The price of emissions

Alberta companies that produce more than 100,000 tonnes of emissions must achieve a 12% reduction from 2005 levels. If they don’t, they pay into a that the CCEMC uses to finance GHG mitigation projects.

January 14, 2011

A bucket wheeler digs into oil-rich bitumen near Fort McMurray, Alta.

Photo: iStockphoto

Darryl West, president of Calgary-based Evergreen Energy Technologies Inc., is pumped about the future. After 20 years installing equipment at natural gas well sites, the mechanical engineer, and Evergreen’s sole employee, developed a 100- to 200-watt stand-alone electric power generating system for remote off-grid locations. Called the Power Pod, it’s a hybrid system that combines solar photo voltaics with a new technology: direct methanol fuel cell (DMFC).

West says the hybrid power generator is far more reliable and efficient in the cold, northern Canadian climate than solar alone. And it emits less greenhouse gases (GHGs) than thermoelectric generators currently in use at well sites.

It’s an idea that has earned Evergreen a commitment for $250,000 from Alberta’s Climate Change and Emissions Management Corp. (CCEMC). Evergreen is one of the first 16 projects to gain the organization’s final approval – and commitments worth $71 million – announced in June 2010. An arms-length, not-for-profit organization, CCEMC is tasked with administering the province’s $187 million – and growing – cuss jar for heavy carbon emitters.

Since 2007, regulation obligated Alberta companies that produce more than 100,000 tonnes of emissions to report and comply with performance standards to achieve a 12% reduction from 2005 levels. One compliance option is to pay into the Climate Change and Emissions Management Fund at $15 per tonne emitted over target. The monies collected are diverted to the CCEMC and are intended to leverage financing for innovative projects that mitigate GHG emissions through greening energy production, energy conservation and efficiency, carbon capture and storage, and adaptation. West came up with an idea that fit the bill.

“Rather than use compressed hydrogen as a fuel source for this particular fuel cell, we use liquid methanol to convert electric power on demand,” West says.

Evergreen’s strategy is to replace thermoelectric generators at well sites throughout Alberta, and beyond, with its solar and DMFC hybrid system. He says a DMFC system is 10 times more efficient in converting fuel into power than a typical thermoelectric system.

But what West is really pumped about is, well, pumps. Where instrumentation is pneumatically operated, he sees an opportunity. Pneumatic pumps run on the natural gas that producers have gone to the trouble of drilling, he explains. The gas is then vented back into the atmosphere.

“All these pneumatic devices bleed gas. Natural gas is mostly methane, which is about 20 times as bad as CO2 on a per volume basis in terms of a GHG effect. In the case of, say, one pneumatic pump, we’re looking at about 400,000 static unit feet per year of vented gas. In terms of GHG emissions, that’s the equivalent of 170 tonnes of CO2 per year. And that’s just one site.” He estimates there are about 120,000 natural gas wells in Alberta alone.

Evergreen has also developed an electrical chemical injection pump as an alternative to pneumatic equipment currently in use. “That’s really where the biggest economic payout would be for the customer and the benefit for reduction in emissions,” West says.

