When the Boundary Dam coal plant in Saskatchewan opened the world’s first commercial-scale carbon capture and storage operation in 2014, it was supposed to save a million tonnes of carbon pollution each year.
Instead, seven years later, the $1.35-billion project — the recipient of hundreds of millions of dollars in federal funding — has captured just four million tonnes, according to an announcement last month by its operator, the provincial utility SaskPower.
SaskPower employees and others have shown in a research paper how the carbon-capture facility “experienced unforeseen operational challenges and design oversights,” which hurt its performance and reliability.
What’s more, the project has abandoned its original goal of capturing 90 per cent of the carbon pollution emitted, settling for just 65 per cent, the Institute for Energy Economics and Financial Analysis (IEEFA) said in an April 20 briefing note.
“The carbon capture is not working as well as they expected,” said IEEFA’s David Schlissel, director of resource planning analysis, in an interview Tuesday. “It’s clear they’ve had problems with the technology.”
Four million tonnes of carbon pollution is not nothing. It’s the equivalent, SaskPower has estimated, of a year’s worth of driving for a million passenger vehicles.
The utility has also learned from its mistakes, making “corrections and additions” to the facility, the research paper noted. Howard Matthews, SaskPower’s vice-president of power production, has said the project is “still finding improvements,” pointing out 2020 was the “second-best year to date.”
Still, the uneven progress at Boundary Dam is seen by Schlissel and others as an illustration of how carbon-capture technology — the process of capturing the carbon pollution that power plants, oil refineries, factories and other big polluters produce before it can escape into the air — is still not ready for prime time.
The project’s latest announcement comes on the heels of another carbon-capture project in Texas that got put on indefinite hiatus. Petra Nova, near Houston, was put on hold due to financial considerations. IEEFA said it, too, was performing “nowhere near expectations.”
“Throwing money at these projects,” said Schlissel, “doesn’t show that these projects are financially viable and that they can stand on their own.”
How carbon capture is supposed to work
Industry is excited about the budget's #CarbonCapture investments. But the technology is still expensive, and projects have not performed to expectations. Environmentalists worry it will lock us in to fossil fuels. Will Trudeau's wager pay off?
Carbon capture is effectively an umbrella term referring to a wide range of different technologies. Three common techniques are capturing the carbon dioxide before fossil fuels are burned, capturing it after they’re burned and capturing it through the combustion process itself.
Pre-combustion carbon capture converts fuels to a mix of carbon monoxide and hydrogen, and then converts the carbon monoxide to carbon dioxide through the water gas shift conversion process. The leftover hydrogen can then be used in chemical plants or fed into a gas turbine to make electricity.
In a post-combustion carbon capture, the gases created from burning fossil fuels, which would normally be released into the atmosphere from a smokestack, are instead forced through chemical absorption solvents, typically derivatives of ammonia. The carbon dioxide in those gases is then separated and forms a carbonate salt.
A third method separates oxygen and nitrogen from air and uses the pure oxygen to create fossil fuel combustion, which results in a concentrated stream of mostly carbon dioxide and water vapour, with small amounts of contaminants. That gas is then purified.
There are different things that can be done with carbon dioxide once it’s captured. It can be stored underground, for example, or it can be injected into concrete to make it stronger. The fossil fuel industry also uses it in a process called “enhanced oil recovery” to extract more oil from the ground.
Budget grants key industry requests
Prime Minister Justin Trudeau bet big on carbon capture this week in the 2021 federal budget.
The budget proposes to spend $319 million over seven years on “research, development, and demonstrations” to improve the commercial viability of carbon-capture technology.
It also proposed a tax credit for investments in carbon-capture projects with the goal of cutting emissions by at least 15 megatonnes annually. The design of that tax credit is subject to an upcoming 90-day consultation period, the budget noted.
Tax credits, financial support and research and development funding is exactly what the Business Council of Canada, a group representing the chief executives and heads of 150 Canadian firms, had asked for in its April 14 report, “Clean Growth 3.0 Achieving Canadian Prosperity in a Net Zero World.”
The business council called carbon capture a “critical” technology, highlighting the Boundary Dam as well as Shell Canada’s Quest facility in its report, and touting its use in capturing pollution during the production of hydrogen from natural gas.
“It’s a technology that has applications across a lot of sectors, which is why it’s important for Canada,” said John Dillon, senior vice-president of policy and corporate counsel at the business council. He said it could be applied in oilsands upgrading and refining in addition to capturing gases from other heavy industry.
Dillon said the government’s support was important because Canadian companies are facing foreign competitors in jurisdictions that don’t have as stringent environmental rules. The business council believes that, while carbon-capture costs are relatively high as of now, that will change as more projects come online.
“The tax credit is one way of making the economics of it work better,” said Dillon. “What we need more than anything, and this is true in other countries as well, is more experience with (carbon-capture technology) to hopefully bring down the costs.”
Another kick at the carbon-capture can
Carbon capture, however, isn’t a new idea; it has received government attention and support for years in Canada. The oil-rich province of Alberta, for example, has championed investing public funds in the technology for well over a decade.
Despite this, Canada is currently capturing only four megatonnes of carbon per year, the federal budget said. Meanwhile, the world needs to capture many, many orders of magnitude more carbon if the climate crisis is to be tackled — a number that stretches into the gigatonnes, according to the International Energy Agency.
For that reason, many environmental groups are skeptical that carbon capture is the solution many are hoping it is. They say government funding would be better directed towards initiatives that lower the production of carbon pollution in the first place.
“We’ve been investing in this technology for two decades, billions of dollars, in the context of coal primarily, but recently also natural gas and oil — and yet globally we’re capturing like 40 megatonnes,” said Julia Levin, climate and energy program manager for Environmental Defence Canada.
“For sure, oil and gas companies should be figuring out how to reduce their emissions. But is that the most efficient use of limited taxpayer money? Why is that where we’ve chosen to put potentially billions of dollars in foregone revenue, to helping oil and gas companies reduce their emissions, when we know that 80 per cent of emissions is downstream — and there are no carbon capture on car tailpipes?”
Levin also raised concerns the tax credit could be weakened during the government’s consultation period. The budget said the tax credit was “not intended” to be made available for enhanced oil recovery, language that leaves the door open to a reversal down the road, she said.
If it is eventually allowed in projects that extract more oil, then it would essentially be “an incentive to pollute,” she said. That is what happened in the United States, Levin argued, with a similar tax credit.
The budget also discussed carbon capture’s use with hydrogen, which is concerning to climate advocates given the natural gas industry’s history of leaking or venting methane into the atmosphere from their equipment. Atmospheric concentrations of methane are driving global heating.
“That’s where our real worry is,” said Levin. “Now we have a tax incentive to create a blue hydrogen sector that will lock us in to natural gas for decades to come.”