Set-backs for CCS in US and Canada...

Set-backs for CCS in US and Canada… Carbon capture: false solution for tar sands & coal-fired electricity

Carbon Capture and Storage (CCS), the technological poster child for the future of Alberta's tar sands and coal-fired electricity generation, has just had its biggest supporter pull the rug out from underneath its feet. The Bush administration has withdrawn its support for the FutureGen CCS project, which is doomed without massive public subsidies. The loss of support from the US government may seal the fate of this expensive and unproven technology in the United States. The technology is also unable to provide a solution to Canada's global warming crisis because of its high cost and long lead times.

At the same time that the coal industry is pinning its hopes on CCS, world demand for renewable energy continues to soar. Between 2000 and 2005, the global market for solar panels alone increased by an incredible 40 percent per year.

"Carbon capture and storage is an extremely expensive technology that will prevent investment in the real solution to global warming -- renewable energy cheaper. It cannot be delivered in time to prevent dangerous global warming" said Greenpeace Canada Climate and Energy co-ordinator Dave Martin, "Carbon capture is a public relations smokescreen for the tar sands and coal-fired electricity generation."

CCS No Solution in Canada

In Canada, the tar sands are the focus of most interest in CCS. Because the tar sands must be heated to separate the bitumen, and then upgraded to produce synthetic crude oil, they produce three to five more greenhouse gas than conventional oil.

However, there are no CCS projects in the tar sands, and no large-scale plants in operation as yet. There are demonstration plants running in Weyburn, Saskatchewan in Canada (Encana), and the Sleipner project in Norway (Statoil). A few more are operating and others planned, but the timelines are lengthy and costs are high.

In September 2007, the Saskatchewan's publicly owned electrical utility, SaskPower, cancelled Canada's first proposed commercial-scale coal plant with CCS. The estimated capital cost of the 450 megawatt plant had soared from $1.7 billion to $3.8 billion (CAD), finally causing them to pull the plug.

In January 2008, the Alberta and Canadian governments released the report of the Carbon Capture and Storage Task Force, Canada's Fossil Energy Future, which proposed a miniscule 5 million tonne (Mt) reduction of greenhouse gas emissions by 2015, at the cost of a staggering $2 billion (CAD) public subsidy. The five Mt reduction is only 0.6 per cent of Canada's current 750 Mt annual greenhouse gas emissions.

"The proposed Task Force reduction of 5 million tonnes by 2015 is an admission that carbon capture and storage will have no significant impact on greenhouse gas emissions for the foreseeable future." said Martin. "The only thing CCS is good at capturing is tax payers' hard earned cash."

CCS needs massive taxpayer subsidies

FutureGen's official supporters read like a Who's Who of the global coal industry with the likes of the US Department of Energy (DOE), BHP Billiton, Rio Tinto, American Electric Power Service Corp., Anglo American, and China's largest coal-based power company, China Huaneng Group all part of the FutureGen alliance.

Despite the impressive list of friends, the project still put its hand out for plenty of tax payers' money. Some of the hand outs the project managed to get are:

 
• US Department of Energy had agreed to pay 75 percent of the project costs
 
• US$17 million investment grant package to bring FutureGen to Illinois, US
 
• Sales tax exemption on building materials and selected equipment
 
• US$50 million of cheap loans by the Illinois Finance Authority

If the cash hand outs weren't enough, FutureGen was also fortunate enough to have a law passed by Illinois lawmakers to take ownership of any sequestered carbon and thereby, somewhat ironically, relieving FutureGen of any future financial and legal liability if there was an accidental release of carbon dioxide.

Coal-addicted lawmakers in the United States also agreed to indemnify FutureGen from lawsuits and pay for insurance policies to cover the plant if it does get sued.

The FutureGen power station was originally scheduled to be operational in 2012 but has still not left the drawing board. Although President Bush announced the project in 2003, it took the coal consortium four years to decide on the town of Mattoon, Illinois, as the preferred construction site.

Cost blow out

FutureGen was then further delayed as the US Department of Energy required a reassessment of the power station's design due to the projected cost for building the station rising in just three years to a staggering US$1.76 billion, an 85 percent cost blow out.

With the US Department of Energy's promise to pay for 75 percent of the project costs now topping out at over US$1.3 billion, even the coal loving, big spending US President decided the price for the unnecessary and unproven CCS technology was too high.

Other CCS projects like BP's Miller oil and gas field in the UK and a joint venture between Statoil-Hydro and Shell in Norway have also hit financial troubles forcing their cancellations.

Energy [R]evolution

In 2007, Greenpeace released its Energy [R]evolution report, which demonstrated conclusively that even without CCS or nuclear power, the world can meet all its energy needs by increasing energy efficiency and switching to renewable energy.

Every dollar spent on false solutions like CCS is a dollar not spent on real solutions like renewable energy and increasing energy efficiency. With FutureGen now all but scrapped, and the cancellation of the proposed Saskatchewan CCS plant, the CCS smokescreen put up by the fossil fuel industry is finally beginning to clear.