Tuesday, October 20, 2009

Conservative Carbon Capture: Good Value for Money?

(originally posted at www.greenparty.ca)

We will not – and let me be clear about this – aggravate an already weakening economy in the name of environmental progress." - Jim Prentice, Federal Minister of Environment.

Stephen Harper and the Conservatives believe that the environment must always take a back-seat to the economy. In their reality, the "economy" and the "environment" are separate files, each to be managed as best as possible, but clearly distinct from another. And as distinct files, there must be priorities. And the environment isn’t it.

Outside of the spin-inhabited world of the Cons exists the real world. In the real world, the economy and the environment have always been linked to one another, and will continue to be; to say that they are flip sides of the same coin does not really do justice to the reality. The interconnections are so entwined that they are manifest within each other; the environment IS the economy, and the economy IS the environment.

A lack of understanding of this reality by Conservatives and Liberals has led to the situation where many of our elected officials are reluctant to act on the climate crisis which is engulfing the planet. Where there is the perception that jobs might be at stake, actions to curb the degradation of our natural environment must perforce be put on hold.

Often, the argument to do so is about jobs, and money. "It will cost too much money to do anything about the environment, and we’ll lose jobs in the process. This will have a negative impact on our sputtering economy."

And as such, nothing gets down. Oh sure, some things might be seen to get done. And maybe a lot of money is being spent to create the illusion of action, so that when the time comes, the Conservatives can go to the voters and toot their own horn, saying, "Look at us. Even in these difficult economic times, we’re doing our part to address climate change. We’ve invested X number of millions of dollars..."

Sure, it’s greenwashing, but it will be compelling.

Especially when the fill in the "X".

The "X" is likely to be in the billions of dollars. We’ve seen some signs of this already in the January budget, when about $700 million federal dollars were allocated for "environmental" initiatives. Add in provincial contributions, and you’re likely to see an "X" of about $1.5 billion. Maybe it’s more. Jeffrey Simpson, in an article in today’s Globe and Mail (which prompted me to write this blog), uses a figure of $2 billion, which also includes provincial funding.

And Conservative funding slash campaign announcements will not be hesitant to include the provincial funding in their press releases. Always announce the highest number when it comes to funding announcements, even if it’s overly-manipulated or not-quite true. It’s the one which will stick in people’s minds.

So, what will Canada get for its $1.5 billion investment in "environmental" initiatives? Ideally, we should be getting quite a lot for this sort of investment.

Unfortunately, the lion’s share of this "investment" is going to the Alberta Tar Sands industry, to facilitate the development of carbon capture and storage technology. As much as $1.2 billion or more (more if you use Simpson’s numbers).

And what will be achieved? According to Simpson, who uses the government’s own "best case scenario", an overall reduction of 2.1 million tonnes of carbon dioxide which otherwise would have been emitted. Of course, since this will likely fall within the "intensity-based targets" being designed for tar sands emissions, we’ll still see an overall increase of carbon dioxide being emitted from the tar sands...just not as much as we would see without these projects.
Well, that must be good value for our money, no? I mean, if the Conservatives are willing to invest $1.2 billion in the Tar Sands, and if it prevents the emission of 2.1 million tonnes of CO2, that must be a good investment, no?

Well...no. First, it’s a preventative measure, which is necessary, but remember that we’ll still see an overall rise in emissions occur here.

Second, the scenario is "best case". Carbon capture and storage technology is still pie-in-the-sky. It’s untested, and it’s quite unclear what the end results in emissions reductions will be. Could be more, sure...but it could be a lot less. Remember: announce the highest numbers, because they are the ones which stick in people’s minds. No one really knows what the end result in emissions prevention will be.

Third, is $1.2 billion really a lot of money (or $2 billion, if you use Simpson’s numbers?). Well, sure, it’s nothing to scoff at. But how much money did our governments recently chip in to bail out the auto industry? I seem to think that maybe it was as much as $6 billion. And how much is allocated to our armed forces in a given year? Something like $10 billion. And what is the budget deficit which our government is going to have to seek to do something about in 2011, through funding cuts and asset sales? Something like $60 billion annually for 2009-10, so about $120 billion.

So maybe $1.2 billion (or even $2 billion) isn’t all that much after all.

And finally...(and this is the one which I was not aware of, so thanks go to Mr. Simpson for pointing this out...and I’ll use Simpson’s numbers from here on in, because he, a nationally-published journalist, likely considered this to a far greater extent than I, an off-the-cuff complainer, have)...and finally, what about value for money?

Well, Simpson estimates that for every tonne of carbon dioxide which will be prevented from being permitted, it will cost $761 dollars. How does this measure up to the costs of other ways of preventing CO2 emissions?

