Coal: Saskatchewan’s Other Black Gold
To much of the world, coal is already the fossil fuel of the past. But Saskatchewan isn’t giving up on it yet—and it believes burying the evidence might be the answer
Saskatchewan appears set to become the last province in Canada to burn coal in its power plants, despite its commitment to using 50-percent renewable power by 2030. The government-owned SaskPower is on the cutting edge of capturing carbon and storing it deep underground, in a process known as carbon capture and storage, or CCS. “There is only one way we can square this circle of slashing greenhouse gases, while ensuring economic growth continues, and a big part of that, absolutely, is CCS,” said Saskatchewan Premier Brad Wall. To some, Saskatchewan and Wall are unlikely proponents of green technology. Wall is better known for his staunch opposition to a federal carbon tax and his strong stance against those who stand in the way of pipelines.
Two years ago, under a slogan of “Capturing carbon and the world’s attention,” SaskPower launched its flagship CCS initiative, the Boundary Dam Integrated Carbon Capture and Storage Project. It was the world’s first and largest commercial-scale, coal-fired CCS project of its kind. It retrofitted a 1970s unit near Estevan into a 115-megawatt plant capable of reducing greenhouse gas emissions by up to one million tons of CO2 per year, roughly the equivalent of taking more than 250,000 cars off the road. Some of that CO2 is sent to the oil patch for enhanced oil recovery (EOR) and the rest goes to deep saline aquifers for storage.
Saskatchewan is no newcomer to CCS. It began the 21st century by partnering on the world’s first CO2 for EOR project that used an artificial carbon source. From 2000 until recently, about 8,500 tons per day of CO2 were captured from a coal gasification facility in North Dakota, and transported the 320 kilometers by pipeline to Cenovus’s Weyburn and Midale oil fields for injection. This is where Howard Matthews, vice-president of power production at SaskPower, cut his teeth in the business.
“We are working now to try to understand both the technology and costs,” he says of the Boundary Dam project. “The point of the whole thing is to understand it.”
Although the project uses the same CCS technology as Shell’s Quest project in Alberta, which buries CO2 from the Scotford bitumen upgrader, the economic thinking behind it is very different. Quest’s captured CO2 is not being used for EOR, but rather is being injected into the same deep saline formation where the excess CO2 from Boundary Dam is being injected, but at a much shallower depth. Quest was subsidized by more than $1 billion from the previous federal and provincial governments and treats CO2 purely as a polluting waste product that requires safe disposal. Boundary Dam also received about $250 million of federal cash, but SaskPower aims to meet federal emissions regulations while keeping a cheap and stable fuel source in play, which in turn attracts heavy industry such as mining to the province. The Harper government’s 2011 regulations restrict new coal-fired power plants to the emissions equivalent of the most efficient combined-cycle gas plant, approximately 420 tons of CO2 per gigawatt-hour of production. For that reason, the future of coal power hinges on the success or failure of CCS.
Coal might be dirty to burn but its value lies in its price stability, unlike the yo-yoing gas market. Coal allows for 15-year power contracts and that stability is passed on to power customers. Its price stability is also matched by supply stability. “Coal has served us well for many, many years and we have 200 to 300 years’ supply,” Matthews says.
The CCS project at Boundary Dam uses a chemical, which has to be heated up by steam, reducing the energy efficiency of the plant that subsequently has to burn more coal to replace the lost heat. But this chemical also captures some sulfur dioxide flue gas to make sulfuric acid, which the plant sells to industry. It also sells fly ash to the cement industry, cutting down the amount of cement needed in a concrete mix, offsetting the CO2 that would otherwise have been produced. However, Saskatchewan doesn’t have a carbon tax, so there isn’t a financial incentive to source fly ash. Selling CO2 for EOR to Cenovus turns a waste product into revenue “If you generate a revenue stream it lowers costs of production,” Matthews says.
But the Boundary Dam project has had its problems. Repeated shutdowns have meant missed deliveries to Cenovus, which it has a 10-year contract with, leading to SaskPower suffering US$7 million in penalties. Nonetheless, the CCS project’s performance has improved considerably. At the Aquistore injection well, Kyle Worth of the Petroleum Technology Research Centre and the senior project manager of Aquistore, says CO2 injection rates since January have been consistent. “The capture plant seems to have had a 100-percent run and the tonnage being injected at Aquistore comes up as we learn more about the system,” Worth says. “It’s a first-of-its-kind in the world—it shouldn’t surprise anyone that SaskPower had some initial challenges,” he says.
