Taxes are key to capturing greenhouse gases: report
A tailings pond reflects the Syncrude oilsands mine facility near Fort McMurray, Alta., Wednesday, July 9, 2008. (THE CANADIAN PRESS/Jeff McIntosh)
The Canadian Press
Published Sunday, November 7, 2010 2:27PM EST
OTTAWA - A fledgling technology that pumps greenhouse gases deep beneath the earth's surface won't get off the ground without taxes, says a newly released report.
A study commissioned by Environment Canada says carbon capture and storage needs a boost in the form of taxation or government policies if it's going to gain widespread use.
The finding could dampen the tax-averse Conservative government's enthusiasm for carbon capture, a technology it has championed to lower the country's greenhouse-gas emissions.
The Tories excoriated former Liberal leader Stephane Dion in the last federal election for advocating a carbon tax. But the study says taxes are needed to make the technology viable.
"Government taxes and policies will also be required to set about implementing large-scale, long-term, wide-spread CCS technology," the report says.
"In the absence of these government penalties, only low-cost capture and value-added storage ... will provide an opportunity for CCS."
Calgary-based consulting firm AECOM gave the report to Environment Canada in May. The Canadian Press obtained a copy under the Access to Information Act.
The study says more research and development needs to be done to lower the cost of carbon capture and turn the technology into a money maker.
Ottawa and the provinces have already spent about $3 billion in recent years on carbon capture and storage. The Alberta government alone has committed $2 billion to various carbon-capture projects.
Neighbouring Saskatchewan is home to one joint Canada-U.S. carbon-capture project.
An aging oilfield in the southern Saskatchewan town of Weyburn buys the odourless and colourless gas from a coal gasification plant in North Dakota and pipes it into an underground reservoir to draw more oil out of the ground.
The United States has shown strong interest in carbon capture and storage. Earlier this fall, a delegation of American senators toured Saskatchewan and Alberta and promised to help set up meetings with the U.S. government's energy department to discuss carbon-capture projects.
But the technology remains costly and largely unproven.
The consultant's report flagged lingering concerns about the technology, such as greenhouse gases escaping from underground and rising into the atmosphere.
"Concerns exist regarding the safety of CCS technology, including possible CO 2 leakage and long-term environmental effects of CO 2 storage on subsurface areas," the study says.
"Most concerns are related to the storage of CO 2 and the potential for accidental release from the storage sites. The resulting liability issues could hinder the large-scale commercialization of CCS."
No one from Environment Canada was available for an interview. The department emailed to say it doesn't necessarily accept the consultant's findings.
"This consultant report reflects the views and opinions of the contractor and not necessarily those of the government of Canada," spokesman Henry Lau wrote.
"Environment Canada will use this report to further understand and inform future work in the area of carbon capture and storage."
The study's author says taxes are among several options that need to be considered to make carbon capture more viable. Other options might include cap-and-trade or subsidies for companies with good environmental track records.
"It would help," Aileen Raphael said in an interview. "That's what we're stating, is that that's part of the piece of the pie that's needed to help spur this. ...
"Without that, it's very hard to see that this technology, in my opinion anyway, would go forward."