It’s not even on the same planet, that’s how. To illustrate, based on research which took me less than 60-seconds to acquire, I just visited Wikipedia’s Carbon Off-Set article, and discovered that in 2006, about $5.5 billion in carbon offsets were purchased, representing 1.6 billion tons in CO2 reductions. Convert that to metric, and it works out to about 1.45 tonnes (if my online converter is to be trusted). Divide the cost of $5.5 billion by the 1.45 tonne reduction, and you end up with a price of about $3.79 per tonne.

Three dollars and seventy-nine cents per tonne of C02 reductions, versus the Conservative’s "investment" in reducing CO2 at the cost of $761 dollars per tonne. In a best-case scenario.
Admittedly, my comparison here is flawed. What do you want for a 6-second investment of time? But keep in mind that I have decided to walk or bike to work each day, or take transit in lousy weather, instead of driving the car. The cost to me has actually been less than zero...I’m making money by not driving the car AND reducing my CO2 emissions to the tune of about one and a half tonnes a year. So whether my math is bang-on or not, or whether you believe in off-sets, the point I’m making is that it’s freaking absurd to think that there’s good value for the money in paying $761 per tonne for CO2 reductions.

Is it any wonder that the Conservatives believe that trying to fix the environment will cost too much money and be detrimental to our economy? Maybe, when it comes to a "fix", they’re just barking up the wrong tree.

Using public funds to invest in carbon capture and storage technology is clearly the "wrong tree". Maybe they could save a few bucks and reduce CO2 in our atmosphere by simply planting a few trees.

And this from the Party which continues to poll the highest as the "best financial managers" of any Canadian political party.

Frankly, this whole situation is absurd.

Read Jeffrey Simpson’s article again. It was an eye-opener, for sure. I liked it so much, I’ll link it here again for you.

---

Updated (October 22, 2009):

It was brought to my attention that the Globe & Mail, on Thursday October 22, 2009, provided a Correction Notice to the Jeffrey Simpson article, from which this post referenced considerably. The Globe & Mail’s correction provides a significantly reduced estimate for the cost per tonne of CO2 reductions through the to-be-funded carbon capture and storage projects. Today, the G&M estimates the cost to be around $30 per tonne, and not the $761 originally estimated by Simpson in his article, and which I have used as a benchmark in my blogpost.

This significantly reduced cost estimate appears to alter some of the opinion I have formed with regards to carbon capture and storage: I am least, in a very small way, somewhat mollified that the $2.1 billion "investment" in this untried technology may not be the absolute complete and utter waste of resources which I believed to be the case the other day.

What has not changed, however, is my opinion that the pursuit of carbon capture and storage technology as a sensible way of reducing greenhouse gases in an effort to avert the oncoming climate crisis which we find ourselves in, is, to be blunt, wrongheaded, mis-guided, and utterly at odds with the responsible management of our tax dollars. This scheme is being perpetuated on the Canadian people because there may be some benefit in using stored carbon to extract oil from the tar sands, and because there will be a benefit for the Conservatives at the polls come election time when they will use the $2.1 billion environmental "investment" in this technology in an attempt to deceive the Canadian public that they are actually committed to taking action to avert climate change.

So, no, it may not be the "complete and utter waste" I believed it to be earlier. I’ll downgrade it to being one of those "marginal at-best" contributions to fighting global warming, but one which certainly costs us all way too much and which diverts resources away from programs and initiatives which might actually do some good for the natural environment.

13 comments:

Anonymous said...

You were wise to put a caveat on quoting Simpson's numbers, as his analysis is flawed, or misleading.

Simpson was looking at the capital cost to the taxpayer for reducing the annual carbon emissions per tonne connected.

So, the $761 cannot be properly compared to your calculation of $3.79.

To do a proper analysis, you would need to amortize the capital investment over the life of the project - say 40 yrs. For argument's sake, take $1.6 billion (or the $761) and divide by 40. Then it becomes, ballparkish $20/tonne cost to taxpayer give or take.

Now, from the perspective of the operator (the oil sands company or the coal fired utility), they still need to pay the operating cost to separate, compress to liquid CO2 and transport it for injection into depleted reservoirs - the energy required which in turn adds emissions. I haven't done the calculations, but I suspect it would be less than the $50/tonne proposed GPC carbon tax.

Anonymous said...

Steve, I see you've received some pointed comments on the GPC site from some supposed knowledgeable people on these matters.

Why don't you post my response there, or better still, invite these individuals to debate the issues here, unsafe from the mutual love environment of the GPC bloggers?

Anonymous said...

Say, I see Michael Villancourt is careless on the quotes he made on the GPC site. Why don't you correct him?

He quotes a Monbiot article, which stated:

A few weeks ago, the green thinker Jim Bliss roughly calculated the environmental costs of this technique. He used as his case study the scheme BP proposed (but abandoned last year) for pumping CO2 into the Miller Field off the coast of Scotland. It would have buried 1.3m tonnes of CO2 and extracted 40 million barrels of oil(10). Taking into account only the four major fuel products, Bliss worked out that the total carbon emissions would outweigh the savings by between seven and fifteen times(11)*.

