Reducing GHG emissions
A Conference Board of Canada report finds projects that receive funding from CCEMC pay more than emissions reduction dividends.
Oil & Gas
Investments in technologies that aim to reduce greenhouse gas emissions and ease the effects of climate change have a positive impact on the Alberta economy and they’re delivering spin-off benefits across the country.
The Conference Board of Canada analyzed 100 projects that have so far received $250 million from the not-for-profit Climate Change and Emissions Management Corp. (CCEMC) for a total investment of $1.3 billion from 2011-16. The analysis shows the projects will generate more than $2.4 billion (in 2007 dollars) over the five-year study period and add 15,017 person-years of full-time employment to the Canadian economy.
This is certainly validation of the work CCEMC has been doing since 2009 when it was established by the Alberta government as an independent organization with a mandate to reduce greenhouse gas emissions through the development and deployment of technology.
Why the analysis?
Kirk Andries, managing director of CCEMC, says the organization’s first five and half years looked at transformative technologies, with the core metric being the reduction of greenhouse gas emissions. “One of the things we hadn’t looked at was the economic impact. We went to the Conference Board of Canada because we wanted an in-depth assessment.”
Predictably, he is pleased with the results detailed in the final report, Investing in GHG Emissions-Reduction Technology.
“It takes some of the sting out of the argument that managing CO2 is just a cost. There are benefits that come out the other end as well, including GDP growth, employment, tax revenues and disposable income,” he says from his office in Sherwood Park, a hamlet located east of Edmonton.
Indeed, the Conference Board estimates for every dollar invested, economic activity is boosted by $1.90.
Much of the benefit (98.3%) flows to Alberta where real GDP is forecast to be $1.95 billion (a multiplier of five for every dollar invested by CCEMC) with an added 12,244 person-years of employment over the study period. At its peak last year, employment was up by close to 5,200 jobs. Household incomes get a boost as will retail sales (by $790 million). Housing starts are expected to increase by 398 and corporate profits are to rise by a cumulative $278 million. Construction, manufacturing and personal services account for the greatest industrial impacts. And the report says a lift to personal income of $1.2 billion (disposable income of $963 million) will add $226 million to general government coffers.
Other provinces receive some benefit through supply-chain dynamics. Ontario is the biggest winner with an increase to GDP of $240 million and an additional 1,231 person-years of employment. Gains to the other provinces range from $22 million in Manitoba to $106 million in BC, while increases in person-years of employment are from 134 to 696.
CCEMC has 100 projects on the go that receive money from the Climate Change and Emissions Management Fund.
Companies that emit more than 100,000 tonnes of CO2 annually are required to reduce their emissions intensity by 12% below their 2004-05 baselines. If they are unable to do so, there are three compliance options: improve internal energy efficiency, buy carbon credits from other Alberta organizations or pay $15 per tonne to the fund, which is collected by the Alberta government.
“We think every project has the potential to be a hot one,” says Andries, who is also executive director of the Alberta Biodiversity Monitoring Institute. “We’re really trying to push the envelope. We see our money as risk capital, so we’re not like a VC [venture capital fund] looking at a financial return in a year and a half. Ours is patient capital. We understand that technology takes time and the return we are looking for is the greenhouse gas reduction.”
Grappling with climate change
Projects cover carbon capture and storage, renewable energy, clean-energy, energy efficiency, climate change adaptation, carbon uses and biological.
Andries offers examples, such as the Lethbridge Biogas Cogeneration project, which converts waste material such as agricultural manure and food processing waste into electrical and thermal energy through anaerobic digestion.
Another is the Enhanced Solvent Extraction Incorporating Electromagnetic Heating (ESEIEH) Consortium that involves the Harris Corp. of Melbourne, Fla., a telecommunications equipment manufacturer, and energy producers CNOOC Ltd./Nexen Inc., Devon Canada and Suncor Energy Inc.
They’re testing a new process that would replace steam used for in situ bitumen extraction with electromagnetic heating, combined with solvent dilution. On a full cycle basis, it has the potential to reduce emissions generated from steam-assisted gravity drainage by up to 80%.
CO2 Solutions Inc., an innovator in enzyme-enabled carbon capture, has been working with a major Alberta oil sands producer to capture carbon from natural gas combustion emissions. The one-year project, almost complete, applies a technology that uses an enzyme (carbonic anhydrase). When introduced in a packed tower scrubbing system, it substantially improves the efficiency of capturing CO2 with low-energy solvents. Andries says the Quebec City company is submitting another project.
Alberta is committed to reducing its greenhouse gas emissions, but the projects funded by CCEMC have the potential for much broader geographic reach as nations grapple with the effects of climate change.
Environment Canada notes average annual temperatures in Canada have increased by 1.7 degrees C over the past 65 years, and the US Environmental Protection Agency estimates the average global temperature is expected to rise between 1.1 to 6.4 degrees C. The effects of climate change run from more severe weather patterns to health risks and damage to ecosystems.
So the work continues at CCEMC. Andries says it’s hard to say how funding might be affected by plunging oil prices because it will depend on whether or not energy companies change their production levels. But looking ahead, he sees CCEMC collaborating more with other organizations. A potential partner is Canada’s Oil Sands Innovation Alliance (COSIA), a resource-rich group of oil sands energy producers that are working together to improve their environmental performance. Both organizations have a common goal. Much rests on the success of their collective efforts.
This article appears in the April 2015 issue of PLANT.