Tuesday, January 3, 2017

According to Glennie, the province dodged carbon taxes years ago by trying to cut pollution at its coal-fired power plants. After cost overruns, delays, and problems, Glennie said Saskatchewan is still a big polluter. "The government decided it was going to pick this winner — it decided to not put a price on carbon. It decided that it was going to try to find the best alternative. And it ended up wasting a billion dollars in carbon capture at Boundary Dam. Wind energy could have done the same job as Boundary Dam — had there been a price on carbon — for a billion dollars less."-------------



It is mind boggling to me that the experts think that the carbon capture industry is going to expand. Why would it expand after the fiasco in Saskatchewan? I guess this is the dumb policy of the federal government which is permitting the dumb waste of money by the provinces.
The federal government provides money for these projects to some extent. Then the provinces can rip off their citizens to pay for the rest of the project. End result is that some CO2 generated in the case of the Boundary Dam Power Station is used for other purposes by big oil and in effect we subsidize big oil. It's pretty neat. But of course we are supposed to believe the baloney that this is all in the end going to save our bacon. My question is how will this save our bacon when even the Boundary Dam Power Station emissions haven't been significantly reduced? And how will government get citizens to put up with the increases of their electricity rates to subsidize big oil? And the spin we have to listen to is so odd. The Saskatchewan government says that the Boundary Dam Power Station CCS project was  a great success even though the power station is the heaviest emitter STILL.


http://www.cbc.ca/news/canada/saskatchewan/saskatchewan-heaviest-air-polluters-oct5-1.3791762
Here is the most recent information about heavy emitters that environment officials could provide (data from Jan 1, 2014 to Dec. 31, 2014):
  1. Boundary Dam Power Station, Saskatchewan Power Corporation (Estevan): 4,994,430 (tonnes CO2 equivalents)
  2. Poplar River Power Station, Saskatchewan Power Corporation (Coronach): 4,641,652
  3. Shand Power Station, Saskatchewan Power Corporation (Estevan): 2,080,808
  4. Co-op Refinery Complex, Consumers; Co-operative Refineries Limited (Regina): 1,618,693
  5. Lloydminster Upgrader, Husky Oil Operations Limited (Lloydminster): 1,265,984
  6. Meridian Cogeneration Plant, Meridian Limited Partnership (Lloydminster): 910,798
  7. North Battleford G.S., Northland Power Inc. (RM of North Battleford): 740,513
  8. Mosaic Potash Belle Plaine, Mosaic Canada (Belle Plaine): 679,598
  9. Queen Elizabeth Power Station, Saskatchewan Power Corporation (Saskatoon): 673,222
  10. Cory Cogeneration Station, ATCO Power Canada Ltd. (Saskatoon): 650,455



Meanwhile all this failure does not stop all levels of government from considering more investments of public dollars into such CCS projects. What do politicians care about the waste of cash? It's all media attention for them and that's all good.Here is one such media event where everyone is extolling the benefits of a money pit.


http://www.estevanmercury.ca/news/business-energy/federal-ministers-tour-boundary-dam-1.2300064


Federal ministers tour Boundary Dam

SAM MACDONALD / ESTEVAN MERCURY
JULY 13, 2016 01:00 AM
Jim Carr, Mike Marsh and Ralph Goodale
Federal Minister of Natural Resources Jim Carr, flanked by SaskPower CEO Mike Marsh, left, and Regina MP and Public Safety Minister Ralph Goodale, spoke to media after touring the carbon capture and sequestration unit at Boundary Dam, on July 7.
The carbon capture and sequestration (CCS) unit at Boundary Dam and the technology it utilizes continue to attract the attention of the federal government. This attention came in the form of a visit and tour of the facility on July 6. Federal Minister of Natural Resources Jim Carr toured the CCS unit, accompanied by Regina MP and Public Safety Minister Ralph Goodale, Saskatchewan Environment Minister Herb Cox and SaskPower CEO Mike Marsh.
Carr’s tour of the facility was done to get information for the federal government, which he said needs to learn more about the technology. Carr described the needs of progressive federal initiatives to reduce greenhouse gas (GHG) emissions as “the point where technology meets public policy.”
He said that the CSS technology in place at Boundary Dam, has achieved a global level of recognition.
“We know what the International Energy Agency said, and they are probably the most important think tank talking about this technology in the world. They say we’re going to need it as we move towards our aggressive climate goals,” said Carr. “People are coming from every continent to look at this technology, to assess how it can help them reduce greenhouse gas emissions, so the government of Canada is very interested in helping with the development of it.”
Carr addressed a common criticism of carbon capture technology, the allegation that it’s a half-measure to mitigating climate change, saying, “Those who say. ‘It’s good, but not good enough, so stop doing it?’ No. What you do is, you try to make it better.”
During a media scrum after his tour of the CCS facility, Carr was asked if Saskatchewan could serve as an example to Alberta, a province that has a mandate in place to completely phase out coal power. Carr said each province will have a different approach to how they reduce emissions.
“I’m sure we don’t have to tell them (about carbon capture technology). They understand the technology,” he said. “The prime minister and premiers are looking at what we can come up with for a pan-Canadian framework, and new technologies will fit into that framework.”
On the subject of the retrofitting of carbon capture Units 4, 5 and 6 at Boundary Dam, Carr said the federal government will be following the project with a great deal of interest and care, but that it’s far too early to talk about specific government investments.
On the same subject, Marsh said SaskPower is looking at different options on which units could be built, when, and under what circumstances. He added that Unit 3 remains the priority, with SaskPower working to make sure the facility is operating as efficiently as possible.
Marsh said, “We want to be able to monitor operating and maintenance costs, and then make a very informed decision on Units 4 and 5. The drop-dead date on making a decision on carbon capture is December 2019.”
“We’ve been looking at issues around carbon capture technology since around the mid-1990s, and this is not a new thing,” he said. “With endorsement from Prime Minister Trudeau, and the presidents of Mexico and the U.S., this technology has an important role to play. How, exactly, it will fit into the total mix of things remains to be seen.”
Cox spoke about carbon taxes, saying that having a carbon tax in Saskatchewan is a subject on which Premier Brad Wall has been very clear, adding, “Now is not the right time.”
Cox asserted that an awareness of the CCS unit is important because the costs of establishing and running such technology serve as an “implicit carbon tax,” in and of themselves.
“The costs of this plant have to be paid for, and some of that has to be passed on. In a way, it’s an implicit tax, and we want it recognized,” said Cox.“Our technology and our innovation are the contribution this sequestration can make — not only provincially, but nationally and globally.”
Marsh noted that carbon capture technology is necessary in bigger plans to meet GHG emissions targets, noting that the International Energy Agency has stated that carbon capture technology is necessary to reduce global GHG emissions.
Marsh said, “This is early days for carbon capture and storage. There are 15 facilities working in the world today. In the next year, seven or eight facilities are coming online, and you’re going to see over the next few years, more carbon capture facilities.”
- See more at: http://www.estevanmercury.ca/news/business-energy/federal-ministers-tour-boundary-dam-1.2300064#sthash.r3BUi4JH.dpuf

