Alberta and Carbon Capture

Most electricity consumers in Calgary don’t know it yet, but a strange and much-ballyhooed technology called carbon capture and storage (CCS) is about to change the neighbourhood.

In fact, the Alberta government has gambled the province’s future on a bold scheme to bury millions of tonnes of carbon underground. Given its uncertain and risky nature, the massive engineering project reads like science fiction and pretty much defies any sense of fiscal conservatism.

In a nutshell, carbon capture and storage is a technology that separates carbon dioxide from other gases in coal-fired power plants and other large-emission sources and stores it kilometres deep underground, instead of releasing it into the atmosphere.

Although the public has never clamoured for such an air-cleaning service, an elite crowd of CEOs, scientists and a few environmentalists argue it could save the planet, if not the life of fossil fuels. It sounds promising, but for the staggering costs involved. Even the Alberta Carbon Capture and Storage Development Council (yes, we’ve got one) warns the megaproject could triple electricity prices and require from $1 to $3 billion dollars a year of public funds over the next two decades — which adds up to $20 to $60 billion. Albertans might also have to assume public liability for leaks from storage sites over thousands of years, too.

The Council describes CCS as “embryonic” and “complex.” That might be an understatement.

Perhaps the loudest advocates for CCS are the province’s biggest carbon-makers. Take Steve Snyder, president and CEO of TransAlta, for example. Last spring, he talked up CCS at the first Alberta Economic Forum in Geneva, Switzerland. TransAlta now provides electricity for 7 million Canadian homes, but the coal-burning utility dumps 40 million tonnes of global-warming gases (95 percent of which is CO2) into the atmosphere annually. Snyder explained to the European audience of mostly energy investors that burying carbon was really the best option for them to stay in business.

According to Snyder, CCS could solve two major headaches. For starters, it would prevent the kneecapping of the Alberta oil and gas industry, Canada’s biggest greenhouse gas generator, for the sake of pursuing an environmental agenda that would most likely tax the hell out of carbon and dramatically cut fossil fuel production and export. Second, it would also keep existing coal facilities, both mines and power plants, operating for another 20 to 50 years. “We need to do all we can to preserve [coal’s] value for all our stakeholders,” Snyder said, adding CCS has the potential to secure the province’s “economic growth,” too.

But solving these headaches comes at no small price. In fact, the Alberta government has already invested $2 billion worth of taxpayer’s money into this waste-disposal technology. Len Webber, a Calgary MLA and parliamentary assistant to the Energy Minister, recently suggested there might be “another $2 billion down the road,” because the first $2 billion, earmarked to support CCS projects that are expected to reduce emissions by up to five million tonnes annually, “didn’t go that far.”

With three CCS demonstration projects (one power plant, one upgrader and one fertilizer plant/pipeline system) approved by the provincial government, the province needs to show a skeptical public the technology can safely store lots of carbon by 2015 and thereby begin to scrub clean the province’s troubled image as a dirty-energy producer. Given no commercial coal-fired power plant with CCS yet exists anywhere in the globe, it’s a bit of a gamble.

It’s going to be challenging, Environment Minister Rob Renner told a CO2 Capture and Storage Conference last February.

In recent months, CCS has become politically fashionable in many global circles. Both industry and government now employ armies of CCS engineers and experts. Every day, academics publish dense papers about the technology with titles like “Risk of Leakage versus Depth of Injection in Geological Storage,” or, “Assessing Geochemical Carbon Management.”

The European Union proposes to invest billions of dollars for 10 to 12 demonstration projects, while the U.S. has devoted both big money and big time into laying out a rigorous regulatory framework. Australia, a big coal exporter, just appointed famed U.K. economist Nicholas Stern to sit on a panel at its new Global Carbon Capture and Storage Institute. Coal-rich China has also expressed interest in CCS. The technology even
sports its own magazine (Carbon Capture Journal)
which, according to the publication, spreads the word “in a way which is clear, useful and won’t waste your time.”  

