Opportunity to Re-think at Hand

As part of Canada West Foundation’s Powering Up for the Future Initiative the organization today released Where to Next on Climate Change? As countries move forward on different climate change initiatives, this document looks at the success and failures of the last 20 years of climate change policy and the stake Western Canada has in the ongoing debate. Although the topic of climate change may have been replaced in many countries by concerns about the economy, discussions and negotiations on the process continue. Where to Next on Climate Change? outlines an approach Canada and the world might consider to help reset the discussion and again tackle the challenge of creating a low greenhouse gas future for us all. This document is worth a read.

CCS Update

Burning fossil fuels results in emissions of carbon dioxide (CO₂), a greenhouse gas linked to climate change. One of the ways of reducing these emissions is carbon capture and storage. CCS involves, capturing the CO₂ at the source – large emitters such as power stations or industrial plants. The CO₂ is then trucked or piped to where it can be injected into deep geologic formations where it remains instead of being emitted into the atmosphere.

Crude oil reservoirs are well-suited for storing CO₂. They are deep, sealed by the same rocks that have sealed in the oil, and, in enhanced oil recovery (EOR) projects, injecting CO₂ helps to recover more oil.

The most studied CCS/EOR project is the Weyburn field in Saskatchewan, where more than 13 million tonnes of CO₂ have been injected since 2000. That’s the equivalent of taking more than 3.5 million cars off the road for one year.

But there are others. FLOW looked at some CCS projects two years ago. Enhance Energy’s Alberta Carbon Trunk Line (ACTL), a pipeline that will take CO₂ from large emitters in Fort Saskatchewan and Strathcona County to oilfields in south-central Alberta, received approval under the Canadian Environmental Assessment Act in September 2010. Construction on the capture facilities could begin as soon as 2012, and on the pipeline itself in 2013. When fully operational, it will have the same impact as taking 2.6 million passenger vehicles off the road.

TransAlta, Capital Power, TransCanada and Enbridge are partners in Project Pioneer, which is designed to capture one million tonnes of CO₂ per year from the Keephills 3 coal-fired electricity generation plant near Edmonton. The CO₂ will then be used in EOR projects or injected into deep saline aquifers. One million tonnes of CO2 is roughly equivalent to the emissions from 182,000 passenger vehicles.

Capital Power is also involved in a similar project at the Genessee 3 power plant. Husky Energy has a project underway that captures CO₂ from its Lloydminster ethanol plant for injection into its nearby heavy oil fields. Arc Resources began injecting CO₂ at its Redwater oilfield in 2008. Although still in the testing phase, results have been encouraging.

To learn more about Carbon Capture and Storage visit the ICO2N and watch the videos Addressing Climate Change, Alberta Saline Aquifer Project – From Earth and Back Again and Safe Storage – Closing the Carbon Loop.

Nuclear Power – It’s the New Black, Again

The idea for using nuclear power to generate electricity was still fairly avant-garde in 1953 when President Eisenhower announced his “Atoms for Peace” program. Prior to the program, nuclear research had been primarily focused on weapons. And electricity was mainly fuelled by coal.

In 1954, the Russians were the first to go on line with nuclear powered electricity generation, using a  five-megawatt reactor at the Institute of Physics and Power Engineering in Obninsk. England built the first commercial-scale power plant at Calder Hall. The first of its four 50-megawatt reactors went online in 1956. Calder Hall provided electricity for 47 years and was shut down in 2003.

Another seven reactors began generating electricity in the late 1950s. Suddenly, nuclear power was all the rage. The United States was the pace setter with 85 reactors by the end of the 1970s. Canada (CNA 1960-2010, 2.5MB PDF) built 20 in Ontario, and one each in Quebec and New Brunswick. World-wide, 42 new reactors came on line in 1985 alone.

But by the 1990s, the number of reactors being built had dropped significantly. Some blame the accidents at Three Mile Island in 1979 and Chernobyl in 1986 but, because it takes up to 15 years to plan and build a nuclear power plant, decisions regarding the future of nuclear power were actually made in the mid-1970s. The primary concerns focused on reactor safety, accumulating nuclear waste and proliferation of nuclear weapons. Nuclear power became soooo passé.

Angst, like fashion, changes with time. Fears of nuclear Armageddon and atomic waste gave way to concerns about climate change and greenhouse gasses. But electricity generation from nuclear power doesn’t emit GHGs. By 2000, nuclear power was chic once again.

Sort of. It all depends on where you are. Of the 61 nuclear power plants currently under construction, 27 are in China, 10 are in Russia and six are in India. Only three are in the Western Hemisphere. Of the 158 in the planning stage, 50 are in China, 18 are in India, 14 are in Russia and nine are in the United States. The west is no longer the trend setter.

Cap and Trade: Canada Shouldn’t Wait for the U.S.

According to the National Round Table on the Environment and the Economy (NTREE), because of uncertainty in U.S. climate policy direction, Canada should adopt a phased-in approach to climate harmonization policy with the U.S. Doing so will avoid delay in emissions reductions and maintain economic competitiveness.

