The Edmonton Journal - Wednesday, April 30, 2008
Duncan Thorne
EDMONTON - The way former premier Don Getty sees it, his company's plan for 250 greenhouse-gas-storing salt caverns will be huge.
That's what people in Two Hills fear.
Others suggest his proposal to bury 113 million tonnes of carbon dioxide, captured from oilsands production, won't happen soon.
Getty's Edmonton company, Capital Reserve Canada Ltd., says it's ready to go this spring. But it has yet to seek government approval, and it's unclear how it will get hold of all that CO2.
Regardless, folks in Two Hills, 110 kilometres east of Edmonton, are taking the company's announcements seriously.
Getty, premier from 1985 to 1992, is company chairman. Now 74, he has said that in 2006 CRC bought mineral rights to 2,500 acres -- about 10 square kilometres -- and an adjacent site that comes with a high-volume water diversion permit and a pumping station on the North Saskatchewan River.
There are four existing salt caverns at one of the sites, created by a former owner while creating brine for chemical production.
CRC held a meeting with Two Hills residents last November to discuss its plans, although residents and county officials say it provided few details.
Getty announced to investors in March that the company had completed a development strategy. CRC said it "expects moving forward this spring to begin the construction of 250 salt caverns and the infrastructure to support the storage capacity of up to 125 million tons (about 113 million tonnes) of CO2."
The announcement added: "This has the potential to be the largest project of its kind in North America."
CRC said the construction would happen over four years. Filling the caverns with CO2, from oilsands production, would possibly start after two years.
Investment announcements from small companies generally don't reach the broader public. But people in Two Hills have monitored CRC's communications ever since they noticed activity at the site last fall.
"People are really starting to get concerned," resident Amil Shapka said.
Shapka, who held a meeting with other residents this month, said concerns include the fear that an accident or natural disaster could spew CO2 from a cavern, asphyxiating people. More than 1,700 died from CO2 that erupted from a lake in Cameroon in 1984.
"The volumes of CO2 there were small compared to what they're talking about here," said Shapka, a dentist.
Robert Jorgensen, chief administrator for the County of Two Hills, said CRC has told the county little about its plans. "Everybody's speculating but we don't know any more than the government."
CRC must apply first to the Energy Resources Conservation Board. If the ERCB accepts it, the plan would need the OK from Alberta Environment officials and final approval from Environment Minister Rob Renner. At each stage there is "an extraordinary level of scrutiny, so this
isn't an overnight project," said Darin Barter, speaking for the ERCB.
In a document filed in 2007 with the United States Securities and Exchange Commission, CRC said it applied to the Alberta Energy and Utilities Board, as the ERCB was then known, for permission to start work on the site.
But company president Steve Claussen said he has yet to file an ERCB application. Claussen told The Journal that CRC's securities declaration dates from before he took charge. He said he is trying to find out why it mentions an EUB application.
Barter said if CRC applies and local residents object, there will be a public hearing. He added: "We have salt caverns up near Fort Saskatchewan, and they've taken years to get to the point where they're actually functioning."
Stefan Bachu, a senior ERCB scientist and renowned expert on CO2 storage, said salt caverns have advantages over pumping the greenhouse gas into the porous rock of disused oil and gas formations, as caverns are easier to fill. But while an accidental leak is unlikely, it could happen more quickly from a cavern, and becomes more of a concern long after the cavern is abandoned.
David Keith, also an international expert in the field, agreed caverns can provide safe storage -- but not as safe as in saline and oil and gas formations, where CO2 can't leak out fast in the event of a disaster.
The Alberta Research Council and ARC Resources has chosen an oil formation northeast of Edmonton, the Redwater geological reef, to eventually store a billion tonnes of CO2 or more.
"In a salt cavern, you've actually stored the carbon dioxide in a high pressure vessel," Keith, who led a Nobel Prize-winning study on global warming with Bachu, said from the University of Calgary. "It's important to say that salt caverns are way down the list of things we'd really do for storage."
He added there is no system in place for collecting CO2 from the oilsands, and no pipeline for shipping it to Two Hills.
There's also the matter of whether CRC can pull together such a big project.
The company's most recent, 2006, financial report on file at the SEC includes an auditor's caution about "substantial doubt" the company is healthy enough to remain a going concern. It then had eight employees.
The shares, which trade thinly in the U.S. among brokers and not on a stock exchange, sold above $1 in 2006. They closed Tuesday at two cents.
The SEC file indicates Getty receives no payment as chairman but owned 2.4 per cent of the company as of last May. The company handed him part of his holdings to settle a $25,000 US debt.
Getty could not be reached for comment but Claussen, the CRC president, said by e-mail the company is committed to infrastructure development at Two Hills "over the next four years."
Claussen said the plans include a pilot project to convert CO2 into gasoline and other fuels.
He did not explain the process but research labs have converted CO2 into oxygen and carbon monoxide, an ingredient used in making synthetic fuels.
The company is doing the final work on a development strategy for Two Hills and will apply to the ERCB and other regulators as required, Claussen said.
CRC subsidiary Two Hills Environmental "is exploring co-ordination opportunities with industry and government," he said.
Despite reported financial concerns, Claussen indicated CRC can handle the project, which he valued at $150 million. "... the company has been inundated with opportunities to meet our funding requirements both in Alberta, Canada and internationally."
