Canada Starts Doling Out Carbon Capture Dollars

(MoneyWatch)  It seems like it was just yesterday that fellow BNET Energy blogger Chris Morrison wrote about the escalation of political rhetoric calling for carbon capture and storage projects. In fact, it was two days ago.

The International Energy Agency has called for a rapid deployment of the technology -- starting now -- for the bargain basement investment cost of $2.5 trillion to $3 trillion through 2050. That includes a $3.5 billion to $4 billion annual commitment from some governments over the next 10 years to fund demonstration projects.

Morrison held up China -- with its high coal usage and growing economy -- as a potential candidate to embark on the IEA's call to arms.

But what about Canada?

The Alberta and federal governments have ponied up C$1.64 billion in the past week for two different carbon capture and storage projects in the Edmonton area.

The governments pledged last week C$865 million from its CCS fund for Royal Dutch Shell'sQuest project. The Quest project would capture carbon from Shell's oil sands upgrader, transport it via pipeline and then store it permanently more than two kilometers underground.

Power generation company TransAlta Corp. announced Wednesday a C$779 million award from the two governments for its Project Pioneer, a proposed carbon capture and storage facility for a coal-fired power plant west of Edmonton.

Project Pioneer aims to cut 1 million tons of greenhouse gas emissions each year and account for 20 percent of the Alberta government's reduction target by 2015.

Funding for the two projects is part of a $2 billion government effort to push carbon capture and storage projects forward.

If the projects are successful it would change Canada's coal and oil sands industries, both of which emit the majority of the country's greenhouse gases.

Of course, both projects have a long way to go. Shell's Quest project is still in the development phase and a final investment decision has yet to be made.

And then there's the minor hiccup -- aside from the massive cost -- facing all plans for CCS projects: technology still needs to demonstrated at a commercial scale.

Previous coverage of carbon capture on BNET Energy:

• Governments Push Carbon Capture as a Cheap Way to Reduce Coal Emissions
• Clean Coal: Oxymoron or Magic Bullet?
• Fixing Coal's Carbon-Capture Problem
• Storing CO2 for the Long Term