Environment Committee on March 30th, 2010

[Dawn Farrell]

What I can say is that for carbon dioxide to be sequestered, I agree that if there is a large point source such as a coal plant, and if that coal plant is sitting over a formation or is close to an EOR or enhanced oil recovery facility, there is a significantly higher probability of getting the CO₂ out of the flue gas and either sequestering it in the formation under the coal plant or moving it to an EOR facility. To the extent that we have a number of those kinds of coal facilities—particularly, if you look in Alberta, all of our coal plants that are up west of Edmonton sit over those geological formations and are close to enhanced oil recoveries—we have quite a high potential for sequestering CO₂.

As to the point about the oil sands, I agree that CO₂ sequestration could be more difficult, if the CO₂ sources are more disparate. But certainly if you're looking at coal plants, and particularly if you're looking at the coal plants in Alberta, and particularly if you're looking at the project we presented, you have a very high probability of sequestering CO₂.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

In 2006, the oil sands were producing 1 million barrels per day and by 2015 it is estimated that this output will rise to 4 million barrels of oil per day. You boasted about the hydroelectric projects in your region. I am sure you are aware of an agreement that was signed between Atomic Energy of Canada and Energy Alberta Corporation to produce more energy, not necessarily from hydroelectricity, but rather using nuclear power.

I would like to know whether your company is aware of and participates in pilot projects intended to produce more energy not necessarily through hydroelectricity or other forms of renewable energy, but rather through nuclear power.

[Dawn Farrell]

TransAlta is not participating in pilot projects on the nuclear side. The nuclear power industry uses a very specific set of skills and attributes, and it is not something that TransAlta would have experience in. If you look at how our company approaches CO₂, we approach it relative, first of all, to CCS with coal, which we talked about today with Project Pioneer; second, we have a thousand megawatts of wind generation across the provinces here in Canada, so we develop wind farms; third, we have, as you've mentioned, hydro-electric—about 800 megawatts—and are looking at additional hydro-electric here in Alberta; and then we invest as well in geothermal electricity in California, where we generate electricity from heat under the ground.

So at TransAlta, we believe fundamentally that if you look out the next 50 years and are thinking about CO₂ and energy use, you need to have projects in all areas. We believe that fundamentally you need to be able to draw on all energy resources, which is why we are focusing on all of those. But our company would not participate in nuclear at this time.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

I have a final question. A few months ago funding of some $780 million was announced for a second carbon capture and storage project, $343 million of which will be contributed by the federal government. A few years ago, a group of experts estimated that $2 billion in public investments in carbon capture and storage projects would be required.

I have the impression that, for this type of project, a great deal of funding comes from the public sector, but not much from the private sector. Aren't you basically in the process of having this carbon capture and storage technology funded by the public sector? I would like to know the breakdown of costs for the application of this technology, particularly with regard to industry. Is there a witness who could give us information on this?

[Dawn Farrell]

I can comment on that. The project you're referring to is our project, Project Pioneer, and the total overall cash spent is in the order of $1.3 billion, of which approximately $750 million is coming from the federal and the provincial governments, with the rest coming from private sources. That project, when it is finished, will be one of the first large-scale pilots of its kind, and it will prove up the technology and determine whether it is viable for us to sequester CO₂ and move it to the enhanced oil recovery.

We have been very clear with all of the public in all of our speeches that we see Project Pioneer as what we call a P3 or private-public partnership, which requires funds from federal government, the provincial government, and private sources. We believe that once this project is up and running, it will allow industry to continue to push the cost down to make CCS viable for coal plants over the longer term.

[The Chair, Conservative, James Bezan]

Thank you. Time has expired.

Ms. Duncan, it's your turn.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

As I'm having trouble seeing the relevance of the testimony, except Dr. Schindler's on a review of the impact of the tar sands on water resources, I will be putting most of my questions to Dr. Schindler, although this is a topic of interest and I'm hoping we can pursue it in greater detail.

But one question I have for Ms. Farrell is this. If one were to do a proper cumulative impact study of the tar sands, one would of course also review the impact of coal-fired power plants. That is because coal-fired power plants, a large proportion of which are owned by your company, are the main source of electricity in Alberta, and the Keephills expansion is probably going to be used 100% for firing up the tar sands upgraders, if they are ever built in the Fort Saskatchewan area.

The intention, as I understand, is to draw water from the North Saskatchewan River. You clarified that the Keephills plant draws water from the North Saskatchewan River at a certain volume. My understanding is that huge volumes of water will be used by the upgraders and that some water is used in CCS. There has been huge controversy about the use of water by the coal-fired power plants, one of those being the Wabamun plant.