Duncan Thorne
EDMONTON - The way former premier Don Getty sees it, his company's plan for 250 greenhouse-gas-storing salt caverns will be huge.
That's what people in Two Hills fear.
Others suggest his proposal to bury 113 million tonnes of carbon dioxide, captured from oilsands production, won't happen soon.
Getty's Edmonton company, Capital Reserve Canada Ltd., says it's ready to go this spring. But it has yet to seek government approval, and it's unclear how it will get hold of all that CO2.
Regardless, folks in Two Hills, 110 kilometres east of Edmonton, are taking the company's announcements seriously.
Getty, premier from 1985 to 1992, is company chairman. Now 74, he has said that in 2006 CRC bought mineral rights to 2,500 acres -- about 10 square kilometres -- and an adjacent site that comes with a high-volume water diversion permit and a pumping station on the North Saskatchewan River.
There are four existing salt caverns at one of the sites, created by a former owner while creating brine for chemical production.
CRC held a meeting with Two Hills residents last November to discuss its plans, although residents and county officials say it provided few details.
Getty announced to investors in March that the company had completed a development strategy. CRC said it "expects moving forward this spring to begin the construction of 250 salt caverns and the infrastructure to support the storage capacity of up to 125 million tons (about 113 million tonnes) of CO2."
The announcement added: "This has the potential to be the largest project of its kind in North America."
CRC said the construction would happen over four years. Filling the caverns with CO2, from oilsands production, would possibly start after two years.
Investment announcements from small companies generally don't reach the broader public. But people in Two Hills have monitored CRC's communications ever since they noticed activity at the site last fall.
"People are really starting to get concerned," resident Amil Shapka said.
Shapka, who held a meeting with other residents this month, said concerns include the fear that an accident or natural disaster could spew CO2 from a cavern, asphyxiating people. More than 1,700 died from CO2 that erupted from a lake in Cameroon in 1984.
"The volumes of CO2 there were small compared to what they're talking about here," said Shapka, a dentist.
Robert Jorgensen, chief administrator for the County of Two Hills, said CRC has told the county little about its plans. "Everybody's speculating but we don't know any more than the government."
CRC must apply first to the Energy Resources Conservation Board. If the ERCB accepts it, the plan would need the OK from Alberta Environment officials and final approval from Environment Minister Rob Renner. At each stage there is "an extraordinary level of scrutiny, so this
isn't an overnight project," said Darin Barter, speaking for the ERCB.
In a document filed in 2007 with the United States Securities and Exchange Commission, CRC said it applied to the Alberta Energy and Utilities Board, as the ERCB was then known, for permission to start work on the site.
But company president Steve Claussen said he has yet to file an ERCB application. Claussen told The Journal that CRC's securities declaration dates from before he took charge. He said he is trying to find out why it mentions an EUB application.
Barter said if CRC applies and local residents object, there will be a public hearing. He added: "We have salt caverns up near Fort Saskatchewan, and they've taken years to get to the point where they're actually functioning."
Stefan Bachu, a senior ERCB scientist and renowned expert on CO2 storage, said salt caverns have advantages over pumping the greenhouse gas into the porous rock of disused oil and gas formations, as caverns are easier to fill. But while an accidental leak is unlikely, it could happen more quickly from a cavern, and becomes more of a concern long after the cavern is abandoned.
David Keith, also an international expert in the field, agreed caverns can provide safe storage -- but not as safe as in saline and oil and gas formations, where CO2 can't leak out fast in the event of a disaster.
The Alberta Research Council and ARC Resources has chosen an oil formation northeast of Edmonton, the Redwater geological reef, to eventually store a billion tonnes of CO2 or more.
"In a salt cavern, you've actually stored the carbon dioxide in a high pressure vessel," Keith, who led a Nobel Prize-winning study on global warming with Bachu, said from the University of Calgary. "It's important to say that salt caverns are way down the list of things we'd really do for storage."
He added there is no system in place for collecting CO2 from the oilsands, and no pipeline for shipping it to Two Hills.
There's also the matter of whether CRC can pull together such a big project.
The company's most recent, 2006, financial report on file at the SEC includes an auditor's caution about "substantial doubt" the company is healthy enough to remain a going concern. It then had eight employees.
The shares, which trade thinly in the U.S. among brokers and not on a stock exchange, sold above $1 in 2006. They closed Tuesday at two cents.
The SEC file indicates Getty receives no payment as chairman but owned 2.4 per cent of the company as of last May. The company handed him part of his holdings to settle a $25,000 US debt.
Getty could not be reached for comment but Claussen, the CRC president, said by e-mail the company is committed to infrastructure development at Two Hills "over the next four years."
Claussen said the plans include a pilot project to convert CO2 into gasoline and other fuels.
He did not explain the process but research labs have converted CO2 into oxygen and carbon monoxide, an ingredient used in making synthetic fuels.
The company is doing the final work on a development strategy for Two Hills and will apply to the ERCB and other regulators as required, Claussen said.
CRC subsidiary Two Hills Environmental "is exploring co-ordination opportunities with industry and government," he said.
Despite reported financial concerns, Claussen indicated CRC can handle the project, which he valued at $150 million. "... the company has been inundated with opportunities to meet our funding requirements both in Alberta, Canada and internationally."
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