Category Archives: Carbon Capture and Storage

Quest. The Energy Resources Conservation Board Approves the First Commercial Scale Carbon Capture and Storage Project in Alberta

By: Nigel Bankes

PDF Version: Quest. The Energy Resources Conservation Board Approves the First Commercial Scale Carbon Capture and Storage Project in Alberta

Decision Commented On: Shell Canada Limited, Application for the Quest Carbon Capture and Storage Project, Radway Field, July 10, 2012, 2012 AERCB 008

In a long-awaited decision issued on July 10, 2012, Alberta’s Energy Resources Conservation Board (ERCB or Board) approved Shell Canada Limited’s application for a commercial scale CCS project (the Quest Project).  The project is associated with the long standing Athabasca Oil Sands Project (AOSP) and the Scotford Upgrader where new facilities are designed to capture up to 1.2 megatonnes of CO2 per year for ongoing injection.  The cumulative stored volume is expected to be greater than 27 Mt of CO2 over the expected 25 year life of the Scotford Upgrader.  The approval is subject to some 23 conditions and, as contemplated by the scheme approval provision of section 39(2) of the Oil and Gas Conservation Act, RSA 2000, c O- 6 (OGCA), the project will only be finally approved by the ERCB following review by the Minister of the Environment who may impose additional conditions on the scheme approval.

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Low Carbon Energy Policies: Vested Rights, Legitimate Expectations, and Differential Treatment in Domestic and International Law

By: Nigel Bankes

PDF Version: Low Carbon Energy Policies: Vested Rights, Legitimate Expectations, and Differential Treatment in Domestic and International Law

Cases and Matters Commented On: Secretary of State for Climate Change v Friends of the Earth and Others, [2012] EWCA Civ. 28,  aff’g lower decision; Mesa Power Group LLC v Government of Canada, Notice of Intent to Submit a Claim to Arbitration under Chapter Eleven of NAFTA, July 6, 2011; Mercer International Inc v Government of Canada, Notice of Intent to Submit a Claim to Arbitration under Chapter Eleven of NAFTA, 26 January 2012, and request for arbitration (ICSID Additional Facility), April 30, 2012

Governments around the world are adopting a variety of low carbon and green energy policies designed to increase the share of renewable energy sources in the energy mix. In addition, some governments, including the government of Alberta, have also adopted policies to provide for the sequestration of carbon dioxide emissions where carbon fuels continue to make up a significant part of the energy mix. These policies often provide financial incentives to investors in order to persuade them to commit to the new technology. For example, many governments provide for feed-in-tariffs (FIT) to encourage the development of wind and solar energy. A FIT represents a commitment by the government directly or through the incumbent utility to purchase the output from the designated facility (e.g. wind generator, solar panels or biomass generation) at a specified price for a prescribed number of years (typically representing the amortization period of the asset). Such commitments are designed to be “bankable” in the sense that the proponent will be able to use the commitment to raise capital to fund the venture. Similarly, many governments have found it necessary to provide financial support (subsidies or “state aid” in the language of the European Union) for the first commercial scale carbon capture and storage projects. For example, the province of Alberta is currently providing support for three different sequestration related projects in the province (see here). Continue reading →

CCS is now a CDM Project Activity

By: Ana Maria Radu

PDF Version: CCS is now a CDM Project Activity  

Decision Commented On: Decision -/CMP.7 Modalities and procedures for carbon dioxide capture and storage in geological formations as clean development mechanism project activities – adopted in December 2011

The 17th United Nations Climate Change Conference and the seventh meeting of the parties to the Kyoto Protocol (CMP) took place in Durban in November-December 2011 and brought hope again to the international community fighting climate change. The negotiations were reasonably successful and blended together the implementation of the Convention and the Kyoto Protocol, the Bali Action Plan, and the Cancun Agreements, concluding with a decision adopted by Parties that a universal legal agreement on climate change is to be adopted as soon as possible, but no later than 2015.

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Carbon Capture and Storage in Alberta: Draft Offset Protocol

By: Nigel Bankes

PDF Version: Carbon Capture and Storage in Alberta: Draft Offset Protocol

Document and Regulations Commented On: Government of Alberta, Draft Quantification Protocol for the Capture of CO2 and Storage in Deep Saline Aquifers, December 2011; Specified Gas Emitters Amendment Regulation, Alta Reg 139/2007, Alta Reg 127/2011 at pp. 448-451

While there has been some suggestion that the post-Stelmach provincial government is less enthusiastic than its predecessor about carbon capture and storage (CCS) as a silver bullet to deliver on provincial plans to reduce greenhouse gas emissions, the province will go ahead with at least three of the four short-listed CCS projects that are to receive provincial government financial support: the Alberta Carbon Trunkline Project, Shell’s Quest Project and the Swan Hills Synfuels project. The one outstanding project is TransAlta’s (TAU) Project Pioneer. The province has yet to finalize a deal with TAU (and may never do so) but I gather that this has more to do with problems with the technology that TAU\Alstom has been proposing to use than any provincial cold feet.

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A Step Forward for CCS as a CDM Project Activity

By: Ana Maria Radu

PDF Version: A Step Forward for CCS as a CDM Project Activity

Report Commented On: Subsidiary Body for Scientific and Technological Advice (SBSTA) Technical Workshop on the eligibility of carbon capture and storage projects under the clean development mechanism of the Kyoto Protocol, released on November 8th, 2011

In December 2010, the Conference of the Parties serving as the meeting of the Parties (CMP) to the Kyoto Protocol (KP), by its decision 7/CMP.6, decided that carbon dioxide capture and storage (CCS) in geological formations would be eligible as a project activity under the clean development mechanism (CDM), provided that the following issues could be addressed and resolved in a satisfactory manner:

  • non-permanence, including long-term permanence;
  • measuring, reporting and verification;
  • environmental impacts;
  • project activity boundaries;
  • international law;
  • liability;
  • the potential for perverse outcomes;
  • safety ,and
  • insurance coverage and compensation for damages caused due to seepage or leakage.

(See also Nigel Bankes’ blog on CCS and CDM: the eligibility of carbon capture and storage projects under the clean development mechanism of the Kyoto Protocol – the Cancun Meeting of the Conference of the Parties)

Parties and admitted observer organizations were invited to submit their views on how to address and manage these issues. Ten admitted observer organizations and Australia, the Alliance of Small Island States (AOSIS), the European Union, Indonesia, Japan, Norway, Qatar, Saudi Arabia, United Arab Emirates and USA (as an observer state to KP) responded the invitation. Also, the Secretariat hosted a technical workshop with technical and legal experts to consider these submissions and to discuss the issues referred to in decision 7/CMP.6. The workshop, held in Abu Dhabi on September 7th and 8th 2011 clarified some of the technical and legal issues in its report and suggested possible solutions.

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