Lessons on CCS from Canada

How come Canada are home to some of the first full scale CCS projects in the world, built faster and cheaper than most other countries, Norway included?
The Embassy of Canada and ZERO brought the spear heads of CCS development in Canada to Oslo the week of Easter. Forty stakeholders, mostly Norwegian CCS players, skipped their skiing trips for an inspiring and educational day.

Central stakeholders responsible for bringing Canada many steps nearer the goal of realisation of full scale CCS projects, shared their experiences and knowledge gained so far. The speakers were representatives from the Canadian authorities, and not the least some of the most prominent CCS projects in Canada.

The speakers talked about their concrete experience and knowledge gained in the Canadian CCS context, and the lessons learnt during planning, building and operating of the projects.  They spoke about the political and financial status of CCS and the work for a good and effective framework for CCS, – especially on a provincial level.

All presentations is accessible here

Making it more than worthwhile
After having heard the representatives from the industry, namely SaskPower, Spectra Energy and Shell, it is tempting to conclude that it is the industry itself that drives the implementation of CCS in Canada. They show a rare will to combine the need to fight climate changes with an effective business model and a will to be forerunners. But this is only half the picture.

The industry needs good incentives, regulations and infrastructure to be pushed and tempted to invest in this technology for CO2 emission reduction. And they need excellent research projects contributing to the essential part, the permanent storage, – like the PTRC storage project Aquistore.

Aquistore are intended to demonstrate that it is safe to store CO2 in deep reservoirs, over 3000 meters below the surface. The storage reservoir consists of porous rocks that absorb CO2, like a sponge takes up water. In addition, multiple layers of hard rock functions as barriers against leakage. The project will explore the safety and economic aspects of CO2 injection and storage. Aquistore is also receiving CO2 from the CCS project Boundary Dam.

Alberta with tools for CCS
Alberta and Sandra Locke represent an example of the provincial work being done for good instruments for CCS. Locke is the Assistant Deputy Minister, Department of Energy, in Alberta, which has supported projects to develop CO2 infrastructure and demonstrate large scale integrated capture, transport and storage of CO2. Hereunder is the Shell Quest project. Quest is a fully-integrated CCS project that will capture, transport, inject and store CO2.

Shell announced in September 2012 that a final investment decision had been made and that the project, having received essential federal and provincial regulatory approvals, had begun construction.  Alberta’s Energy Resources Conservation Board had announced its approval for the project in July 2012, and noted the suitability of the proposed reservoir storage site.

The project reached a milestone in March 2012 with the release of a federal environment assessment, which concluded that the company had planned appropriate measures for mitigating any adverse environmental effects. And a one-month public comment period was held.

Shell previously filed for approvals from Alberta’s Energy Resources Conservation Board on 2 August 2011, the first application the province has received for a commercial-scale CCS project.  Key stakeholders already consulted include local communities, landowners, government departments and agencies, and NGOs.

Regulatory framework is essential
Canada adopted a set of rules for emissions standards for coal-fired power plant in September 2012. The new standard limits the amount of CO2 coal-fired power plants are allowed to emit. It also applies to units that have reached the end of their useful life of 50 years. Temporary exceptions will be made for plants that incorporate CCS, until 2025, and there are incentives for existing plants incorporating CCS earlier than necessary. The EPS is equivalent to a combined cycle natural gas plant. It is due to come into effect on July 1, 2015.

This was decisive for the SaskPower which had to either adapt to the new regulation, and consequently use CCS, or simply close down coal-fired power plant. The different Canadian regions, particularly Alberta, Saskatchewan and British Columbia, have also introduced various frameworks and regulations that help to facilitate CCS in the provinces. They have also provided financial support to several CCS projects, which has been a crucial incentive.

The investment decision for the Boundary Dam CCS project was made in 2011, and in 2014, SaskPower will “push the start button” of the world’s first full-scale CCS projects on coal-fired power. This is a carbon capture project that heads for an emission reduction of a million tonnes of CO2 a year. The project is being built in less than five years from project idea to start-up, and will only cost around 7 billion CAD. This proves that carbon capture – and storage can provide valuable technical and economic benefits, in addition to the very favorable climate advantage.

The third project being presented at the seminar, the Fort Nelson CCS Plant, is expected to be storing impressively 3 million tonnes of CO2 annually by 2017 following a trial phase starting in 2014.