Now, what about that pesky little asterisk? Here's what it said:

*Jim Bliss has now been in touch to say that he was misled by the wording of BP’s press release. The scheme would in fact have stored 1.3m tonnes of CO2 per annum, which means that it would have resulted in a net CO2 saving (of around 50%). My apologies for this mistake.

Same mistake Simpson made. How negligent of Michael Villancourt to omit.

Why don't you correct your mistake as well as his on the GPC site?

Anonymous said...

Home img National
CORRECTION

From Thursday's Globe and Mail
Last updated on Thursday, Oct. 22, 2009 02:36AM EDT

The cost of two recently announced carbon capture and storage projects in Alberta could be around $30 a tonne over 25 years, rather than $1.6-billion at the outset. One of the two, Shell Quest, is an oil sands project. Incorrect information appeared on Tuesday.

http://m.theglobeandmail.com/news/national/correction/article1333365/?service=mobile

Stuart Hertzog said...

Unfortunately, I can't find your posting on the Green party web site, which seems to have buried blogs in some arcane fashion. Can you give the URL?

Anonymous said...

Pull down the GPC menu "newsroom" - bottom item to get to member blogs.

http://www.greenparty.ca/blogs/2022/2009-10-20/conservative-carbon-capture-good-value-money

Sudbury Steve said...

Thank you for bringing the Globe & Mail’s “Correction” piece to my attention. An estimated cost of $30 per tonne of CO2 is significantly less than the number used by Simpson, and which I in part relied on in my initial post ($761 per tonne).

Clearly, this changes the complexion of part of the case I had been making in my blog. My thanks go out to SIR (perhaps one of the “Anonymous” posters on my blogspot site) for bringing to my attention the Globe & Mail’s correction. This only came to my attention today, as I do not monitor my blogs every day.

As a result of this new information, I have added an addendum my original posts on the GPC blog site and on my own blogsite. The addendum includes a link to the Globe & Mail’s correction notice.

And finally, FYI, as this came up in comments posted on another site, I have never blocked participation by anyone on my own blogsite in the past. I currently have no intention of doing so, either.

Anonymous said...

Here's a question for you Steve, since you appear to be mixing up issues.

As a resident of Ontario who presumedly drives a car and consumes electricity, where do you rank these two opportunities on the scale of least desirable to most desirable:

Investing Fed tax dollars in CCS at the rate of $20/tonne (assuming the AB gov't pays $10 and the Feds pay $20), or paying $1627 / tonne so that Erich Jacoby-Hawkins can install a solar powered grid on his rooftop in Barrie and make $50k profit over the next 20 years?

And are you a supporter of Canadian energy sovereignty and security, negotiating out of the energy provisions of NAFTA so that Canadian energy can be used by Canadians instead of exporting our oil to the US and at the same time importing oil into eastern Canada? Isn't this GPC policy?

Yes? Well, where do you think the oil will probably come from for eastern Canada? I'll give you a clue: It ends with "sands".

Sudbury Steve said...

Dear Anonymous Poster, it’s not me who’s mixing things up around here. Your tossing of numbers around in an attempt to obfuscate what is otherwise obvious to anyone who has their eyes open is likely being done for the purposes of misleading readers, and adding your own spin. I don’t know what your motivation is, and frankly I don’t really care, but if it remains your suggestion that investing taxpayer dollars in “corporate welfare” for oil companies to perfect oil extraction methods which will lead to an overall increase in greenhouse gas emissions is somehow a better idea than subsidizing Jacoby-Hawkins hanging out on his roof installing solar panels in an effort to actually reduce real emissions, you can go and jump in one of those tailings ponds in Northern Alberta.

The fact is Carbon Capture and Storage is a misappropriation of my hard-earned tax dollars, which I give freely to the government, under the impression that they will be spent wisely and in the interests of myself and others in my community, province and nation. Handing my money over to the oil industry so that they can figure out a way to pollute more (and that’s what intensity-based targets are: a license to pollute more, just not as much as they would otherwise pollute), that’s crap. That’s not spending my money wisely.

This isn’t difficult to understand. But nonsense and spin being spewed by our politicians, repeated in the media and at watercoolers around the nation, succeed to a degree in turning a no-brainer into a head-scratcher. And that makes it all easier just not to think about.

I don’t have time to engage you in your nonsense; you should use your own limited time and resources to spread this kind of nonsense elsewhere.

SIR said...

See, that's what is wrong with most of the GP bloggers who don't have the foggiest idea of what they are talking about.

They form a policy based upon ideology, and look for selective facts to support their predetermined positions. When challenged, they crawl into their shells and start spewing indefensible nonsense.

