As governments and economies across the world wrestle with how to tackle climate change, Alberta’s oil and gas sector is developing technology to help minimize greenhouse-gas emissions and lessen its environmental footprint.
In early September, Suncor Energy announced it would be making a $1.4-billion investment to build a new power cogeneration plant just outside Fort McMurray, Alta. The project wasn’t just an economic boost — the investment would see Suncor stop burning heavy, carbon-emitting, coke-fired boilers to power its oilsands-mining operation in favour of cleaner-burning natural gas.
The day after the announcement, Alberta Premier Jason Kenney was quick to boast about the investment during a speech at the Oil Sands Conference and Trade Show in Fort McMurray.
“It will reduce the greenhouse-gas emissions of the Suncor base plant by 2.5 megatons. That’s the equivalent of taking — get this — 550,000 automobiles off the road,” Kenney told the crowd.
“It is one of the single largest contributions to reducing greenhouse-gas emissions in the history of Alberta’s economy … and one of my favourite aspects of this new development? No government subsidies.”
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It’s true that Suncor made the decision to invest such a significant amount in a technology that will lower greenhouse-gas emissions without direct government support, but experts point out that had it not been for significant government investment, this technology wouldn’t be as attractive to industry.
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“The reality around these new technologies is they do require some early support in the form of subsidies, whether it be a direct grant, a tax incentive or a price on carbon,” said Steve MacDonald, CEO of Emissions Reduction Alberta, an organization created in 2009 to invest money collected from Alberta’s industrial carbon levy into new technologies that reduce greenhouse-gas emissions.
“We’ve done some innovations in that combined heat and power technology being used by Suncor. Government had some involvement in the early stages of de-risking the technology, but now Suncor has made its own investment because the technology has been proven cost-effective and reliable.”
In recent years, oilsands development and production has become cleaner. According to Natural Resources Canada, greenhouse-gas emissions have fallen 28 per cent per barrel of oil produced in the region since 2000. However, overall greenhouse-gas emissions from the sector are on the rise.
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“Of course, emissions have increased, simply because there’s been more production over the years,” said Eddy Isaacs, an executive fellow with the University of Calgary’s School of Public Policy. “I think you’re looking at an industry that has been very proactive in making changes needed but I do think extra incentives through carbon pricing is going to help.”
Isaacs says developing new technologies around carbon capture, sequestration and storage is also an important part of the solution.
In Canada, there are three major operations successfully taking CO2 from the atmosphere. In May, Shell Canada’s Quest carbon capture and storage facility reached a significant milestone. The facility had safely stored four million tonnes of CO2, which is equal to the annual emissions of about one million cars.
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“I think these are extremely successful projects and have shown that Canada can actually lead the world in carbon capture and storage,” Isaacs said, though he cautions that globally, there is still a very long way to go.
“For instance, Shell estimates that in the next 50 years, we’re going to have to build 10,000 very large-scale carbon, capture and storage facilities to make a dent in the carbon emissions on a global scale. We have probably 50 projects right now.”
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