Vancouver, Canada (GLOBE-Net) - Carbon capture and storage (CCS) has been hailed as a "silver bullet" for the coal industry. According to the World Resources Institute, there is a need for CCS. But the lack of a regulatory framework governing carbon emissions is making it difficult for industry to invest in the development and implementation of major, new technologies.

A similar concern has been expressed in Canada. Lack of a regulatory framework governing carbon emissions is making it hard for the energy industry to develop and implement technologies to reduce greenhouse gas emissions, according to Stephen Kaufman, Suncor Energy’s director of business development, speaking at a workshop two weeks ago on the pros and cons of carbon capture and storage.

More recently Steve Snyder, TransAlta Corporation’s President and Chief Executive Officer said the development of permanent carbon capture and storage technologies is essential if Canada is to achieve its goal of reducing carbon emissions by 20 percent from current levels by 2020.

Mr. Snyder made the remarks at the Edison Electric Institute Annual Conference in Toronto, where he was part of a panel of industry CEOs discussing technology as a key to addressing the challenges of global climate change.

Coal is here to Stay

CCS also has detractors, who are calling for more investments in wind, solar and other renewable energies rather than in carbon capture technologies. Renewable energy undoubtedly will play a critical role in addressing rising energy demand issues and concerns over climate change. But renewables account for only 2% of the US electricity mix now and is projected to remain so well into the future.

By contrast, half of US electricity supply and 15% of Canadian electricity, comes from burning coal. Technology and the energy mix may look very different in several decades, but in the near and medium term, it is technically and economically impossible to significantly reduce coal as the dominant energy source in the United States and in may other parts of the world.

CCS also extends to reducing emissions associated with new fossil fuel developments - such as the Tar Sands of Alberta and power plants fuelled by natural gas.

Given these realities, any solution that can reduce emissions from coal use -without eliminating coal as an energy source - merits serious consideration.

The U.N. Intergovernmental Panel on Climate Change (IPCC) has said CCS could contribute a bigger share of greenhouse gas cuts than energy efficiency, renewable energy, or nuclear power.

Yet there are considerable challenges to CCS, and they are the focus of WRI’s report Capturing King Coal: Deploying Carbon Capture and Storage Systems in the U.S. at Scale released in early June, 2008.

According to the WRI analysis, using CCS technologies to inject carbon dioxide from coal combustion into underground formations will require solutions to a host of technical, regulatory and financial challenges. And there needs to be simultaneous, rapid progress on all three of these fronts for CCS to become a feasible solution to climate change.

There are several challenges preventing the widespread roll-out of Carbon Capture and Storage in the US.

Technology Challenges: CCS is an extremely complex string of processes, each with its own technologies, having to operate in concert on a large scale. Massive amounts of CO2 have to be captured, compressed, transported by ship or rail and sequestrated in underground formations. This would require a fundamental transformation of the US energy infrastructure, but, according to the WRI, no more than would be required by a huge scale adoption of wind energy.

Regulatory Challenges: On the regulatory front, there are questions around long-term liability for underground sites where carbon dioxide will be stored. Since the gas must stay underground for centuries, there are liability issues around potential leakage 100 years into the future or more. This creates a need to make sure that CCS is done right.

So far pilot projects are showing promise regarding long term carbon storage.  EnCana Corporation, one of North America’s leading natural gas producers, manages the world’s largest greenhouse gas sequestration project at its Weyburn Saskatchewan oilfield operation.  According to EnCana, the first phase of the IEA research project is complete and the results suggest more than 99% of the CO₂ sequestered at Weyburn will safely remain in the ground for at least 5,000 years.

Financial Challenges: Extraordinary financial and investment challenges also will have to be overcome in order to create a CCS infrastructure. In addition to the large up front capital investments that will be required, a more immediate concern is that construction firms, already facing rising costs, may be reluctant to extend performance guarantees to coal plants built with untested technology.

Some form of government support will be necessary, according to many industry observers. Duke Energy Corporation Chairman, President and CEO James Rogers made this point to US legislators last year. In this testimony, he emphasizes the need for Congress to regulate greenhouse gas emissions, while being mindful of the need to continue the use of coal to produce electricity. Legislation should encourage innovation and investment in clean coal technologies, such as carbon capture and storage that reduce emissions from existing plants and bring new technology to market, he argued.

Putting a Price on Carbon

What CCS really requires to become feasible is a price on carbon.  According to Gerard Protti, Executive Vice-President of Corporate Relations and President, Offshore and International Division of Encana, carbon emissions need to be priced at $40 per tonne.  Until there is a price placed on carbon, CCS will be a net economic loss.

The call for allowing free market forces to work their magic is not restricted to North America. David Porter, chief executive of the U.K. Association of Electricity Producers, stressed recently that the decision on whether to invest in CCS should be left to the market: "The EU emissions trading scheme will set CO2 emission limits out to 2020, and it should be left to companies to choose how to stay within those limits," he warned.

He also noted that "Developing a regulatory framework and the infrastructure for capturing and storing carbon will take time. Meanwhile, coal-fired power stations still have a significant role to play in maintaining security of electricity supply."

These challenges are not reason enough to abandon CCS as a tool in the fight against climate change. Significant emission reductions simply cannot occur without a feasible option for coal-based emissions. Whatever its problems, CCS is likely part of the solution.

However, if these challenges are to be overcome within the timeframe needed, there must first be a price on carbon emissions through an emissions trading system that is high enough to make CCS technologies cost-competitive. There must also be immediate government support for large-scale demonstration plants, far beyond current efforts.

If we can get some "steel in the ground" in the form of running demonstration plants, the investment community will follow, and CCS technology will be on the road to cutting greenhouse gas emissions on a significant scale according to the World Resources Institute.

This may be true, but it will need clear government policy, considerable financial support and time before CCS makes a real difference in terms of reducing greenhouse gas emissions notes Dr. John Wiebe, President and CEO of the GLOBE Foundation of Canada.

"There is no magic bullet in the technologies needed to capture and store CO₂ emissions", he stated. He noted that the technology to capture CO₂ and to pump it underground is commercially available and fairly well developed. However, no large scale power plant in the world operates with a full carbon capture and storage system.

"Carbon capture and storage is definitely not an illusion; but making it a commercial scale reality - at least in Canada - will require a great deal more than what has been put on the table to date, "said Dr. Wiebe.