On a cost basis, carbon-capture projects are madness
The small reductions gained by staggering per-tonne costs illustrate what
every independent analyst knows: The Harper government's 20-per-cent
reduction target will not be met
Jeffrey Simpson
The Globe and Mail
Published on Monday, Oct. 19, 2009 5:50PM EDT
Prime Minister Stephen Harper makes so many spending announcements, flying
like Mary Poppins on speed around the country to distribute billions of
dollars, that the news media have given up analyzing any of them.
For the heck of it, let's look back to last week, when Mr. Harper dropped
into Edmonton to announce $343-million of federal money for a coal-fired
TransAlta Corp. carbon-capture and storage (CCS) project. Simultaneously,
Alberta Premier Ed Stelmach announced a contribution of $436-million, for a
total investment of $774-million of taxpayers' cash.
That Harper-Stelmach announcement followed an earlier Ottawa-Alberta one for
a coal-fired Shell carbon storage project. In that case, the combined
federal and provincial contribution was $865-million.
The two announcements – both for coal-fired facilities, the oil sands
therefore remaining untouched – mean about $1.6-billion in taxpayer money in
the years ahead, or about $220 for a family of four.
What do we get for that sum?
We get, at best, a reduction in greenhouse-gas emissions of 2.1 million
tonnes. "At best" because the announcements were tempered with hedging words
such as "could" achieve and "up to one million tonnes." Therefore, something
less than 2.1 million tonnes might actually be captured.
Let's be generous and assume the two projects costing $1.6-billion do in
fact bury 2.1 million tonnes of carbon dioxide, the most-prevalent gas
contributing to global warming. Such a reduction would mean a per-tonne
carbon-reduction cost of about $761 – staggeringly, wildly, mind-blowingly
higher than any other conceivable measure designed to cut greenhouse-gas
emissions. Want a contrast? Alberta has a piddling carbon tax on emissions
over a certain level that companies can avoid by paying $15 a tonne into an
technology fund.
What does 2.1 million tonnes mean in pan-Canadian terms? Canada emits about
720 million tonnes of CO{-2}. Mr. Harper has pledged by 2020 to lower that
amount by 20 per cent, or about 144 million tones. The two carbon-capture
projects just announced, by lowering emissions 2.1 million tonnes, will
therefore achieve about 1.4 per cent of the reductions the Harper government
has pledged at a cost, remember, of $1.6-billion. At this rate, achieving
the 20-per-cent reduction would cost almost $110-billion between now and
2020.
For Alberta? The province, with 11 per cent of Canada's population, is
responsible for about 30 per cent of the country's emissions. Taking 2.1
million tonnes from Alberta's emissions will represent about 1 per cent of
the province's total emissions. As the province's emissions rise, courtesy
of further development of the oil sands, the predicted carbon-capture and
storage gains will necessarily represent less than 1 per cent of total
emissions.
But wait. After these announcements, Alberta has more money left in its
$2-billion fund for encouraging capture and storage. This is the fund the
province whips out to show critics that it is serious about global warming.
There remains about $800-million in the fund, but if future projects are
like the two just announced, once the entire $2-billion is spent, Alberta
might have lowered its emissions by maybe 2 per cent.
On a cost-benefit basis, these carbon-capture and storage projects are
madness, leaving aside the fact that taxpayers are picking up the bill. They
are wildly expensive for the small amount of carbon they will (might?)
prevent from entering the atmosphere. They are most definitely not a
substitute for a serious climate-change policy that, however structured,
must put a price on carbon emissions by those who produce them – either
upstream emitters such as industrial concerns and/or downstream consumers.
The small reductions gained by such large sums also illustrate what every
independent analyst has concluded: The Harper government's 20-per-cent
reduction target will not be met; indeed, it is increasingly being seen as a
joke.
Can anything good be said for these announcements, apart from the nice
public relations they brought Mr. Harper and Mr. Stelmach?
At a stretch, these projects will test technologies that, if successful,
could eventually bring unit costs down and perhaps be exported overseas,
although plenty of other companies and jurisdictions are now in the race to
develop carbon-capture and storage technologies.
CCS will be part of the long-term effort to reduce greenhouse-gas emissions,
but the possibilities of its contribution have been hyped by promoters and
political actors beyond what is reasonable to expect. And the initial costs,
as these projects show, lead to staggeringly expensive per-tonne reductions.
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