synfuel coal plant across the border since 2000. In 2015, Saskpower also started sending CO2 to The Aquistore Project in southeast Saskatchewan, Canada’s first deep saline CO2 storage project – and the province’s first pure CCS project.

Husky Energy’s pilot project near Lloydminster, Saskatchewan, began capturing CO2 at its ethanol plant in 2012 for EOR purposes. Will the Saskatchewan government’s support for CCS projects draw projects away from Alberta, and will Alberta change course in response? That depends on costs and public acceptance. Shell gives its Quest project insights away, free, to bring costs down for others’ future projects. Alberta Innovates’ Zhou says that the public success of a large-scale project like Quest is required to “prove to the world that it can be done.”

Upfront costs for CCS are still so significant that a company can’t exactly toy with projects as a hobby. Alberta’s new carbon tax – or, as Harvard University’s Keith puts it, “putting a price on using the atmosphere as a waste dump” — may incentivize construction. Robin Mills, a petroleum economist and author of Capturing Carbon says low oil prices also create a problem. “Clearly the lower oil price makes new CO2-EOR projects much less viable. But a carbon tax at $30 per ton plus CO2-EOR revenues should be approaching commercial viability for the right projects.” He cites industrial capture from certain processes, or contaminated gas processing as good examples. Mills says that Alberta needs to “reduce the CO2 footprint of its golden goose, the oil sands.”

Neighboring B.C. – not exactly an oil sands cheerleader – may play a vital role in making CCS in Alberta viable. Vancouver-based Inventys Thermal Technologies says its breakthrough technology captures carbon at a cost of US$15 per ton, and is looking for a pilot project site. Two more B.C. companies also aim to harness carbon capture technology. Kitimat Clean’s (550,000 bpd) and Pacific Future Energy’s (200,000 bpd) carbon capturing refineries are planned to start up near Kitimat, B.C. by 2021. Kitimat Clean will convert its CO2 to synfuels, and Pacifc Future Energy is studying sending its CO2 to Albertan oil fields.

All potential breakthroughs aside, CCS remains an expensive endeavor for governments and the private sector. And yet, while CCS is by no means the solution to all of Alberta’s carbon emissions woes, it’s certainly an avenue worth pursuing. Without significant progress in emissions reduction methods, Canada’s oil sector could eventually suffer the consequences. But until Alberta’s politicians clue into that fact, it might be a little much to expect voters to.

Carbon Capture Projects