Kenney's carbon capture conundrum: How do you fight Ottawa while also begging for money?
Carbon capture and storage by any other name is just plain expensive, writes columnist Graham Thomson
This column is an opinion from Graham Thomson, an award-winning journalist who has covered Alberta politics for more than 30 years.
I'm pretty sure this is 2021 but I'm beginning to wonder if I'm back in 2009.
A troubling sense of déjà vu began descending on Tuesday during a news conference where Alberta politicians touted a government-supported technological solution to human-made climate change.
Say hello again to carbon capture and sequestration (CCS), now under a new alias: carbon capture utilization and storage (CCUS).
CCS involves capturing carbon dioxide emissions from a large industrial source (such as a coal-fired power plant) compressing the gas into a fluid, transporting it by pipeline to a site and injecting it more than a kilometre underground. Adding "utilization" to the mix means finding ways of using captured CO2 to make money such as making bioplastics, building materials and soda pop.
You might remember CCS from a scheme a decade ago under then-premier Ed Stelmach to spend $2 billion on experiments run by half a dozen companies to stuff industrial emissions of carbon dioxide underground — and then ramp up the process to the point we'd be pumping 140 million tonnes of CO2 into Alberta's basement every year by 2050.
Here's what Alberta Energy Minister Mel Knight was saying about CCS in 2009: "This, ladies and gentlemen, is action, action that will have immediate results locally as it markedly reduces greenhouse gas emissions."
Here's what Alberta Energy Minister Sonya Savage was saying this week about CCUS: "The ingenuity of Alberta's energy sector combined with our geological capacity to store carbon and the federal government's commitment to invest in CCUS is a winning combination for Alberta."
The problem is that during the decade between those two optimistic comments, CCS failed to live up to the hype.
CCS didn't die but neither did it sprint out the starting blocks. It's been kept on life support by government subsidies.
Company after company refused to get involved in the experiments because of the costs involved. In 2014, Alberta's auditor general, Merwan Saher, concluded that CCS would not solve Alberta's greenhouse gas problem.
That same year, then-premier Jim Prentice called it an unproven "science experiment."
In 2015, then-premier Rachel Notley would have cancelled the scheme except the government was trapped in contracts for two projects costing the province about $1.25 billion.
Alberta wasn't alone in having CCS troubles.
In Saskatchewan, SaskPower's $1.6-billion CCS project at the coal-fired Boundary 3 power plant near Estevan chronically missed its targets. In 2018, SaskPower announced it would not be expanding CCS technology to two other power plants.
Alberta today has two working CCS projects: Shell's Quest project at the Scotford Upgrader northeast of Edmonton that has managed to sequester one-million tonnes of carbon dioxide a year for the past five years; and the The Alberta Carbon Trunk Line Project that has pumped one million tonnes underground the past eight months. Total tax dollars committed to the projects: $1.4 billion with a roughly 90/10 per cent split between Alberta and Ottawa.
The basic technology of CCS might have been around for decades but it is still costly and unproven at the large scale needed to put a dent in national emissions, never mind global emissions. And even though there are commercial uses for the "utilization" of captured CO2, revenue from that market cannot offset the high cost of stuffing CO2 underground and keeping it there forever.
Expensive and unproven
CCS by any other name is just plain expensive. You need one of two things to make it work: a significant price on carbon emissions or government subsidies.
Premier Jason Kenney is opting for curtain number two. But not subsidies from the Alberta government.
He wants the federal government to put up $30 billion over ten years to get Alberta's CCUS industry up and running to the point it's pumping 30 million tonnes of emissions underground every year.
That scale is certainly more reasonable than the arbitrary and ridiculously unreachable target of 140-million-tonne target under Stelmach's scheme.
But it's still expensive and still unproven.
And is it fair to ask Ottawa to foot the bill?
The federal government is non-committal at this point but has agreed to collaborate with Alberta through a new federal-provincial working group to look at the future of CCUS.
In that vein, two federal cabinet ministers took part in Tuesday's online news conference to celebrate Alberta's carbon capture achievements.
But as ever, nobody can hide the tensions for long between the Alberta Conservatives and federal Liberals when it comes to climate change and carbon taxes.
When asked if Alberta should impose a wide-ranging carbon tax to pay for its CCUS projects, Kenney said absolutely not, dismissing any higher levies on the energy industry as a "gift to OPEC."
While acknowledging a "difference of opinion with the premier," Federal Environment Minister Jonathan Wilkinson defended higher levies, saying "the price on pollution will drive technology over time."
Oh, the irony.
When Kenney killed the former NDP government's provincial carbon levy in 2019, he gave up a source of revenue that had been targeted toward programs to reduce emissions. He is now dependent on begging for money from Ottawa, money that's being raised by the federal "price on pollution" that's being hiked year by year toward a $170-per-tonne target.
And, perhaps most galling of all, "Fair Deal" Kenney who wants "Less Ottawa, More Alberta" now needs Ottawa's approval for future carbon capture projects in Alberta.