From: Reuters
Published January 24, 2008 04:45 PM

Alberta targets emission cuts with carbon capture

By Jeffrey Jones

CALGARY, Alberta (Reuters) - Alberta, Canada's top oil-producing province, will let greenhouse gas emissions rise for more than a decade before emission cuts take hold in a new climate change plan that includes no new restrictions on industrial emitters.

The government of Premier Ed Stelmach said on Thursday it expects to bring carbon emissions 14 percent below 2005 levels by 2050, mostly through capture and storage of the gases blamed for global warming.

But emissions in the province -- where more than $100 billion of oil sands projects are planned -- will rise until around 2020 as oil output triples, according to the plan.


Stelmach said Alberta cannot risk harming its reliability as a key oil supplier to the United States or damaging its own economy. Any new barriers to investment would threaten Alberta's C$74 billion ($73 billion) of annual exports to the United States, he said.

"It would be very difficult to bring in real reductions, immediate reductions, without devastating the economy and the quality of life of Albertans," Stelmach told reporters.

During a trip to Washington this month, Stelmach faced protests by environmentalists urging the United States to eschew Alberta's oil due to the ecological impact of oil sands projects, where companies use chemicals and hot water to extract tar-like crude from sand.

The plants are among Canada's largest carbon emitters.

The "made-in-Alberta" plan says capture and underground storage will make up 70 percent of a targeted 200 megaton cut in emissions over the next 42 years.

"It acknowledges that as a global energy supplier, Alberta's greenhouse gas emissions will rise over the short term. But we will implement technology that exists today that will reduce our emissions over the medium and long term," Stelmach said.

The new climate change strategy, which drew quick condemnation from environmentalists, says 12 percent of the cuts will come from conservation and energy efficiency.

The government also will invest in renewable and alternative energy such as bioenergy, wind and solar power.

Stelmach, who is expected to call an election within weeks, had not been expected to bring in new carbon taxes or other measures directed at industry, especially after he angered the oil patch last year by raising oil and gas royalties.

In 2007, his government began charging industrial emitters C$15 per ton of carbon dioxide above a set limit, and it has been putting the money into an emissions management fund.

Under the plan, that money, along with federal and provincial dollars, will go to a C$500 million contribution to research and develop capture and sequestration technology.

Some firms have been trying for years to develop a pipeline to ship carbon emissions to old oil fields, where the gases can be used to increase output. A new industry-government council will study the costs as part of its mandate, Stelmach said.

Greenpeace said the plan shows the oil industry is directing climate-change policy in Alberta.

"Carbon capture and storage is a high-cost option with long lead times," Mike Hudema, energy campaigner with the environmental group, said in a statement. "Sequestration programs will prevent investment in more cost-effective green energy solutions to global warming."

($1=$1.01 Canadian)

(Reporting by Jeffrey Jones; editing by Janet Guttsman)

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