Opening of carbon capture project in Saskatchewan draws global interest

ESTEVAN, Sask. - A carbon capture and storage project touted as the world's first commercial-scale operation of its kind attracted international attention Thursday at its opening in southeastern Saskatchewan.

SaskPower said more than 250 people from at least 20 countries attended the unveiling of the $1.4-billion facility that is to take carbon dioxide released by the Boundary Dam power plant near Estevan and release the gas deep underground using a steel pipeline for storage.

The aim is to reduce emissions by one million tonnes annually, which amounts to 90 per cent of what the coal-fired power plant releases.

Federal Natural Resources Minister Greg Rickford said he expects the Boundary Dam project to be an example for future coal-fired plants around the world.

"We share the view that it's still an expensive technology, but it's up and running. It's working. It's employing Canadians. It's reducing greenhouse gas emissions," he said.

The plant has been heralded as one possible solution to fight climate change since 2008, when Prime Minister Stephen Harper visited the site and announced $240 million in federal funding.

SaskPower executive Mike Monea acknowledged the project is overbudget and said it will be approximately six months before the utility knows the total bill. He added that the amount could be between $150 million and $200 million.

Monea said that because it's the first commercial coal operation to use carbon-capture technology, the Boundary Dam project will be more expensive than future plants.

"Nobody has built a commercial plant like this. When you build a major large commercial plant, that's when you see the performance data," he said.

"It would be a shame not to help other countries learn how to clean up their emissions."

Critics of the technology argue that it doesn't effectively address environmental concerns because it justifies the burning of fossil fuels.

The Sierra Club of Canada has said the capital used for the project would have been better put towards renewable energy projects such as solar and wind farms.

Saskatchewan Premier Brad Wall disagreed. He said the project helps curb greenhouse gas emissions while creating affordable energy.

"India's using coal. China's using coal. They are building new plants all over the world so we need to invest in renewables. We better also invest in technologies to clean up coal," he said.

Some of the carbon dioxide released at Boundary Dam is to be liquefied and sold to oil companies to help extract more crude from the ground. The utility has a 10-year contract with Cenovus Energy Inc. (TSX:CVE), a Calgary-based oil company, to buy the captured gas.

Wall said he believes it's preferable to reanimate a mature oil field as opposed to drilling new wells.

"There's an environmental benefit to enhanced oil recovery."

The power station will also capture sulphur dioxide, which can be converted to sulphuric acid and sold for industrial use. A byproduct of coal combustion called fly ash will be captured and sold for use in concrete products.

The carbon dioxide that isn't used for oil recovery is to be stored permanently through a process that injects the gas more than three kilometres underground.

Wall said he believes there is enough research on carbon-capture technology to ensure that storing emissions won't contaminate the environment.

"I wouldn't agree with those that are saying that, just based on the fact that we have over a decade of experience with geologically storing (carbon dioxide) in southeast Saskatchewan."