***


All this public socializing with journalists means only one thing-they are selling more such CCS projects to a less than thrilled public.
Just how committed are the feds to this junk?


I'd say they are selling this snake oil to all the naive citizens. If the federal minister for natural resources is so clueless that he can't look at this waste of money for no deliverables as anything other than a money pit then we know we are in big trouble as citizens. The sales pitch is so unbelievable as well:


http://www.estevanmercury.ca/news/business-energy/federal-ministers-tour-boundary-dam-1.2300064


Carr’s tour of the facility was done to get information for the federal government, which he said needs to learn more about the technology. Carr described the needs of progressive federal initiatives to reduce greenhouse gas (GHG) emissions as “the point where technology meets public policy.”
He said that the CSS technology in place at Boundary Dam, has achieved a global level of recognition.
*********************


The CSS technology at this dam has certainly achieved some recognition by citizens as a big waste of cash for greenwashing on the global stage.  The spin we have to listen to spun to us by the spin doctors makes my head whirl.


Apparently there is wide spread support for this junk. I guess if you don't understand how dumb these projects are for so little deliverables and so much waste of cash you would believe this spin. I don't.


http://www.nrcan.gc.ca/publications/fossil-energy-future/1167


The Recommendations

Industry will build and operate the CCS projects, which entails a significant amount of upfront investment risk, for which the main benefit is the potential for reducing the cost of current and future GHG regulations. Any industrial facility with a large capture opportunity (projects that capture on the order of one megatonne of CO2 per year) requires a total project investment in the hundreds of millions to billions of dollars. Before any decisions are even made on these projects, industry invests tens of millions of dollars on front-end studies. Industry should continue to play this role in CCS deployment but this effort should be complemented by public support.
Industry and governments should work collaboratively to develop the financial and regulatory conditions needed to move CCS forward. Governments already provide support in many ways, including funding for some of the front-end studies; they also need to share in the financing of actual CCS projects. Therefore the following are recommendations to Federal and Provincial governments for their roles in these collaborative efforts.
Three immediate actions are recommended to get Canada on the pathway to successful CCS implementation, and three subsequent actions should be undertaken as next steps. The first three require urgent attention as they are intended to address the two main barriers facing CCS today: the financial gap associated with CCS projects today, and current gaps in regulatory frameworks. Canada must overcome these hurdles, and in short order, to succeed with CCS.

Three Immediate Actions

Immediate Action #1 – Federal and Provincial governments should allocate $2 billion in new public funding to leverage the billions of dollars of industry investment in the first CCS projects; this funding should be distributed expeditiously through a competitive request for proposals process so that these phase-one projects are operational by 2015.
Funding the first set of three to five CCS projects will result in five Mt of annual CO2 reductions from CCS, and will initiate the process for getting the country on the pathway towards a made-in-Canada solution for reducing emissions and towards global leadership in CCS.
Immediate Action #2 – Authorities responsible for oil and gas regulation should provide regulatory clarity to move the first CCS projects forward by: quickly confirming legislation and regulation related to pore-space ownership and disposition rights; clearly articulating the terms for the transfer of long-term liability from industry to government; and increasing the transparency of regulatory processes.
Confirming provincial jurisdiction over the ownership and disposition of pore space, and clearly articulating that industry will not face long-term liability obligations associated with CCS will help create a regulatory environment that is conducive for CCS. The time required to make the regulatory changes should not delay decisions or approvals on the phase-one CCS projects.
Immediate Action #3 – Federal and Provincial governments should ensure as much opportunity for CCS projects under the GHG regulatory frameworks as for any other qualifying emission reduction option. This will require the creation of CCS-specific measurement and crediting protocols.
Ensuring a role for CCS in meeting emission reductions obligations, and ensuring that any CO2 credits from CCS are no less tradable or valuable than other credits, will help create some potential commercial value for CCS activities.

