How easy is it to nab greenhouse gases at the smokestack?

Backgrounder on carbon capture.

Scientists call it carbon sequestration — a big geological word that means putting the gaseous carbon dioxide from burning fossil fuels back in the ground where it came from, rather than into the atmosphere where it is contributing to global warming.

In the battle to contain climate change, pumping carbon dioxide (CO2) back into old coal seams or natural gas reservoirs has become one of the hot topics among scientific and government planners over the past couple of years.

Now, it is bound to get even hotter — perhaps particularly in Canada — with Barack Obama moving into the White House.

Not only is the new U.S. president committed to what he calls clean-coal technology and "five, first-of-a-kind, commercial scale coal-fired plants with carbon capture and sequestration."

But he has also been threatening to halt energy imports from countries — presumably including Canada — that do not employ the most advanced environmental techniques.

Obama's interest in carbon capture should not be seen as coming completely out of the blue.

Almost two years ago now, the Bush administration sped up its $2 billion clean-coal initiative and said it wanted a sequestration strategy in place by 2012.

Not to be outdone, Ottawa announced a pilot project to capture CO2 on a commercial scale in Estevan, Sask., and also joined forces with the Alberta government to kick-start a plan for a $1.5 billion pipeline that would ship unwanted CO2 from utilities and oil sands production to old natural gas fields, where it would be either stored or injected to tease out more gas from aging wells.

More recently, Alberta Premier Ed Stelmach set aside $2 billion in the summer of 2008 for carbon capture and other mitigation projects. As for the proposed pipeline, however, he warned it would still take several years to get the project rolling and that the $1.5-billion cost is from earlier estimates and may go much higher.

Stelmach's warning, of course, also came before the economic recession took hold and it remains to be seen whether projects like this will still have industry support or might become much-needed make-work endeavours in a period of energy patch layoffs. 

The cost factor

When it comes to carbon capture, no less an authority than the UN's Intergovernmental Panel on Climate Change touts sequestration as one of the important mitigating factors for climate change and points out that Canada, with its wealth of tapped-out oil and gas wells, provides a natural home.

But the high costs that go along with trapping CO2 at the smokestack, compressing it into pipelines and then shipping it to a disposal site where it can be injected deep into an underground cavern are making energy execs and utility managers nervous, particularly now that  oil prices have fallen so dramatically.

At the moment, there are at least nine carbon-capture projects underway in Canada at mostly Western utilities and oil sands operations, according to news reports.

But most of these are still considered experimental and the costs of capturing, transporting and storing CO2 are really unknown and vary because of geography.

Recent estimates, like one by Cambridge Energy Research Associates in London, put the cost of capturing Alberta's current carbon output at between $80 and $140 a tonne. The UN has suggested that these costs could come down to the $24-$40 a tonne range for the next generation of utilities, but this estimate stems from 2005.

For a big coal-fired utility that emits 20 million tonnes of CO2 a year, such as Ontario's giant, aging Nanticoke (scheduled for decommission by 2014) or Alberta's Sundance, a six-unit generating plant that burns 250 rail cars' worth of coal every day, this could mean a $1-billion retrofit, albeit one that would be passed along to consumers over 40 years or so.

Still, some have estimated that the cost of capturing carbon at the utility level could result in a 20 per cent increase in household electricity bills.

And, indeed, the arguments for and against sequestration are not unlike those for insulating homes: it's one thing to insist on much higher energy standards for next year's subdivisions or the next generation of coal-fired power plants, quite another to go in and redo a draughty, old ranch-style bungalow from the 1950s.

It's working now

At the moment there are three big capture programs already underway in the world, which proves the idea can work: 

  • Norway's national oil company is stripping one million tonnes a year of CO2 from the natural gas it is mining under the North Sea and re-injecting it back into empty wells.
  • British Petroleum is doing the same with an oil well in Algeria and planning a similar project in California.
  • And a (coal-gasification) utility in Beulah, North Dakota, is shipping approximately 1.5 million tonnes of CO2 each year over 200 kilometres by pipeline to Weyburn, Sask., where it is being re-injected into an old oil field to help with the recovery of new deposits.

Over a 20-year lifetime, each of these projects has the potential to pull the equivalent of roughly five million cars off the road for a year.

The real beauty, however, is that they show carbon capture can take place across the full range of energy production, from extraction to electricity generation, which in Canada's case accounts for 82 per cent of the greenhouse gases we pump into the environment each year.

"Technically this is really quite feasible," says Malcolm Wilson, an energy expert at the University of Regina and the director of CO2 management at the Energy Innovation Network, a business-government partnership.

What's stopping us, he says, is which industry "is willing to go first" — in the process probably driving up its costs more than a competitor's.

Too much geography

Canada's theoretical deposit sites are enough for 1,300 billion tonnes of CO2, which is well over a century's worth.

Most of these sites are in the Western Canadian sedimentary basin, home to the oil patch and the big, dirty oil sands projects. But as Wilson notes, the corporate impact would be uneven.

Older tar sands developers such as Syncrude and Suncor use an extraction technology that emits a particularly pure stream of CO2, which would make it more economical for them than their competitors to separate that particular greenhouse gas from other by-products.

Would the techniques work in Canada's 21 coal-fired generating plants, which together account for 129 million tonnes (17 per cent) of this country's annual GHG emissions? Same answer.

Not only does the cost vary considerably depending on the type of coal or technique (coal gasification vs. simple burning) used, but geography enters the equation here as well.

Studies by the Alberta Energy and Utilities Board have noted that the province's big coal utilities are ideally sited near potential CO2 disposal sites. The four equivalent utilities in Ontario on the other hand would probably have to run CO2 pipelines into the U.S. to find appropriately deep deposit sites (typically a kilometre or more below the surface).

In the grand Canadian scheme it may not matter much if Alberta has a relative CO2 disposal advantage over Ontario, which has more cleaner energy options in hydro and nuclear it can turn to.

But if Ottawa is to enforce some kind of carbon capture scheme, these kinds of geographically dictated costs could have a huge impact on smaller provinces or on those with high energy-using exporters such as a steel mill.

In those cases, a 10 to 40 per cent increase in the electricity bill (depending on the age and type of plant that's being retrofitted) could make the difference between whether a prime employer stays put or relocates to sunnier climes.