Regulatory Framework to Accommodate Geological Storage of CO2 in Alberta

Abstract

This article, written by Senior Technology Editor Dennis Denney, contains highlights of paper SPE 121000, "Guidelines for a Regulatory Framework To Accommodate Geological Storage of CO2 in Alberta," by M. Zeidouni, SPE, M. Moore, and D. Keith, University of Calgary, prepared for the 2009 SPE Americas E&P Environmental & Safety Conference, San Antonio, Texas, 23-25 March. The paper has not been peer reviewed. A variety of methods has been proposed to reduce the effects of carbon dioxide (CO2) emissions. One method is CO2 capture and storage (CCS) in geological formations. Despite exceptional CCS potential in the Province of Alberta, Canada, legal and regulatory issues must be resolved to allow implementation. Without changes, there will not be enough certainty to enable the industry to make appropriate decisions that encourage investment. Introduction The Canadian federal government has announced a national objective to reduce emissions nationally by 20% from current levels by 2020, and by 60 to 70% by 2050. Various target levels have been defined for greenhouse-gas (GHG) emissions in Alberta. Alberta is the first province in Canada to introduce legislation to reduce GHG-emission intensity from large industrial sources. Large companies in Alberta emitting more than 100 000 t/a of GHGs will have to reduce their annual emissions intensity by 12%, or they will be charged USD 15/t (all costs are in 2005 dollars) above the 12% target. Alberta claims that it wants to cut its projected GHG emissions in half, by 200 Mt, by 2050. CCS CCS is a process for reducing GHG emissions into the atmosphere by first extracting CO2 from gas streams typically emitted during electricity production, fuel processing, and other industrial process. Once captured and compressed, the CO2 would be transported by pipeline or tanker to a storage site, often to be injected into an underground storage site (or geological formation). Potential sites for geological storage of CO2 include enhanced oil recovery by use of CO2, CO2 storage (CS) in depleted oil and gas reservoirs, replacement of methane by CO2 in deep coalbeds, injection of CO2 in deep saline aquifers, and CS in salt caverns. Among these options, saline aquifers possess the highest potential for CS in Alberta. Preliminary estimates indicate that the capacity of the Alberta basin to sequester CO2 dissolved in the formation waters at depths greater than 1000 m is on the order of 4000 Gt of CO2. Challenges and Deployment High capital costs and regulatory issues are the main challenges to CCS. Although all the components of CCS technology (i.e., capture, transport, and storage) are available and being demonstrated, they are not fully integrated in commercial-scale facilities. The current cost of CCS is USD 65 to 85/t of CO2. This cost is predicted to reduce to USD 20 to 30/t of CO2 after the technology is fully commercialized, which is expected to occur along with technology advancement after 2020. Financial and regulatory support is needed to make this happen. The industry requires policy and regulatory certainty to assess financial risks of carrying on with investment.