Carbon capture for oilsands: expensive, unproven, distracting

David Thompson, June 29, 2009, Freelance--Environment Minister Rob Renner is now hoping that an oilsands project will step up and grab some of the$2 billion that the province has earmarked for carbon capture and storage. He may be hoping for a long time.

First off, as recently noted in The Economist, carbon capture and storage (CCS) is an expensive way to reduce CO2 emissions. It currently costs $80 to $200 per tonne removed, compared to market rates of just $15 to $20 per tonne.

While that price might come down in the future, it might not. More importantly, we don't know if CCS will work to keep the carbon out of the atmosphere over the long term.

Nevertheless, the Alberta government has held up CCS as its centrepiece solution to GHG emissions. It claimed that CCS "will be responsible for 70 per cent" of Alberta's greenhouse gas emission reductions by 2050, and that "the bulk of these reductions will occur in production and upgrading" of oilsands.

However nobody, anywhere in the world, has successfully built a commercialscale integrated CCS facility. This alone suggests the government may be putting too many eggs in this particular basket.

Furthermore, the very possibility of CCS being effective depends on what you use it for. Burning coal in a power plant with a smokestack is one thing, but extracting and upgrading oilsands is quite another.

It turns out that CCS just doesn't fit with the type of operations used in the oilsands. A joint AlbertaCanada government study in early 2008 pointed out that CCS can only capture "a small portion of the CO2 streams" from the oilsands.

So it's not surprising that the big oilsands operators recently declined to participate in the $2billion CCS pilot subsidy scheme.

What is surprising is the Alberta government's reliance on CCS as a magic bullet to address oilsands greenhouse gas emissions. The government is paying$2 billion--more than $500 from the pocket of every Alberta man, woman and child--to run pilot projects.

That isn't what the public likes to see. A recent IpsosReid poll showed that 91 per cent of Albertans think it's fairer for companies to pay the costs of cleaning up their pollution.

But why would industry pay? When you think about it from their perspective, it wouldn't make much sense. First, there is the speculative nature of CCS. One can just imagine the discussion in the corporate boardroom:

"Boss, my department recommends the company build a big CCS facility."

"Will it work?" "We don't know." "You're fired."

More to the point, it's simply cheaper not to make the investment. Until Alberta or Canada puts a serious price on carbon emissions, there is little financial incentive to pay for emission reductions, let alone an expensive method. It's cheaper to just go on polluting.

Because CCS is expensive, unproven and illsuited to the oilsands, it doesn't seem a very responsible use of billions in public funds.

A better investment would be the wellknown, tried and true methods of reducing emissions--e. g., building worldclass transit systems, and boosting the energy efficiency of residential and commercial buildings.

Take weatherization. The Alberta government could weatherize all the homes in Alberta that need it, and reduce greenhouse gas emissions equivalent to taking over 150,000 cars off the road--permanently.

The cost of retrofitting all those homes? Less than the $2 billion the government spent for the last six years of the nowdefunct natural gas rebates. Less than the$2 billion allocated to CCS pilot projects.

More importantly, such strategies don't need expensive pilot projects to determine whether they are even going to work.

These strategies can put tens of thousands of unemployed Albertans back to work. And this can start right now, in the midst of this recession, when we need the jobs.

David Thompson is an independent consultant in energy and environmental policy.