Alberta/Canada Policy Development and Implementation Status Update

This discussion will summarize the present state of carbon emissions regulations in Canada and some current developments relating to the oil and gas sector. The sectoral approach taken by the government of Canada has resulted in national regulation of transportation (following US CAFE standards) and coal fired power sectors. The next sector under development is oil and gas. This sector presents a significant challenge for the federal government in part due to the regional variation of the industry. It is anticipated that provincial “equivalency” rules will be applied to new regulations, which may result in some variations regionally. Examples of existing regional GHG regulations variations (BC and Alberta) will be discussed along with potential future developments.
The assumption of many economists in the field is that without a carbon price of at least $100 per tonne CO2, CCS cannot receive commercial uptake. This leads to some sense of despair for CCS as the political will to drive regulation to an equivalent carbon price does not appear to be imminent. This assumes that CCS derives from post combustion capture on coal fired power plants. This may be the most important application in the US case. However in Canada the role of coal is far from dominant either as a contributor of emissions or power. Capture costs, the main driver of CCS economics, are likely to be much lower in select niche (and important) industrial applications. These special cases (for example Gorgon in Australia and Shell Quest in Alberta) in aggregate may represent significant opportunities and the real way forward for development of CCS in Canada. In addition there is evidence of some will among oil sands producers to invest, at least at pilot scale, in carbon capture technologies opening the path to innovations that may be suitable for that sector.
Finally it is postulated that the regulated carbon levy, if implemented similar to the current Alberta path, could open the door to substantial progress. The next greatest barriers to implementation may not be either technical or regulatory, but objections relating to local and broader social license issues.