Turning Carbon Into Cash

Unlocking carbon capture, use and storage technologies key to meeting climate change goals economically, Emissions Reduction Alberta workshop learns.

Reaching the goal set out in the 2012 Paris climate agreement to reduce greenhouse gas emissions to a level that limits increases in global temperatures to less than 2 degrees Celsius is going to take an effort similar to the industrial revolution. This is how Steve MacDonald, chief executive officer of Emissions Reduction Alberta (ERA), set the stage for an audience gathered at ERA’s Lesson Learned Workshop in Calgary on November 30.

“We’re facing another revolution; call it the carbon revolution. It will change how we live,” MacDonald told the crowd of around 200 gathered to learn the latest on carbon capture, utilization and storage technologies (CCUS). “A ten-fold increase in carbon efficiency is needed and we have to do it in one-third of the time as the industrial revolution.”

Launched in 2009, ERA’s mandate is to identify and accelerate solutions that secure Alberta’s success in a low carbon economy. A part of that effort is speeding the development of CCUS technologies and pushing them towards commercialization. This includes the $35 million Grand Challenge, a multi-year, multinational effort to help identify and develop technologies that capture carbon and turn it into valuable products while reducing emissions. Other efforts like the Canadian Oil Sands Innovation Alliance’s (COSIA) Carbon XPPRIZE and the recently constructed Alberta Carbon Conversion Technology Centre (ACCTC) build on ERA’s efforts in CCUS technology adaption. MacDonald said all these things combined are positioning Alberta to be a world leader in the carbon revolution.

“Imagine a world where carbon is a commodity, where people are competing for carbon streams right here in Alberta. We’re sitting on the precipice of a great opportunity,” he said.

Leaders in Alberta’s major industries agree there is great opportunity, but a lot needs to be done to make it happen.

“There needs to be certainty in the province’s regulatory and fiscal schemes, including carbon taxes, to give investors confidence the rules won’t change after substantial dollars are spent,” said Brian Vaasjo, president and chief executive officer of Capital Power.

“Good stable policy embraced by Canadians and all political parties is needed,” he added.

“Carbon pricing, regulatory, political uncertainty all create risk in these projects,” added Meera Nathwani-Crowe, manager, technology and innovation, at Canadian Natural Resources Limited. “These are long-life projects, decades long, and need certainty on the price of carbon over that timetable.”

Vassjo also said the industry needs to focus its efforts on technologies that can stand on their own economically.

“The route to being successful is through technology. Those technologies that have a path to being self-sustaining are critical,” he explained. “If a technology always needs a subsidy, I don’t think those technologies are helpful.”

Nathwani-Crowe said collaboration is key to moving CCUS technologies into the commercial realm, and operating companies play a key role in driving this effort.

“We could do a better job helping vendors understand our operations,” she said. “What it takes to integrate into our operations, to operate in harsh environments like Fort McMurray.”

Jon Moser, head, environment and public affairs Canada, for LafargeHolcim, agreed collaboration is key to driving CCUS technologies forward.

“Canada has a real opportunity. We need a coalition of the willing,” he said.

Robert Mitchell, senior client engagement lead at the Global CCS Institute, said that virtually all climate change models require CCUS technologies to achieve the Paris goal of limiting temperature increases to 2 degrees Celsius. The International Energy Agency (IEA) expects CCS technology to account for 14 per cent of carbon dioxide emission reductions by 2060. If temperatures are to be kept below 2 degrees Celsius, CCS will need to account for 32 per cent of reductions.

“That’s a daunting task,” he said. “We would need 90 facilities put on line every year for 20 years.”

Mitchell said right now enhanced oil recovery (EOR) is the only CCUS technology available that can handle large volumes of carbon while also providing revenues from increased oil production. With Alberta’s favourable geology and infrastructure, the province is well positioned to take advantage of this opportunity. But EOR won’t solve the world’s problems, he added.

“Conversion of carbon dioxide into economic products is in the development stage. It’s not ready yet. We need to encourage it and move it to the commercial stage. We need a mix of utilization, EOR, and dedicated geological storage. There will come a time when the oilfields are full and we need dedicated storage.”

Kevin Jabusch, president and chief executive officer of Enhance Energy, said his company is playing a key role in developing the infrastructure to make carbon dioxide EOR and storage possible in Alberta. Enhance is currently constructing its 240 km carbon dioxide trunkline running from the North West Refinery and the Nutrien fertilizer plant at Alberta’s Industrial Heartland north of Edmonton to an EOR scheme at the Clive oilfield north of Red Deer. The project has been a major challenge, he noted.

Financing the project was difficult as investors struggled with uncertainty surrounding carbon dioxide supply. Nailing down the supply from the North West refinery was key to getting investors to buy-in. A $300 million grant from the Alberta government was also critical to getting the project into development.

The carbon dioxide pipeline is expected to be in operation in late 2019, but challenges remain to making the project profitable, said Jabusch.

“We need stability in regulations, a predictable and appropriate price on carbon, sequestration credits, stable commodity prices and a reasonable differential,” he said.

Jabusch added that the carbon dioxide trunkline lays the groundwork for future CCUS projects in the province.’
“We’re expecting other people would be able to access the system,” he said.

