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PTAC CO2 Conference: November 8, 2010 Carbon Capture & Storage A Canadian Clean Energy Opportunity.

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Presentation on theme: "PTAC CO2 Conference: November 8, 2010 Carbon Capture & Storage A Canadian Clean Energy Opportunity."— Presentation transcript:

1 PTAC CO2 Conference: November 8, 2010 Carbon Capture & Storage A Canadian Clean Energy Opportunity

2 2 ICO 2 N: Accelerating CCS in Alberta for 2015

3 3 ICO 2 N: Forefront of CCS in Canada Wide range of industry participants 16 members including 5 based in Canada, and 11 based internationally Oilsands, Coal power generators, gas processors, and pipeline operators CCS policy leadership in Canada Source of unbiased thoughtful CCS expertise for 5 years Leader in CCS policy input to governments: -CCS economics- Long term liability -Ownership of reduction credits- CCS Quantification -Risk valuation methodology Grounded analysis ICO 2 N’s integrated CCS economic model employed by both governments Leading key industry projects and analyses: - Capture technology assessment- Alberta CO 2 Purity Study - Safety of surface operations- Integration of RFP Projects

4 4 Evolution of Canadian CCS Dialogue Early years: Today Getting CCS on the Agenda Internal analysis of CCS deployment - Technology - Economics - Policy Basic CCS education and advocacy Advocacy on the scale of the potential reduction Size of the initial financial gap facing first- mover projects Focusing on CCS Deployment Support for 4 Alberta Demo Projects for 2015: - Funding of ~$3B (Federal/Provincial) for initial demo’s - Specific technical studies (safety, purity) - Policy framing - Help develop regulatory process in Alberta Scope a broadly defined risk assessment to address safety and stakeholder concerns Leveraging initial deployment towards large-scale infrastructure CCS Learnings and Next Phases Adopt critical learnings from existing projects around the world Continued advocacy on broadened incentives for next phase of projects Long-term, large-scale deployment and an Integrated system approach

5 5 ICO 2 N’s 2011 Focus

6 6 ICO 2 N Vision for a CO 2 Network

7 ICO 2 N has completed the first phase of this work, and has determined that CO 2 pipelines can be safely deployed if they are designed, constructed and regulated in the same manner as other hydrocarbon infrastructure in the Province. F-1.5 Rupture Maximum Hazard Distance Radius Leak Maximum Hazard Distance Radius Maximum arc of Ground Plume 19% D-10 D-5 F-1.5 Leading Technical Evaluations – CO 2 Hazard Distance for Pipelines

8 Alberta CO 2 Purity Project Broad range of CCS industry expertise Robert Craig, ICO 2 N Coordinators Susie Dwyer, PTAC Kali Taylor, ICO 2 N Chair

9 Project Genesis Q4 2009: $2B Alberta RFP proponents selected $1 B contribution from Ottawa 4 projects underway in 2015 timeframe Industry and regulators initiate important ground work: Capture, pipeline and engineering feed design Evaluate sequestration / EOR locations Commercial contracts being negotiated Regulatory policy and governance being developed This work is not informed by purity standards Multi-faceted project team developed to undertake Project:

10 Funding Commitment and Timeline Budget of $500,000 for phases I and II $250,000 provided by industry $50,000 provided by Alberta Energy Additional funding sought (GCCSI, NRCan and CMC) High leveraging of participants’ funding dollars PTAC is managing Agreement and providing project administration Funding Agreement executed Project Launch August 2010 Stage I will be complete in Dec Stage II to follow in 12 months FUNDING TIMELINE The ACCP is a critical component of accelerating CCS in Alberta

11 Alberta’s CCS Demo Projects Quest Project Pioneer Alberta Carbon Trunk Line Swan Hills Synfuels Project Lead Shell Canada for AOSP Group TransAltaEnhance EnergyS. H. Synfuels Sagitawah Power Host Facility Shell Scotford Oil Sands Upgrader Keephills 3 (450 MW coal- power plant) Agrium Fertilizers Northwest Upgrader (Proposed) SHS Underground Coal Gasifiier (Proposed) Pipeline 12 to 16 inch, <100 km ~8 inch, 20 km & 70 km 16 inch, ~220 km ~ 8 inch, 20 km Sequestration Deep Saline + Pot’l future EOR Deep Saline and EOR EOR +Pot’l Depleted Oilfields EOR CCS Volume1.2 Mtpa1.0 Mtpa1.9 Mtpa1.3 Mtpa Estimated Cost C$ B $1.35$1.1 to 1.2$0.70 to 0.75$0.40 to 0.45 Public Funding C$ billion $0.9$0.8$0.50$0.3

12 12 Economics of Network CO 2 Pipeline A 400 km CO 2 Pipeline Example Economies of Scale: coordinated design and pre-building is significantly more cost effective than phased in CCS solutions. Option 1: Build in phasesCapital Cost Pipeline Capability t / day (T/yr) $ / t Cost Pipeline (Phase I)$400 M20,000 (7.5) Pipeline (Phase II)$400 M20,000 (7.5) Total$800 M40,000 (15)$10/t Option 2: Build for capacity Capital Cost Pipeline Capability (t / day) $ / t Cost Build in one phase$500 M40,000 (15)$6/t

