Obviously, this isn’t great news for the coal industry. What’s that expression — cry me a river? It doesn’t mean CCS can’t be put to good use in rich countries, but obviously that will come at higher cost. Will anyone want to pay developed-world prices to get the needed 100 or so clean coal and carbon sequestration projects working? Tough to say, but I doubt it. Developing-world projects were considered a way to get some volume deployment, and without that, it doesn’t look good for coal. But given what’s on the line for Canada, Australia, the U.S. and others, leaving out CCS doesn’t look good for Copenhagen either, so someone’s going to have to give.

Isn’t international politics fun?

When the Alberta government announced last week that it would be handing over $745 million to Shell Canada so it could move ahead with its Quest commercial-scale CCS project, and when the federal government said it would chip in another $120 million, it didn’t sit well with environmental and energy think-tank The Pembina Institute.

It’s not that Pembina is against developing this technology. What it doesn’t particularly like, and I can’t help but agree, is the fact that the Alberta and federal governments’ are covering two-thirds of the cost for this $1.35 billion project, which will be designed to capture CO2 from the steam methane units at the Scotford Upgrader in Fort Saskatchewan. It’s part of the Athabasca Oil Sands Project, a joint venture among Shell (60 per cent), Chevron Canada (20 per cent) and Marathon Oil Sands (20 per cent).

Why, Pembina asks, are taxpayers covering the majority of a project’s costs when the companies benefitting from this public freebie are some of the most profitable companies in the country? Pembina is also opposed to the governments being “singularly focused” on end-of-pipe technologies, such as CCS, at the expense of investments in technologies and energy sources that reduce or altogether eliminate carbon emissions at the front of the pipe — renewables, energy efficiency, etc…

Rather than carry the load for the private sector, the government should be moving quickly to establish a cap-and-trade regime that would put a sufficient price on carbon, Pembina argues. Ultimately, polluters should cover the whole cost of CCS deployment and that will only happen when they factor in the cost of not doing so once carbon pricing hits their bottom line. Pembina also argues that the government shouldn’t be so narrowly focused on CCS that it ignores the much broader, and less risky opportunities out there. “In parallel to its support for CCS, the government needs to support a massive scale-up in renewable energy and energy efficiency, the most sustainable solutions to climate change,” it says.

Fact is the federal government appears to be pulling its support from the ecoEnergy for Renewable Power program, which covers 1 cent of the cost for every kilowatt-hour of electricity produced from green energy sources, primarily wind. The program has been successful and is expected to run out of allocated money this fall. Here’s the problem: even if the government at some point renews the incentive, and there’s no indication it will, the fact that there’s likely to be a period of inactivity creates a boom-bust situation for renewable energy developers. We saw the negative impact this had on the U.S. wind industry just a few years ago, so it’s concerning to see the Canadian government heading in this direction. I asked Lisa Raitt, Minister of Natural Resources, about this concern and she’s very aware of it. But she said the government has to be cautious about how it spends money over the next few years given the huge deficits caused by unprecedented stimulus spending and lower government revenues. Translation: end-of-pipe projects that allow us to produce more oil and coal, those are fine, but lower priority goes to renewable energy that avoids emissions in the first place. Don’t even get me started about the government’s complete lack of interest and support for geothermal power.

The other concern has to do with the enormous risks associated with CCS. According to a recent report out of the Munk Centre for International Studies at the University of Toronto, “The technology holds the promise of massive reductions in emissions but any success may ultimately be limited to a relatively few projects due to cost, liability, technology, scale and public skepticism.” It goes on to say that CCS “may turn out to be another costly Faustian bargain” because it merely justifies and prolongs our addiction to fossil fuels while offering no long-term certainty:

Nobody knows how billions of tonnes of highly compressed carbon dioxide will behave underground. Could CO2 eventually leak and find its way into underground sources of drinking water (USDW)? Could plumes of pressurized carbon dioxide displace salt water from the saline aquifers into USDW? What would happen if sequestered carbon dioxide were to leak into the atmosphere or creep into an underground source of drinking water 50 years from now? Who would be responsible? Who would monitor the carbon dioxide underground for centuries? What would happen if carbon dioxide injected in one jurisdiction migrated into a neighbouring jurisdiction?

In other words, are we really willing to put so many eggs — and future generations — in one basket? The reality, according to the Munk report, is that “Instead of buying us time to find alternate sources of clean energy, CCS is buying politicians’ time to avoid making tough, unpopular decisions.”

Those tough, unpopular decisions can be found in the International Energy Agency’s World Energy Outlook 2009, or at least an early excerpt from that outlook. To limit CO2 levels in the atmosphere to 450 parts per million, the agency estimates that $10.5 trillion (U.S.) will need to be spent globally between 2010 and 2030 on top of what’s been spent or committed up to mid-2009. In total, $6.6 trillion will need to be invested in “low-carbon power generation,” with 72 per cent of that committed to renewables, 19 per cent to nuclear, and 9 per cent to CCS. The good news is that total fuel savings are estimated to be $8.6 trillion over that period, so there are clearly economic and environmental benefits to aggressively pursuing this path.

But let me just emphasize: The IEA figures 72 per cent of those trillions should be spent on renewables, with just 9 per cent spent on CCS. It also says fossil fuel energy consumption must peak by 2020 and then begin falling to achieve the 450 parts per million target. Given this, why is the Canadian government giving so much attention to CCS, a technology that encourages greater fossil fuel consumption and is burdened with massive risk, when the world’s energy agency clearly shows that limiting fossil fuel use and spending heavily on renewables should be the chief goal?