Three Next Steps

Next Step #1 - Industry and both government levels should form a collaborative framework including an advisory group over the next two years to coordinate discussion, to institutionalize learning, and to potentially carry out specific aspects of immediate actions 1, 2, and 3. This may evolve into a more formal organization as future needs are assessed.
A collaborative effort based on coordinating and institutionalizing the learning gained will foster CCS capabilities in Canadian industry, government, and non-government organizations.
Next Step #2 – Federal and Provincial governments should provide stable financial incentives to help drive CCS activities beyond the phase-one projects. These may include the continuation of RFPs for phase-two projects, CO2storage incentives, and/or the use of tax and royalty incentives.
Broad-based, phase-two support for CCS is required to drive the country towards deep future GHG reductions, potentially one-third to one-half of Canada’s projected GHG emissions by 2050.
Next Step #3 – Canadian-based research organizations and technology developers should focus research and demonstration efforts on CCS to achieve two goals: to drive down the cost of existing CCS technologies; and to enable the deployment of next generation CCS technology and processes – the Federal and Provincial governments should provide financial support for these activities.
Canadian-based research on cost-effective and next generation technology will support broader application of CCS in other sectors and locations, both domestic and international.
These recommendations are based on the premise that governments, while remaining cognizant of the requirement for international competitiveness, will continue working towards clearer and more certain GHG emission reductions policy, which is the ultimate driver behind CCS. Only through balanced GHG policy will the country achieve the fundamental objective of all its early-stage investments in CCS, wind energy, and other emission reductions options – a lasting solution to the carbon challenge.

The Way Forward

The technological components for CCS already exist and can be built into industrial facilities today. What is required is financial and regulatory support. A few fully integrated CCS projects will demonstrate to industry and the public the feasibility and safety of integration at scale. These projects will initiate the learning-by-doing curve that leads to cost reductions. The first projects will test the regulatory processes and help pave the way for future projects seeking approvals. Each of these outcomes is essential if CCS is to play its role in reducing emissions.
Canada has an opportunity to be the world’s first country to build a commercial-scale power plant, bitumen upgrader, or some other fossil energy facility with the capability of capturing and storing the associated CO2. Industry and governments should work collaboratively to develop the financial and regulatory conditions needed to move CCS forward.
For its part, industry will undertake a significant amount of investment risk by building and operating the first CCS projects. Industry should play this role, but its efforts should be complemented by a public investment in this critical technology and infrastructure.
Governments already provide support in many ways, including funding for some of the front-end studies; they also need to share in the financial investments to accelerate CCS development and deployment.
The Task Force estimates a public investment on the order $2 billion is needed to close the funding gap on an initial set of projects, which will result in five Mt of annual CO2 reductions from CCS by 2015. This is the equivalent of eliminating the GHG emissions from 1.4 million vehicles per year in Canada. Beyond the first projects (which should be operational by 2015), the Task Force envisions the need for further public support to help sustain CCS activities through an interim stage until the carbon market has matured or other regulatory requirements are at the point where the financial gap facing CCS is sufficiently closed.
This is a significant initial public investment, but it is an important one because it will more quickly enable Canada to make industrial-scale GHG reductions (using CCS) while remaining internationally competitive in a carbon-constrained world.



So it looks like we are going to be subsidizing the private sector as well as the oil and gas industry to waste a ton of cash to get increased electricity bills. Wow. Why? I guess it's all about greenwashing, paying your corporate donors handsomely and screwing the public. But of course we don't hear about the screwing of the public until someone tells us and that someone is not from the government. In the case of the Boundary Dam CCS project where is the auditor general of Saskatchewan? Why aren't there cost benefit analysis work by the government of Saskatchewan? Who the hell is in charge of this waste of cash?
And why is no one firing this incompetent government?

https://www.saskwind.ca/blogbackend/2016/11/3/audit-boundary-ccs

Audit request re Boundary Dam Carbon Capture Scheme

In the twenty months since we produced our detailed financial analysis of the Boundary Dam Carbon Capture Scheme (BD3CCS) the Federal Parliamentary Budget Office (PBO) produced their own report. It confirmed our conclusion: Carbon Capture at Boundary Dam doubles the price of electricity. In so doing, the PBO report again raised the question of why SaskPower proceeded with a project when it knew, or should have known, that it would needlessly add $1-billion of costs to the bills of electricity consumers province-wide.
Despite all this evidence and perhaps because the sole beneficiary of the project is an Alberta-based oil company which was the largest donor to the SaskParty in 2013 and 2014, SaskPower has refused to provide any form of financial accounting to justify the project.  This is particularly troubling since Premier Wall recently appealed for $2-billion of federal funds to invest in more Carbon Capture projects (as well as nuclear). We are also concerned that, while public funds continue to be used to subsidise coal, wind energy will be disadvantaged in forthcoming tenders for new generation capacity.
Consequently today we wrote to the Provincial Auditor to request a full audit of BD3CCS.
Alternatively the full text (with references where applicable) follows;


Ms. Judy Ferguson
Provincial Auditor of Saskatchewan
1500 Chateau Tower, 1920 Broad Street
Regina, SK. S4P 3V2                                                                                                         3 November 2016
Dear Ms. Ferguson,


