Lawyers, not engineers, to dominate work on carbon storage in 2010

EDMONTON — Before you start putting carbon in the ground, you first have to put lawyers in a room.

EDMONTON — Before you start putting carbon in the ground, you first have to put lawyers in a room.

After a year that saw billions of dollars in public funds sprayed around a variety of carbon capture and storage pilot projects, the focus in 2010 will shift from splashy press conferences to quiet boardrooms where officials will work out exactly how all that money will be spent.

“We’re currently working on grant agreements,” says Karen Karbashewski of Alberta Energy. “We expect to have them signed early in the new year.”

The province doled out about $2 billion in 2009 to back a series of large-scale, real-world projects to collect carbon dioxide from emitters, pipe it to a wellhead and inject it deep underground.

But skeptics warn making the technology an effective weapon in the fight against climate change — which federal and provincial governments are counting on — will take a lot more than working out funding details.

“At the same the governments of Canada and Alberta are providing significant subsidies for carbon capture and storage, we haven’t even announced an outline for a national approach to reducing greenhouse gases,” says Simon Dyer of the Pembina Institute, an environmental think-tank.

Last fall saw a series of high-profile funding announcements.

In October, Prime Minister Stephen Harper visited a coal-fired power plant west of Edmonton to unveil $779 million in federal and provincial money for a project that could, in about five years, be injecting about one million tonnes of CO2 deep underground every year.

The previous week, Natural Resources Minister Lisa Raitt was in Edmonton to announce an $865 million federal-provincial subsidy for a $1.35-billion carbon capture and storage project at Shell’s Scotford oilsands upgrader.

Since then, the province has coughed up $495 million for a pipeline to move CO2 from another oilsands upgrader to a depleted oilfield, where it will be injected underground in an attempt to squeeze out more oil. Alberta also found $285 million for an in-situ coal gasification project, the CO2 from which will also be used to produce more oil.

The companies involved in the projects combined will have to put up about $1 billion of their own money for things to go ahead.

Alberta isn’t alone.

Saskatchewan will invest up to $55 million into two projects that would capture carbon from a refinery and a power plant. The plan is to have the power plant’s emissions piped south of the border into Montana; the refinery’s will go into another tired oilfield in the hope of making it last longer.

In British Columbia, both government and industry are mulling carbon capture and storage projects for two huge natural gas developments proposed for the Horn River Basin area, about 1,600 kilometres north of Vancouver.

The soonest any of these projects is expected to begin actually storing carbon is Saskatchewan’s relatively small refinery project in 2013.

None of the Alberta projects start shooting gas underground until two years later. And that’s if they pass corporate muster, winning approval from the various company boards involved in the work.

Meanwhile, private- and public-sector negotiators have a Pandora’s box of issues to sort out, from relatively straightforward issues, such as who gets how much money and when, to complicated legal tangles over matters such as liability and jurisdiction.

That’s one of the reasons Canada shouldn’t place all its carbon-emitting eggs in the capture and storage basket, says Dyer.

“We don’t have regulations in place to reduce pollution, we’re not investing in renewable energy and energy efficiency,” he says. “It seems like governments are focusing on subsidizing end-of-pipe pollution control at the expense of all the other opportunities out there.”

Environmentalists point out that other countries, including the United States, are spending far more than Canada on renewables and conservation. Without the kind of public support now focused almost entirely on carbon capture and storage, they warn Canada will miss out on the energy opportunities of a post-carbon economy.

Most agree that carbon capture and storage can play a role in reducing Canada’s overall emissions, especially for large industrial emitters that send most of their CO2 out a single source such as a smokestack. Coal-fired power plants in Alberta and Saskatchewan are natural places for such technology, especially since the geology of two provinces seems to offer plenty of underground formations to stash the gas.

Nevertheless, Dyer maintains that high-profile, taxpayer-funded pilot projects are no substitute for a well-thought-out national plan.

“We’re sort of doing this backwards.”