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Wed, 28 Jan 2009
Canada's stimulus budget has been unveiled. Pundits expected massive investments in green infrastructure and energy. Unfortunately there are major disappointments.
There are additional funds for energy-saving home retrofits. Even more money for renovations that don't save energy. The financing under the ecoEnergy program that provides grants for wind, small hydro and other clean-energy projects was not extended. This is a great disappointment, especially for the country's hard-hit industrial and manufacturing sector, which stood to be a leader in providing these technologies to the continent and the world. Ontario and Quebec have many companies that are world leaders in green electrical technology. Now the US will certainly leapfrog Canada in this market thanks to their government's spending.
It seems that Canada will be spending more on INefficiency than efficiency. For those unfamiliar with the subject, Carbon Capture and storage (CCS) reduces the efficiency of energy use by a large amount, 30% to over 100% reduction in efficiency depending on technology. It is literally putting money into a hole in the ground at a time when we can ill afford luxuries.
Unfortunately, the laws of thermodynamics and of economics doom it to failure. Separating the low concentration of impure, hot CO2 emitted from combustion processes requires a large amount of energy. Whatever CO2 you manage to extract and bury is negated by what was emitted to produce the extra energy required to separate and bury it. That's why none of the major CCS projects so far have used CO2 that comes from combustion.
When a panel of experts formed by the US National Research Council reviewed the U.S. Department of Energy's (DOE's) Carbon Sequestration Program last year, it concluded that carbon sequestration could not be implemented without a significant carbon tax, and examined carbon taxes of $100 or $300 a ton. Even then the benefits are marginal, and they don't include any environmental or security benefit. To make sequestration a viable alternative you need a high price on emissions. But the taxes that make CCS feasible make other low-emission energy cheaper than fossil fuels. Whatever the price of energy, other sources of energy always give a better return on investment.
There are other solutions, even some that reduce GHG emissions without shutting down the mining of bituminous sand. I would like to explore them in a later post. They involve burning or gasifying bitumen rather than upgrading it. Every single political party on the continent has said it is in favour of some kind of carbon pricing, some by carbon tax and some by the more expensive cap-and-trade, and if it stays on the current path of upgrading bitumen, the industry going to suffer a catastrophic crash and take at least a couple of provinces down with it, unless we get this freight train onto another track very soon.