The scientific community generally views CCS technology as one of several tools that might keep the planet from overheating. Every year, the burning of fossil fuels puts approximately 30 billion tonnes of greenhouse gases into the atmosphere; about 50 percent of that waste comes from coal. To prevent catastrophic predicted climate changes (flooded coastal cities, sustained crop failures and failed economies), governments can increase the fuel efficiency of 2 billion cars from 30 to 60 mpg, double nuclear power capacity or install CCS at 800 large-scale coal power plants. Each one of these solutions could reduce greenhouse gas emissions by 25 billion tonnes a year. That may or may not be enough.

According to David Keith, a long-time proponent of action on climate change and the University of Calgary’s Canada Research Chair in Energy and the Environment, greenhouse gas emissions need to be reduced to almost zero — meaning all of these solutions will need to be put in place.

Meanwhile, climate change has already begun to unsettle Alberta’s economy. At a 2007 climate conference at the University of Alberta, economist Paul Boothe explained the changes will reduce moisture in Alberta by 24 percent by 2020, followed by a 50-percent reduction over time. “It will have an instant effect on Albertans and will require a complete change in agriculture in the province,” Boothe said.

In order to stabilize the climate, citizens need to keep their per capita emissions around 1 tonne per year. But the average in Canada is 24. In Alberta, it’s an astounding 72 tonnes, because of the energy intensity of fossil fuel production.

Many scientists such as Keith agree storing carbon in old oil reservoirs or salt aquifers is pretty doable. (Keith, for example, is currently exploring the capacity of the Wabamun area, home to four coal-fired plants, to safely hold 1,000 megatonnes of CO2 at depths of 1,600 metres. Other potential sites now cover an area of 140,000 square kilometres.) But experts also say significant economic, technical and regulatory uncertainties now dog CCS technology as persistently as coal pollution downwind from Wabamun’s power plants.

In fact, researchers at Stanford University and Sweden now compare CCS to other risky, complex and capital-intensive technologies such as nuclear power and the liquified natural gas (LNG) industry. Although nuclear power and LNG promised lots of cheap energy in their infancy during the 1960s, both technologies delivered extreme economic surprises due to regulatory uncertainty, misplaced optimism and security issues. CCS, concluded one 2009 U.S. study, faces “analogous hurdles before it can be applied on a widespread basis.”

The economics for CCS are as ugly as the prospect of dangerous climate change. It takes a lot of energy to strip a pure stream of CO2 from other gases in a smokestack, compress it and then inject that gas into the ground. A fine stream of CO2 can be captured by burning the coal with oxygen or removed from the stack by various solvents. It then takes more energy to transport the gas to a storage site. While the natural gas and ammonia industries have had lots of experience stripping CO2 on a small scale for decades, it’s largely foreign territory for coal plants.

According to the U.S. Department of Energy, CCS necessitates more coal burning. A coal-fired plant equipped with CCS must consume 30 percent of its power just to capture the carbon stream. That means the facility will have to burn more coal to provide the same amount of electrical power to consumers. Experts call it “parasitic loss” or “energy cannibalism.”

Adding CCS technology to a modern coal plant adds 30 percent to the electrical bill, while retrofitting older models increases costs by 80 percent. One can only assume these costs would be transferred on to the consumers through higher electricity prices. Given current technology for capturing carbon (and that’s about three quarters of the total price tag for CCS), it now costs about $150 per tonne of CO2. On top of that, there are other costs, including transportation, injection and monitoring over what the U.S. Environmental Protection Agency (EPA) predicts could be thousands of years.

One oil sands operation calculated CCS would cost $200 a tonne, partly because the emissions would require a lengthy pipeline network to distant storage sites. Such economics have sobered enthusiasm for the technology in the oil sands, which produces almost as many climate-warming gases as the province’s coal-fired electrical plants.

In 2007, Frede Cappelen, an advisor to Statoil-Hydro, a Norwegian firm with major oil sands holdings for in situ developments, recommend-ed government and industry work together
to deploy CCS on a large scale. But when the provincial government asked the industry to join the CCS parade in 2008, StatoilHydro balked at the cost. From an original pool of 20 firms selected by the province to pilot CCS projects, eight oil sands heavyweights, including Suncor and Syncrude, withdrew from the process, largely for financial reasons.

Robert Skinner, a VP for StatoilHydro and highly respected heavy oil researcher, told the Calgary Herald that CCS “is not a slam dunk.” Given the impure and diverse stream of CO2 emissions in oil sands operations, CCS will remain a problematic solution for the industry.

