GLOBAL ENERGY REPORTER
The much-touted carbon capture and storage technology is not the answer to reducing greenhouse gas emissions from oil sands projects in northeastern Alberta, Environment Minister Jim Prentice says.
While Ottawa and Alberta are spending billions of dollars on CCS demonstration projects, the minister yesterday acknowledged what critics have said all along: The technology has limited application at the energy-intensive mines and in situ projects that extract the bitumen from the ground.
However, 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.
"CCS is not the silver bullet in the oil sands," Mr. Prentice told The Globe and Mail's editorial board.
"It's important, but it is really in the upgrading of bitumen that CCS has more promise, rather than in the mining or in situ production," he said.
The industry will have to rely mainly on "other technologies" to reduce emissions at the production sites, he said.
The oil sands represents 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, according to the National Round Table on the Environment and the Economy, a government-appointed advisory group.
Mr. Prentice said he intends to spell out the government's policy on greenhouse gas emissions for each industry, including the oil sands, before the Copenhagen climate change conference in December, where countries hope to hammer out a global climate change agreement.
He then expects to unveil next year the actual regulations, which will take effect on Jan. 1, 2011.
The minister 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.
Ottawa is funding coal power CCS projects in Saskatchewan and Alberta, while the Alberta government will soon announce funding for carbon capture projects involving a coal-fired plant and, likely, an oil sands upgrader.
Older oil sands projects, including the mines at Syncrude Canada Ltd., and Suncor Energy Inc., have upgraders on site that process the bitumen into lighter synthetic crude oil.
But most companies now ship raw bitumen to be processed at upgraders near Edmonton, or at refineries throughout Canada and the United States.
With the proposed expansion in the oil sands, several companies are planning to build upgraders in central Alberta.
A stand-alone upgrader would account for 40 per cent of emissions that result from producing a barrel of synthetic crude oil from an in situ project, and 60 per cent of emissions from a barrel that comes from a mining operation, said David McColl, a researcher at the Canadian Energy Research Institute.
Eliminating emissions from upgraders would go a long way to making the overall emissions from an oil sands project comparable to that of conventional light oil, he said.
While Imperial Oil Ltd. has begun construction of its Kearl oil sands mine with no special technology for reducing emissions, several companies are pioneering new approaches - especially for in situ projects, which could substantially lower CO{-2} emissions.
Both Suncor and EnCana are experimenting with the use of solvents to reduce the need for natural-gas-generated steam to free up the bitumen.
While those approaches could prove commercially attractive by reducing costs, Mr. McColl said their adoption could be speeded through government support and the introduction of effective carbon caps.