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Swan Hills site for carbon capture and storage project

Swan Hills will set the stage for what the government and its project partners are calling an innovative clean-energy initiative that will capture carbon dioxide from a deep coal gasification process.

Swan Hills will set the stage for what the government and its project partners are calling an innovative clean-energy initiative that will capture carbon dioxide from a deep coal gasification process.

The Government of Alberta and Swan Hills Synfuels signed on July 27 a final funding agreement for a carbon capture and storage (CCS) project. The province has committed $285 million to the Swan Hills Synfuels project as part of its $2-billion CCS funding program. Construction is expected to begin in 2013 with carbon capture beginning in late 2015.

Back in July 2008, the province announced its climate change strategy, which set Alberta on a path to deliver on large-scale green house gas reductions. Part of that strategy was a 50-per-cent reduction target from business as usual by 2015, which equated at that time to about 200 million tons. Of that total, 70 per cent of it was to be delivered by CCS.

This, and objectives through the provincial energy strategy for clean energy production, led to an announcement of $200 billion for a CCS project in Alberta. This funding is to be doled out over the life of the funding agreement, and will be paid at crucial points of the project development. The province then kicked off its request for proposal process to come up with three to five projects to deliver five megatons of carbon dioxide by 2015.

From those proposals, four were selected including the Swan Hills Synfuels project. To date, the province has signed funding agreements with three of those projects.

Swan Hills Synfuels president Doug Shaigec said via a telephone conference call that the project would use an innovative set of proven technologies to tap unmineable coal seams more than one kilometre deep near Swan Hills. During in-situ coal gasification (ISCG), the coal is turned into a synthetic gas called syngas and is flowed to the surface and processed in a conventional gas plant to remove the carbon dioxide. The resultant clean low-carbon syngas is then used to fuel the high-efficiency combined-cycle power generation plant. This project will create enough power to provide for the needs of about a quarter of the city of Edmonton or Calgary.

The process will capture about 1.3 million tons of carbon dioxide per year, and it will be used for enhanced oil recovery geological sequestration. The project will cost about $1.5 billion to build, and construction is planned to start in early 2013 with a target in-service date of 2015.

“This project is a world leader among the next generation of coal-to-clean energy projects,” Shaigec said. “It offers a best of both worlds situation both economically and environmentally.”

Economically, the project uses deep unmineable coal, an essentially untapped Alberta energy resource that contains more than double the energy than all the oil sands and conventional oil and gas remaining in Alberta, he said. The coal is located 1,400 metres below the surface of the earth, and the syngas will be used to generate 300 megawatts of clean burning baseload electricity for the Alberta grid.

Environmentally, due to the use of carbon capture and sequestration, the project brings a major reduction in emissions compared to traditional coal-fired power, Shaigec said.

“(It will mean) about a two-thirds reduction, with environmental performance that is better than that of a natural gas-fired power generator.”

To make ISCG happen, the company would drill a pair of holes into the coal seam using a horizontal well to inject oxygen and salt water. The oxygen supports a controlled amount of combustion, which boils the water and heats up the coalface. The resultant steam creates a natural formation pressure and the right condition for the coal to undergo gasification, a series of chemical reactions that convert the coal into syngas, Shaigec said. A vertical well is used to bring that gas to the surface for processing. Practising ISCG at this depth offers a number of environmental benefits.

“First, it does not require a coal mine or coal handling, which minimizes surface disturbance,” Shaigec said. “The high-pressure environment supports very efficient and cost-effective carbon dioxide capture in the surface gas plant, minimizing air emissions.”

There are 800 metres of impermeable rock between the coal seams and aquifers. Deep ISCG uses saline water in the process, and does not require fresh water, Shaigec said. The energy density of the coal makes for a very compact project development, and only five square miles of sub-surface coal resource is required to support four years of operation of the project.

“It’s this kind of innovation and the can-do attitude and experience in Alberta’s energy base industry, along with the support of the province and the Whitecourt and Swan Hills communities, that help move forward this innovative clean-energy project.”

CCS funding is limited to 75 per cent of incremental CCS cost. The first 40 per cent of funding is provided during the development of the project, with an additional 20 per cent provided once the project reaches commercial operation. The remaining 40 per cent is provided over the operating phase up to a maximum of 10 years.

“This project has tremendous potential to change the way we use our vast coal resources,” said Ron Liepert, Minister of Alberta Energy. “This innovative approach will decrease the environmental impact while generating a reliable energy supply.”

“The support of the province is helping to make this major energy project a reality, upgrading a low-value resource into valuable clean energy in Alberta,” said Martin Lambert, Chief Executive Officer of Swan Hills Synfuels. “We are excited to be building a baseload generating plant that will provide the reliability and economic stability that coal-fired power has brought to Alberta for many years, but with greenhouse gas emissions lower than that of comparable natural gas-fired generation.”

The Alberta government is working to build a better Alberta by fostering economic growth, strengthening health and education systems, investing in infrastructure, supporting safe and strong communities and ensuring a clean and healthy environment, said Liepert.

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