Canada: Saskatchewan Unveils World's First Commercial-Scale Carbon Capture & Storage Project

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.

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