Alberta carbon capture bill in controversy

Alberta's energy minister says proposed rules that could put the province on the hook should anything go wrong with carbon capture projects are the best way to launch the technology, but opponents say taxpayers are paying a high price.

"It's not a question of whether energy will continue to be developed. Rather, it's a question of how energy can be developed in cleaner ways," Energy Minister Ron Liepert told the legislature last week after introducing Bill 24, which is aimed at kick-starting the industry.

"Carbon capture and storage is one of the solutions."

Carbon capture is a leading-edge technology aimed at reducing carbon dioxide, a major contributor to greenhouse gases. The carbon is taken from an industrial source, such as a smokestack, liquefied and shipped by pipe to another location and stored deep underground in porous rock.

'The liability could be huge.' — David Swann, Liberal leader

Proponents say it's the best way to feed the consumer appetite for fossil fuels while reducing the pollution.

Opponents say the technology is expensive and unproven. It's not being done on a large scale anywhere in the world. They also voice health concerns, noting if the concentrated CO2 leaks, it could poison underground water sources or asphyxiate people if released to the surface.

$2B commitment

Alberta has a basin of porous underground rock considered ideal for carbon capture. The province has committed to spending $2 billion on four projects, none of which are expected to begin reducing emissions for another four years at least.

The bill, which is expected to pass in the current session, lays out the rules for the projects, including the thorny issue of who is ultimately responsible if things go wrong.

Liepert says the government will take responsibility, but only after the private sector operator has delivered scientific evidence that the carbon it has stored underground is safe and stable.

The province and operators will also pay into a fund to monitor the sites and pay to clean up orphan sites if the operators fail to do so or go out of business.

David Swann, leader of the Opposition Alberta Liberals, says the province needs to hammer out details such as how long a site must be monitored before it's considered safe and turned over to taxpayer liability.

"This is not completely-understood technology," said Swann. "The liability could be huge. It's not clear yet just how much damage the leaks could create."

NDP Leader Brian Mason said the liability questions speaks to the health concern.

Safety concerns

Taxpayers "are assuming all of the liability. Why? Because the liability is too much for private companies, and that raises issues about the safety of it," said Mason.

Another issue is that the liquid carbon dioxide, once it is sent underground, will stay in the pore spaces of rock, which are akin to the spaces between interlocking brick on a patio.

The legislation spells out that the pore space belongs to the province, even though the minerals may still belong to others, such as freehold landowners, who inherited the subsurface rights from the original land settlers.

"This amendment doesn't in any way change ownership of mines and mineral resources," said Liepert.

Swann said that, too, is up for dispute.

"We've always thought that the people who own the land own the spaces below the land, including the freehold mineral rights owners," he said. "We're gonna sort through some of that in the legislature."

While Alberta has committed $2 billion, the money has been slow to roll out. Only $760,000 has been spent so far on preliminary research and handshake deals with partners.

The province hopes to have ratified deals in place next year for the projects, which are targeted to reduce carbon emissions by five million tonnes beginning in 2015.

It's the cornerstone plan in the province's larger strategy to reduce greenhouse gas emissions by 200 megatonnes by 2050.

Oil royalties possible

Liepert said carbon capture may eventually pay its own way. The same technology used to push the carbon underground could be used to push hard-to-reach oil to the surface in depleted reservoirs, delivering up to $25 billion in royalties.

Paul Hinman of the Wildrose Alliance, said that suggests the eco-part of the carbon capture plan is secondary to helping oil companies, and the government, boost their bottom line, by developing the enhanced oil recovery.

If so, said Hinman, the government should then level the playing field and open it up to all investors through tax incentives rather than delivering public cash to companies such as Shell and TransAlta.

"If enhanced oil recovery is economically viable, then let (the companies) do it, " said Hinman. "Don't just give money to companies. They're picking and choosing, and this government has a very poor track record at picking winners."