Boundary Dam Carbon Capture and Storage Facility
We contact your office in its capacity as provider of independent assurance and advice on the management, governance and effective use of public resources. Our concern relates to the $1.5-billion Boundary Dam Carbon Capture and Sequestration facility (BD3CCS), which was commissioned in October 2014 and financed entirely using public funds.
Given the sizeable quantity of those funds, the questionable economic merits of the project and the availability of significantly cheaper alternatives; one might reasonably have expected SaskPower to have released financial information in justification of the project. That information was, however, not forthcoming when the project was commissioned and was still not available six months later. Consequently, in March 2015, we released our own analysis .
Although BD3CCS was billed as an environmental initiative, that analysis indicates its primary purpose is to supply publicly-subsidised CO2, at well below cost, to the oil industry for use in Enhanced Oil Recovery. We believe it will result in at least $1-billion of losses for SaskPower: those losses can only be recovered through increased electricity rates. Indeed, since January 2013, SaskPower has announced six separate electricity rate rises amounting to a compounded increase of 28.2% .
While BD3CCS leaves SaskPower (i.e. all electricity consumers of Saskatchewan) with major losses, it appears to generate $1-billion of profits for Cenovus Energy: an Alberta-based oil company which also happens to have been the largest corporate donor to the SaskParty in 2013 and 2014 and the second largest in 2012.
In April of this year the Parliamentary Budget Office concluded that BD3CCS doubles the cost of electricity  and, in so doing, they largely confirmed our conclusions. Nonetheless; SaskPower and the SaskParty have, to date, been dismissive of our analysis but unwilling to justify BD3CCS with their own.
Yesterday, however, the following was in the National Post;


“SaskPower won’t recover its $1.5 billion investment. Over the next 30 years it will run up additional operating losses totaling $651 million, according to a report by Saskatchewan Community Wind.
SaskPower doesn’t dispute the numbers but says there’s a cost for pioneers”
— The National Post. 'Take into account captured carbon’s use and Saskatchewan coal plant just as dirty as others, critic says'. By - Evan Balgord. 2 November 2016
It is concerning that SaskPower, notwithstanding its own admission of the questionable economics of CCS and the presence of significantly cheaper alternatives, is still considering two additional Boundary Dam CCS units at a cost of at least $2-billion. Also rather puzzling, given the weak economics of CCS, is Premier Wall’s request, two weeks ago in his ‘Climate White Paper’, for $2-billion+ of federal funds for additional research into CCS and nuclear.
Noticeably absent in all of this is a transparent financial accounting of BD3CCS: something which SaskPower has thus far been unwilling to provide. Surely this is owed to the population of Saskatchewan given the $1.5-billion of public funds involved. We believe there are six key questions which would benefit from your attention;
1)    Did SaskPower’s investment represent efficient operation of the corporation’s business for the public good ?
2)    Were risks and rewards allocated in a manner consistent with SaskPower’s fiduciary duty to safeguard public funds?
3)    Did Crown Investments Corporation exercise its supervisory powers in the interests of all Saskatchewan residents ?
4)    Given its knowledge of the influence of BD3CCS costs in SaskPower’s October 2013 multi-year rate application; was the Saskatchewan Rate Review Panel justified in its conclusion that the application was fair and reasonable for the people of Saskatchewan?
5)    Would SaskPower’s planned investment in two additional CCS units at Boundary Dam be an efficient use of public funds given the known cost of alternatives?
6)    Does the Province of Saskatchewan own the intellectual property associated with Carbon Capture technology and, if not, how will international sales of CCS technology benefit Saskatchewan ratepayers?
While your office may have reservations about questioning this Government’s energy policy; it may be of note that the Ontario Auditor appears to have no such qualms. It has, in the last five years, conducted at least three major reviews on the subject: a 2011 audit of the Green Energy Act   as well as two in 2013 of the Oakville   and Mississauga  Gas Plant cancellation costs.  The Auditor, in undertaking the 2011 review, noted: "The objective of our audit was to assess whether the Ministry of Energy and the Ontario Power Authority had adequate systems and procedures in place to ensure that renewable energy resources are obtained in a cost-effective manner and within the context of applicable legislation and government policy."
We look forward to your answer to these questions and to your view on whether low-carbon energy resources were, and are, being obtained by SaskPower in a cost-effective manner within the context of applicable legislation and government policy.
Regards,

James Glennie. MBA, CFA
President, SaskWind
http://www.pipelinenews.ca/news/local-news/report-critical-of-boundary-dam-ccs-project-suggests-the-answer-is-wind-1.1808714

Report critical of Boundary Dam CCS project suggests the answer is wind

BRIAN ZINCHUK / PIPELINE NEWS
APRIL 1, 2015 10:12 AM
Boundary Dam
The integrated carbon capture and storage project at the Boundary Dam Power Station has earned a top North American award.
Regina – The Canadian Centre for Policy Alternatives, an Ottawa-based thinktank with a Regina office, put out a paper on Feb. 10 critical of the Boundary Dam Integrated Carbon Capture and Storage Project.


Entitled SaskPower’s Carbon Capture Project – What Risk? What Reward? the paper runs 24 pages. Brian Banks and Mark Bigland-Pritchard authored the report.
The report suggested the province of Saskatchewan would have been better off investing in wind-powered electrical generation or at least combined-cycle natural gas. The largest benefactor of the risky project was the oil company benefitting from CO2-enhanced oil recovery, and the province is committed to the development of fossil fuels over any other alternatives.


