(Part 2 of a 3-part series)
It’s dawning on us, here in oil-rich Alberta.
If we don’t solve this CO2 emission thing, we could be doomed to go the way of the Maritimes, the way of Detroit and the American “rust belt”, the way of so many once-thriving, now-economically-depressed regions that did not adapt to changing circumstances.
“It’s not complicated,” says Ian MacGregor, the visionary behind the $8.5 billion state-of-the-art Sturgeon Refinery, now being built north of Fort Saskatchewan.
“To produce any oil-based products, we need hydrogen. For every molecule of hydrogen we make, we produce a molecule of CO2.”
“We’re in a hole to begin with,” says MacGregor.
“But a hill can be built in the hole. We have the tools and technology to flip CO2 from an environmental liability to a value-added asset.”
That’s exactly what’s happening today.
Hand-in-hand with construction of the Sturgeon Refinery is the building of the 240 kilometre-long Alberta Carbon Trunk Line.
All the CO2 emissions from the Sturgeon Refinery will be collected, compressed and sent down the carbon-only pipeline, to be pumped into three depleted conventional oil reservoirs/deep wells in Central Alberta.
The pressure from the injected CO2 will bring the wells back to life.
Half the oil is still in those wells. With the added CO2 pressure, half of the half still in the ground can be economically retrieved.
If we want to stay in the energy game, Alberta has to prove to the world that “green oil” is not only possible, but practical. “If we’re not right about CO2 capture,” MacGregor said in a speech to the Alberta Enterprise Group last month, “then bitumen will go the way of coal.”
Carbon capture is nothing new. The technology has long been proven. In Saskatchewan where CO2 from a coal-burning plant is pipelined to Weyburn, where it has both buried CO2 and economically revitalized depleted oil wells for decades.
The immediate challenge is the infrastructure cost. The first phase of the Alberta Carbon Truck Line, from the Sturgeon Refinery to the Central Alberta wells, is a billion dollar project. \Shell’s Quest carbon-capture project collects and ships CO2 emissions from its Scotford Refinery to underground storage wells near Thorhild, some 65 kilometres away. Quest is a $1.3 billion project.
In each case, in the name of environmental clean-up, the provincial and federal governments are covering more than half the cost. While the Notley government has yet to announce where its 2017 carbon tax revenue will go, carbon capture and storage will likely be high on the list.
MacGregor convincingly argues that carbon collection pipelines must be viewed as an essential public service, vital to the long-term economic well being of Alberta.
The government subsidy, he suggests, makes it possible to build a carbon-disposal pipeline for the future, with the capacity to carry 10 times as much compressed carbon as at next year’s start-up.
He expects most existing petro-chemical and oil processing plants in Northern Alberta will hook into the carbon-disposal pipeline (or pipelines), if only as a less-costly alternative to financial penalties for excess carbon emissions.
It’s a win/win/win, says MacGregor.
Carbon emissions are greatly reduced, enabling Alberta and Canada to meet CO2 reduction targets.
Revitalizing depleted oil wells with CO2 injection will produce additional royalties, sufficient to cover the government’s carbon capture investment.
The conventional oil economy of Central Alberta gets a shot in the arm through re-vitalized conventional oil production.
Some environmentalists oppose CO2 injection on the grounds it will produce more (conventional) crude oil. Countering that argument is the fact low-emission fossil fuels are slowly being accepted as part of the range of clean-energy choices now available.
Massive government involvement is not new. In the ‘50s, the provincial government built the Alberta Gas Trunk Line to capture natural gas then being flared as a waste product, to use that gas as a feedstock for the fledgling petro-chemical sector. That public investment has paid for itself many times over.
If the Alberta Carbon Trunk Line and the Quest project prove successful, perhaps the Notley government may be persuaded revisit its ban on all coal-burning plants by 2030. If the same air quality goals can be achieved through carbon capture and storage, why kill an industry?
(Next in the Sturgeon Refinery series: Making diesel fuel versus shipping diluted bitumen.)