Newspaper article The Canadian Press

TransAlta Says Pioneer Carbon Capture Project Scrapped Due to Poor Economics: Pioneer Carbon Capture Project Scrapped

Newspaper article The Canadian Press

TransAlta Says Pioneer Carbon Capture Project Scrapped Due to Poor Economics: Pioneer Carbon Capture Project Scrapped

Article excerpt

CALGARY - A $1.4-billion project to capture carbon dioxide emissions from an Alberta coal plant and store them underground has been scrapped because the economics of the plan aren't good enough, says TransAlta Corp., one of the companies backing the project.

CEO Dawn Farrell said an initial study of Project Pioneer found the technology works and that the capital costs were in line with expectations.

However, there were not enough customers to buy the CO2 to make it worth the Pioneer partners' time and the price was not good enough.

"You have to be able to use the carbon somewhere and we couldn't find enough places to use it to make the project work," Farrell said in an interview.

The idea was to sell some of carbon dioxide to nearby energy producers, who would inject the gas into their fields as a means to get more oil out of the ground. The emissions would have been prevented from entering the atmosphere.

The federal and Alberta governments have been banking on CCS, or carbon capture and storage, as a means to reduce the carbon footprint of the power generation and oil and gas industries. Project Pioneer, which would have been connected to the Keephills 3 coal plant west of Edmonton, received $779 million in backing from Ottawa and Edmonton.

Enbridge Inc. (TSX:ENB) and Capital Power Corp. (TSX:CPX) were the other companies behind the initiative.

Now was the time the companies had to make a go or no-go decision.

"In the timeframe where we had the government grant money, it could not come together, and so we had to cancel the build part of the project," Farrell said.

"Frankly, if we'd had more time, you might have been able to make it work. But it just wasn't coming together in this time frame."

Farrell said no one is to blame for the project's cancellation. Oil companies are relying more and more on horizontal drilling and other technologies to boost output from mature oilfields, so the demand for carbon dioxide to perform that function has been pushed out several years. …

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