The U.S. Department of Energy freely admits that, “existing CO2-capture technologies are not cost-effective.” It doesn’t expect to pare costs down for workable commercial operations for a least a decade.

This probably explains why Jim Carter, chair of the Alberta Carbon Capture and Storage Development Council, told a CO2 gathering that CCS “won’t be cheap, any way you look at it.”

In fact, Carter’s Development Council concluded in 2008 that “substantial cost improvements are expected, but significant direct support is needed until these learning curve benefits appear.” In other words, CCS can’t proceed without public subsidies in the neighbourhood of $1 to 3 billion a year.

Alberta’s sedimentary basin can probably sequester 10 billion tonnes of CO2 or more. But apart from the cost, burying carbon in giant saline aquifers poses some unique technical challenges. The ability of underground formations to contain large volumes of CO2 is generally not debated, explains Stefan Bachu, a world-renowned CCS researcher for the Alberta Research Council and associate editor of the International Journal of GHG Control. “We know how to do it and there is no doubt we are moving there,” he says.

Although many experts suspect captured CO2 won’t leak from storage sites for at least 1,000 years — provided they are well selected, designed, operated and prudently monitored — front-line scientists such as Bachu and Keith still worry a lot about leakage.

In many ways the security issue for carbon storage boggles the mind. High volumes of carbon dioxide injected underground will likely spread out and rise over time underneath a large land base.

Most potential CO2 injection sites in Western Canada, for example, have been highly perforated by the oil and gas industry with up to five wells per kilometre. (Alberta’s Pembina Oil field, a candidate for CO2 storage, extends over 140 townships and boasts 8,000 wells.)

A high density of oil and gas operations on the surface means that underground plumes of CO2 could potentially connect with hundreds of existing wells and, well, leak. Just a one-millimetre opening in an old well casing could allow “substantial” amounts of gas to escape. 

Alberta has more than 300,000 oil and gas wells that could serve as critical leakage pathways for CO2 storage systems. Salt water acidifed by CO2 may complicate the picture. It could move up old drilling holes and degrade cement seals on wells.

A 2005 paper co-authored by Bachu called the scale of the security problem “impressive.” Building pressure from a CO2 injection field could eventually impact hundreds of wells over an area of “hundreds to thousands of square kilometres.”

The leakage risk explains why the EPA believes the measurement, monitoring and erification for carbon storage will have to be air-tight. The agency has the job of protecting groundwater, a critical resource for any economy. Given that nearly a quarter of Alberta’s population gets their drinking supply from groundwater, it should be a significant concern for us as well.

And it’s not just the integrity of oil and gas wells that has the EPA worried. In meetings and proposed rules for geologic storage, the EPA recommends governments establish the current state of groundwater and soil near potential storage sites. Once carefully chosen sites begin to pump down CO2, the EPA proposes regulators track CO2 plumes in salt water, monitor local aquifers above and beyond the storage site to assure protection of drinking water, and sample the air over the site for traces of leaking CO2. And this isn’t something that needs to be done over 20 or 50 years. The EPA believes this oversight needs to be maintained for hundreds, if not thousands of years.

And just how likely is leakage? If Florida’s experience with the deep injection of wastewater is any indication, there will be leakage and lots of it. Since the 1980s, 62 Florida facilities have been pumping three gigatons — three cubic kilometres — of dirty water full of nitrate and ammonia into underground saltwater caves, some 900 metres deep, every year to keep the ocean clean. During the 1990s, the wastewater migrated into at least three freshwater zones, contaminating fresh drinking water. The EPA didn’t acknowledge the scale of the problem until 2003.

Keith, who has studied the Florida problem, says surprises will occur with carbon capture and regulations must adapt and be based on results from a dozen large-scale pilot projects.

Rules that absolutely prohibit CO2 leakage would be a mistake, he says. “It seems unlikely that large-scale injection of CO2 can proceed without at least some leakage,” says Keith. He suspects the risks to groundwater will be small compared to “the environmental benefits in the form of reduced costs for controlling the emission of the global-warming gas.”

The CCS Reg Project, a group developing CCS rules and anchored at the Department of Engineering and Public Policy at Carnegie Mellon University, agrees. It recently told the EPA some groundwater will be sacrificed over time. “Protection of drinking water is an essential environmental goal, but must be balanced with avoidance of the dangerous impacts of climate change.”