Ambitious CCS policy, less ambitious climate policy
Canada is home to one of the world’s first, and still one of the world’s largest, CCS demonstration projects at Weyburn, Saskatchewan. Using CO2 to enhance the oil production from depleting oil reservoirs at Weyburn and Midale, Saskatchewan, this commercial project has been successfully demonstrating the safe underground storage of CO2 – over 16 megatonnes of CO2 has been injected since the start of the project. CO2 is bought and then brought in pipes from a coal power plant just across the border in the U.S., and soon also from the mentioned Boundary Dam CCS project.

When projects like Transalta and Swan Hills I being shelved and cancelled, this proves how essential a good business case is, and how connected the future of full scale CCS is to the energy market. It also shows that a long term financial framework is a needed basis for the deployment of CCS.

Canada has signed up to voluntary emission pledges to 2020 under the UNFCCC, but has not ratified a second commitment period under the Kyoto Protocol. It is, committed to reducing total greenhouse gas emissions by only 17% from 2005 levels by 2020.
The Environment Minister Jim Prentice has said Canada will pursue policies that are comparable but not identical to those in the United States. Climate change rules here «will be driven by Canada’s national interest,» he said. Mr. Prentice said CCS is particularly critical for the coal industry because coal-fired power is a far greater source of greenhouse gas emissions globally than is the oil industry.

The oil sands though, represent the fastest-growing source of emissions in Canada. Without dramatic mitigation efforts, Canada will find it nearly impossible to meet its target of reducing greenhouse gas emissions by 20 per cent from 2006 levels by 2020. It accounts for 40 million ton of CO2 emissions per year in Canada. Emissions intensity of producing oil sands has decreased, i.e., 26% over the past decade. Total emissions are expected to increase due to higher production levels. Total emissions for oil sand is estimated to be 67 megatonne (Mt) per year by 2015.

Environment Minister Jim Prentice says that CCS could play a major role in virtually eliminating carbon dioxide emissions from upgraders that process the bitumen into synthetic crude oil, thereby reducing the carbon footprint of oil sands projects over all. The industry will have to rely mainly on other technologies to reduce emissions at the production sites, he said.

The learning from the Quest project might prove another case. The Shell-led Quest project in Alberta, Canada, will be the first commercial-scale CCS project to tackle emissions from oil sands extraction.

All presentations is accessible here

Short on the projects presented at the seminar :

 Aquistore:
Malcolm Wilson, CEO, Petroleum Technology Research Center (PTRC):
Aquistore is a five-year, $26.5M research and monitoring project located near Estevan, Saskatchewan, which aims to demonstrate that storing liquid carbon dioxide (CO2) deep underground (in a brine and sandstone water formation), is a safe, workable solution to reduce greenhouse gases. The project is being managed by PTRC in collaboration with several partners from the private sector and academia, and with federal and state funding.

Boundary Dam III CCS project:
Max Ball, Manager, Clean Coal Technologies, Carbon Capture & Storage Initiatives, SaskPower:
The Boundary Dam CCS project  will capture and store over 1 million tonnes of CO2 a year, partly in collaboration with PTRC and its Aquistore CO2 storage research project. This $1.24-billion project in Saskatchewan, Canada, retrofits a carbon capture system at Unit 3 of SaskPower’s coal-fired Boundary Dam Power Station, near Estevan, and integrate it with enhanced oil recovery operations. It is on track to becoming the first commercial-scale project in the world combining CCS with coal-fired power generation.  SaskPower, has also reached a deal to sell captured CO2 to Cenovus for its enhanced oil recovery (EOR) operations at the Weyburn oilfield SaskPower’s. The  Boundary Dam CCS project  will begin initial testing of a full scale CCS facility at Boundary Dam in 2013 with full operation in 2014.

Fort Nelson CCS plant:
Al Laundry, Director Carbon Capture & Storage Projects, Spectra Energy:
Fort Nelson CCS Plant is expected to be storing almost 3 million tonnes of CO2 annually by 2017 following a trial phase starting in 2014.
Spectra Energy is in the process of assessing the feasibility of a large-scale CCS project at its existing Fort Nelson natural gas processing plant in British Columbia, Canada. The plant will be designed to capture around two million metric tonnes of CO2 per annum. Initial characterisation work has identified the Slave Point and Sulphur Point saline reservoirs as potential storage sites.

Quest:
Bill Spence, Vice President Strategy,Royal Dutch Shell:
The Shell-led Quest project in Alberta, Canada, is the first commercial-scale CCS project to tackle emissions from oil sands extraction. It aims to capture and store up to 1.2 million tonnes of CO2 per year from the Scotford Upgrader, the facility at Fort Saskatchewan which produces synthetic crude oil from bitumen derived from the Athabasca Oil Sands extraction project.