Royal Dutch Shell PLC inked a deal Friday with the Canadian government to develop technology to control oil emissions.

The province of Alberta announced it would provide C$745 million to test carbon capture and sequestration technology on Shell's Scotford Upgrader, which is similar to a refinery for processing heavy oil. The Canadian government will chip in an additional C$120 million, making the project one of the most expensive attempts to control carbon dioxide output from Alberta's oil sands region.

The deal, which comes as debate rages about the carbon footprint of the Canadian oil sands, is the first test of whether greenhouse gas output from upgraders can be controlled, according to Shell. The project -- which will receive the money over a 15-year time span -- would inject 1 million metric tons of C02 underground for permanent storage in saline rock formations. The injections would start in 2015.

"By continuing to move CCS technology forward, Alberta is demonstrating its ongoing leadership in realizing the commercial-scale deployment of this technology and greening our energy production," said Albertan Premier Ed Stelmach in a statement.

The project is part of a $2 billion initiative by the province to deploy carbon capture and sequestration, or CCS, a technology that has never been proven at scale. It typically is associated with coal plants, but also is being looked at increasingly to curb emissions from other fossil fuels.

The carbon footprint of Canadian oil sands is a source of debate on both sides of the border, since oil from the oil sands is more carbon intensive to produce than oil from traditional drilling. Oil sands crude must be blasted or heated out of thick sand formations.

According to a January report from a Canadian government panel, oil sands production is a chief factor why Canada's emissions are growing at a faster rate than those of the United States.

In the United States, much of the focus of critics has been on the Keystone XL pipeline. If built, it could double the amount of Canadian crude imported to the United States.

In a public letter in June, NASA scientist James Hansen wrote that "if the tar sands are thrown into the mix" with other fossil fuels, "it is essentially game over" for the planet.

Enviro groups say deal will increase emissions
On Friday, other environmentalists complained that the CCS proposal actually would raise Alberta's emissions over time, since the province simultaneously changed the way companies can receive offset credits under a provincial greenhouse gas law as part of the announcement.

Now, they will be able to receive double the credit to reduce overall emissions for every metric ton of pollution reduced via CCS projects that store carbon dioxide permanently.

That means companies will be able to avoid more emissions at their own facilities simply by counting CCS as a "double" offset under provincial law, said Chris Severson-Baker of the Pembina Institute, a Canadian environmental think tank.

"This defeats the whole purpose of doing CCS in the first place," said Severson-Baker. He said his organization is not opposed to testing the technology but said Canada should do so in a way that will actually decrease greenhouse gas emissions.

Alberta currently requires industrial companies to pay $15 a metric ton of carbon if their emissions rise above a certain level, which many environmentalists say is too low of a price to alter corporate behavior. According to Severson-Baker, the province had the option of raising the carbon price if it wanted to give a financial boost to carbon capture and sequestration.

But supporters of oil-sands production have long said that criticism of the industry is overblown, considering that Canada constitutes 2 percent of global emissions, with the oil sands contributing a tiny fraction -- 5 percent -- of that number.

5 Comments

1. 1. sault 01:11 PM 6/27/11

   THIS IS AN ABSOLUTELY HORRIBLE WASTE OF MONEY!!!
   
   To capture and sequester JUST 10% of the world's CO2 emissions in this manner, we would have to pump the same volume of CO2 into the ground as the ENTIRE oil industry takes out of the ground in crude oil. All those trillions of dollars in oil drilling equipment would need to be duplicated somehow, just to capture 10% of the CO2 emissions that are destabilizing our climate. This is just a cynical political ploy to clean up the public relations problem that the Tar Sands has.
   
   Here, I'll make their job even harder so this boondoggle is even more repulsive:
   
   Just to extract and upgrade the tar sand bitumen into a refinable crude oil product requires an amount of natural gas that has 25% of the energy content of the crude oil. So for every 4 units of energy in a barrel of tar sands crude, they already had to burn 1 unit of natural gas just to get it to the refinery.
   
   Then it still needs to be refined into petrochemicals, using still more energy. It is estimated that just the ELECTRICITY used to refine a gallon of gasoline could power an electric car just as far if not farther than that gasoline would in a regular car.
   
   These tar sands operations still have huge sludge waste ponds from their extraction and upgrading operations that sit perilously close to the pristine rivers and boreal forests of the region. They need to regularly set off small artillery pieces to frighten away migratory birds since landing in the sludge is a quick death sentence. That alone should tell you how bad this waste can be.
   
   Remember, the drug dealer will always try to find new and creative ways to keep their junkies hooked, especially when they're trying to kick the habit.

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2. 2. Chris G in reply to sault 02:51 PM 6/27/11

   Thanks Sault,
   I'll add that purpose of converting tar to oil is primarily to burn the oil, and cars have no practical carbon capture solution.
   
   Of course the extraction company is willing to spend this much on the project; it is a fraction of the money they stand to make and part of it isn't theirs to begin with. It's icing on a turd.

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3. 3. jtdwyer 03:34 PM 6/27/11

   Doesn't the pursuit of carbon intensive energy extraction depending on secure co2 sequestration run the risk of catastrophic failure and release? In that case, might the result be catastrophic climate change/failure?

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4. 4. eco-steve 06:59 PM 6/27/11

   The easiest way to capture and store carbon is to leave it where it is...in the ground. Instead develop renewables which are abundant and ultimately cheaper than carbon when all the clean-up costs are counted. The only future for hydrocarbons is to extract the hydrogen by Pyrolysis and put the carbon in landfill.
   Hard luck on those who foolishly invested money in coal. They should have read the writing on the wall...

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5. 5. scientific earthling 10:09 PM 6/27/11

   First we release captured and stored carbon. Carbon stored in oils, gasses, coals etc. took millions of years and an enormous amounts of energy to sequester.
   
   Now you release the carbon and recover about 10% of the input energy. You have a CO2 problem, no problem, you are going to re-sequester it again.
   
   WoW! Canadians, the smartest people in the world! They have invented the Perpetual Motion machine. A Nobel prize is coming your way.
   
   

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