Gov't plan will 'double' cost of electricity
Carbon capture also demands billions of taxpayer dollars: premier's advisory council
By Hanneke Brooymans, Edmonton JournalJuly 25, 2009 7:32 AM
Carbon capture and storage will "at least double" electricity prices in Alberta and require taxpayers to contribute up to$3 billion more a year to support industry's efforts to use the technology, says the chairman of a provincial advisory council.
"The whole slate of new electricity that has got a lower carbon footprint is going to be more expensive than we've experienced
up until now," Jim Carter, of the Alberta Carbon Capture and Storage Development Council, said Friday. That would include nuclear power and other alternatives, he said.
Premier Ed Stelmach appointed the council last year. Its report, submitted to the province in March, was released Friday.
Carter, a former president of the oilsands giant Syncrude, said captured carbon dioxide could be pumped into older oilfields, producing more oil and generating $105 billion in revenue, with $11 billion to $25 billion going to the province in royalties.
This calculation assumes oil is $75 US per barrel and an enhanced capacity to potentially store 450 million tonnes of carbon dioxide.
To make this happen, Carter said industry will need $1 billion to $3 billion annually in federal and provincial money for seven to 10 years, beginning in 2015.
That's when the three projects chosen last month for the province's current $2-billion carbon capture and storage fund come on line. Those projects will capture about four million tonnes of carbon dioxide annually by 2015.
The move is designed to reduce greenhouse gas emissions while at the same time taking heat off the Alberta government from environmentalists and other critics.
Carter said once the industry gets more experience with the technology, costs could be significantly cut.
When North American industries were told to cut sulphur dioxide emissions to tackle the problem of acid rain, the initial capital cost was double what it is now, he said.
Alberta NDP Leader Brian Mason said polluters should pay for the technology, not taxpayers.
"If this government is considering billion-dollar investments to combat climate change, they should fund renewable projects like solar or wind," he added.
Alberta Energy is still reviewing the report.
"Right now, we don't know the true cost of CCS projects," said department spokeswoman Karen Karbashewski. "The $2 billion with the three projects will give us a great sense of the true costs and we expect the costs to come down."
Further funding could come from a variety of different sources, such as Ottawa or a carbon tax, greenhouse gas compliance payments or carbon dioxide credits, she added.
The Pembina Institute, an Alberta-based energy and environment think-tank, said renewable energy sources should be given an opportunity, too.
"We really have not provided any stimulus or incentive for that to really occur," said executive director Marlo Raynolds.
"So before spending additional billions of dollars on carbon capture and sequestration, I'd want to first give the potential for renewable energy given an opportunity, and two, see what emerges out of our first $2 billion of investment."
Raynolds also has some concerns about producing more oil by pumping carbon dioxide underground, because, ultimately, that oil, too, will be burned and produce more carbon dioxide.
But the overall impact of that depends on whether or not that enhanced oil recovery would take place anyway, without the carbon dioxide. And currently, some of it is done using fresh water. In that case, using carbon dioxide would be a better option, he said.
