Saskatchewan is betting $1 billion that it can capture carbon dioxide from one of its coal-fired generating stations and sell the CO2 to oil companies for enhanced oil-recovery projects. In so doing, the province hopes to give a new lease on life to its aging fleet of thermal generating stations and its 300-year reserves of coal. Saskatchewan hopes to demonstrate the technical and economic feasibility of “clean coal” technology to a world that still relies on coal for 40% of its electricity generation.

Regina-based SaskPower, a provincial Crown corporation, has announced it is going ahead with a $1.2-billion carbon capture and sequestration demonstration project at its Boundary Dam power station in the province’s southeast, near Estevan. It will be the first commercial-scale deployment of CCS technology in the world.

The CCS project, which is supported by $240 million from the federal government, will answer a number of questions: can clean-coal technology work on a commercial scale; can the process be cost-competitive with other sources of electricity generation, such as natural gas?

The project will have major consequences for SaskPower’s three coal-fired generating stations, which provide half of the province’s electricity-generating capacity. Those stations also generate most of the province’s greenhouse-gas emissions.

The project will reduce the plant’s GHG emissions by one million tonnes a year — equivalent to removing 250,000 vehicles from the roads for a year. If successful, the CCS project will show that clean coal is technically feasible, environmentally friendly and economically sound.

Environmental groups oppose CCS because it perpetuates dependence on fossil fuels and generates incrementally more GHG emissions, especially if used for enhanced oil-recovery projects. Ann Coxworth of the Saskatchewan Environmental Society says clean coal is more expensive and less effective in reducing GHG emissions than energy conservation: “[Clean coal] requires generating about 25%-30% more electricity just to run the carbon-capture process.”

Others argue that as there currently are no federal regulations restricting GHG emissions from coal-fired generating stations, why spend $1 billion on clean coal?

But Rob Norris, the minister responsible for SaskPower, believes tougher regulations are coming — and soon. The CCS project, expected to be in operation in 2014, will be financed internally by SaskPower and through the sale of CO2 to the oil industry. Proponents say the captured CO2 can be injected into mature oil formations to increase recovery rates and extend the life of the oilfields by another 25 to 30 years. IE