Is this our Great Green Hope?

Last Updated: Saturday, December 05, 2009 | 03:22 PM EST

Financial Post

Jean Borlée is standing in a prairie field dotted with pumpjacks, round bales of hay, cattle and cow pies because his company, Luxembourg’s steel giant ArcelorMittal, needs help.

He has made the long voyage from his home in Liège, Belgium, to this tiny southeastern Saskatchewan community as part of a trip requested by the French government, in the hope of learning more about a new, but unperfected, technology in the fight against global warning called carbon capture and storage (CCS).

Weyburn, after all, is home to the largest CCS facility in the world.

“My company is launching a project for CO2,” he said, looking up at a nodding black-and-orange Lufkin pumpjack owned by Cenovus Energy Inc., the operator of the nine-year-old CCS operation. “We have few contacts, so we have to make contacts … These people have been storing CO2 for [nine] years, so that’s the best practical experience worldwide.”

Global carbon-dioxide emissions topped 27 billion tonnes in 2003, a 19% increase over 1990, according to the World Bank. Companies such as ArcelorMittal, which must use coal — a key culprit of carbon-dioxide emissions — to produce steel, are racing to lower their emissions as jurisdictions impose financial penalties for polluting.

Indeed, the European Union is ahead of North America in that regard, but it is widely believed companies on this continent will eventually face financial consequences as well.

“We want to take leadership in this domain, too,” Mr. Borlée said. “We know we have to do it.”

Resource-industry officials, scientists and politicians from around the world have flocked to Weyburn because CCS — a process by which carbon dioxide, the byproduct of fossil-fuel development, is pumped underground and trapped in saline aquifers or rock formations once inhabited by oil and gas before industry pumped them clean — has been elevated to the top of the list when it comes to climate-change solutions.

Alberta, home to much of Canada’s oil-and-gas industry, has led the way, committing $1.956-billion of its $2-billion climate-change fund to four CCS projects since October. Ottawa has pitched in as well, but not to the same extent.

“CCS is at the core of our efforts to meet our goals under Alberta’s climate change strategy,” Ed Stelmach, the Premier of Alberta, said last week as he pledged $495-million over 15 years to a new CCS project. The province is committed to reducing projected emissions by 200 megatonnes by 2050, with 70% of the reductions coming from CCS projects.

But with the United Nations Climate Change Conference in Copenhagen set to begin on Monday, critics say politicians may be putting too much hope in a system that is still a tangled mess of challenges. The problems range from technical to social, from capacity concerns to transportation logistics. Then there is the financial costs of capturing CO2 versus the financial penalties that may arise from ignoring it.

“Everyone is very much aware that there are a lot of doubts regarding this technology and that will make it very difficult to agree on binding commitments for this technology [at Copenhagen],” said Heleen Groenenberg, a senior researcher at Energy Research Centre of the Netherlands, which advises the Dutch government. “It will be difficult, but not impossible,” she then added.

The lengthy list of challenges explains why Mr. Borlée ended up in southern Saskatchewan on a sunny November day. He, along with 53 other French and Canadian academics, government advisors and industry players, spent two days in a conference room at the Hotel Saskatchewan in downtown Regina sifting through the science behind CCS before heading to Weyburn, 100 kilometres away. The session, called the First France-Canada Carbon Capture and Storage Workshop, was organized by Saskatchewan’s Petroleum Technology Research Centre, the French Embassy in Canada, and France’s IFP, formerly the Institut Français du Pétrole.

For the most part, companies, even governments, are forging ahead with CCS projects more out of self-interest than righteous concern for the environment. At his recent CCS funding announcement in Alberta, Mr. Stelmach said the technology will not only address climate change, but increase the efficiency of oil recovery.

“It is good news for the economy. Every barrel of oil recovered using CCS means more revenues for Alberta,” he said.

And the reason why ArcelorMittal is in Saskatchewan fine-tuning blueprints is because of carbon-tax legislation.

The Weyburn project, while hailed for its pioneering green ways, exists only because capturing carbon dioxide is a lucky byproduct of Cenovus’s efforts to squeeze more oil out of the ground. The company, which was spun off last month by Calgary-based Encana Inc., pumps CO2 underground to create pressure to push up viscous oil that is otherwise out of its grasp. Cenovus pipes its CO2 332 kilometres to Weyburn from a coal-gasification plant in Beulah, N.D.

