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$14.5M for Husky Energy carbon capture project

Husky Energy has received a $14.5 million investment from the federal government for a carbon capture and storage (CCS) project at an ethanol plant in Lloydminster, Sask.


May 18, 2012
by PLANT STAFF

OTTAWA: Husky Energy has received a $14.5 million investment from the federal government for a carbon capture and storage (CCS) project at an ethanol plant in Lloydminster, Sask.

The project, which is to create 15 jobs, involves capturing the carbon dioxide (CO2), purifying, dehydrating and compressing the gas, then transporting it nearby Lashburn and Tangleflags heavy oil reservoirs. The CO2 will then be injected into the reservoir to extract the oil.

This project, intended to develop new knowledge and methods for oil recovery while reducing greenhouse gas emissions, is designed to capture up to 100,000 tonnes of CO2 per year from the plant, which produces about 130 million litres of ethanol per year from more than 350,000 tonnes of non-food quality grain and corn.

The federal government of Canada is providing the funding through the ecoENERGY Technology Initiative. So far $151 million has been distributed through the program for “industry led initiatives” to advance carbon capture and storage technologies.

However, a $1.4-billion project that received $779 million in backing from Ottawa and Edmonton to capture carbon dioxide emissions from an Alberta coal plant and store them underground has been scrapped because the economics of the plan aren’t good enough, said TransAlta Corp., one of the companies backing the project.

CEO Dawn Farrell said there were not enough customers to buy the CO2 to make it worth the partners’ time and the price was not good enough. an initial study of Project Pioneer found the technology works and that the capital costs were in line with expectations.

“We thought the better decision was not build at this time and return the money so that the government could then reinvest it into other projects that can advance the technology on CO2 capture,” said Farrell.

Enbridge Inc. and Capital Power Corp. were the other companies behind the Project Pioneer initiative, which would have been connected to the Keephills 3 coal plant west of Edmonton.

The Globe and Mail said about $30 million had been spent on the project, $20 million coming from governments.

Files from Canadian Press