Home power bills may triple
Alberta green plan to cost up to $24B over eight years; Carbon capture and storage
By Renata D'aliesio, Calgary HeraldJuly 25, 2009 7:30 AM
Technology touted to capture carbon emissions and store them underground will require Alberta and Ottawa to kick in as much as $3 billion a year, while consumers' electricity bills may triple, says the head of a provincial blue-ribbon council.
On Friday, Alberta Energy released the panel's final report on carbon capture, which stresses billions more public dollars are needed before the technology can pay for itself.
Council chairman Jim Carter, former president of oilsands giant Syncrude, said a concerted effort by government, industry and consumers is needed to ensure carbon capture and storage technology succeeds and reduces the energy sector's greenhouse gas emissions. - What it is: The process involves capturing carbon emissions from industrial sites, such as coal-fired power plants, and storing them deep underground in geological formations to prevent emissions from entering the atmosphere and contributing to climate change; - Cost: A government-appointed council estimates alberta and ottawa will have to commit an additional $1 billion to $3 billion annually for up to eight years to expand ccs; - Time for research: The council expects it will take 15 to 20 years to achieve commercial-scale ccs at reasonable costs; - Consumer impact: CCS may double or triple the cost of electricity, heating and gasoline for consumers; - Government impact: Alberta may gain between $11 billion and $25 billion in royalties and taxes if captured carbon is injected into oil reservoirs to produce oil currently inaccessible through conventional methods.
Compiled by Renata D'Aliesio source: acceleraTing carBon
As part of its effort to fight climate change, Alberta has already committed $2 billion to getting three large CCS projects off the ground. The federal government has pledged $650 million toward advancing the expensive technology, which critics contend is unproven.
Carter said the expert panel --which included industry, government and academic representatives--estimates an additional$1 billion to$3 billion annually will be needed from the province and Ottawa for five to eight years, potentially costing as much as $24 billion.
But the report states consumers will ultimately bear the financial brunt of tapping CCS to keep carbon emissions produced by the oilpatch and coal-fired power plants from entering the atmosphere.
"I'm not sure the public really is aware of the magnitude of the impact of some of these (climate change) measures," Carter said, adding electricity bills could double or triple.
"It's going to have an impact, whether it be the price(of gasoline) at the pumps eventually, or whether it be electricity or home heating."
The council's report, which provides the province with a road map for expanding CCS projects, prompted the NDP and Wildrose Alliance to call on the Stelmach government to withdraw its $2 billion in funding.
Wildrose Alliance Leader Paul Hinman said the government is wasting taxpayer dollars on an unproven technology to combat what he contends is a scientifically unproven problem -- that man-made carbon emissions are accelerating climate change.
"Consumers won't have to pay a little. We'll have to pay the whole shot," he said. "This is going to affect the working man and those people that are struggling to get by."
NDP Leader Brian Mason doesn't question the science behind climate change, but thinks giving public dollars to the energy industry is a "boondoggle."
Instead, he wants the Alberta government to pour the money into renewable energy, including wind and solar.
"Hold onto your wallet," Mason implored. "The size of the sums involved here are staggering."
But Energy Minister Mel Knight said the province is committed to aiding the development of CCS, likening its significance to the technological breakthroughs that unlocked the oilsands.
Knight acknowledged finding the government cash will be a challenge, as Alberta and Ottawa are on track to post record deficits.
"We know that the (financial) gap exists and we'll find ways as we move forward to close the gap," he said.
Part of the problem, Carter noted, is carbon's current value is too low and greenhouse gas regulations haven't taken hold globally.
In Alberta, companies pay a $15-per-tonne levy if they exceeded emission limits or they can buy credits on the market, which generally sell for about $7 a tonne.
Carter figures the price of carbon will have to rise to $50 or $60 per tonne to make CCS development viable on a commercial scale.
One potential CCS benefit for industry and government is enhancing oil recovery, injecting carbon emissions into reservoirs to stimulate oil production.
The report estimates this could yield an extra 1.4 billion barrels of oil, while delivering between$11 billion and$25 billion in additional royalties and taxes to governments.
Marlo Raynolds, executive director of the Pembina Institute, an environmental think-tank, supports developing CCS technology, but cautioned governments shouldn't provide additional money until Alberta's three approved carbon capture projects--years away from completion--demonstrate results.
He added that carbon capture is just one piece of the puzzle. He said the province and Ottawa need to beef up their support for renewable energy and energy efficiency.
Eric Beynon, a director with Integrated CO2 Network, which represents 18 companies interested in CCS, said overcoming the technology's high cost is the most significant barrier to its widespread deployment.
"CCS is not currently economical. But when you look down the road 15, 20 years and you sort of see the picture's end, it does play a big part of Canada's energy future."
Jim Wachowich of the Consumers' Coalition of Alberta wants to see a breakdown of the cost for consumers.
"It's nice that this report says, 'Look, consumers, get ready, you're going to pay more.'But we should arm consumers with the knowledge of how much more so they can make those choices."
© Copyright (c) The Calgary Herald
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