Oilweek - March 2008

“GHG emissions result from making fossil fuels, power, and manufactured materials that benefit all Canadians. The consumer will have to pick up a share of the tab for cleanup.”

If not exactly profitable, these developments will at least make ICON viable. “We are very interested in starting this system off,” Kaufman says. “The first GHG injections could go into storage in 2013,” he adds, stressing that the project is ambitious and the “hurdles are very substantial.” However, it “could represent perhaps the largest single carbon dioxide reduction approach Canada takes until renewables, alternative fuels, and energy conservation become very significant.”

Also known as carbon sequestration, CCS has been a topic of many reports in recent years. “When it’s not commercial to do something,” Kaufman points out, “you tend to do a lot of study. We need these technical and economic reports, and eventually we will also need public input. People need to be sure this can be done safely.”

Most importantly, though, “We are looking for the right way to move this concept forward. Our first objective is to contribute to policy—it will need provincial and federal legislation to make this happen.”

The right policy will include a cost- or risk-sharing formula, clear GHG emissions rules, and government commitments to reassure ICON that the policy will not change during the one to two decades needed to develop the carbon disposal grid.

“Slowing or even reversing the
existing trend of global warming is
the defining challenge of our age.”

— Rajendra Pachauri, chairman, IPCC

Long-term policy commitments will encourage new oilsands and power plants, and other large GHG-intensive facilities to invest in carbon capture technologies during construction, so they can connect to the system when they go on stream.

Kaufman believes tax incentives will also be needed, as will carbon disposal credits. Carbon credits “will need to be as widely tradable as possible, so we can develop an efficient market.”

For example, an Ontario industrial producer with a GHG emission problem could pay to capture and store carbon in Alberta, thereby using tradable credits to meet local emission regulations. This approach reflects an environmentally acceptable exchange of value. After all, global warming is a planet-wide problem precisely because carbon dioxide respects no boundaries. No matter where they take place, GHG reductions benefit everyone. From the perspective of economic efficiency, it is important to reduce emissions wherever it is cheapest.

The tropical paradise of Bali may be far from Alberta’s main centres of industrial GHG pollution, but in the big picture of energy-induced climate change there is an ironic link between the two. ICON illustrates how Canada’s oil patch could take a leadership role in mitigating the causes of global warming—and do so without waiting for the diplomats.