I think it’s a fair question for all Canadians to be asking. The country’s national energy and climate policy shouldn’t be primarily based on the economic interests of Alberta.

Researchers co-injected carbion dioxide and chemical tracers into an underground storage site. The tracer makes it possible to differentiate CO2 from the experiment from naturally occurring CO2. They then placed bee hives about 150 metres upwind and downwind of the site, where CO2 from underground was intentionally released as part of the experiment. The idea is that pollen from surrounding flowers would collect the CO2 and be marked by the tracer. As bees gather the pollen, they bring it back to their hives, where researchers collect samples for analysis. If there’s no tracer, there’s presumably no leak.

While a novel idea, I’m not sure I’m comforted by the idea of having bees used to track CO2 leaks over hundreds of years. Also, I wonder if there ever was a major leak whether it would just kill the bees — that to me, is a pretty good sign that something is wrong. Problem is, it would also kill the humans in the area. As a way to pre-test the ability of a site to hold CO2, however, this could be one approach worth employing.

My Clean Break column today takes a shot at the Canadian government for repeatedly touting carbon capture and sequestration as a panacea for the oil sands, while at the same time refusing to recognize — and support — the role that renewable energy can play. It comes on the heels of an appropriately critical National Geographic feature on the oil sands called “Scrapping Bottom,” and the recently yet repeatedly expressed belief of Environment Minister Jim Prentice that technology will save the day.

Perhaps technology will helps prolong our days on this planet, but it won’t be carbon capture and sequestration, which is too expensive, unproven, inefficient and, in some applications, ineffective to tackle the ghost in Canada’s climate-change closet. By refusing to acknowledge the major role that other renewables can play to avoid these carbon emissions in the first place, and to do it more quickly and economically, Stephen Harper is sending Canada’s economy down a path that’s unsustainable.

Aside from some environmental groups, nobody is asking the government to shut down the oil sands. What they’re asking is for development to be frozen while we address the environmental concerns we face today. CCS is part of the solution, and the long-term part, so we need to put more investment and attention to technologies that make oil sand operations more efficient, or which use clean alternatives to natural gas — such as geothermal and solar thermal. Canada is not doing itself any favours by broadening the path it’s currently on. Better to build a couple of new paths that will enable a less painful transition over the long term.

Oil sands supporters like to remind the rest of Canada, particularly Ontarians, that the Alberta oil industry is the country’s economic engine and creates the jobs and government revenues that keep the rest of us happy. Yeah, and it creates a lot of jobs for foreign workers as well who take that wealth out of the country, and for foreign companies that also take that wealth out of the country.  Maybe if we slowed down development, we could come to a pace that’s sustainable using our own national workforce? And why can’t we pursue other paths as well? Why is it just assumed that the path laid down is the only path for employment and GDP growth in Alberta?

To quote the end of my column:

Under an Obama administration, America is no longer in denial. Having acknowledged its addiction to oil, the United States is checking itself into rehab. Canada’s steadfast position? Renovate the crack house, use cleaner needles and continue feeding a nasty global habit. Surely we could broaden that narrow, dangerous vision.

I’ll end with this: Just what is Rex Murphy smoking? His position — that Alberta’s oil sands is bringing home the Canadian bacon so we should just shut up – borderline insulting, and ignores the fact that the oil sands — despite its job and wealth creation so far – is a generational symbol of the crossroads we are at. We either choose to go down an unsustainable path or we begin creating some other paths to make the transition less painful in the long term. Attacking National Geographic for consuming fuel in the course of making its story is like blaming the dog for eating the slop that’s put in front of him. We, as average Canadians, haven’t had much say about it.

But let’s assume, a decade out, that all the promise of CCS pans out. Let’s assume it takes hold, that a vast network of pipelines is built, that we’re certain sequestration sites won’t leak, and that the percentage of CO2 we can capture from coal plants and industrial sites continues to improve. Let’s assume that two decades out we start to see a number of acquifers and old oil fields filled to capacity with CO2 and, finally, capped shut.

Think those storage sites will be forever permanent? Think again.

I was talking recently with someone heading up a government algae-based carbon recycling program. The goal of this program is to come up with an economic way to divert CO2-rich flue gases from industrial sites and coal plants to nearby enclosed algae farms. The algae would “eat” the CO2, grow quickly, and then be harvested to make a combination of products, from biodiesel and ethanol to protein feed for livestock. I’m probably not telling you anything new — there are dozens of companies out there trying to do the same thing.

But then this person, who shall remain nameless, says something that caught my attention. He called all those storage sites “gold mines of the future.” At first I didn’t get what he was saying, then I realized the significance of that comment. He was basically saying that, down the road, algae farms could be created right on top of CO2 storage sites. The farms could be designed to pump this CO2 back to the surface, giving them a predictable stream of relatively pure algae food. An earlier scenario would be to build these algae farms at CO2 pipeline hubs. Either way, it would be much more economical than building an algae farm/processing plant next to each and every coal plant or aluminum smelter.

There’s a part of me that loves this idea, and there’s a part that asks: Shouldn’t we leave this stuff alone? Sure, the biodiesel and ethanol and other chemical products made from this algae will presumably displace the use of oil down the road. But given that, long term, we’re going to need an 80 per cent reduction in CO2 emissions globally, developing infrastructure for this would seem to undermine this target.

It made me realize that short- and medium-term ideas, despite there merit, need to be considered as part of a larger long-term picture. CO2 stored, assuming we can ever make it work to the scale that’s necessary, is probably best if capped shut and left alone.