CKUA

[johnlw]

Let's get realistic about cutting greenhouse gas emissions
Forget about impossible targets and focus on sensible solutions that work

Gary Lamphier
The Edmonton Journal

Tuesday, December 18, 2007

EDMONTON - On Saturday, I mocked the absurd, hyperbolic rhetoric of overheated greenies -- and their media soulmates -- as they do their best to portray Alberta's oilsands as a key cause of global warming.

The facts? Alberta's energy-dependent economy accounts for roughly 40 per cent of Canada's emissions. Canada as a whole accounts for about two per cent of the global tally. The oilsands? A fraction of one per cent.

China's coal-fired economy, meanwhile, adds the equivalent of Canada's entire annual CO2 emissions every 18 months. Yet China continues to resist all international pressure to curb emissions, while demanding that rich nations transfer their environmental technology on the cheap.

Sure, Canada can gut its economy to save the planet. That might make us all feel like good boy scouts. But it won't matter much to the planet unless major emitters -- notably the U.S. and China -- get on board.

Enter Canadian Environment Minister John Baird, who said so himself before flying off to Bali. But once there, he caved in to pressure, ultimately choosing not to oppose a loosely worded plan calling for industrial countries to slash emissions some 25 to 40 per cent below 1990 levels by 2020.

With Canada's emissions growing by two per cent a year, that implies a cut of more than 50 per cent from 'business as usual' levels in just 12 years. Does anyone really have a clue how this can be achieved without bringing whole sectors of the economy to ruin? Nope.

Canada's manufacturing sector is already on the ropes. Ditto for forest products. Thus, it's illuminating to hear how Jayson Myers, president of the Canadian Manufacturers & Exporters Association, sees the Bali accord.

"We're in a world where politicians are falling all over themselves to set targets. But I don't see any plan in place that would be effective in actually achieving those targets," he says. "These are targets that are taken out of a hat."

So where to from here? Given Canada's pathetic record of setting -- and subsequently missing -- overly ambitious targets, and its patently empty rhetoric on this issue, it's easy to despair. But that solves nothing.

So here's a thought. Why not start with one major initiative? Why not show real political leadership by focusing on one major project that has the potential to cut CO2 emissions in a substantial way? Not just in Alberta, but nationwide? One that's already supported by industry, and which will actually enhance the competitive position of Canada's top export sector?

I'm referring, of course, to the carbon capture and sequestration (CCS) system that's been proposed by the Integrated CO2 Network -- otherwise known as ICO2N -- a group of 15 of Canada's biggest industrial emitters.

Collectively, the group accounts for more than 100 million tonnes of CO2 emissions per year. Under terms of their proposed CCS system, those emissions could be cut by more than 20 million tonnes annually by 2020. That's akin to taking four million vehicles off the road.

Further out, those reductions could hit 100 million tonnes a year, equivalent to 13 per cent of Canada's total current emissions. That's huge.

The project would cost billions, of course. On a per tonne basis, it would amount to a minimum of $45 per tonne. That's three times the slim $15 per tonne penalty major Alberta emitters must pay, starting Dec. 31, under the province's current climate change plan.

As Journal reporters Gordon Jaremko and Hanneke Brooymans have written, such a scheme faces other obstacles. Besides the upfront cost, there's still no agreement on a cost-sharing formula between industry players and the federal and provincial governments. That's months away.

The key cost, accounting for 70 to 80 per cent of the total, would be to cover the actual capture of the CO2. Over and above that, oilsands producers, power plants and other backers would have to build costly pipelines and secure underground storage space to sequester the gas.

There's also the issue of liability. With all that CO2 trapped in hundreds of potential underground storage sites, governments and industry players will have to decide who takes responsibility for securing it for generations to come.

But here's the thing. Such CCS systems are already in use elsewhere, including the southern U.S. and Europe.

Secondly, with California leading the charge by more than a dozen U.S. states to impose low-carbon fuel standards in coming years, Alberta's oilsands-dependent energy sector has no choice but to act.

To do nothing isn't an option. The clock is already ticking. What's more, for oilsands producers, the cost of CCS may not be as high as you'd think.

According to CIBC World Markets economist Benjamin Tal, it amounts to about $1.25 per barrel. That's equal to about 1.7 per cent of the current price of light crude.

Finally, the CCS scheme gives both the feds and the Alberta government a golden opportunity to appease the oilpatch, which is still smarting from last year's decision to kill the income trust market by 2011, and the Stelmach government's recent move to hike energy royalties by 2009.

Think of it as required infrastructure for a new century. Whatever you call it, it's a way forward. Finally.