December 10, 2007

Industry network proposes strategy for staged, large-scale carbon capture and storage development

Canada is in a unique position to take advantage of carbon capture and storage (CCS) technology and, in so doing, become an environmental and energy leader, says a new industry study.

The large-scale CCS system proposed by the Integrated CO2 Network (ICO2N), a group of 15 energy sector companies, presents Canada's single largest greenhouse gas (GHG) reduction opportunity, with the potential to reduce carbon dioxide (CO2) emissions by 20 million tonnes annually. This is the equivalent of removing four million cars from the road, says the ICO2N report, Carbon Capture and Storage: A Canadian Environmental Superpower Opportunity.

In addition to outlining the environmental and economic benefits of CCS, the report details the measures necessary to implement a large-scale CCS system in Canada, capitalizing on the geology of the western Canadian sedimentary basin. This natural formation, says the ICO2N, provides reservoirs, relatively close to hydrocarbon developments, with vast subsurface storage capacity for CO2.

Geological formations such as depleted oil and gas reservoirs, coal formations and saline aquifers have proven safe for storing other gases and liquids (i.e. trapping crude oil and natural gas underground for centuries). CO2 injected into the permeable rock, which is capped by a layer of impermeable rock, would remain trapped there.

The proposed ICO2N system targets large sources of industrial CO2 emissions in Alberta, including coal-fired electrical generation and energy production. The approach outlined in the report consists of three distinct components: capture, storage and transportation.

The network would move CO2 captured from multiple sites via pipeline, to buyers for use in enhanced oil recovery (EOR, a process in which CO2 is injected into mature oil fields to increase resource productivity) and to depleted oil and gas reservoirs for permanent storage.

This, says the report would allow Canada to address the global climate change challenge while continuing to use its extensive coal reserves for power generation. It would also permit continued growth in petroleum-based energy production with lower CO2 intensity.

The ICO2N says it makes both environmental and economic sense to develop initial CCS projects in the context of a longer-term, large-scale system to be built in stages. It notes, however, that decisions about a phased, integrated CCS system require a focus on Canada's long-term environmental and energy policy objectives (i.e. for 2020 and beyond). Accordingly, close co-operation between industry and government will be needed relating to CCS design and funding, as well as to policies surrounding this technology.

A strategy for developing a CCS system should be aimed at designing a large-scale system that would be built in phases. This, says the report, would result in major emission reductions while accelerating the development of an EOR market for the purchase of CO2. Phased development of the system would also allow economies of scale which in turn would lower costs. With such a strategy, CCS could mitigate the release of millions of tonnes of CO2 per year, says the ICO2N. At the same time, it emphasizes that a large-scale CCS system designed solely to meet climate change objectives would not be economical in and of itself.

"This report is designed to create greater public awareness of CCS and the significant role we believe it should play as part of Canada's climate change response," said Stephen Kaufman, head of the ICO2N steering committee. The ICO2N group of companies includes Suncor Energy, Nexen, Shell Canada, Epcor; TransAlta; Husky Energy; Air Products Canada; Keyera; Agrium; Sherritt International; Total E&P Canada; ConocoPhillips; Syncrude Canada; and Imperial Oil.

The report, along with supporting materials, may be viewed on-line at www.ico2n.com.

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