Approved for funding
The following 16 climate change projects representing $71.3 million were approved by CCMEC in June. Proponents are now preparing contracts before moving forward.
Cleaner energy production, carbon capture and storage
E-T Energy Ltd., $6,862,000: Poplar Creek project, ET-DSPTM for development of Athabasca Oil Sands.
ESEIEH consortium, a joint venture of four companies: Harris Corp., Laricina Energy Ltd., Nexen Inc. and Suncor Energy Inc., $16,474,839: Enhanced solvent extraction incorporating electromagnetic heating.
HTC Purenergy Inc., $315,000:
GE, $2 million:
Ceramic membrane-based technology for H2 production with CO2 capture and sequestration.
Suncor Energy Inc., $2,500,000: HTC Purenergy CO2 capture FEED study for Devon’s Jackfish SAGD facility. OTSG Oxy-fuel Demonstration Project.
Energy efficiency projects Evergreen Energy Technologies Inc., $250,000: Reliable power for remote locations.
May-Ruben Technologies Inc., $569,704: BFE thermally driven refrigeration system.
Nova Chemicals Corp., $700,000: Energy footprint reduction for ethylene manufacturing.
Suncor Energy Inc., $790,905: Alberta oil sands energy efficiency and GHG mitigation roadmap.
Great Northern Power Corp., $1.57 million: Conversion of waste heat from reciprocating engines into electricity, using Great Northern Power’s expander system.
Genalta Power Systems Inc., $1.849 million: Waste energy to power utilization within an amine facility.
Renewable energy projects
Enerkem Inc., $1.8 million: Reduction of GHG emissions through greening biofuel production and CO2 utilization, from pilot plant to commercialization.
City of Medicine Hat, $3 million: Medicine Hat concentrating solar thermal power project.
ECB Enviro North America Inc., $8.2 million: Lethbridge Biogas, biogas cogeneration project.
Plasco Alberta Inc., $10 million: Plasco Alberta renewable energy and waste conversion project.
Enmax Corp., $14.5 million: Home generation.

Projects ramp up
It’s too early to say whether or not the CCEMC will have an impact on stimulating innovation in clean technology, energy efficiency or renewable energy. To date, not one dime of the allocated funds has been spent, according to CCEMC’s managing director Kirk Andries. Those who represent the approved projects announced in the spring are currently preparing contribution and licensing agreements. But he says interest is high in developing ideas to mitigate GHG emissions using the CCEMC commitment as leverage to attract further financing.

The first of three Calls for Expression of Interest since late 2009 garnered 223 submissions, representing requests for $1.6 billion from the fund. “We had to wean them down to the 16 best ones,” Andries says. (See Approved for funding.)

The second call narrowed the pool to energy efficiency projects. Fifty-two projects were shortlisted to 17 in October. At this writing, the proponents were preparing business plans for a Dec. 1 deadline before moving forward to the final cut.

The third call, this time for projects in renewable energy, went out in October. The deadline for the ten-page submission was Nov. 4. “We want to make darn sure we get the best ideas out there,” Andries says.

Surprisingly, some of Alberta’s heavy carbon emitters were recipients of millions of dollars from the CCEMC. “It didn’t escape my notice that as a recipient of the fund, I was standing on the same platform as a representative for Suncor,” West told PLANT.

Three carbon capture and storage projects received 30% of the allocated $71 million in funding in the first round of CCEMC projects, even though the Alberta government has already committed $2 billion to four carbon capture and storage projects through a different fund.

Andries explains. The province of Alberta has set rules around how the funding can be allocated. The fund is intended to help finance “the best projects we can get our hands on.” He points out that between 100 and 110 of Alberta’s heavy emitters pay into the fund. These firms are responsible for up to 65% of Alberta’s GHG emissions.

“These emitters are submitting funds to meet compliance. I’ve heard the criticism that the fund allows heavy emitters to ‘pay as you go’. But even if you are a contributor, if you have a brilliant idea that will help you mitigate greenhouse gas emissions, we are open for business and we will entertain your idea,” Andries says. He also notes the adjudication team comprises third-party experts in engineering who collectively evaluate each project using a consensus process and an independent fairness judge oversees the process. PriceWaterhouseCoopers scrutinizes each project’s financial due diligence.

“Our endgame is reduction of greenhouse gas emissions,” says Andries.

An ideal project would involve lots of low-cost GHG reductions that can be broadly applied across the marketplace.

But bright ideas take some time to develop. CCEMC’s challenge will be to accelerate innovation and help turn those ideas into practical applications that will tame Alberta’s greenhouse gas emissions.

Kim Laudrum is an award-winning writer based in Toronto, who specializes in sustainability issues. E-mail