Thursday, March 8, 2007

New Alberta CO2 Pipeline: A step in the right direction

I was pleased to learn that Prime Minister Harper has signed on with Premier Stelmach’s proposed CO2 pipeline. This pipeline is a step in the right direction in reducing the Oil Sands industry’s Greenhouse Gas emissions; however, the more significant portion of the costs will lie in the Capture and Compression of this initiative. In addition, Oil Wells receiving this CO2 will likely need to be retrofitted and modernized.

More importantly, we need to ensure that in spite of high growth of the Oil Sands, total Greenhouse Gas emissions are reduced from this industry. Although Carbon Capture & Storage will significantly contribute to this objective we also need to focus on improving energy efficiency of Oil Sands extraction and upgrading.

This comes at a time when both Federal and Provincial governments are reviewing incentive programs for Oil Sands development, namely the Oil Sands Royalty Regime and the Accelerated Capital Costs Allowance programs. Providing incentives to the Oil Sands to have it reduce its total Greenhouse Gas emissions will prove to be costly given the current rate of growth this industry is experiencing. I believe that the above programs can be reformed in order to help the industry reduce its Greenhouse Gas emissions. I have elaborated on how these programs could be reformed in my initial posting below.


Brian said...

Great blog Derek. I like the way that it has practical suggestions for government rather than just the usual complaining I do.

I would like to become more involved in this issue, but I have no idea what I could do to make a difference. Any ideas?

Derek Hachey said...

Dear Brian,

Thank you for your comment and your endorsement on your blog. In regards to your question on how you can help out this initiative, first and foremost I am looking to spread the word and generate a wide discussion on the topic. The actions you took are already contributing to this objective, and any other way you can think to include more people in the discussion would be much appreciated.

My next steps will include revising and republishing the initial paper I wrote to include some anonymous feedback I received (i.e. building a stronger case on why Oil Sands development incentives from the provincial and federal governments are no longer needed, generally outline different approaches to reducing GHG emissions other than Carbon Capture and adding a sunset clause on the proposed new incentives). There were a few other small portions of the document, which could be clearer, that I may revise. I am always looking for feedback on whether this proposal is easy to read and understand. I hope that I could have this completed and published by March 17th.

Another point that I believe needs to be enforced is the use of GHG Intensity as a metric for stewarding our performance in reducing GHG emissions. As you may know, the premise behind this is that we should measure GHG reduction in relation to economic growth (e.g. reducing GHG emissions on a per bbl bases rather than on a total basis). Using this metric at the national and provincial stewardship level is not a true gauge of progress and misleads the public into a false sense of security. This point has and is already a high profile issue, but as we observed from the Alberta Conservatives’ throne speech, the governing party is still using it. I will probably post a short update by mid-week on this topic.

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