The report’s introduction makes the point of the escalating costs of the project – first announced on April 26, 2011 as a $1.24 billion project, then rising to $1.4 billion.
(On Feb. 11 SaskPower reported the total cost is $1.467 billion, which includes $240 million in federal contributions.)
The paper sought to assess the “financial, environmental and technical risks of SaskPower’s CCS project versus the potential rewards/benefits of expenditures exceeding $1.4 billion.”
They authors ask, “What are the current and future impacts on SaskPower’s finances? How will project costs affect electrical rates and ratepayers in years to come? Are the publicized environmental benefits as positive as claimed? Who is the major benefactor of the CCS facility?”
Of 55 carbon capture and storage projects in various stages of planning or construction world-wide. Only one project, Boundary Dam, is a CCS post combustion coal-fired plant: other such projects have been abandoned or postponed for cost reasons, they note. Most American projects are intended for enhanced oil recovery, while Chinese, European and Korean projects intend to use deep saline storage similar to the associated Aquistore project that is part of the Boundary Dam initiative.
The Kemper County Energy Facility, which envisions carbon capture as part of a coal gasification system, is now expected to cost US$6 billion, double its initial budget.
“The necessary preconditions to take CCS in North America to the next stage of development are: high North American natural gas prices (low natural gas prices make it more desirable as a fuel); continued logistical or policy barriers to low-cost renewables such as wind power; available indigenous low rank coals; a desire to control or lower CO2 emissions; either a serious carbon pricing regime or nearby oil fields that would purchase the CO2 for enhanced oil recovery projects; and suitable geological formations for CO2 disposal. Without these conditions being present, second generation CCS coal-fired plants are highly unlikely,” the paper states.
Low-cost natural gas makes coal less competitive as a fuel. However, “Apart from Boundary Dam 3, remaining coal-fired capacity in Saskatchewan amounts to 1285 MW: 427 MW at Boundary Dam 5 and 6, 582 MW at Poplar River and 276 MW at Shand. Canadian regulations exclude renewal of these plants after their retirement dates if CCS is not installed: hence the choice will be between permanent shutdown and a problematic CCS conversion process.”
Canadian regulations require that all new and any retrofitted coal-fired units must meet carbon dioxide emissions guidelines that can only be met with carbon capture and storage. If they are not retrofitted by their retirement date, they must be shut down.
“These regulations could enable CCS in the USA and in coal-dependent Canadian provinces (principally Alberta and Saskatchewan); but whether it will generate new out-of-province revenue streams for SaskPower depends on whether the corporation has any significant intellectual property rights over the technology,” the paper said, adding, “The main reason the utility industry is resisting the new standards and CCS is that it forces coal to compete with natural gas and could raise wholesale electricity prices by as much as 80 per cent. The US Energy Department admits that first generation CCS technologies have a captured cost of carbon dioxide of between $70 and $90 per tonne for wholesale electricity. Given the current absence of serious carbon-pricing schemes in the jurisdictions concerned, this is not good news for those wishing to sell CCS technology.”


Financial risks


There was a lot of risk involved for SaskPower, a relatively small utility. The report noted, “The $240 million contributed by the federal government covers only about one sixth of the costs. Investing $1.5 billion in experimental technology involves a high level of risk, especially for a company of SaskPower’s size.”
They take aim at the ageing infrastructure argument SaskPower continually makes, stating, “Ageing infrastructure is SaskPower’s mantra, oft repeated in its rate increase submissions and in its annual reports. The need to upgrade ageing infrastructure has been the corporation’s historic go to position when seeking rate increases. It is a given that whichever energy path SaskPower embarks on its infrastructure will have to be upgraded, preferably with smart grid technology — and that its demand projections indicate a need for new capacity. But what is ironic is that SaskPower decided to rebuild (at reduced capacity) one of its oldest coal-fired plants, Boundary Dam 3, rather than mothball it and build new, less expensive, less polluting electrical generation.”
One area of the report is incorrect. It states, “It is also interesting to note that in the 2013 Annual Report the corporation predicts that it will need to invest one billion annually in capital expenditures to update its system as a normal practice. One billion just happens to be the approximate cost of the CCS part of the Boundary Dam project. SaskPower closed Boundary Dam 4 in 2014 and it would have to be retrofitted with CCS in order to reopen. Such investment levels are not possible without significant additional rate increases. Can a corporation with a current debt of $5.5 billion responsibly take on annual investments of $1 billion annually?”
Boundary Dam Unit 4 is still in operation, SaskPower has confirmed.
The authors take issue with the cost of coal versus wind stating, “In its submission to the Rate Review Panel SaskPower admits the price for coal will increase in 2014 as contracts with producers expire and that was one of the additional reasons it applied for a three year rate increase. By sticking with coal-fired plants SaskPower will continue to face long term fuel input costs at a time when wind power, for example, is becoming more competitive.”
They noted power rates are going up, and that SaskPower asked for a 15.5 per cent rate hike increase over three years, but, “Cabinet later approved the first 5.5 per cent rate hike, but scaled back the 2015 increase from five to three per cent.”


While potash and oil companies can pass on rate hikes, senior citizen condos cannot afford such high rate increases, the authors assert.


