Alberta's CO2 targets 'ambitious' research warns

Darcy Henton, Calgary Herald, Jan. 18, 2010--For all the criticism environmentalists have heaped on Alberta's climate change program, the goals the province has set to reduce greenhouse gas emissions will be extremely diffi cult and expensive to meet, says a University of Alberta researcher.

Andrew Leach, an assistant professor and researcher in energy and environment economics, says the Stelmach government's plan to capture and store 50 million tonnes of carbon annually by 2020 and 139 million tonnes annually by 2050 without any other action is "seems almost impossible."

"The goals are quite ambitious and hard to meet," he told an audience of about 100 recently at the university's school of business. "We'll probably have to put signifi-cantly more resources into climate change than any other jurisdiction in the world."

But Leach warned the $2 billion the province has invested over the next 15 years to launch four projects "is nowhere near enough" to meet its goals and will capture only five-million tonnes annually. "It's important that people understand the $2 billion is not the end game -- it's the start," he explained later in an interview. "Alberta is committed to a very aggressive plan here and in order to meet it we will need either very stringent policies or a lot of government investment," Leach said. "The message that needs to get out is that if Alberta met its goals, we will have the most stringent carbon policy on a dollars per tonne basis in the world."

Leach said the $15 per tonne tax the province has levied on carbon emissions will likely have to be boosted to $100 per tonne or higher to spur industry to spend the necessary money to capture carbon. The price tag on Alberta's CCS plan could climb as high as $14 billion annually, he said.

"We're talking about imposing costs of hundreds of dollars a tonne. Nobody else is talking about that."

Leach told his audience it would be wrong to assume the costs of capturing carbon will decrease as technology improves because industry will be "high-grading" or capturing the easiest, cheapest carbon streams first and other projects down the road are likely to be more difficult. "It is going to be for the most part a money-losing venture," he said.

He said no business is going to willingly spend money on capital to engage in carbon capture if they know they will lose money doing it. "This is the scary part of the $2-billion (investment). We spent the money, but we still haven't created the strong incentive to actually capture and store any carbon."

Leach made the comments while Premier Ed Stelmach was in Abu Dhabi Friday touting Alberta's climate change plan at a World Future Energy Summit. The researcher warned the provincial government has exposed itself to unnecessary financial risk by setting carbon capture goals rather than greenhouse gas reduction goals.

Rick Hyndman, with the Canadian Association of Petroleum Producers, says no one in industry thought the province's $2 billion investment was going to solve the problem.

"It was basically an investment to get started on the technology," he said. "If you think about this jurisdiction -- which has huge hydrocarbon potential -- investing in advancing the only obvious technology that can allow you to exploit those resources without having carbon dioxide emissions makes sense."

He says Alberta's actions put it way out in front of other jurisdictions, despite criticism from environmentalists that the targets are too low.

"There is no other jurisdiction in North America that is being as ambitious," he said. "In terms of industrial strategy, Alberta, I think, is the leader on this continent."

While critics say Alberta's $15-tonne carbon tax is too low, it's zero in the United States, he noted. University of Alberta environmental engineering professor Rick Chalaturnyk says the province will also face challenges storing the carbon.

"C02 is anticipated to be injected in volumes which we have just never done before. Most of the projects to date have been relatively small pilot projects of 10,000 tonnes. When you start to get to a million tonnes a year -- those are large numbers."