Putting a price on carbon sequestration

Tyler Hamilton of the Toronto Star has an excellent piece today on the potential costs of capturing and sequestering carbon dioxide, in this case from Ontario’s massive Nanticoke coal-powered electricity plant. This won’t come cheap, Hamilton finds, even though there’s at least one site nearby that ought to be excellent for storing liquid CO2:

Calgary-based Talisman Energy currently drills natural gas wells on Lake Erie, where more than 2,000 have been drilled since 1913. About a quarter of those are active, and the gas that’s retrieved is transported over a 1,500 kilometre pipeline along the lakebed.

“Talisman has the ability to drill wells out in that environment,” says Terry Carter, a geologist with Ontario’s Ministry of Natural Resources. “If this kind of (carbon storage) activity were to take place on the lake … they have the equipment required to do it.”

The cost: somewhere between $7 and $14 per tonne, according to the one study that’s been done on the subject, and that doesn’t include the cost of capturing it in the first place, which is not small in a 35-year-old, 4,000-megawatt generating station. According to Environmental Defence — not a disinterested source, but one with a strong interest in presenting accurate information — Nanticoke emitted more than 17.6 million tonnes of carbon dioxide and equivalents in 2005 (according to the province, that’s down from d a couple of years before), so sequestration would cost between $123 million and $246 million, assuming the research on the subject is correct.

The Nanticoke plant is slated to be closed by 2014 anyway (the latest in a line of promises from the Ontario government about closing coal-fired generating plants, but they’ve started to make real progress and the deadline seems entirely plausible), so it’s not an urgent concern, but this work sheds some light on the importance of lining up the incentives for operations such as Nanticoke. It needs to be the operator’s problem.

While Nanticoke is the biggest greenhouse-gas emitter in the country, according to Environmental Defence’s numbers, private facilities belonging to oilpatch operators like TransAlta, Syncrude and Epcor are also in the multimillion-tonne range. The cost of sequestration obviously depends a great deal on geology and other factors that vary widely, but they aren’t going to do it for free.

Coincidentally, the Guardian also reported today on British energy firms seeking government support for carbon-sequestration projects:

Gordon Brown has spoken about Britain becoming a pioneer in this revolutionary sector and the energy white paper outlined the criteria by which companies would compete for part-funding for trials. However, oil and electricity providers are understood to have privately told ministers they will need more than £300m for each of the three expected experimental facilities, according to industry sources.

BP, one of the companies pushing to proceed with an experimental hydrogen plant using carbon capture in a North Sea oil field has abandoned its plans due to government delays. Other companies are now threatening to do the same unless ministers accept they must make a significant investment, said the source.

Seems to me Tyler Hamilton reaches the only sensible conclusion on his personal Clean Break blog, that renewables, conservation and efficiency are vastly preferable alternatives to any of this stuff.


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