Can you confirm, Ms. Farrell, whether the Wabamun plant, which drew substantial water from Lake Wabamun, is being de-commissioned this year?

[Dawn Farrell]

Yes. Wabamun will be decommissioned on March 31. So on Wednesday night at ten o'clock, that plant will be shut down—actually, tomorrow night.

As to the water on the North Saskatchewan, the water that's required for the CCS project is a small amount, and it fits well within the existing water licences that we have for the power plants in that region.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

The remainder of my questions will be to Dr. Schindler, but thank you to the others for your presentations. I very much appreciated Canada West's paper on the need for national energy security policy, and I will be pursuing that at another time.

Dr. Schindler, could you tell our committee whether anyone else, including the owners and operators of the tar sands facilities or either of the provincial or federal governments, has ever undertaken the level of analysis that you took, including the sampling of snow?

[Dr. David Schindler]

There have been no snow samples taken in recent years, certainly, except for water content. Environment Canada and Alberta Environment both have small monitoring programs. Both have been jeopardized year after year by successive budget cuts, to the point that, the last I heard, Environment Canada was down to monitoring very infrequently at only one station on the river, downstream of the oil sands plants.

Of course, it's easy to say that it's “all natural”, if you don't have a program that is intense enough to separate natural from industry sources. I'm hoping that as a result of the work we've done, that program will be upgraded, because they have very good people and the right expertise and equipment to do a really good monitoring program.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Dr. Schindler, I noticed in your testimony and in the written testimony you provided to us that you mentioned earlier work by Dr. Timoney and a study by Timoney and Lee. Am I to understand that this peer-reviewed field work analysis you've done in fact simply confirms what several years ago was already made known.

[Dr. David Schindler]

That's largely correct. Their work, of course, was criticized because it was at very few stations on the river. And it was dismissed in part because it was felt that the background for fish in mercury, for example, was always high, which is true. But there have been studies at the experimental lakes area that I reference in my brief that show that if you put more mercury in the river, the mercury in fish will go up. So what's happening with respect to mercury is not good news. What were originally high mercury levels are probably going higher. We have the fish to analyze, so we'll know within a year.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Dr. Schindler, you also mention reclamation. Are you aware if the provincial government seeks the input of federal authorities, such as federal Fisheries, when they sign off on reclamation plans? And can you clarify what role you would suggest the federal government might play, particularly where some of those tar ponds are adjacent to the river?

[Dr. David Schindler]

I don't know if the federal government is consulted at all on the sign-off. I do know that what industry is saying about reclaiming to the same sort of communities that were on that land before is not going to happen. My wife, for example, is a scientist working in reclamation in the oil sands. What needs to be done is to set some reasonable reclamation targets that can be obtained, and then reclaim.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Dr. Schindler, what inspired you to go in and do this intensive fieldwork, and was any government money provided to do that work?

[Dr. David Schindler]

No, it wasn't. I knew the governments were already strapped for cash for their own work. If I'd asked the Natural Sciences and Engineering Research Council of Canada for the money, they would have told me to go around and get letters of endorsement from all of the oil companies. On the other hand, I knew of two foundations that were anxious to see the work done. So I did it with foundation money.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

So part of the reason, clearly, why you're recommending this be done by government...are you suggesting that this kind of monitoring should be ongoing and not just a one time only by dedicated scientists?

[Dr. David Schindler]

Yes. I don't think it's the place of university scientists to run long-term monitoring programs. They're not any more suitable for a succession of graduate students to do than a succession of consultants. You really need long-term expertise. Environment Canada is very good at doing it. They have a long history of expert monitoring, and they're the agency best suited to do it.

What I'm suggesting is that perhaps some university and other scientists be in an oversight role to ensure that the results are reported to the public, but that Environment Canada is the agency best suited to do the program.

[The Chair, Conservative, James Bezan]

Thank you.

Moving to our last questioner on the seven-minute round, Mr. Warawa.

[Mark Warawa, Conservative, Langley, BC]

Thank you, Chair. Thank you to the witnesses for being here, and also thank you for using video conferencing. It does protect the environment when we take these efforts, and you don't suffer from jet lag, so thanks for the efforts in that respect.

I personally have visited the oil sands twice, once from the Athabasca River and the other time last year was with the committee. From the river I saw the natural leaching of bitumen into the watercourses. And then the primary focus on our second visit with the committee was actually on site at the oil sands, and I think each of us saw something different from what we expected.

