Province wise to take role in developing carbon-capture technology

Opinion Editorial by AEG President Tim Shipton

Edmonton Journal

June 21, 2011

Opposition parties in Alberta unanimously oppose the government's $2-billion carbon capture and storage (CCS) plan, but we think Albertans need to separate the politics from the reality of living in an oil-producing province such as Alberta.

The reality we face as a society is that the future will be "carbon constrained." That means, whether through taxation or international cap-and-trade schemes, CO2 emitters will be responsible for the cost of those emissions.

As owners of the resource, we have a stake in protecting the long-term value of the oilsands asset. We jeopardize the value of that "asset" if we stand pat and do nothing about carbon emissions.

It makes more sense to develop made-in-Alberta technologies than to send money and jobs outside Alberta in the form of penalties, carbon credits, taxes or reduced market access.

Albertans all share in the successful development of our vast energy resources. As such, the Stelmach government's CCS plan is prudent and forward-thinking, if not politically popular.

We need every tool at our disposal to both meet global energy requirements and dramatically reduce CO2 emissions. These tools include increased use of renewables such as wind and solar energy, more efficient extraction and refining processes and, yes, carbon capture and storage. The crux of the issue is to what extent the government should be involved with funding or facilitating emerging technology such as CCS.

As the elected representatives of all Albertans, who collectively own the resource, the Alberta government is justified in taking a role in proving out CCS technology. Private industry can and should bear much of the burden. But in this case, with the stakes historically high, government investment is needed to speed the process up. We don't need carbon capture and storage 20 years from now, we need it today.

The Stelmach government's carbon capture storage initiative may get us there sooner. And we aren't alone in our pursuit of large-scale CCS. At Statoil's offshore Sleipner project, our friends in Norway have safely sequestered 11 million tonnes of CO2 since 1996. That's the equivalent of taking 175,000 cars off the road for more than a decade. In recent weeks the world's largest CCS project -a 25-megawatt coal-fired power plant -came online in Alabama. CCS is not quite as risky as opposition politicians often suggest. It's not whether CCS works or not -it's working right now around the world. The question is whether the technology can be scaled up and affordably used to make meaningful emissions reductions.

There is, however, significant financial risk for Alberta taxpayers, and for that reason we urge caution. The government must invest where it will get maximum technological advancement for the dollar. We believe the Quest project, being developed by Shell Canada and its partners, is a good example of project-specific funding with a clear and measurable objective -to capture one million tonnes of CO2 annually. And, as University of Alberta Environmental Economist Dr. Andrew Leach has often pointed out, the Alberta government must have a clear exit strategy. Taxpayers must not be asked to backstop the cost of CCS indefinitely, and the government should consider legislation ensuring that won't be the case.

With more than a trillion barrels of oil at our fingertips and economic potential jurisdictions around the world can only dream of, Alberta is in a wonderful position. Rather than bury our heads in the sand and ignore the global movement toward carbon constraint, it's better for all of us to get ahead of the curve and demand that Alberta industry be the best in the world -both operationally and in terms of environmental performance.

The Alberta government can and should play a pivotal role in kickstarting the development of largescale CCS technology. Tim Shipton is president of Alberta Enterprise Group(AEG), a business advocacy group based in Edmonton.

AEG members employ more than 50,000 Canadians in the energy, manufacturing, construction and retail industries and generate billions of dollars in economic activity each year.