Back at Weyburn, the French and Canadian group looked more like tourists than scientists. They arrived on a chartered bus, gawked at the mechanical bobs of the pumpjacks in farmers’ fields, giggled at the cow patties and took pictures of the yellow pipes that poked out of the ground at injection satellites.

The real magic at Weyburn is found in unobtrusive fibreglass huts. Allan Greeves, the head of Cenovus’s Weyburn operation and the tour guide, opened a door on one of these shelters so the scientists could view the monitoring equipment and the cluster of yellow, stainless-steel pipes that sprout up a few feet from the ground and emit a hissing sound — all that’s needed to inject the CO2 into the ground. The machinery in one hut pushes enough CO2 underground to service up to nine oil wells.

To these scientists, who flew 6,993 kilometres from Paris to Regina, and then travelled on to Weyburn, it is an awesome sight.

“It is even more interesting than I expected,” said Maurice Bouteca, the director of the exploration-production technology business unit at IFP, after peering inside the hut. “What is important, especially in the CO2 area, is showing — making people understand, seeing how it works — that it can work. That’s what is important.”

Therein lies one of the biggest challenges facing CCS. Public acceptance was a major theme at the Regina conference and on the Weyburn tour. Not-in-my-backyard protests in Europe over CCS projects have been increasingly vocal, although in Canada there has been relatively little objection. Safety concerns, such as the potential for leaks, top the list.

Royal Dutch Shell PLC, for example, is working on a project in the Netherlands, near Barendrecht, and has faced “massive protests,” said Ms. Groenenberg in a telephone interview. Local decision makers quashed the project, but the national government overruled them. The local politicians, she said, may turn to the courts to block Shell’s project.

Jean-Claude van Duysen, from Electricité de France, the Paris-based utility giant, best summed up the concerns voiced at the Regina conference. “You could have the best technology in the world, but if the public doesn’t want it, it is useless.”

Even if governments and industries can prove the process is safe, not all the Earth’s layers are as welcoming to CO2 as those in Alberta and Saskatchewan. There are only so many caverns where CO2 can be stored, another factor limiting CCS.

Cenovus’s Weyburn operation has buried about 15 million tonnes of carbon dioxide so far, with the potential to hide up to 30 million tonnes as part of its oil production, and room for an extra 25 million tonnes on top of that — a small dent in a massive problem.

Moreover, experts such as Hugo DeLasa, director of the University of Western Ontario’s Chemical Reactor Engineering Centre, say that it is the cost of capturing — not storing — CO2 that is one of biggest obstacles facing CCS.

In a power station, for example, fuels such as methane or coal are burned with oxygen in the air, forming a mix of CO2 and nitrogen, Mr. De Lasa explained. Nitrogen makes up about 80% of the mix, with CO2 accounting for the rest. In other words, for every four molecules of nitrogen, there is just one molecule of CO2. That makes a storage headache.

“The issue is you can’t put all that CO2 highly diluted in nitrogen underground,” Mr. DeLasa said. “The nitrogen has to be separated prior to burying the carbon dioxide. This is the challenge. If you analyze the cost of CO2 capture, it is 70% separation costs.”

Existing methods of separating CO2 and nitrogen, he said, are extremely expensive. “We have to solve this problem of CO2 and nitrogen separation. This is an issue of great importance for Canada.”

Christine Schuh, the head of PricewaterhouseCooper’s Canadian climate-change team, argues the thicket of unanswered policy questions could further stymie CCS advancements.

Should companies capture CO2 for the sake of it? Legislators have yet to sort out who would be awarded environmental red ribbons for their efforts.

Upping the ante even more is that CO2 itself is morphing into a commodity. So, does a coal facility that captures CO2 and pipes it to a dried-up oilfield for sequestration earn a carbon credit? Or should the oil company that stores it be rewarded? When CO2 is shipped across borders, as is the case with Cenovus’s Weyburn project, should the United States’ net carbon-dioxide emissions tally go down and Canada’s climb? Or does Canada’s stay neutral because the substance never made it into the atmosphere?

In the end, while CCS makes carbon dioxide go away, at least temporarily, it does not change human behaviour.

“One of the problems is it is a relatively short-term solution,” Ms. Schuh said of CCS. “It doesn’t enhance our chances of moving to a less carbon-intensive economy.”

[email protected]

SOURCE ARTICLE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.