You're no more or no less ignorant of the facts and issues than many others.

Sudbury Steve said...

Just to be clear about one thing before completely terminating my involvement in this silly exchange with an anonymous poster: my withdrawal has nothing to do with a scenario whereby I am turtling as a result of having no meaningful data and a lack of understanding of the issues around carbon capture and storage, nor is it because I am somehow influenced to a greater degree by political ideology. Instead, my withdrawal from the conversation at this time is because I do understand the issues here to a significant degree, and I am choosing not to waste my time in an attempt to further educate a dissenting voice on this topic; a voice, from what I’ve been able to tell, which has no interest in understanding the real issues around carbon capture and storage, and whom I believe is merely trying to inject confusion into this discussion.

Suffice it to say that my own beliefs will not be shaken by weasel words, and given that I know what the science around this subject is, I am choosing simply to disengage myself at this point and focus my limited resources on other matters. There is nothing further to be gained in arguing with those who refuse to accept the facts. Who was it that said it takes 10 seconds to throw out an incorrect fact, and 30 minutes to provide a logical dispute as to why the incorrect “fact” was in fact, incorrect (or something like that).

I know carbon capture and storage is a very poor investment to fight climate change, based on my understanding of the science around it, and economics. I suspect many other readers of this blog feel the same way, and for the same reason. Yes, some may hold dissenting opinions and/or beliefs. I guess you’re entitled to that. I wish maybe those people would investigate this sham further, but I also know that we all suffer from a lack of time to look into everything to the degree necessary to completely form our own opinions (especially on something as scientifically and economically difficult as carbon capture and storage), so perforce our opinions will need to be shaped by others. I feel that I have taken the time to investigate this on my own to a significant degree, and I have come to an understanding that it’s not going to be all that helpful in the long term, and is certainly a misallocation of our resources in the short term.

I could give this anonymous poster all the facts in the world to support my opinion, if I had the time to do so. But even if I did, I have no doubt that his own opinion would not change. So why bother? I’m writing him off and moving on.

Anonymous said...

Well Steve, far be it from me to educate someone who apparently works in Government as a Senior Advisor/Housing on how CCS or miscible flooding works. The point being, if you don't know what you are talking about, don't make such pointed and obviously partisan commentary. Your title starts with "Conservative" - usually a beacon of what's to come from GPC bloggers.

Now, some basic facts. According to wiki, Canada produces approx 2.75 million barrels of oil per day. Roughly 50% is conventional (which is fastly declining), and 50% is derived from the oil/tar sands. 1.78 million barrels per day were exported. That means approx 1 million barrels per day of Canada's production was consumed domestically.

http://en.wikipedia.org/wiki/Petroleum_production_in_Canada

Now, at the same time, Canada consumes est 2.37 million barrels per day - the difference made up by importing oil into eastern Canada.
http://www.indexmundi.com/canada/oil_consumption.html

If one was to therefore put a box around Canada, and save all of the current and future production for our own use and security, we would be consuming roughly 50% of oil produced from the oil/tar sands.

Get it? You can't have your cake and eat it too. This is what Gordon Laxer/ the NDP and Elizabeth May have been advocating - save our oil for ourselves, let's not freeze in the dark- renegotiate NAFTA and build a pipeline from Alberta to Eastern Canada for our own security.

Now, if you can't control demand, then you have to do something in the short term to change your energy mix (oil).

You can try to recover more oil from conventional wells through waterflood (secondary) or through a miscible flood (ie CO2 injection); or you can try to reduce the impact of the emissions from the oil/tar sands. Or you can do both.

Now, the Alberta and Fed gov'ts receive a great deal of revenue from the oil and gas industry directly (AB gets royalties) and the Feds through corporate and personal taxes. Billions and billions. So, one way to look at it would be if they are benefitting financially from a dirty industry, then they should participate in cleaning it up, financially. It would be quite easy to separate the oil and gas company's and their employees' contributions to Fed taxes from your hard earned ones.

I can tell you, as others have, that in the specific applications considered (depleted reservoirs), the technical challenges of CO2 injection are not as significant as you claim.

By having an economic benefit to sequestering C02 through a miscible flood (as opposed to injecting it into gas wells), more C02 will be sequestered than without the incentive. The per unit cost to the O&G company declines. It's really that simple.

Btw - I see you didn't bother correcting the Monbiot quote and footnote on the GPC site. As the person who initiated the blog, I think that's being irresponsible. I see one other has embraced it, falsely claiming:

Great Article
Submitted by Scott Gadsby on 22 October 2009 - 7:18pm.

The Monbiot article was excellent and once again uses FACTS to fight ingnorance. The more we know the better.


Of course, the FACTS are wrong in Monbiot's article, as he imself acknowledged.

So, in the future, stick to a subject where you have some understanding/expertise before making such definitive claims, OK? Then we'll leave you alone.

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