Industry enters carbon hub talks

By COLLIN GALLANT on November 30, 2021.

cgallant@medicinehatnews.com@CollinGallant

A second power producer in Alberta says it will develop plans for off-site carbon capture for its power plants, joining the City of Medicine Hat, which has said a CO2 storage hub is key for the viability of its plant and other local industry.

Capital Power and Enbridge announced jointly on Monday that the power producer and pipeline giant will investigate how to move carbon dioxide produced at the Genesee power plant complex east of Edmonton to storage facilities underground. That, the company said, would keep the natural-gas-fed power production viable in the face of escalating carbon compliance fees.

The plan is also not remarkably different from a proposal made by officials with the City of Medicine Hat this summer.

TC Energy and Pembina Pipelines have also announced they would jointly explore creating a backbone system to connect mostly central and northern regions to developed CCUS caverns in central Alberta.

It would create an “open” system wherein other CO2 emitters could book space on the line that would move the gas to be sequestered deep underground – a major initiative that many say could help government reach steep emission targets to mitigate climate change.

That plan doesn’t include the southeast, however.

City officials this summer raised the potential of creating a local carbon hub with potential users – like the city’s own power plant, Methanex, CF Industries and other large emitters in the region – as an offshoot of hydrogen hub discussions. They say they’re now also engaging potential carbon hub operators.

“There is a lot of interest in the private sector and industry, and we’re taking all conversations until we make a decision that’s best for Medicine Hat,” said Brad Maynes, the city’s managing director of utilities and infrastructure.

Officials with Invest Medicine Hat said this summer that the deep geology needed to sequester pumped carbon dioxide exists in the southeast, and can be accessed by wells already in the city’s portfolio. Deep wells drilled in unsuccessful oil exploration program decades ago will be reopened next year as part of a $6-million drilling campaign proposed in the 2022 budget.

The goal for the city is to decrease the carbon compliance cost at its utility division – administrators have said controlling utility costs to customers is a key priority – but also help shield existing private industry and using the CCS project to lure new investment

Maynes said this division believes the province will seek to open a select number of stable carbon hubs that will provide “open access” to smaller emitters.

The release from Capital Power and Enbridge also states they made initial expression of interest to the province this fall – as has Medicine Hat – ahead of a more robust call for proposals expected as soon as December.

“Collaboration like this is critical as we look to advance cost-effective, customer-focused carbon capture, transportation and storage solutions in Alberta and across North America,” said Colin Gruending, president of Enbridge’s liquid pipeline division.

Capital Power operates former coal plants near Warburg, Alta. that are being upgrading to burn cleaner natural gas. Still, the combined operation, totalling 1,200-megawatts of capacity, would create about 3 million tonnes of greenhouse gases annually.

Subject to provincial approval and a final go-ahead from the companies, they target 2026 as a potential in-service date.