Parallel Paths: Canada-U.S. Climate Policy Choices, is the third report in the NRTEE’s Climate Prosperity series examining the economic risks and opportunities of climate change for Canada. The report explains that while our economies are integrated and the U.S. is our largest trading partner, there are significant differences that call for a made-in-Canada policy. The report shows that Canada’s current policy of harmonizing greenhouse gas reduction targets with the United States requires a higher carbon price in Canada to achieve those targets. Alternatively, harmonizing with the U.S. on carbon prices alone, rather than on targets, means Canada’s GHG target of cutting emissions to 17 per cent below 2005 levels by 2020 would not be met.

The report suggest a “Transitional Option Policy” which contains four elements:

• Contingent Carbon Pricing – to establish a price collar that limits the Canadian carbon price to no more than $30.00/tonne CO₂e higher than the price in the U.S.
• A National Cap-and-Trade System – with auctioning of permits and revenue recycling to cap emissions and address regional and sectoral concern
• Limited International Permits and Domestic Offsets – to keep domestic carbon prices lower for Canadian firms
• Technology Fund – to stimulate investment in needed emission reductions technologies.

The report also recommends creating a new Canadian Low-Carbon Technology Fund financed through the compliance investments of carbon-polluting firms.

The National Round Table on the Environment and the Economy is an independent Canadian federal advisory agency dedicated to preserving the environment while maintaining a strong economy.

Government Renews Promise on Renewable Fuel

Federal Environment Minister Peter Kent announced today that the Canadian Government is moving ahead with the requirement for an average two per cent renewable content in diesel fuel and heating oil.

This announcement was further to one made September 10, 2010 when Jim Prentice, environment minister at the time, publicized the requirement for five per cent renewable content in gasoline, which came into effect December 15, 2010. At that time Minister Prentice advised “Canada will implement a requirement for two per cent renewable content in diesel fuel and heating oil, subject to successful demonstration of technical feasibility under the range of Canadian conditions, which would be put in place by an amendment to the Renewable Fuels Regulations.”

Today, Minister Kent advised that “After positive results, we are moving forward with this requirement which will result in further reductions in greenhouse gas emissions and ultimately in cleaner air for all Canadians.”

A report on the Technical Feasibility of Integrating an Annual Average 2% Renewable Diesel in the Canadian Distillate Pool by 2011 was issued by Natural Resources Canada in October 2010.

Reducing emissions in the transportation sector is a key component in the Government’s plan to achieve Canada’s target of reducing total greenhouse gas emissions by 17 per cent from 2005 levels by 2020. In addition to the Renewable Fuels Regulations, the Government has also finalized regulations to reduce greenhouse gas emissions from passenger vehicles and is working to do the same for heavy-duty vehicles.

As well as reducing emissions, the new regulations help Canada’s farmers. According to Agriculture Minister Gerry Ritz “The new renewable fuel content in biodiesel and heating oil will give our farmers another market for their crops and demonstrates how agriculture can contribute to reducing Canada’s environmental footprint.”

Fuel Switching Part 2: Canada

Unlike the United States, there are federal government policies aimed at reducing greenhouse gas emissions in Canada, and they may result in gas to coal fuel switching. On June 23, 2010 the federal government announced regulations regarding the gradual phase-out of inefficient coal-fired generation in Canada in an effort to reduce greenhouse gas emissions.

The regulations will apply to new coal-fired facilities as well as those reaching the end of their economic life, defined as the longer of 45 years from commissioning date or the expiry of the power purchase agreement in effect when the policy was announced.

The performance standard will be the equivalent of the emissions intensity of natural gas combined cycle technology, which is between 360 and 420 tonnes per gigawatt-hour, and will come into effect in mid-2015.

Coal is used by five provinces as a primary fuel for generating electricity and accounts for 13 per cent of Canada’s greenhouse gas emissions.

However, some fuel-switching has already taken place. Since 1998, Alberta has added 615 megawatts of coal capacity and decommissioned 603 megawatts. Over the same period, as the demand for electricity rose, the province added 4,376 megawatts of natural gas fired electricity while decommissioning 877 megawatts.

Saskatchewan forecasts replacing its entire generating system by 2033. In the short term, it will focus on natural gas projects, including partnering with a natural gas power provider to build a 261 megawatt power station.

Ontario will phase out coal-fired generation by 2014, replacing switching to natural gas or biomass.

Fuel Switching Part 1: United States

Coal to natural gas fuel switching the United States is a function of coal prices versus natural gas prices. Coal has historically been the fuel of choice, but the percentage of electricity generated from coal has dropped from 52.1 in 1996 to 44.5 in 2009 while the percentage generated from natural gas has risen to 23.3 from 13.2 over the same period.

In 2009, high coal prices relative to low natural gas prices caused an 11.5 per cent drop in the amount of electricity generated by coal compared to a 4.3 per cent increase in the amount generated by natural gas.

On an annual basis, the percentage of electricity generated from coal rises in the winter months when natural gas is directed to home heating. Conversely, in summer months, more natural gas is available for electricity generation, so the amount generated by coal decreases.