“The CCS plant will have a parasitic effect on SaskPower’s financial position for the next twenty years,” the report states.


Financial rewards


The largest income line item in the balance sheet presented is the sale of carbon dioxide. The report stated, “Sale of CO2, estimated to be $450 million, may be too high. SaskPower has agreed to provide Cenovus Energy a million tonnes of CO2 per year for ten years, but the actual price per tonne has not been made public and it is not known whether Cenovus is able to lower the amount purchased at any time.
“Estimates range in the neighborhood of $20 to $25 per tonne over 20 years: thus total revenues could be $400-$500 million. But it is also questionable whether the Weyburn field will have an additional twenty year life span even with enhanced oil recovery technologies are applied. Will Cenovus continue to operate its enhanced oil recovery operation should the price of oil drop below $70 per barrel for extended periods of time as low prices negatively affect profit margins? With West Texas Intermediate oil dipping below $50/barrel in early 2015 Cenovus may not purchase the contracted amounts of CO2, and as a result SaskPower will forego revenues and be required to inject the CO2 in its Aquistore site and take on additional operating costs. Many risk factors are at play regarding the sale of CO2.”
Sulphuric acid sales pegged for the next 20 years are pegged at $60 million. Fly ash sales should not be attributed to the CCS project, but normal operation of the plant, they argue.
Similarly, the report questions if SaskPower will be able to monetize any of its knowledge gained at the Shand Carbon Capture Test Facility or at Boundary Dam.
The authors suggest that the Shand facility would not have been built without Boundary Dam CCS, and thus it should be included in the total bill.
The biggest financial beneficiary, according to the report, is the Cenovus-operated Weyburn Unit. “SaskPower has taken on almost all of the financial risk but Cenovus will reap the greatest rewards.”
Their calculations determine that oil production would remain at 30,000 barrels per day, resulting in an incremental increase of 10.9 million barrels per year of oil production as opposed to its 8,000 barrels per day production level in 1990. In 20 years, even at $50/barrel, this equates a potential gross revenue gain of $3.45 billion.
The report does not account for the SaskPower-sourced CO2 being in addition to the long-term Dakota Gasification Company-sourced CO2, or the possibility of production increasing as a result of having additional CO2 available for injection.


Environmental risks


Even though greenhouse gas emissions would be greatly reduced with CCS, that’s not good enough for the authors, who wrote, “The pollution effects of coal mining, burning coal, venting coal gases, and disposing of ash and other residues are well known. Burning coal releases more GHGs than any other fossil fuel per unit, twice that of burning natural gas. With a 90 per cent capture rate coal plants with CCS emit CO2 at a rate 1/10 that of a conventional plant, but this is still a significant amount, perhaps as much as 140 tonnes of CO2 per GWh of power.”
Air quality issues, water contamination from coal washing and disposal of fly ash in unlined landfills, land degradation from strip mining, occupational risks to works and community health hazards such as increased asthma, cancers and pulmonary disorders are all listed ad side effects of coal-fired power.
They stated, “The health impact of these toxic substances has not been documented for Saskatchewan, but is most likely significant. The financial cost — in medical treatment, environmental impact, insurance, etc. — may also be expected to be high.”
They added, “Many experts agree that to believe coal can be clean is self-delusionary.”
While the project is touted to reduce greenhouse gas emissions by 1 million tonnes a year, the report points out that between its three coal-fired power plants, three natural gas-fired power plants, two coal mines and three cogeneration plants, a total of 15.7 million tonnes of GHGs are emitted (the numbers include Boundary Dam Units 1, 2 still in operation.) Province-wide, the total is 74.8 million tonnes of greenhouse gases emitted per year. Plus, additional oil production from the Weyburn Unit due to CO2-EOR will result in more greenhouse gas emissions when that oil is consumed.
“For each tonne of carbon dioxide injected, d, about 2.7 tonnes of carbon dioxide are eventually emitted from combustion of the oil recovered,” the report states. “This calculation does not even account for carbon dioxide losses in the course of the injection process: a substantial proportion returns to the surface with the oil.”
“When all GHG emissions are considered the one million tonnes captured annually is not a significant reduction in the province’s contribution to climate change.”


Conclusion


The report concluded, “In 2011, SaskPower’s decision to rebuild Boundary Dam 3 and construct a CCS facility is an important turning point in the corporation’s history. At a time when utilities and grid management corporations around the world are shifting decisively towards renewables as costs fall, SaskPower appears willing to lock the province into fossil fuel electrical generation for decades. SaskPower missed an opportunity to shut down its oldest and dirtiest plant and instead spent $1.5 billion on a very financially risky new technology, CCS.