Issam Dairanieh, operating partner at Ascent Capital Holdings and the former CEO of CO2 Sciences at the Global CO2 Initiative, said in his keynote address that interest in CCUS is growing around the world with more government and industry money targeting new technologies.

“The Carbon XPRIZE has been a true catalyst in creating a lot of awareness in the U.S. and Europe,” he said. “Canada led, Europe is following fast, and there is that kind of pick-up in recognition of value.”

Dairanieh said from a greenhouse gas mitigation perspective, CCUS has “gigatonnes of potential, not megatonnes.”

But, he cautioned, most CCUS applications are in the early stages of development, with some applications three to five years from deployment and others more than 10 years away from commercial development.

“It needs some support at the beginning. You need to identify the technologies that can stand on their own feet. They have to be able to scale,” he said. “And when you are talking about scale you have to talk about the business case. Saving the world is great, but it needs a business case.”

To speed development, Dairanieh said rather than supporting 20 or 30 potential CCUS technologies, Alberta should support five technologies and try to rapidly get them to commercialization.

“The downside is putting eggs in limited baskets, but you get acceleration to markets,” he explained.

There are a lot of CCUS technologies being developed, he said, before recommending industry focus on products that have as large a market as possible or technologies that have a smaller market but large margins.

Another question to ask, he said, “is how easy is it going to be to deploy in the market.”

CCUS technologies that use the same products and same market channels of existing technologies have a greater chance of deployment, he said.

He also suggested focusing on technologies that have, “a true potential for carbon reduction.”

“What we are after is five technologies that are going to drive the sector fast,” he explained, adding that the CCUS sector needs success stories to further interest and investment.

Alberta and Canada are beginning to generate these success stories through the ERA Grand Challenge and the COSIA Carbon XPRIZE.

One example is Inventys, developer of a solid carbon dioxide absorption technology it believes will cut the cost of carbon capture down to the $30-$50 per tonne range, around half of current costs.

“That’s what we believe the market needs to implement widespread carbon dioxide capture,” said Brett Henkel, VP strategic accounts and government affairs at Inventys.

Launched in 2007, Inventys now has a 30 tonne per day pilot project for its technology with Husky in Saskatchewan slated for start-up in the spring.

Henkel said the company has had a lot of help in getting to this point in development.

“ERA was an early supporter, big energy companies have come in and supported us. Almost all the Canadian funding bodies have funded us,” he said. “For the commercial phase we are looking for support from industry.”

The ERA Grand Challenge also played a role in pushing McGill University/Lumenfab’s solar-powered artificial photosynthesis technology that converts carbon dioxide and water into chemicals and fuels forward, said Zetian Mi, associate professor of electrical and computer engineering at McGill.

“We’re doing exactly as Mother Nature has been doing for billions of years except faster and cleaner,” Mi said. The process uses readily scalable semiconductor technology and looks like a solar panel. While still in early development stages, Mi hopes it can leverage the solar cell industry as a model to scale up, ultimately creating mega or giga-watt solar refinery plants where large emitters can capture carbon dioxide and transfer it into hydrocarbons.

Carbon Upcycling Technologies was started as a direct result of the ERA Grand Challenge, says Apoorv Sinha, VP research and development and co-founder.

The company manufactures CO2-enriched nanomaterials, adding performance and value to industries like concrete, polymers and adhesives, energy storage, solar PV, and more.

Carbon Upcycling is also a finalist in the Carbon XPRIZE, which Sinha said, “has helped establish us as one of the top carbon utilization companies in the world.”

The company has one product in market dealing with corrosion control and is moving towards commercialization of a second product that improves the performance of fly ash, an additive to cement that makes concrete stronger.

While CCUS has momentum in Alberta, more needs to be done to enable it to advance, including infrastructure development, policy changes and other enabling activities, the workshop attendees heard.

Jeff Pearson, president of Wolf Carbon Solutions, the operator of the Alberta carbon dioxide trunkline, said more government support to build carbon dioxide infrastructure would enable further CCUS development. He pointed out the trunkline will only be 10 per cent utilized when it begins operations in 2019 and will need more suppliers and users of carbon dioxide if it hopes to be the backbone of a network based on CCUS.

“Government support is a huge enabler,” said Pearson.

Real world opportunities to test CCUS technologies through the Alberta Carbon Conversion Technology Centre will enable faster technology uptake, said Harold Krenkel, manager, processing technologies, at InnoTech Alberta.

Krenkel said the ACCTC puts Alberta and Canada in the lead in developing CCUS technologies. For its first two years of operations it will house the Carbon XPRIZE finalists in its five bays as they work towards commercializing their products. For the next eight years it will be open for other technologies. Kenkel said he hopes it, “is the start of a hub for technology developers.”

McGill’s Zetian Mi said efforts like ERA’s Grand Challenge provide the footing to move forward with finding new partners to further develop and commercialize CCUS technologies.

“We’re grateful for the ERA,” he said, adding it has allowed his team to stick to its core focus of building out its technology rather than having to continually chase outside funding sources. “Now we can look at partners for the next stage of development.”