STOP: Stop Tar Sands Operations Permanently

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$2 Billion Dollar Greenwash

Posted by mhudema on July 10, 2008

The cost of green
Calgary Herald
Published: Thursday, July 10, 2008

Sometimes, one just does what one must. Such is the case with the provincial plan to put $2 billion of an expected surplus wholly attributable to resource royalties into pumping the energy industry’s carbon dioxide exhaust back into the ground.

Recognize it for what it is, a $2-billion public relations campaign to arm provincial cabinet ministers against critics of Alberta’s supposedly dirty oil. “No, we’re not pumping CO2 into the air: In Alberta, we bury it. Next question?”

It has to be viewed that way, because otherwise it’s a lot of money for not much.

Environment Canada’s National Inventory Report on Canadian greenhouse gas sources gives the perspective.

Nationally, Canada produced 721 million tonnes of CO2-equivalent in 2006. Alberta was responsible for 234 million tonnes.

When fully implemented in 2015, the government’s $2-billion plan will capture and sequester five million tonnes of it annually.

That’s two per cent. Or it’s about 3.4 per cent of the 146 million tonnes of CO2 produced by the province’s electrical generators and its energy industry — perhaps the more reasonable comparison, as vehicle and residential emissions are scarcely amenable to capture.

The $2 billion will be distributed as grants to build the necessary infrastructure of carbon capture, pipelines and compressors — steel in the ground, so to speak, and by Premier Ed Stelmach’s account, a well-understood technology. The only thing is that assuming all this infrastructure lasts 20 years, it will still bury just 100 million tonnes of CO2, but at a capital cost of $20/tonne. Then there’s the cost of fuel to run it, maintenance and operators’ wages.

In other words, it’s not rocket science, just astronomically expensive. Herein lies the rub.

Provincial regulations require large emitters that don’t meet their CO2 reduction targets to pay a levy of $15/tonne. Assuming government mathematics are correct, it’s obviously cheaper to pay the levy. Therefore, to get industry to buy into its preferred carbon-capture and sequestration answer to climate-change, the government basically has to provide the machinery at no cost, and hope industry can run it for less per tonne than the levy. (The government’s ability to encourage buy-in by simply hiking the levy is limited. Generators pass it along to customers — who vote — and oilsands producers have the price of their product set outside Alberta, making them and their royalties vulnerable to market volatility.)

It is tempting to dismiss the whole thing as a boondoggle. Yet, that would be a mistake.

There are collateral benefits. A lot of oil remains in reservoirs officially classified as depleted — as much as 70 per cent. Repressurizing these old fields with CO2 is likely to increase conventional oil production. Likewise, some of the $2 billion expended on fabrication and construction will also come back to the government in taxes.

The principal benefit, however, is indeed the gain in public perception outside Alberta referenced above.

The people who buy Alberta’s oil need more than a good product at a fair price: they also need cover, in this case, green cover. This gives it to them.

And helps the environment.

© The Calgary Herald 2008


5 Responses to “$2 Billion Dollar Greenwash”

  1. Tired of Greenwash said

    The only greenwash of the week is this website. If the government and the industry do nothing – you complain. If they do something – you complain. If you are serious about making a difference and not only serious about getting on the front page of the paper – bring some balance to the debate like the other serious groups like Parkland or Pembina. Hell even the big bad oil industry these days are listening more than you guys are.

  2. mhudema said

    Hi Tired, appreciate your comment. It’s tough to get excited about a $2 billion dollar industry subsidy that won’t do much to actually decrease emissions. To me the biggest measure of how successful a climate plan is, is how much overall emissions in the province decrease. Under the governments plan emissions are expected to keep going up for well over the next decade.

    The $2 billion dollar investment in transportation was a good step. We sorely need more dollars for mass transport and this will be a good injection just sorry the full $4 billion didn’t go in this direction.

  3. Aaron said

    For $300 million, a private company is building a pipeline that can ship over 9 million tonnes annually. That’s a much better bang for the buck than what the Province is proposing, although the timing of this project is a little suspicious, given its close proximity to the recent announcement.

    Enhance plans Alberta carbon dioxide pipeline

  4. Tim said


    ‘Tired’ is right. If gov’t does nothing, you complain. If they do something, you complain. Which is odd, especially in this case, since with sequestration you can come to a defensible estimate of how much CO2 will be captured and at what cost. A carbon tax plan does nothing like this. Neither does cap and trade. And the latter two plans make no accounting for any negative economic impacts with respect to investment.

    You and your organization would have some credibility if your default position was something other than “no development, nowhere, at no time”. The name of this blog says it all. You do nothing to advance responsible development like the other organizations listed in the earlier comment, which at least occasionally acknowledge that we need an economy in this province and cannot all be paid ‘activists’. You don’t attempt to differentiate between new technologies, and mining versus SAGD. It’s all big, bad and dirty oil to you guys.

    You would at least have got partial credit if you had publicly praised the transit investment. But I guess that is not as exciting as rapelling from the ceiling. And it wouldn’t fit with your “the AB gov’t is evil and we Greenpeace are on the side of the angels” fundraising gig.

    Aaron’s comment shows some thought, but he mistakes simple transport for capture and sequestration. The two are not the same, and hence will not have the same cost estimate. It is also clear – to me, if not the Herald – that the $2 billion will be used to provide financial assistance to a number of projects, and not just represent one investment with gov’t money only. Sequestration may see a partial cost offset if additional oil is extracted, which would contribute to provincial royalty revenue.

  5. mhudema said

    We did actually publicly commend the transit funds. It’s not enough but it is a step in the right direction. When the government does good things with respect to the environment we do try to recognize it but to be honest its not that often.

    On the CCS side the plan will reduce emissions by five million tonnes, or the equivalent of taking one million cars off the road by 2015.

    In that same time, the tar sands are projected to grow by 76 million tonnes, or the equivalent of putting 15.2 million cars on the road.

    The plan is to by 2050 reduce GHG emission to 14 per cent below 2005 levels (about 200 million tonnes). This leaves us only 166 million tonnes short of where scientists say we need to be by 2050 to avoid the worst effects of global warming.

    We do need energy to heat our homes but very little if any of that is coming from the tar sands. In fact the tar sands consume enough natural gas to heat 300,000 Canadian homes.

    The world is turning to cleaner sources of energy and we are heading in the opposite direction. It’s time that we built an energy economy of the 21st century and start leading the world in clean energy. That’s the Alberta I would love to see.

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