13 13 Important Elements of a CCS Network Designed for present & future volumes Routing linked to first stage projects and optimized for longer term source/sink matching Allows multiple CO2 sources and markets If a facility has an outage, alternatives are available Reduced Infrastructure reduces environmental footprint Minimizes surface impact and environmental consideration Greater Safety and Stakeholder confidence Fewer pipelines and sequestration sites improves safety and focuses monitoring efforts Open Access / Public Utility Model for Pipeline and Storage Need to ensure fair toll pricing for all shippers Leverages public investment, diffuse criticism of government selecting winners

14 14 Thank You

15 15 CCS Costs

16 16 Modeling: Supply and Demand

17 17 ICO 2 N Policy Messaging

18 18 Intergovernmental Panel on Climate Change: “The IPCC has identified CCS as the most promising technology for the rapid reduction of global emissions – by up to 55% by 2100.” US Energy Secretary Stephen Chu (Oct. 12, 2009): “I believe we must make it our goal to advance carbon capture and storage technology to the point where widespread, affordable deployment can begin in 8-10 years.” “It will require an aggressive global effort, harnessing the scientific talent and resources of government as well as industry” Investment: G8 – 20 projects underway by 2020 Statoil’s Sleipner project in Norway – operating since 1996 BP & Statoil’s In Salah project in Algeria – operating since 2004 Considerable government focus on demonstration projects CCS: A Global Endeavour

19 19 Source: NRTEE ‘Achieving 2050: A Carbon Pricing Policy for Canada”, 2009 A Strategic Investment for Canada

20 20 Economic gap in transition period EOR sales (avg.) Industry’s Contribution Through CO 2 reduction obligation Costs declining over time A Case for Partnership Conceptual Portrayal of CCS Economics Provincial and Federal leadership is needed in overcoming this gap

21 21 Western Canadian Sedimentary Basin >10,000 MtCO 2 of storage potential in oil and gas reservoirs alone Atlantic Region  Studies underway into coal and Deep geologic reservoir storage SW Ontario  Work to delineate storage potential in Hamilton to Sarnia corridor required Long-term Vision of CCS Across Canada

22 22 ICO 2 N in 2011

23 23 ICO 2 N 2011 Activities Policy and Regulation design input: Helping Alberta set the stage for CCS projects, includes work on items such as long-term liability, risk valuation etc. CCS Policy Support: Ensuring that support for CCS remains strong and that government includes CCS in their long-range climate change policy ICO 2 N Economic Input: Working to share economic conclusions and modeling capabilities with both levels of government Public Education/Awareness: Communications work in collaboration with others to ensure CCS is accepted International Engagement: Ensuring work is coordinated with international efforts Integration of initial projects: Analysis on how RFP winning projects can be integrated Purity Specification Project: Leading a multi-stakeholder study to develop CO 2 purity and contaminants standards This work will advance knowledge in key areas in advance of the first four RFP projects

24 24 For more information: ICO 2 N report on CCS: Carbon Capture and Storage: A Canadian Clean Energy Opportunity Contact: Eric Robert Thank You

25 25 CO 2 Capture and Storage Overview

26 26 The ICO 2 N Group addresses challenges and solutions to how large-scale CCS can be deployed in Canada Through policy development work, CCS technical studies, input on the formation of CCS regulations and stakeholder engagement, ICO 2 N will provide industry’s guidance to how CCS can be implemented efficiently during the next decade ICO 2 N Mandate

27 ICO 2 N’s Value Proposition Impact Opportunity to help set direction and priorities for CCS deployment CCS Knowledge Access to existing ICO 2 N knowledge base ICO 2 N’s 17 companies provide a deep pool of experience and expertise Leverage of staff time on subject matter Brand Unparalleled access to information, communication and interaction with peers, governments and stakeholders Value for Financial Contribution Access to a broad range of initiatives Leverage financial contribution at a 25:1 ratio (Tier II) Management Strong four year record of managing the consortium and strict overall budget control Strong project management skills, network of on-demand consultants

28 28 ICO 2 N Structure ICO 2 N Steering Committee Communications - Education - Media Engagement - Public Acceptance Technical - Safety Work - CO 2 Purity Work - Capture Cost Analysis - Integration of RFP projects Policy & Economics - CCS Economic Analysis - Education for policy makers - CCS Policy and incentives - CCS Regulations

29 29 Source: 2008 Alberta Climate Change Strategy Greenhouse Gas Reduction Highlighting Greener Energy Production Reductions A Strategic Investment for Alberta

30 Number of installations / Products Technology cost % The demonstration phase is essential and may need direct support. The demonstration phase is essential and may need direct support. Demonstration phase Deployment phase CCS is here !! Discover & Develop phase Path to Deployment Full Commercialisation

