CANADA: It Requires New Oil-Sands Projects to Capture, Store Carbon

Requires New Oil-Sands Projects to Capture, Store Carbon
Canadian oil-sands projects that start operating in 2012 or later will have to capture and store carbon emissions, according to new environmental rules that also largely ban new ``dirty'' coal-fired power plants.

The regulations will be finalized next year and come into force at the start of 2010, Environment Minister John Baird said today in a statement from Ottawa.

The process of extracting oil from tar deposits in the western province of Alberta is one of Canada's biggest sources of greenhouse-gas emissions, which may more than double by 2015 as production rises, a United Nations report said last year. Because energy companies are just now starting to develop the technology to store carbon underground, the rules may deter investment in the tar sands, an energy executive said.

``We have to figure out how to do it and what it costs,'' Charlie Fischer, chief executive officer of oil and natural-gas producer Nexen Inc., said today in Edmonton, Alberta, before the announcement. ``If you don't know what it costs and how you're going to do it, that could just stall the investments.''

Enbridge Inc., Canada's largest pipeline company, said in February it will lead a group of 19 energy firms in a project to limit pollution by developing ways to store carbon dioxide. The project is studying if it can inject and store carbon underground, perhaps in salt-filled reservoirs buried at least 8,000 feet (2,438 meters) down.

Stephen Hazell, executive director of the Sierra Club of Canada, said before the announcement today that carbon capture rules might slow new investment in the tar sands and even halt the growth of emissions within five years.

``There will have to be a timeout or moratorium on new tar sands projects until the new technology is brought on stream,'' Hazell said.

Prime Minister Stephen Harper's Conservative Party government was criticized last year when it announced its initial climate-change plans, pledging to reduce emissions 20 percent by 2020. Opposition parties with a majority of seats in the legislature said the plan wasn't tough enough on big polluters.

Source: Bloomberg|by Greg Quinn

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