ASSESSMENT CALLS FOR CLEARER CCS REGULATORY OVERSIGHT IN ALBERTA

Tamar Hallerman
GHG Monitor
8/23/13

The Alberta government needs to do more to clarify the regulatory process surrounding the oversight of carbon capture and storage projects, particularly related to the responsibilities of regulators and the permitting, reporting, monitoring and post-closure requirements for proposed ventures, a draft report commissioned by the province states. The Alberta government released a draft CCS Regulatory Framework Assessment earlier this week, asking for public input on dozens of conclusions and recommendations for CCS oversight in the province. “We must ensure CCS is conducted in the safest and most environmentally responsible way possible. That’s why we have been working with world experts and local leaders to look at how we can improve the regulations we have now, and it’s why we are asking the public for their say,” Alberta’s Energy Minister Ken Hughes said in a statement.

The assessment recommends that the province tighten up its definitions for what constitutes CCS, enhanced oil recovery and acid gas disposal projects, since each type of project is subject to different regulatory frameworks in Alberta. Particularly in the case of CCS, the assessment says the regulatory and approval process needs to overall be clearer and more efficient, especially when it comes to defining the roles and responsibilities of each regulator. The report says regulators should do more to require the demonstration of capacity, injectivity and containment factors, as well as mandate robust CO2 monitoring, measuring and verification plans in order to more properly manage risk. The document states that regulators should also qualify details related to closure, post-closure stewardship and liability transfer to the government. It also calls on substantial public communication efforts, as well as more research into leak detection methods and the use of amines in post-combustion capture systems.

Input from 100+ Experts

The assessment is the result of a two-year process in which the Alberta government convened a group of more than 100 experts from industry, academia, government and environmental NGOs to formulate a batch of recommendations ahead of the province’s large-scale CCS projects coming online. The review group examined current rules for CCS in Alberta related to planning, monitoring, safety, environmental protection and the long-term needs of storage sites, and also took into account best practices from elsewhere around the world before issuing their recommendations. 

The recommendations are part of a larger regulatory and political reform effort in order to incentivize CCS in the fossil fuel-heavy province. Alberta has funneled considerable resources into CCS over the last five years since the province said in 2008 that it planned to utilize the technology to provide 70 percent of the province’s greenhouse gas reductions by mid-century. In addition to commissioning the CCS regulatory framework assessment and putting in place a $15 price on carbon, Alberta leaders pushed to define pore space ownership in the province, as well as long-term liability transfer for CO2 storage projects post-closure.

Two Large-Scale Projects Remain in Alberta

The province also initially set aside $2 billion to fund four large-scale CCS projects, one of the largest commitments from any government. Two of those projects have fallen away in the last 18 months—TransAlta Corp. abandoned plans for its $1.4 billion post-combustion retrofit, Project Pioneer, last year due to lack of demand for the project’s CO2 and political instability, while the Alberta government cancelled its funding agreement with the Swan Hills coal gasification project earlier this year after its developer said the project’s synthetic gas would be uneconomic given the recent low gas prices. It appears that the roughly $700 million in provincial dollars allocated to those two shelved projects will be returned to the treasury and not reprogrammed to other CCS projects.

Meanwhile, the two CCS projects remaining in Alberta have been very visible over the last calendar year, when both projects—both of which are capturing CO2 from oil sands refineries—moved into the construction phase. A trio of oil and gas companies led by Royal Dutch Shell made international headlines last fall when they made a final investment decision on the $1.35 billion Quest project. That project, which is retrofitting capture technology on to Shell’s existing Scotford oil sands upgrader near Edmonton, is slated for operations in late 2015 and began construction work late last year. Work also continues on Enhance Energy’s Alberta Carbon Trunk Line, a pipeline infrastructure project that aims to connect several CO2 sources in Alberta’s ‘Industrial Heartland’ to depleted oil fields about 150 miles south. One of the oil sands-capture projects that will be linked to the pipeline, North West Redwater Partnership’s Sturgeon Refinery began construction late last year. Both Quest and the Trunk Line projects are expected to reduce the province’s greenhouse gas emissions by 2.76 million tonnes a year in 2016. Despite those two projects, some have said that the province has not done enough to ensure that a CCS industry can survive in Alberta beyond an initial demonstration phase.