In the longer term, the United States Energy Information Administration predicts that by 2035, natural gas will account for 25 per cent of the electricity generated in the U.S. compared to the current 23 per cent. Over the same period, coal-fired electricity will drop to 43 per cent from 44.5.

These changes result from the expectation that natural gas prices will remain low for at least the next ten years and construction costs for natural gas plants will remain lower than those for new nuclear or renewable energy plants. Although there are no federal government policies to reduce greenhouse gas emissions, environmental concerns will curtail new coal-fired capacity.

E3 Roundtable Discussion Continues

The third of four E³ (energy, environment, economy) Roundtables was held in Calgary January 17^th, 2010. Hosted by Corporate Knights magazine and sponsored by Enbridge, the Roundtables “provide for a discussion that will support the development of visionary energy policy options for the whole of Canada.”

Central to the discussion was the theme question “Most Canadians expect that we all will eventually transition from carbon-based to low-carbon energy. How do we make it happen in a way that unites rather than divides?”

While five of the six panelists agreed with the necessity for an energy policy or strategy, David Keith, Director, ISEEE Energy and Environmental Systems Group, sees the need for a “climate policy” because the prime driver for an energy policy is climate.

Preston Manning, President & CEO, Manning Centre for Building Democracy, presented four key principles toward an energy policy, foremost of which is the need for proper measurement of the environmental aspects of all energy sources, not just oil and gas.

Marlo Raynolds, Senior Advisor, Pembina Institute, spoke to Canada focusing too much on fossil fuels. A national energy policy has to focus on greenhouse gas emissions and include renewable energy and energy efficiency in the economy.

According to Roger Gibbons, President & CEO, Canada West Foundation, hydropower and hydrocarbons form Canada’s competitive advantage and going forward we must focus on producing them in better ways.

Both Eric Axford, Senior Vice President, Suncor Energy Inc., and Eric Miller, Senior Vice President, Nexen Inc., cite technology and innovation as keys to achieving energy sustainability.

Most agreed that ultimately, if we all make the right personal choices, we won’t need an energy policy.

NGVs reduce GHGs

In the future, when you stop for gas, you may actually be stopping for gas, as in natural gas.

The Natural Gas Use in Transportation Roundtable, a group comprising representatives from the trucking, automotive and natural gas industries, environmental groups and federal and provincial governments, published its report Natural Gas Use in the Canadian Transportation Sector: Deployment Roadmap (4.2MB PDF) in December 2010.

The report touts natural gas as a clean, economic and abundant fuel for all vehicles, but particularly for medium and heavy trucks operating in return-to-base and corridor fleets.

In commending the report, the Canadian Gas Association, added that natural gas can reduce GHG emissions from heavy trucks by as much as 25 per cent, while saving up to 30 per cent in fuel costs. The CGA also pointed out that natural gas vehicles can run on renewable natural gas from landfills, digesters and wastewater treatment plants.

Currently, 99.4 per cent of the energy used in Canada’s transportation sector is sourced from refined crude oil products and only about 0.1 per cent is sourced from natural gas.

There are some barriers, however, such as vehicle conversion costs and limited infrastructure. But, with growing environmental concerns, with vehicle energy use forecast to increase 31 per cent between 2004 and 2020, and with the price of crude oil forecast to average $93 US per barrel in 2011, natural gas vehicles deserve a closer look.

Injecting Gas, Cash and Controversy

Fuel injection’s a great way to improve the efficiency of an engine, but a cash injection’s nothing to sneeze at either. UBC researcher Steven Rogak is going to be getting the latter to do the former, with a five-year, $499,824 grant from  the federal government in support of his natural-gas-injected-engine research.

The project’s goal is to develop a fuel injector that will make natural gas engines competitive with equivalent diesel engines. And while natural gas is currently a relatively niche fuel — the Canadian Natural Gas Vehicle Alliance (CNGVA) says that Canada has only 12,000 natural-gas-powered vehicles — that might not always be the case.

Canada’s transportation industry currently accounts for the largest share of our CO2 emissions — more than 35 per cent — and natural gas emits less carbon than oil. According to the CNGVA (1.1 MB PDF), for example, a comparable diesel-powered heavy-duty truck would save 23 per cent in GHG emissions, while rail transport could save 19 per cent. And supply is no issue, even if the supply has issues.

Unconventional reserves are now being accessed across the country, with shale, natural gas from coal and tight sands constituting a potential boom in production. However, drawing all that extra natural gas from unconventional isn’t a done deal yet. In Quebec, for example, which currently has no natural gas production infrastructure, Questerre Energy and Talisman Energy recently pushed back the start of test wells by six months because of public opposition based on another kind of injection — fracking. In freeing trapped gas with chemically infused water, the industry is confronting fears of contamination and the use of our limited water reserves. Federally, the government says that shale gas rules are still a work in progress, but it’s certain that these issues will continue to inform any future discussion on unconventional natural gas, even if it’s destined for our engines.

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