Other scientists, such as a group at the U.S. Lawrence Berkeley National Laboratory, suspect keeping CO2 out of groundwater will be more difficult than managing liquid waste in Florida. They say CO2 injection involves more complex hydrologic processes than storing liquid waste water does, and it could even force salt water into freshwater sources.

The group, now studying CCS and groundwater, says scientists don’t have a good idea how CCS could change the pressure in the groundwater table level, impact discharge and recharge zones and affect drinking water.

In addition to security and groundwater concerns, CCS already has some public relations issues. To date, the public has not fallen in love with the technology. Poll after poll shows burying carbon doesn’t rate very high on the public agenda compared to investments in renewable energy such as wind and solar. In fact, one 2004 study by Keith found CCS was less popular than nuclear power. Most respondents thought the  CO2 would ultimately leak back to the surface. Even an open and transparent approach to regulation, monitoring and emergency response would not “guarantee success” in the court of public opinion, Keith concluded. A major leak at just one demonstration site could spell the end for the technology.

A 2007 communications workshop hosted by Alberta Climate Change Central, a non-profit group co-chaired by former Nexen CEO Charlie Fischer, examined many of these issues. Presenters noted one of the critical moral issues boiled down to whether CCS served as a bridging technology to a green economy or, “simply as a mechanism for sustaining the life of fossil fuels.”

The meeting noted technology could face huge opposition “with respect to land use legacy issues and a general distrust due to the complicated nature of the subject matter.”

Another formidable hurdle may be scale. Although the oil and gas industry can easily bury thousands of tonnes of CO2 in oil recovery projects, no one has scaled up to tens of millions of tonnes yet.

“The scalability of CCS has yet to be demonstrated,” John Pavlish, a senior energy researcher at University of North Dakota’s Energy and Environmental Research Centre, reported earlier this year. Yet to make a difference to climate change, CCS has to bury billions of tonnes.

Pavlish isn’t the only one with doubts about scale. Vaclav Smil, an energy economist at the University of Manitoba, expressed his skepticism in a letter to Nature magazine last year. He calculated governments would have to construct a carbon infrastructure about twice the size of the world’s crude oil industry to bury 25 percent of
the world’s emissions and that it would take decades. “Carbon sequestration is irresponsibly portrayed as an imminently useful large-scale option for solving the challenge,” he wrote.Smil recommends conservation or limits on absolute energy use instead.

The Alberta government, never a strong believer in climate change, hasn’t exactly been forthcoming about the risks associated with carbon storage. A 2009 fact sheet proclaims CCS “can be done safely and produce positive environmental results.” Yet economists fret about costs while scientific literature highlights potential leaks, the security of rock caps above salt aquifers, the lack of regulations and the complicated scale of infrastructure needed to bury billions of tonnes of carbon.

Moreover, the International Risk Governance Council, an independent group based in Switzerland, says “vital information needed to create general governance capable of managing wide-scale commercial deployment of CCS is not yet available.” The IRGC cites the long-term behaviour of CO2 underground, as well as competent monitoring programs for leakage, as just two of many unanswered questions. The group adds, “there is substantial risk that despite the best intentions early projects could be completed without providing the scientific and technical underpinnings needed for wide-scale deployment.”

In 2009, a group of Swedish scientists interviewed 24 CCS experts and came up with some findings in the journal Energy Policy. The experts, all optimists, admitted the costs for CCS remain uncertain and could escalate. Many found it difficult to justify “why it is sustainable to leave CO2 in the ground for thousands of years for future generations to worry about.” Others feared the technology may become too complex to manage. A few even pointed out that funding for CCS might eclipse funding for green energy such as solar and wind.

The Swedish researchers concluded the current political and scientific sunshine on CCS didn’t accurately reflect the technology’s dark uncertainties and knowledge gaps. In fact, the urgent need for carbon-fighting technologies shouldn’t be taken “as an excuse for excluding uncertainties.”

That bit of wisdom might soon become the subject of Snyder’s next speech, as well as many Calgary dinner conversations the next time the Alberta government sinks more public money into carbon capture and storage.