Dr. David Keith at the Environment and Sustainable Development Committee

Understood. Okay.

Forgive me if I am a little bit slower or less coherent than usual. I just flew in this morning and I've already done a lot of work with only an hour or two hours' sleep.

Let me say a couple of words. I guess I want to make four points. First of all, I want to argue that CO₂ capture and storage is ready for prime time, in the sense that you could implement industrial-scale projects today, with industrial performance guarantees, in the clear understanding that they would work. Now, that's not to say they wouldn't be expensive—and “expensive” is a relative term, as we can argue about how much we want to pay—but I think it's essentially a statement of fact that we are ready to do this on a full industrial scale.

I want to say what the reason for that statement is. You might say, oh, this is some university professor saying this, and what does he know? The reason is the following: the underlying technologies all exist on the industrial scale in the commercial market already.

So you might ask what happened, given that CO₂ capture and storage incentives have moved very quickly from where we stood a decade to two decades ago, when there were some first meetings at MIT and there were only a couple of academics interested, and almost no serious interest, to nowadays when we have a major global R and D budget and interest from the G-8 and the IPCC, and various projects are being announced around the world. Why did we move that quickly? Was it because there was a bunch of innovation and laboratories? The answer is no.

The reason things moved quickly, essentially, is that we're talking about using, on a full industrial scale, the components we already had in a tool box. So with coal gasification, for example, while there are certainly issues about gasifying some of the coals in western Canada, there are 60 gigawatts of thermal coal capacity worldwide. The German government, during World War II, fueled most of its aircraft fleet out of coal gasification turned into liquid fuels. Likewise, hydrogen production from natural gas is a worldwide enterprise that's more than 1% of the global energy system. Similarly, CO₂ capture in aqueous amines is widespread around the planet. CO₂ is transported at distances of up to about 1,000 kilometres. Again, none of this was developed for the purpose of managing humanity's CO₂ emissions; it was developed for other, completely separate commercial reasons.

Finally, the injection of CO₂ into deep geological formations for CO₂ storage amounts to more than 30 megatonnes a year in the U.S., or something like 0.5% of the U.S. CO₂ emissions.

So it's the combination of these components, each of which already existed, at a full commercial scale.

CO₂ capture and storage is the opportunity to use these pieces of technology we have in the fossil fuel industry and assemble them in a new way—to assemble the parts in the took box in a new way—to enable us to use the benefits of fossil energy with greatly reduced emissions. Each of these things already existed. It's for that reason, with the megatonne and billion-dollar scale all around the world, that we can say for certain that if you want to build power plants with capture today, you can do it. There are many independent routes that would allow you to do it.

As a second comment, despite what I said—but not in contradiction to it—I think there still really is a need for more energy R and D in Canada. I don't think that doing more research should be an excuse for inaction. Indeed, as far as I can tell, it's the almost unanimous view now among the community of people who think about CO₂ capture and storage that at this point what we need to do is pull the trigger and get some major projects in the ground. Just doing more research without big projects won't even be an effective way of doing research, because the best way to do research is via big projects.

That said, it is still important to say that Canada's energy R and D is in many ways very, very small, as was demonstrated by the blue ribbon panel on energy R and D that reported back to NRCan and Parliament last year—which I was on. So if you see, for example, that the ratio of investment in energy R and D in Canada to the size of Canada's energy sector is one of the lowest of the major countries, you really get a sense that Canada is not aiming upstream; we're not aiming for the high-value-added clean technology, high-value jobs, that we would get if we were focused more on an R-and-D-intensive energy sector.

The energy sector as a whole invests something under 1% of revenue in R and D, which is tiny compared with the average of all the other sectors, or with the sectors that are more focused on R and D. You really have to scratch your head and say, how would the energy sector look if we did significantly more R and D?

I'm not suggesting that R and D should be done through some giant parcel of federal money going to federal labs and universities. Indeed, personally, although I am a professor, I think the opposite. I think this R and D needs to happen mostly, dominantly, in the private sector, but government policies can incent that.

I have argued, first, that it's prime time, and second, that even though it is ready for prime time, more energy R and D on this and other topics is really necessary if we're going to meet the challenge of living in a carbon-constrained world, if we're really going to do what we need to do to stabilize the climate, which is to make very deep reductions in emissions over just 50 years. The third point is that the risks of doing large-scale CO₂ storage are not zero, but they are small. There's a lot of background to understand on what those risks are, including background from the very successful Weyburn project, for example.

There are no really large-scale industrial technologies in the world that have zero risks, and this is no exception. If we really put gigatonnes of CO₂ underground, we can expect some local risks. If you're looking for a risk-free technology, you can go elsewhere--although I don't think there is an elsewhere. But a series of different lines of evidence give us real confidence that we understand these risks and that we can control them, given a suitable regulatory regime.

To harp on the regulatory regime for a minute, people often ask, almost point blank, what's the risk of geologic storage of CO₂? The correct answer to that question—and this is the answer the IPCC gave, I think quite wisely--is that essentially there is no answer. It's an engineering question. To some extent, if a politician asks me, “What's the risk?”, the answer I'll give as a project engineer is, “Tell me what level of risk you want, sir.” This is an engineering project design question.

So the risks of the upstream petroleum industry in Alberta are very small. The risks of the upstream petroleum industry in Nigeria are quite large. It's not due to some intrinsic difference in the hardware; it's due to the regulatory system in which these things are embedded. Similarly, flying commercial aircraft around Canada is very safe, whereas flying in parts of Africa is very dangerous. This has to do with the rule of law, high-quality regulatory systems, etc.

Much the same applies to CO₂ storage. If we set the guidelines appropriately, if we have a high-quality regulatory system that's adaptive, that's able to deal with new information and new techniques or managing the risks of CO₂ storage, the risks can be very small, I think quite comparable to or smaller than the risks of the current upstream petroleum industry.

Finally, I want to say a few words about policy. In that fourth set of things I want to say, I'll give a couple of my views on what needs to happen.

I think it is vital for this and any other technology that we put some kind of price on carbon. The merits of something simple...for instance, an economy ring-fenced carbon tax, which is exceedingly easy to implement. It does not require facility-based accounting systems and it puts an even price everywhere in the economy. It is hard to get away from the merits of such a system, because such a system has the government only telling the economy what we should do about releasing emissions. It gets the government out of the business of picking winners and losers, either between provinces or between sectors or within industries.

Second, I think that needs to be supplemented by something like loan guarantees that help to enable firms to buy down the risk of very large capital intensives and uncertain investments. I think that is as true for other new energy technologies as it is for CO₂ capture and storage.

Finally, I think it's time for Canada to think about what has already been implemented in British Columbia and is being now talked about quite seriously--suprisingly seriously--in the U.S. House and Senate, and that is something that comes close to, or is, a complete ban on the construction of new coal-fired power plants that do not have CO₂ capture and storage, because those are among the most carbon-intensive objects our society builds. They have very long lives, and they can mean very long emissions. Since we do have alternatives in Canada, both non-coal alternatives and the alternative of CO₂ capture and storage, I think we should think hard about whether we want to allow any more such plants to be built.

Thank you very much for giving me the time.