Costs for CO2 Capture and Sequestration in Western Canada
Authors: Fisher L. , Sloan T. , Mortensen P. 
Published: July 2010

Introduction

Since the beginning of the Industrial Revolution anthropogenic activities in general, and fossil fuel combustion in particular, have contributed to an appreciable increase in atmospheric CO2 concentrations, among other greenhouse gases (GHGs)(1). With Canada's ratification of the Kyoto Protocol, the potential for sequestration of CO2 is worth serious consideration. This paper, which summarizes the results of a comprehensive three-volume study(2), provides an overview of the costs to capture, transport, and geologically sequester CO2 in Western Canada.

In general sequestration means storing CO2 which has been removed either directly from anthropogenic sources or from the atmosphere, for geologically-significant time periods, if not permanently. Used herein sequestration refers to taking carbon dioxide which has been extracted from an exhaust or vented gas stream and placing it in long-term storage in depleted western Canadian oil and gas reservoirs, referred to as sinks. This study deliberately excludes CO2 used for enhanced oil recovery (EOR) projects, which may be economically attractive, but are volumetrically limited in comparison to pure storage projects.

Methodology

CERI used net discounted cash flow (DCF) models to estimate costs for CO2 capture, transportation, and storage. Discounted cash flow calculations generate the present value of a future stream of net cash flows. In this application. CERI models solve for a CO2 " price" that would make a CO2 capture. Transportation, and/or storage operation profitable. The model results therefore.; tre the prices that a company specializing in CO2 mitigation would have to charge per unit of CO2 sequestered to recover all of its costs including taxes and a return on investment.

The methodology used to arrive al capture and sequestration costs analyzed CO2 sources and sinks in a similar way. Establishing the locations and characteristics of the major point sources and eligible sinks was a logical first step. However performing detailed cost analyses on every source and sink was not feasible. Instead, prototypes representing a range of different characteristics were selected for detailed analysis, from which the results were scaled to the remaining population. Unit costs for CO2 capture and storage were then generated from the population data using the economic (DCF) models. Finally to link the sources to the sinks, unit costs were developed for a common-carrier pipeline network in the basin.

CO2 Capture

Any large-scale CO2 capture program must first establish an inventory of potential capture candidates, including the volumes, characteristics, and locations of the most significant sources. For this study. CERI compiled an inventory of 192 discrete CO2 sources found at 115 sites throughout the Western Canadian sedimentary Basin, with total annual CO2 emissions of 141 Mt. Figure 1 illustrates the distribution of assessed emissions according to the industry from which they are emitted. The significance of coal-fired power plants in Western Canada's emission picture is evident. Oil sands mines and in situ projects contribute another large quantity, one that is expected to increase dramatically in the future.

Based on projected emissions in 2005(3), CERI's inventory accounts for over 75% of industrial and power generation emissions in the four western provinces and 50% of total CO2 emissions.