Canada-Alberta Carbon Capture and Storage Task Force Report Says CCS Vital for Canada’s Future, Calls for Allocation of C$2B in New Public Funding Among Other Actions
1 February 2008
The Governments of Canada and Alberta have released the final report of the Canada-Alberta ecoENERGY Carbon Capture and Storage Task Force. The report, entitled Canada’s Fossil Energy Future: The Way Forward on Carbon Capture and Storage, calls Carbon Capture and Storage (CCS) “vital to Canada’s future, and...a must-have for western Canada.”
The task force identified two main barriers facing CCS today: the financial gap associated with CCS projects today and current gaps in regulatory frameworks. The report outlines a set of recommendations to support the successful widespread deployment of CCS that include: incorporating carbon capture and storage into Canada’s clean air regulations; allocating C$2 billion in new funding to projects through a competitive process; and targeting research efforts to lower the cost of this technology.
The challenge facing every nation is how to make deep GHG emission reductions while continuing economic progress—a complex task given the direct linkages between economic growth, fossil energy use, and GHG emissions. The magnitude of this challenge was recently noted in the Energy Pathways work of the Canadian Academy of Engineering. They note the need for “transformational change”, and that the level of effort required “will not be made through the efforts of individual companies, nor governments acting alone; it will require a coordinated national effort.”
...The magnitude of the reward is clear. Canada-wide potential for CO2 capture and storage may be as high as 600 megatonnes (Mt)/year, or roughly 40 percent of Canada’s projected GHG emissions in 2050.
The task force recommended three immediate actions to get Canada on the pathway to successful CCS implementation, and three subsequent actions to be undertaken as next steps.
The first three require urgent attention as they are intended to address the two main barriers facing CCS today: the financial gap associated with CCS projects today, and current gaps in regulatory frameworks. Canada must overcome these hurdles, and in short order, to succeed with CCS.
Immediate Action #1. Federal and Provincial governments should allocate C$2 billion in new public funding to leverage the billions of dollars of industry investment in the first CCS projects; this funding should be distributed expeditiously through a competitive request for proposals process so that these phase-one projects are operational by 2015.
Funding the first set of three to five CCS projects will result in five Mt of annual CO2 reductions from CCS, and will initiate the process for getting the country on the pathway towards a made-in-Canada solution for reducing emissions and towards global leadership in CCS.
Immediate Action #2. Authorities responsible for oil and gas regulation should provide regulatory clarity to move the first CCS projects forward by: quickly confirming legislation and regulation related to pore-space ownership and disposition rights; clearly articulating the terms for the transfer of long-term liability from industry to government; and increasing the transparency of regulatory processes.
Confirming provincial jurisdiction over the ownership and disposition of pore space, and clearly articulating that industry will not face long-term liability obligations associated with CCS will help create a regulatory environment that is conducive for CCS. The time required to make the regulatory changes should not delay decisions or approvals on the phase-one CCS projects.
Immediate Action #3. Federal and Provincial governments should ensure as much opportunity for CCS projects under the GHG regulatory frameworks as for any other qualifying emission reduction option. This will require the creation of CCS-specific measurement and crediting protocols.
Next Step #1. Industry and both government levels should form a collaborative framework including an advisory group over the next two years to coordinate discussion, to institutionalize learning, and to potentially carry out specific aspects of immediate actions 1, 2, and 3. This may evolve into a more formal organization as future needs are assessed.
Next Step #2. Federal and Provincial governments should provide stable financial incentives to help drive CCS activities beyond the phase-one projects. These may include the continuation of RFPs for phase-two projects, CO2 storage incentives, and/or the use of tax and royalty incentives.
Next Step #3. Canadian-based research organizations and technology developers should focus research and demonstration efforts on CCS to achieve two goals: to drive down the cost of existing CCS technologies; and to enable the deployment of next generation CCS technology and processes—the Federal and Provincial governments should provide financial support for these activities.
The Task Force was formed in March 2007 by Prime Minister Stephen Harper and Alberta Premier Ed Stelmach to recommend the best ways for Canada to implement carbon capture and storage on a large scale.
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