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CCS technology, being applied at Shell’s Quest project, is the cornerstone of Alberta’s long-term climate plan.Nathan VanderKlippe/The Globe and Mail

Once touted a major answer to oil sands' carbon emissions, carbon capture and storage (CCS) technology has seen setbacks in Canada and around the world that have prompted alarms about its potential to make a difference in the battle against climate change.

But in Alberta and Saskatchewan, governments remain committed to CCS projects, which they believe will allow their provinces to continued their reliance on a fossil fuel economy while dramatically reducing greenhouse gas emissions.

Alberta Energy Minister Ken Hughes says the province remains committed to almost $1.3-billion worth of government spending for the two remaining private sector projects, including a carbon dioxide trunk line he said will become the "Trans-Canada Highway" for carbon.

"We're very confident in those two projects," Mr. Hughes said.

The stakes couldn't be higher for Alberta, which has had to wage a public relations war against charges it is a "dirty" oil producer.

Opponents of the proposed Keystone XL pipeline, which would bring Alberta crude to the U.S. Gulf Coast, have singled out the oil sands as a carbon-intensive source of crude. In that context, the U.S. Environmental Protection Agency has urged Washington to work with Canada to reduce emissions in the oil sands, "including a joint focus on carbon capture and storage projects and research."

Saskatchewan is pioneering its own CCS project at a coal-fired power plant at Boundary Dam, confident that success will allow continued reliance on coal deposits that could last 300 years.

Federal Natural Resources Minister Joe Oliver said carbon capture is a "potentially important" process the government wants to succeed. "We're determined to see this succeed … but there's more work to be done in this regard," he said in an interview.

Carbon capture and storage technology involves collecting greenhouse gas emissions from a large stationary source, such as a power plant, followed by transport via pipeline for injection into a deep underground geological formation – burying emissions for hundreds or thousands of years.

The International Energy Agency (IEA) says CCS is required to help forestall climate change, given that the world will not wean itself off coal and oil any time soon. Last month, the agency noted the development of the technology has slowed to a crawl, except in Canada.

Alberta, too, saw two of four planned projects cancelled this year and last, including TransAlta Corp.'s Pioneer project and the Swan Hills Synfuels LP synthetic gas plant. In both cases, the companies said the economics of the projects no longer made sense.

But Mr. Hughes said the two remaining projects – the Shell Quest project that will capture CO2 from an oil sands upgrader and the Alberta Carbon Trunk Line – spurred by provincial and some federal dollars, will go ahead. CCS technology is the cornerstone of Alberta's long-term climate plan, and is expected to contribute 70 per cent of the planned emissions reductions by 2050.

He highlighted the role of Enhance Energy Inc.'s Alberta Carbon Trunk Line, which will use emissions from a yet-to-be-built oil upgrader and an Agrium plant for enhanced oil recovery. The process involves injecting CO2 underground to create pressure in an oil reservoir, which pushes more oil to the surface.

"It's like a Trans-Canada Highway for carbon," Mr. Hughes said of the trunk line. "That will be a backbone of how we manage carbon in this province for the long term."

The trunk line construction is still in the works, and Enhance chief executive officer Susan Cole said the project's planned start is still 2015. She said the project's economic viability lies in the fact that enhanced oil recovery produces 10 to 20 per cent more oil from reservoirs than regular techniques.

The CCS technology being built at the retooled Boundary Dam coal unit near Estevan, Sask., will have the potential to capture one million tonnes of CO2 per year, or 90 per cent of the plant's emissions.

Construction is proceeding, and SaskPower president Robert Watson said on Monday that the plant should begin commercial production early in 2014. He expressed confidence that carbon capture technology will allow the province to depend on its indigenous coal supply for power, while reducing emissions well below that of a comparable natural-gas-fired unit.


Glenn Kelly thinks he can drive down the cost of capturing carbon dioxide emissions in the oil sands, and Prime Minister Stephen Harper has just given him $4.7-million to prove it.

Mr. Kelly's Quebec City-based CO2 Solutions Inc. is pioneering the use of enzymes to scrub CO2 from the exhaust of natural-gas-fired boilers that generate the steam required to free the sludge-like bitumen in underground oil sands operations known as steam-assisted gravity-drainage, or SAGD, projects. The company is working with an industry partner – he can't release the name yet – to build a pilot plant near Fort McMurray, Alta., to demonstrate the efficacy of his system.

CO2 Solutions was one of 55 clean energy projects that received $82-million from Ottawa last week, including several aimed at advancing technology in carbon capture and storage. Mr. Harper toured Mr. Kelly's Quebec City operation Friday as a backdrop to the announcement, saying the spending is "aimed at producing and using energy in a cleaner and more efficient way."

Oil sands production facilities have always been regarded as the most expensive place to deploy CCS technology, more costly per tonne of CO2 captured than similar efforts at SaskPower's coal-fired power plant at Boundary Dam or Royal Dutch Shell PLC's Quest project at its oil sands upgrader in Fort Saskatchewan.

Companies can use solvents to scrub the CO2 from flue gases, but the solvents must regenerated after each use. To regenerate the solvents at a SAGD project, the facility would have to be 330 metres high owing to the impurity of the flue gas, and would require a tremendous amount of energy, sending the operating costs soaring.

"If we put our enzyme in there, we bring that down to 20 metres," Mr. Kelly said in a telephone interview. "So now we have an economic capital expenses, and we're using a solvent that requires much, much less energy to regenerate."

He expects to be able to reduce capture costs by 30 to 40 per cent, and potentially more than that, and cut emissions at the production stage by as much as 90 per cent.

Ottawa isn't the only backer. CO2 Solutions has also received funding from Alberta's Clime Change and Emissions Management Corp., the tech fund that is financed by the $15 per tonne levy the province imposed on large emitters that exceed targeted levels, and from Carbon Management Corp., an industry consortium that includes heavy weights such as Suncor Energy Corp.; BP PLC; Royal Dutch Shell PLC, and Chevron Corp.

Shawn McCarthy