Enbridge Inc. (TSX:ENB), a major Canadian oil and natural gas pipeline company, is heading a group of 19 energy industry players in a project that will inject their carbon dioxide emissions into underground saltwater pools.

The Alberta saline aquifer project, or ASAP, will be the first of its kind in Canada, the Calgary-based company said Monday.

"The oil and gas that is the source of these carbon emissions came from deep underground and essentially we're putting it back from where it originated," Chuck Szmurlo, Enbridge's vice-president of energy technology, said in an interview.

The Alberta government and many in the oilpatch have been lauding carbon capture and storage as an effective way to deal with the massive amounts of greenhouse gases emitted by the industry.

"Sequestration is widely considered to be one of the most meaningful ways that Canada and Alberta can reduce overall emissions," Patrick Daniel, Enbridge's president and chief executive, said in a statement.

Critics question financial side of storage

But some have questioned the economics of such projects, since they're costly to build and storing the gas doesn't generate revenue in itself.

"It's not a trivial proposition," Szmurlo said.

"What would generate the economics of this is ultimately the value society places on not having carbon dioxide in the atmosphere."

The companies involved in the project could turn a profit if provincial or federal governments ever decided to give financial incentives for each tonne of carbon dioxide pumped underground.

The first study phase of ASAP is expected to cost about $750,000. The participants are conducting a study to find good spots to get the project started.

The cost of a small-scale pilot project that will process about 1,000 tonnes of carbon dioxide a day would be about $20 million to $30 million. Bringing it to the commercial level will cost "in excess" of $200 million, Szmurlo said.

That's a far cry from the $2 billion put forth last week by provincial federal taskforce on carbon capture and storage, chaired by TransAlta Corp. (TSX:TA) chief executive Steve Snyder.

2nd consortium looking at emissions pipeline

TransAlta and more than a dozen other companies, including Imperial Oil Ltd. (TSX:IMO) and Suncor Energy Inc. (TSX:SU), are part of another carbon capture consortium called the Integrated CO2 network, or ICON.

ICON wants to set up a national system that would capture emissions from a number of industrial sites and move them underground via pipeline. Under that plan, the carbon dioxide could be kept in depleted oil and gas reserves, deep and unminable coal formations or in deep saline aquifers, like in ASAP.

The ASAP study phase is underway and expected to wrap up at the end of the year.

"If we get the funding in place and the permitting goes as we hope it will, we're hopeful that this time next year we'll be turning some dirt," Szmurlo said.

Aquifers resemble petroleum reservoirs

The naturally occurring aquifers look a lot like oil and gas reservoirs, but instead hold saltwater. Until now, the oil and gas industry had no use for them.

"We don't really go looking for them, but you discover them in the course of doing exploration work for oil and gas," Szmurlo said.

The carbon dioxide will be injected into the pools in the "reverse way" oil and gas is normally pumped out, he explained.

"Eventually the carbon dioxide will be absorbed into them and they'll be kind of like a carbonated salt water," Szmurlo said.

Epcor Utilities Inc. (TSX:EP.UN), which builds, owns and operates power plants, and electrical transmission and distribution networks in Canada and the U.S., is a founding member of ASAP.

Other participants include, ATCO Power Canada Ltd. (TSX:ACO.X), BP Canada Energy Company, Chevron Canada Resources, ConocoPhillips, EnCana Corp. (TSX:ECA) TransCanada Corp. (TSX:TRP) Opti Canada Inc. (TSX:OPC) and Penn West Energy Trust (TSX:PWT.UN).

On the Toronto Stock Exchange on Monday, Enbridge shares were down 15 cents at $40.05.