September will bring what may be a deciding moment for the history of Alberta's environmental policies: the sunset of the Specified Gas Emitters Regulation. Since 2007, the SGER has essentially imposed a cap-and-trade system on carbon emissions in Alberta. Alberta is the only jurisdiction in North America to have any sort of carbon pricing regime.
(This should convince anyone to take the complaints of Canadian provinces such as Ontario or Quebec with a grain of salt, let alone those of US states such as Washington.)
Consultations between the provincial government and industry have been ongoing. One expectation is that the carbon pricing threshold -- currently 100,000 tonnes -- will change. The question is: how much? Coupled with that question is another: how many more facilities should be brought under the carbon pricing regime?
Also potentially subject to change the price of any amount of carbon over that threshold. Currently, it's $15 per tonne. That $15 per tonne is paid into the province's technology fund, although producers can avoid this penalty by purchasing carbon offsets -- which can also be accomplished by purchasing unused "cap space" from other regulated emitters. The catch is that offset or idle cap space must be purchased within the province. That, too, may be subject to change.
These changes will have a great deal of impact of the Albertan economy for good or ill, depending on how carefully the government moves. But it may well have the greatest impact on the future of Carbon Capture Utilization and Storage technology.
As the World Energy Council's 2014 Energy Issues Monitor has it, North America -- and Alberta in particular -- have defied a global trend toward disinterest in the technology. As the WEC has it, carbon pricing -- or the lack thereof -- is a key factor driving this lack of interest.
"The issue with the most dynamic change over the past years is carbon capture, utilization and storage (CCUS) which is rapidly continuing its movement to a position of perceived lesser impact: without a formal price signal or regulatory requirements for CO2 emission avoidance, this technology is at risk of simply being seen as adding cost and reducing energy efficiency," the report states. "This must be of highest concern as we lock ourselves into a high CO2 emission future for the next 40 to 50 years with every new coal plant built."
So as Alberta's carbon pricing regime continues to drive investment in the research and development of CCUS technology, the prospect of a made-in-Alberta solution for global emissions abatement needs looms ever larger. That technology could lend itself not only to the greening of oil, but also to the greening of coil. And as the CCUS has it, such technology could be badly needed by those who intend to attempt a fight against climate change:
"WEC’s latest World Energy Scenarios show no plausible scenario that brings us close to meeting climate objectives by 2050 without a significant contribution by CCUS," the report continues. "The two scenarios – ‘Symphony’ and ‘Jazz’ – provide an assessment of the potential energy landscape in two extreme situations. Jazz shows a more decentralised scenario and Symphony shows a more orchestrated result. In terms of curbing CO2 emissions, the Symphony scenario sees the world being able to decrease emissions to 490–535 parts per million (ppm) by 2050. In contrast, the Jazz scenario will see emissions reach 590–710 ppm over the same period. Both emissions levels are in excess of the 450 ppm CO2 target identified by many."
With carbon pricing being a key factor in driving CCUS technology, the stakes for the renewal of the Specified Gas Emitters Regulation will be high not just for Alberta, but for perhaps the globe as a whole.