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SaskPower’s Boundary Dam power station, near Estevan, Sask., is the world’s first commercial-scale carbon capture and storage project at a coal-fired power plant.

HANDOUT/REUTERS

SaskPower officially opened the world's first commercial-scale, coal-fired power plant equipped with carbon capture and storage technology on Thursday, with expectations the facility will generate global opportunities for Saskatchewan's state-owned utility.

After Alberta Premier Jim Prentice disparaged carbon capture and storage (CCS) this summer as a "science experiment," Saskatchewan Premier Brad Wall said the $1.4-billion Boundary Dam project represents a major milestone in the quest for "environmentally sustainable coal power."

The refurbishment includes retooling the 110-megawatt coal-fired plant, adding solvent-based processors to strip away carbon dioxide, and then piping the CO2 to a nearby oil field where Cenovus Energy Inc. will use the gas in its enhanced-oil-recovery project. Most of the CO2 is expected to remain trapped in the oil-bearing structures.

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"This project is another Saskatchewan first," Mr. Wall said in a release. "The rest of the world is very interested to learn how they, too, can produce environmentally sustainable coal power."

Cenovus has for years been using CO2 piped up from North Dakota to boost production at its aging oil field, and scientists from around the world have studied that project to determine whether the gas would indeed remain sequestered. Now, SaskPower is pioneering the use of a solvent-based capture process at an operating coal plant in order to demonstrate its effectiveness. The Boundary Dam plant is expected to capture one million tonnes of CO2 annually – the equivalent of emissions from 250,000 cars.

The ceremony in Estevan on Thursday was attended by 250 people – including government officials, scientists and industry representatives – from 20 countries But the technology remains highly controversial and hugely expensive. Ottawa provided $240-million in subsidies for the plant, and has allocated $580-million for four CCS projects. Many environmentalists scorn CCS as the equivalent of putting lipstick on a pig – a high-subsidy effort to justify the continued use of fossil fuel energy while the world should be turning to renewables.

In his leadership campaign this summer, Mr. Prentice vowed to back away from the provincial government's previous endorsement – and subsidization of CCS projects – describing it as an experiment that had failed to progress as once hoped.

Royal Dutch Shell PLC remains committed to CCS. The company is finalizing a project at its Scotford upgrader, which is expected to begin operating next year and would capture CO2 and sequester it in a deep saline aquifer. Shell's Quebec-based subsidiary, Cansolv, provided the technology to capture both CO2 and sulphur dioxide, and said the project will help prove the viability of the technology and pave the way for future projects.

While critics question the viability of CCS, both the International Energy Agency and the UN's Intergovernmental Panel on Climate Change continue to promote it as a critical piece of the puzzle as the world moves to reduce carbon emissions in order to avert the worst impacts of climate change.

"When humanity really gets serious about reducing emissions, fossil-fuel-endowed regions are likely to pursue carbon storage in addition to many different renewables, and perhaps some forms of nuclear," said Mark Jaccard, an energy economist at Simon Fraser University and climate activist. "There is no one-size-fits-all for the planet. But it is difficult to believe that fossil-fuel-endowed regions will simply stop completely the exploitation of all fossil fuels. Even with the extra cost of CCS, this option will often be the cheapest way to get dependable energy."

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A recent report by the Global Commission on the Economy and Climate concluded that the world could boost economic growth even while tackling climate change, but described CCS as a key component in keeping down the costs of action. Projects like SaskPower's Boundary Dam plant are important to reduce its cost, said Michael Levi, a fellow on energy and environment at the New York-based Council on Foreign Relations. But eventually, companies will need regulations or market-based carbon prices to justify investment in CCS, he said.

Editor's note: Royal Dutch Shell PLC's carbon capture and storage project at its Scotford upgrader will sequester carbon dioxide in a deep saline aquifer. An earlier version of this story incorrectly said the carbon dioxide would be shipped to oil producers near Edmonton for use in oil recovery.

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