Reclamation is important to me, and we did see some reclamation. In fact there was an area where buffalo had been reintroduced in a reclaimed area. We saw surface mining, and we also saw examples of in situ. We heard from witnesses in Fort McMurray, Fort Chipewyan, and Calgary and Edmonton, so it was actually a very informative hearing from first nations, industry, scientists. And unfortunately Mr. McGuinty and Mr. Bigras chose not to be part of that, but I think it was very beneficial for everyone who attended.

I'm going to Weyburn, Saskatchewan, on April 7--

[The Chair, Conservative, James Bezan]

Mr. Warawa, I need to interrupt you here.

It's against House rules to point out absences that occurred in the House or at committee meetings, and I expect you to respect that.

[Mark Warawa, Conservative, Langley, BC]

Oh, at committee? My apologies.

On April 7, I'm going to Weyburn, Saskatchewan, to actually see the carbon capture facility there, and I encourage anybody from the committee who would like to come. I've always found that to see a facility and to see technologies is very enlightening and helpful in making good decisions.

The other thing I want to share with the witnesses is that I've been at a number of international environmental conferences—in Berlin, in Washington, D.C., and in Copenhagen—and in each case, the importance of carbon capture and storage was shared with the delegates. Science is counting on Canada to be a world leader, which we are--and to give credit where it's due, the previous Liberal government endorsed the technology of carbon capture and storage, as does this government, and provided funding for the same.

The science community is sharing that they're hoping that Canada and the United States will be able to commercialize carbon capture and storage and to see it affordable so that for developing countries that burn coal, and likely will be burning coal to create electricity as they develop, that technology is affordable.

Ms. Farrell, you unfortunately ran out of time and the committee didn't want to hear the rest of your presentation. I think it's valuable to hear from you. You wanted to share with us a monitoring program, water safety and use, and technology. So could you continue sharing with us about carbon capture and storage and its importance? Is it a proven technology? I believe so, but perhaps you could continue sharing with us.

Thank you.

[Dawn Farrell]

Thank you very much.

First of all, in terms of “is it a proven technology”, there is a project in the U.S. called Mountaineer, which does prove the technology on a smaller scale.

The real purpose of Project Pioneer is to get the project to large scale and ensure all the detail is taken care of so that we can get the cost down as we go forward, so this technology can happen. So it's really not proving whether or not we can sequester CO₂; it's trying to get the costs down so that carbon capture and storage, along with coal production, can be economically viable long term.

Monitoring is probably one of the most important pieces of work we'll do here. Through our monitoring program we will be monitoring injection-well pressures, temperatures, rates, CO₂ composition. We'll be monitoring to be able to detect the location of the CO₂ plume, the integrity of the abandoned wells. We will be able to detect if there is any impact on groundwater quality, which I think is some of what you're really interested in here today, and we'll be able to detect any seepage in the soil. Monitoring will go on through the operational stage of the project and also past the end of the project, so I think that's very important.

In terms of water safety, I know there's been some contention that there's some potential for groundwater to be impacted by CO₂ injection. I think it's important to note that these aquifers we'll be injecting CO₂ into are well below the depths where groundwater sits. We'll be making sure we can prove conclusively that the CO₂ is taken down into the saline aquifers and that it does not affect groundwater. That will be an important part of what we're trying to do.

The previous speaker asked us about water. It's important to note that on the North Saskatchewan River, our approved licence limit for our power plants is 43 million cubic metres. Our power plants today at those locations use 26 million cubic metres, and Project Pioneer will use about 1.6 million cubic metres per year. It uses a relatively small amount of water relative to the coal plants at that site and fits well within the capacity of that water basin.

I think it's important that the committee note that this kind of funding among the provinces, the federal government, and private industry--with this scale of project--will put Canada well ahead of what I think other G-8 countries are doing on the CO₂ front. We will take CO₂ out of the air and sequester it. There won't be a lot of discussion about CO₂. A million fewer tonnes of CO₂ will be emitted into the environment after this project is finished. I think that will serve this country well and it will serve industry. As we go forward and look for environmentally and economically cost-effective solutions, I hope this will be on the list of things we can do.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Time has expired. We're going to go to our five-minute round.

Mr. Scarpaleggia, if you'd kick us off, please go ahead.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Thank you, Mr. Chair.

Dr. Schindler, you provided incontrovertible evidence that oil sands operations are polluting surface water in the region, more specifically the Athabasca River, which runs north to Fort Chipewyan.

I'd like to ask you about surface water contamination through the water link, and specifically with regard to the tailings ponds. We know tailings ponds leak into groundwater. Shell even said their tailings ponds would leak into the groundwater, but it wouldn't be a long-term problem, I guess because that pollution would be diluted. I think it's called the “dilution is the solution to pollution” approach.

Do you agree that the seepage from the tailings ponds into the groundwater is not a long-term problem because of dilution?