Energy consortium launches Alberta carbon project
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Enbridge Inc, Canada's No. 2 pipeline operator, is leading 19 energy firms in a project to develop carbon dioxide storage in Alberta, but growing emissions from oil sands plants will not initially be part of the study, an executive said on Monday.
The group, which includes such firms as BP Plc, ConocoPhillips, EnCana Corp and Penn West Energy Trust, will spend about C$750,000 ($758,000) over the next year identifying sites for long-term storage of the greenhouse gas in deep saline aquifers.
A second phase would involve a C$20 million-C$30 million pilot project in Alberta -- Canada's biggest energy-producing province and largest emitter of gases blamed for global warming -- that will be designed to receive carbon dioxide.
The consortium, which also includes such power companies as Epcor Utilities, Atco Power Canada and TransCanada Corp, may eventually develop a large-scale commercial project at a cost of more than C$200 million, Enbridge said.
The Alberta and Canadian governments have touted carbon capture and storage -- where the gas is diverted from smokestacks and other industrial sources -- as a tool to reduce emissions while having minimal impact on economic growth.
In a four-decade climate change plan announced last month, Alberta Premier Ed Stelmach said the technology is expected to account for more than two-thirds of reductions. He also said he would make C$500 million in provincial and federal funds available for research and development.
Enbridge Vice-President Chuck Szmurlo said the energy-company plan, called the Alberta Saline Aquifer Project, is a good candidate for the money.
"As I understood the government's discussion of this funding, it was looking for the kind of demonstration projects that did something tangible, that had wide interest and long-term appeal, and I think this project has all those characteristics," Szmurlo said.
Alberta has many briny underground water reservoirs that could be considered, but none near the oil sands hub of Fort McMurray, where more than $100 billion worth of developments are planned, he said.
Some sites could be in areas around Edmonton, where refineries, oil sands upgraders and coal-fired power plants are located, he said.
"You have to have good geology, you have to have a source of CO2, the site would have to be amenable to the environmental and legal things that will have to be resolved and ultimately we'd like it to integrate into the future infrastructure plans that we have," Szmurlo said.
Various companies have discussed the concept of a pipeline to ship carbon from industrial sites to old oil fields, where it could be used to boost output.
Enbridge is in the early stages of considering carbon dioxide transportation options, he said.
"This study is independent of a CO2 pipeline, " he said. "But this study will be mindful of the potential routing of a CO2 backbone pipeline."
(Editing by Peter Galloway)