On October 2, 2014, SaskPower unveiled the world's first
commercial-scale carbon capture & storage (CCS) project at its
Saskatchewan Boundary Dam facility. The
project is expected to reduce emissions by one million tonnes of
CO2 per year, the equivalent of taking 250,000 cars off the road.
Some of the carbon released by the plant will be liquefied and sold
to oil companies to help extract more crude from the ground (known
as enhanced oil recovery), while captured sulphur dioxide will be
sold for industrial use. The remaining CO2 will be injected through
a steel pipeline more than 3km underground where it is to be stored
permanently. Of the $1.4 billion spent to retrofit the Boundary Dam
facility, the federal government provided $240 million.
Proponents of carbon capture and storage cite the approximate
7,000 coal-fired turbines worldwide that provide much of the planet
with reliable electricity. Since world electricity demand requires
these facilities to operate well into the foreseeable future,
investments in CCS technology can significantly help reduce the
harmful impacts they have on the environment. Ian Yeates, Vice
President – Carbon Capture & Storage Initiatives at
SaskPower, for example, stated that "we are going to be
burning fossil fuels as a world economy for many many decades if
not a century or two as energy demands grow...[and as such]
something like carbon capture and sequestration will be of value to
deal with that." Undoubtedly, CCS technology has the potential
to help governments and project managers meet increasingly
burdensome regulatory environments and developing climate change
legislation. Yeates and others believe that the unveiling of the
CCS project at the Boundary Dam facility may pave the way for
others around the world to explore CCS technology and implement it
into their operations. Indeed, strengthening environmental
regulations and rising carbon prices will help justify steep
investments in CCS technology.
Critics believe that projects like Boundary Dam encourage and
justify the continued burning of fossil fuels, and delay the
transition to a low carbon future. The $1.4 billion spent, they
argue, could have been used to build solar and wind farms, or other
renewable energy projects. Others note that CCS technology is
relatively unproven at commercial levels. Costs are also a
significant hurdle to the widespread implementation of CCS. In
order to be economically viable, market prices for carbon would
need to increase significantly; without such increases, CCS remains
heavily dependent on government subsidies.
Just one day after the unveiling of the Boundary Dam project,
Alberta Premier Jim Prentice announced his intention to decrease
his province's funding for CCS. Alberta "has done more
than its fair share at this point in terms of very significant
public investments in CCS...prudence dictates that we should ensure
that we begin to see some commercial viability to these
investments," he said. The premier stated that the province
would honour commitments made for two CCS projects currently being
developed, but that future projects were on hold.
The unveiling of the Boundary Dam project raises novel legal
issues that will have to be clarified as CCS gains traction. Who
will maintain the long-term responsibility for overseeing CO2
deposit sites – the length of monitoring (up to hundreds of
years before CO2 sufficiently bonds with rock) raises the issue of
which entity will be liable for a CCS project? What if CO2 migrates
into neighbouring lands over time? Who will be liable if injected
gasses contaminate groundwater or cause other environmental
concerns? These are just some of the legal implications that will
need to be addressed before CCS can become accepted worldwide.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).