In future CCS may become lower cost and technical issues may be resolved, but in 2011 it was an extremely poor fit for SaskPower and the purchasers of electrical power. When corporations take high risks, then the potential for high rewards should be the result, not so for Boundary Dam 3 CCS. The financial losses for Boundary Dam 3 are high and the future rewards are far from proven.”
The authors suggested SaskPower should have instead built wind farms. “Coal when compared to wind is about $300 million more expensive over 20 years. When factoring in the capital cost of CCS, coal is even more uncompetitive. Wind is affordable. Twenty-six per cent of North Dakota’s power is generated by wind; Denmark almost 40 per cent, and Spain over 20 per cent.41 Wind could become a much more significant part of Saskatchewan’s electrical generation.”
Germany and Denmark are held up as countries that have successfully integrated wind into their power generation. For Denmark, the number is quoted as 40 per cent of their power. Integration of solar power and smart grid technology are offered as ways to address grid issues.
Alternatively, the Queen Elizabeth Power Station in Saskatoon could have been upgraded at a cost of $488 million, providing double the power at a fraction of the cost compared to BD3. Using natural gas, it would not be as climate-friendly, they noted.
But even natural gas doesn’t get a free pass. “Those who, following the findings of climate science, believe that we must move to a low carbon economy much faster, put the emphasis on shifting to renewables such as wind, solar, hydro and biomass, and seek to minimize the degree to which natural gas is used as a “bridge” fuel. No fossil fuel can ever be carbon neutral; and there is evidence that emissions associated with natural gas are increasing as a result of methane leaks (especially from fracked wells), venting and flaring.”
The report misquoted from a Pipeline News article (Page A14, Oct. 2014), stating, “Premier (Brad) Wall has stated that he had to convince a SaskPower board committee to support the CCS project.” In fact, the committee convinced the premier to approve the project, not the other way around.
The authors suggested Wall’s in approval of the project was political in nature, stating, “To increase SaskPower‘s debt so substantially in order to garner US support for the Keystone Pipeline demonstrates the government’s commitment to the development of fossil fuels over any other alternatives.”
The authors end by saying, “The predominant reason for the CCS to go ahead appears to be to recover more oil from south east Saskatchewan and reward the oil producing companies rather than adopting appropriate carbon pricing, and moving forward more rapidly on a menu of renewable energy options.


About the authors


According to the report, Brian Banks is a former director of CCPA Saskatchewan Office and board member, and is also a member of the board of Adult Educators Association of Saskatchewan. His career in education included K-12, adult education, post-secondary and training and development. Banks holds an arts degree from the University of Saskatchewan, a Bachelor of Education from the University of Regina and a masters degree in History from the University of Regina.
Mark Bigland-Pritchard’s bio stated he is “an independent consultant in energy, environmental assessment and sustainable building. His background includes two engineering degrees, a PhD in architectural physics, several years of teaching energy studies at two major British universities, and a diverse range of consultancy, research and project management work. His current work-in-progress includes a technical assessment of a transition to renewables-only electricity in Saskatchewan (in conjunction with economist Brett Dolter), and home design to meet Passivhaus standards.
The report also acknowledges the assistance of Dr. Emily Eaton, professor of geography from the University of Regina. Pipeline News reported on her summer tour in 2014 researching the impact of oil on Saskatchewan. The story appeared on page B7 of our August 2014 edition.
Of the 52 endnotes in the report, eight referenced Pipeline News stories.
- See more at: http://www.pipelinenews.ca/news/local-news/report-critical-of-boundary-dam-ccs-project-suggests-the-answer-is-wind-1.1808714#sthash.3zk1Gtys.dpuf

http://www.cbc.ca/news/canada/saskatchewan/saskatchewan-heaviest-air-polluters-oct5-1.3791762

Boundary Dam Power Station among Saskatchewan's heaviest air polluters

SaskWind president says carbon taxes are a way of taxing pollution without raising PST

CBC News Posted: Oct 05, 2016 5:30 AM CT Last Updated: Oct 05, 2016 5:30 AM CT
The federal government's direct-pricing plan means polluters will pay $10 per tonne starting in 2018, increasing to $50 per tonne by 2022.
The federal government's direct-pricing plan means polluters will pay $10 per tonne starting in 2018, increasing to $50 per tonne by 2022. (Darryl Dyck/Canadian Press)

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A proponent of wind power says Saskatchewan can afford to tax carbon emissions.
On Monday, Prime Minister Justin Trudeau announced a federal carbon pricing deadline all provinces must comply with by 2018 — or the federal government will impose a price.
The federal government's direct-pricing plan means polluters will pay $10 per tonne starting in 2018, increasing to $50 per tonne by 2022.
James Glennie, president of SaskWind, said Premier Brad Wall knew this was coming, and needs to double check his math.
On Monday, Wall said a national carbon tax would siphon $2.5 billion from this province. Glennie said that's not true.
  
"All the monies from it will be kept within Saskatchewan," Glennie said. "This is not the feds just implementing another tax. This is simply saying, 'Tax what's bad. Don't tax what is good.' "
  
Glennie said carbon taxes are a way of taxing pollution without raising the PST.
According to Glennie, the province dodged carbon taxes years ago by trying to cut pollution at its coal-fired power plants. After cost overruns, delays, and problems, Glennie said Saskatchewan is still a big polluter.
"The government decided it was going to pick this winner — it decided to not put a price on carbon. It decided that it was going to try to find the best alternative. And it ended up wasting a billion dollars in carbon capture at Boundary Dam. Wind energy could have done the same job as Boundary Dam — had there been a price on carbon — for a billion dollars less."
He said Saskatchewan's emissions could be cut by at least 30 per cent by generating more wind power.
When asked about Glennie's comments, a government spokesperson said "we have a 50 per cent renewables goal by 2030 — which is one of the boldest in the country."
The government added wind power will be a part of its plans, "but it's not the only renewable needed to meet that goal."
As well, the government said, Boundary Dam Unit 3 "is working well and will reduce emissions this year by the equivalent of taking 200,000 vehicles off the road."