31 31 Conceptual CCS Economics Costs of CCS system components are variable and site specific. Key drivers are: Pipeline – Distance of transport and pipeline size Capture – Facility specifics and chosen capture technology EOR – Productivity of EOR field Compliance – Strictness of government regulations Tax Savings – Individual corporate finances and economic loss associated with respective CCS operation $20 $40 $60 $80 $100 $120 CCS COSTSCOMPENSATION Capture Operating Cost $140 Uncertainty Range EOR Revenue Avoided Compliance Funding Gap Uncertainty Uncertainty Range Uncertainty Corp. Tax savings GAP Capture Capital Cost Uncertainty Range (With a range of site specific factors ) $/ tonne levelized over 30 year project life Transport & Storage Cost

32 32 CO 2 Reduction Options – Volume Comparison of Canadian GHG reduction options undertaken by The Delphi Group

33 33 CO 2 Reduction Options – Cost

34 34 Important Elements of a CCS Network Built to handle present & future volumes Routing optimized for longer term source/sink matching Allows multiple CO 2 sources with reduced EOR/storage locations If a facility (capture or storage) closes for maintenance, alternatives are available Focus on minimum number of storage sites, for validation and liability benefit Environmental Responsibility Minimizes surface impact and environmental consideration Fewer local residents impacted by pipeline development Open Access / Public Utility Model for Pipeline and Storage Need to ensure fair toll pricing for all shippers Leverages public investment, diffuse criticism of government selecting winners Longer term plan and demonstration projects must fit together Alignment and linkage to long term infrastructure should be part of first projects ICO 2 N is advocating for the most efficient way to deploy CCS

35 35 Federal government ~$1.3 billion for CCS through various funding programs Clean Energy Dialogue with the United States Alberta government $2B towards deployment of 4 projects by 2015: 1.Shell Scotford Upgrader 2.TransAlta Pioneer 3.Enhance Pipeline 4.Swan Hills Synfuels Saskatchewan and British Columbia Encana EOR/Storage project in Weyburn – operating since 2002 SaskPower coal fired electricity generation Spectra Energy gas plant Canada is a World Leader

36 36 ProjectLocationProject TypeVolume 1.Shell Scotford Upgrader Edmonton, Alberta Bitumen Upgrader Post- combustion amine solvent 1 Mt/yr EOR & Sequestration 2. TransAlta Pioneer Wabamum Lake, Alberta Coal-fired power plant Post-combustion chilled ammonia 1 Mt/yr EOR & Sequestration 3. Enhance Pipeline Industrial Heartland, Alberta (3 facilities) Large-scale CO 2 pipeline CO 2 from fertilizer plant & bitumen upgrader 1.7 Mt/yr initially Pipeline for up to 14Mt EOR 4. Swan Hills Synfuels White Court, Alberta In-situ coal gasification (syngass for 300MW of co- generation) 1.3 Mt/yr EOR 5. SaskPower Boundary Dam Estevan, Saskatchewn Coal-fired electricity power plant Oxyfuel 1 Mt/yr EOR 6. Spectra Energy Fort Nelson, British Columbia Natural gas plant IGCC – pre-combustion capture 1 Mt/yr EOR & Sequestration Strong CCS Projects Underway

37 Alberta’s CCS Demo Projects Sept 2010 Quest Project Pioneer Alberta Carbon Trunk Line Swan Hills Synfuels Project Lead Shell Canada for AOSP Group TransAltaEnhance EnergyS. H. Synfuels Sagitawah Power Host Facility Shell Scotford Oil Sands Upgrader Keephills 3 (450 MW coal- power plant) Agrium Fertilizers Northwest Upgrader (Proposed) SHS Underground Coal Gasifiier (Proposed) Pipeline 12 to 16 inch, <100 km ~8 inch, 20 km & 70 km 16 inch, ~220 km~ 8 inch, 20 km Sequestration Deep Saline + Pot’l future EOR Deep Saline and EOR EOR +Pot’l Depleted Oilfields EOR CCS Volume1.2 Mtpa1.0 Mtpa1.9 Mtpa1.3 Mtpa 10 Year Cost Est. C$ billion $1.35$1.1 to 1.2$0.70 to 0.75$0.40 to 0.45 Public Funding C$ billion $0.9$0.8$0.50$0.3

38 38 Learning Curve improvement – slow and uncertain Flue Gas Desulphurization Source: Rubin et al et al, Estimating Future Costs of CO2 Capture Systimes Using Historical Experience Curves

39 39 Learning Curve Improvement for CCS Reduction of CO 2 Capture Costs Based on Expected Learning Rates Data provided for this chart is based upon a technical study done by the IEA on estimating the future trends in the cost of CO 2 capture technologies. Pre/post/oxyfuel combustion technologies for CO 2 capture were reviewed and an estimated range of learning curves (13%-40%) were presented. We have used a midpoint of 25% to demonstrate potential reduction of CO 2 capture costs and have included the low rate for comparison.

40 40 Application at Alberta’s Oil Sands Source: Cambridge Energy Research Associates (CERA). The use of this material/graphic was authorized in advance by CERA. No reuse or redistribution of CERA information is permitted without written permission by CERA. For more information on CERA please visit or call Jim Meitl at or at


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