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Wednesday, 08 October 2014 13:56

Carbon capture and storage is just a good start for Sask.

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Saskatchewan Premier Brad Wall looked relaxed when he stepped up to the podium last week to speak at the first ever commercial-scale carbon capture and storage (CCS) process on a coal-fired power plant in the world.

The official opening of this project at SaskPower’s Boundary Dam power station near Estevan took place Oct. 2 in front of government, business and media representatives from more than 20 countries.
“It’s really a great pleasure to be here with you this morning,” Wall said with a broad smile at the start of his speech.
His excitement and relief that the project is finally operational is not surprising. He has been pitching the benefits of carbon capture for quite a while, also to audiences in the United States, where he used this project as an example that Canada is serious about reducing greenhouse gas emissions and the Obama administration should therefore have no qualms about approving the controversial Keystone XL project.
The hefty $1.4-billion price tag of this CCS process also must have made it a happy occasion for Wall to finally cut the ribbon on this project. The federal government contributed $240 million and Saskatchewan taxpayers will pay the rest.
A cost analysis by Leader-Post political columnist Murray Mandryk in an Oct. 4 article found the project will probably be a financial loss for taxpayers. He estimated the $1.2 billion in revenue over 20 years will be offset by the initial $1.4-billion taxpayer investment and another $800 million in operational costs.
Numerous reports have highlighted the high cost of CCS projects. For example, the March 2009 final report by the Alberta Carbon Capture and Storage Development Council referred to the financial gap that exists between the capital costs for equipment and the ongoing cost to operate the CCS on the one hand and the potential revenue from selling captured carbon dioxide.
“Until this difference or gap can be reduced, industry cannot invest in CCS without incurring a loss, or without placing it at a competitive disadvantage,” the report said.
The Integrated CO2 Network initiative by the Canadian industry has recognized the strategic importance of CCS for coal-fired electricity and oil sands production, but in an October 2009 report it emphasized the need for mechanisms to overcome an “economic and risk gap” for private sector investment.
“Without appropriate fiscal and regulatory policies to support the initial capital investments needed for capture, pipeline, and storage facilities, the deployment of CCS will be delayed indefinitely,” the report said. “Industry and government need to work together in the early years to encourage uptake of CCS.”
The Boundary Dam CCS project represents that commitment from the Saskatchewan government towards the development of this technology.
Premier Wall highlighted the importance of this project in his speech when he referred to the challenge facing decision-makers who must take steps to address global concerns about greenhouse gas emissions while energy costs affordable for economic growth.
“One of the biggest challenges that we face in terms of public policy is this balance, this quest for a balance between the energy we need for a growing economy and environmental considerations,” he said.
He noted coal-fired power plants are still viewed by many countries around the world as an appropriate way to produce affordable energy and that 1,200 new coal-fired plants are being planned around the world, with 76 per cent of those plants located in China and India.
This also explains the significant international interest in the Boundary Dam CCS project.
The International Energy Agency (IEA) has welcomed the project as “a historic milestone along the road to a low-carbon energy future.”
In a press release on Oct. 1 the IEA stated CCS will play a key role in climate-friendly energy scenarios for the future.
“IEA analysis has shown that without significant deployment of CCS, more than two-thirds of current proven fossil-fuel reserves cannot be commercialized before 2050 if the increase in global temperatures is to remain below two degrees Celsius,” the press release stated.
For Saskatchewan, the Boundary Dam CCS project should be viewed as a significant start to a broader effort to address climate change. The province has the highest per capita greenhouse gas emissions in the country at 69.8 tonnes of greenhouse gas per person compared to 20.3 tonnes per person for Canada as a whole.
Saskatchewan’s growing population and strong economy means a growing energy demand will present a real challenge to reduce greenhouse gas emissions, which will require a multi-faceted approach beyond just CCS.
Unfortunately, some of Premier Wall’s remarks at the launch event for the Boundary Dam CCS project raise concerns over how open-minded the provincial government will be to considering various approaches to reduce greenhouse gas emissions. He expressed doubts about the effectiveness of carbon taxes and felt that “contrived carbon markets” do not really deal with the problem.
“Maybe what we’ve done here in southeast Saskatchewan … sends a message that we should focus on technological solutions, that we should invest in this kind of technology,” he said.
The Boundary Dam CCS project might be a good start, but the Saskatchewan government will also have to look at investing into alternative renewable energy and environmental technologies to reduce the province’s dependence on fossil fuels.
Matthew Liebenberg is a reporter with the Prairie Post. Contact him with your comments about this opinion piece at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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Matthew Liebenberg