Saskatchewan's heaviest air polluters

Sask Carbon Capture 20141002
Part of a carbon capture and storage facility is pictured at the Boundary Dam Power Station (background) in Estevan, Sask. on Thursday, October 2, 2014. (Michael Bell/Canadian Press)
According to the Ministry of Environment, "Saskatchewan is required to report to Environment and Climate Change Canada by facility, rather than organization."
Here is the most recent information about heavy emitters that environment officials could provide (data from Jan 1, 2014 to Dec. 31, 2014):
  1. Boundary Dam Power Station, Saskatchewan Power Corporation (Estevan): 4,994,430 (tonnes CO2 equivalents)
  2. Poplar River Power Station, Saskatchewan Power Corporation (Coronach): 4,641,652
  3. Shand Power Station, Saskatchewan Power Corporation (Estevan): 2,080,808
  4. Co-op Refinery Complex, Consumers; Co-operative Refineries Limited (Regina): 1,618,693
  5. Lloydminster Upgrader, Husky Oil Operations Limited (Lloydminster): 1,265,984
  6. Meridian Cogeneration Plant, Meridian Limited Partnership (Lloydminster): 910,798
  7. North Battleford G.S., Northland Power Inc. (RM of North Battleford): 740,513
  8. Mosaic Potash Belle Plaine, Mosaic Canada (Belle Plaine): 679,598
  9. Queen Elizabeth Power Station, Saskatchewan Power Corporation (Saskatoon): 673,222
  10. Cory Cogeneration Station, ATCO Power Canada Ltd. (Saskatoon): 650,455
With files from CBC's Jennifer Quesnel

http://www.cbc.ca/news/business/ccs-carbon-tax-shell-saskpower-1.3905724?cmp=rss


CBC News
Avoiding high emission taxes would make innovative alternatives more economical.

Considering all the recent debate about carbon taxes, climate change and greenhouse gas emissions, there's been little discussion about one of the methods of containing…
CBC.CA



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Julie Ali
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Julie Ali
Julie Ali I doubt that carbon capture and storage will be cost effective. You only have to look at the mess in Saskatchewan with their CCS project to see how taxpayers have been robbed. It's ridiculous. All Canadians are paying into the CCS projects and where are the cost benefit analysis work? I have yet to see this information. The only folks who are working on the high costs of CCS are citizens. Why do we have to do the work of government? I guess because the government is in the pockets of the oil and gas industry. In Saskatchewan the citizens took all the risk for the CCS project, they pay more for greenwashing the electricity generation and the oil and gas industry gets the benefits. It is pretty neat. https://www.saskwind.ca/blog.../2016/11/3/audit-boundary-ccs Audit request re Boundary Dam Carbon Capture Scheme
In the twenty months since we produced our detailed financial analysis of the Boundary Dam Carbon Capture Scheme (BD3CCS) the Federal Parliamentary Budget Office (PBO) produced their own report. It confirmed our conclusion: Carbon Capture at Boundary Dam doubles the price of electricity. In so doing, the PBO report again raised the question of why SaskPower proceeded with a project when it knew, or should have known, that it would needlessly add $1-billion of costs to the bills of electricity consumers province-wide.


Despite all this evidence and perhaps because the sole beneficiary of the project is an Alberta-based oil company which was the largest donor to the SaskParty in 2013 and 2014, SaskPower has refused to provide any form of financial accounting to justify the project. This is particularly troubling since Premier Wall recently appealed for $2-billion of federal funds to invest in more Carbon Capture projects (as well as nuclear). We are also concerned that, while public funds continue to be used to subsidise coal, wind energy will be disadvantaged in forthcoming tenders for new generation capacity.


Consequently today we wrote to the Provincial Auditor to request a full audit of BD3CCS.
**** Even with the massive public subsidy of this CCS project the Boundary Dam Power Station is still a heavy emitter so what value did the public get for all the subsidy it provided to the oil industry? I'd say very little.http://www.cbc.ca/.../saskatchewan-heaviest-air-polluters... According to Glennie, the province dodged carbon taxes years ago by trying to cut pollution at its coal-fired power plants. After cost overruns, delays, and problems, Glennie said Saskatchewan is still a big polluter.


"The government decided it was going to pick this winner — it decided to not put a price on carbon. It decided that it was going to try to find the best alternative. And it ended up wasting a billion dollars in carbon capture at Boundary Dam. Wind energy could have done the same job as Boundary Dam — had there been a price on carbon — for a billion dollars less."


He said Saskatchewan's emissions could be cut by at least 30 per cent by generating more wind power. **** And yet we have the federal government willing to waste more money on this junk science. The amount of baloney we have to listen to is amazing and means more money down the drain in the future on a technology that isn't useful: http://www.estevanmercury.ca/.../federal-ministers-tour... The carbon capture and sequestration (CCS) unit at Boundary Dam and the technology it utilizes continue to attract the attention of the federal government. This attention came in the form of a visit and tour of the facility on July 6. Federal Minister of Natural Resources Jim Carr toured the CCS unit, accompanied by Regina MP and Public Safety Minister Ralph Goodale, Saskatchewan Environment Minister Herb Cox and SaskPower CEO Mike Marsh.


Carr’s tour of the facility was done to get information for the federal government, which he said needs to learn more about the technology. Carr described the needs of progressive federal initiatives to reduce greenhouse gas (GHG) emissions as “the point where technology meets public policy.”


He said that the CSS technology in place at Boundary Dam, has achieved a global level of recognition.



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