…environmental economics and the implications of environmental policy

Archive for the ‘Carbon capture’ tag

Secret Advice to Politicians: Design Better Regulations

with 26 comments

This article comes as no surprise to anyone looking at the CCS issue:

Secret advice to politicians: oilsands emissions hard to scrub

…Little of the oilsands’ carbon dioxide can be captured because most emissions aren’t concentrated enough, the notes say. For efficient capture, there must be a high concentration of CO2 coming out of a smoke stack.

The article is correct to state that the streams of CO2 coming off the power units is not concentrated. Most In-Situ Steam Assisted Gravity Drainage (SAG-D) units are running on natural gas (gas produces steam which is injected in the ground to loosen oil in the sand, which is then pumped to the surface). In these plants, natural gas powers a couple of co-generators and upwards of eight power boilers. Given the high efficiency of the co-generators and the low carbon content of the natural gas, emission rates are low and so CO2 is less concentrated. Total emission rates of CO2 from SAG-D facilities are in the order of 60 kg/bbl, but these units produce 100,000 plus barrels per day, so total emissions can approach 2 to 5 MT. This is a big number, and so it seems appropriate to target these facilities. But, what reductions do we get for what cost?

The article implies that capturing CO2 is not feasible from SAG-D units. But this is not right: CCS is technically feasible for SAG-D units, it just costs lots. Federal regulations, for example, require emission performance from new SAG-D units to match that of CCS. Cost estimates for these units could then be upwards of $200/tonne removed CO2 to achieve the 90% removal efficiency. Feasible yes, cost-effective, perhaps not.

And here is the problem. While most of Canada’s emissions remain unpriced, these units will be facing costs of upwards of $200/tonne. Equity aside, this leads to high cost abatement strategies. That is, we are requiring high cost reductions from these units while other emissions remained unpriced and lower cost abatement opportunities ignored. And oh yes, the embodied carbon emissions in a barrel of oil is roughly 340 kg, or 6 times that of SAG-D extraction. So, we can assume the moral high ground about oil sands needing to reduce emissions right up to the point when we turn the ignition. The real story implied in the article is the misaligned carbon prices across Canadian emissions. This needs to be fixed. This is the challenge for Canadian carbon policy.

Written by Dave Sawyer

November 25th, 2008 at 3:06 pm