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‘What if we were first?’: James Millar on how Canada can be a global leader in carbon capture and storage

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This episode of Hub Dialogues features host Rudyard Griffiths in discussion with James Millar, the president and chief executive officer of the International CCS Knowledge Centre. They discuss the key role carbon capture and storage will play in helping Canada meet its climate goals, why Canada is uniquely suited to becoming a global leader in implementing this innovative technology, and what more still needs to be done.

You can listen to this episode of Hub Dialogues on Acast, Amazon, Apple, Google, or Spotify.

RUDYARD GRIFFITHS: James, welcome to the Hub Dialogues.

JAMES MILLAR: Rudyard, thanks so much for the opportunity. I really appreciate it.

RUDYARD GRIFFITHS: Ditto. I’m looking forward to this conversation, to learning from you, and to going deeper on some of these issues around carbon capture and sequestration. And that’s where I want to start with you, James. I think it’s important just to explain what this is. We use this word, we throw around the associated acronyms, but from an engineering perspective, technically, what are you doing when you’re capturing and sequestering carbon?

JAMES MILLAR: It’s a fascinating area. Capturing carbon and storing it underground actually started in the early seventies in Texas, and it was associated with the oil and gas industry. You would take the carbon and inject it underground. So one of the issues I hear around is, “Well, it’s not proven.” And well, it’s been done since the 1970s, and it’s become more on a commercial scale, I’d say, in the last 25, 30 years. So essentially, you have processes such as burning fossil fuels to make products from oil and gas to make cement, to make steel, fertilizer, to generate power.

So anytime you burn a fossil fuel, we get a positive impact out of it with all the items I mentioned. But the negative is if you are sending that CO2 into the atmosphere, then there’s an issue with climate and climate change. So the whole notion of CCS is before that carbon dioxide goes into the atmosphere, you can pass it through a series of facilities and pipes and you absorb the carbon. Essentially, you compress it into a liquid, you pass it through a pipeline, and you inject it anywhere from one and a half to three kilometres underground. And you store it for eternity, and you’re essentially taking carbon that Mother Nature gave us and you’re putting it back to where it came from.

RUDYARD GRIFFITHS: You’re saying you’re liquefying this, so you’re getting way more density than if you were just taking whatever’s coming out of my proverbial tailpipe. And then you’re putting it underground, and you’re saying it’s there for good, that there’s a geology, a certain type of what that ensures that that’s going to stay there forever?

JAMES MILLAR: Yeah. So a good example of demonstrating that is there’s a project in Southern Saskatchewan in Canada, the Wyburn-Midale project. So they’ve been storing carbon underground there since the year 2000. They’ve been monitoring it since that point in two different areas, and there has never been an issue with that CO2 moving. And what you’re essentially doing is you’re injecting it deep into the porous rock, whether it be a depleted oil field or in a lot of cases where we’re moving now are into saline aquifers, so that CO2 is injected below an area of the subsurface called cap rock. And cap rock essentially forms that sealed dome where the CO2 can’t escape. The other thing that happens during time from a geology standpoint is that the CO2 can calcify or form solids, and it essentially becomes part of that aquifer, part of the sand. And that’s why I used the analogy a minute ago of, “We’re taking the carbon Mother Nature gave us in fossil fuels, and then we’re putting it back, and it actually can become part of that strata over time, and it’s protected by that cap rock layer.”

RUDYARD GRIFFITHS: What I did not know before starting to research this conversation with you was that Canada has some pretty special geology, don’t we? If you look around the world in a fascinating way, we’re really well situated to do this, and not to do it, as you say, just for the oil sands or for energy production, but possibly to do this for a lot of other use cases where carbon is being produced. And you mentioned concrete manufacturing, or really any manufacturing processes that, is kind of carbon-intensive. Maybe just explain to us a little bit about this serendipity here of how Canada could really be exceedingly well served by its geology once again.

JAMES MILLAR: You’re right. When you look at the subsurface primarily in Alberta and in Saskatchewan, to a lesser degree in British Columbia, but I think you’ll see more of that come on stream here shortly, we are very well endowed with those saline aquifers and those depleted areas from oil caverns previously. So we have enough storage for billions and billions of tons of CO2 for years on end. So we have that capacity, and I think that’s why you’re seeing when you look at the projects that are in the queue even in North America for a province—when you compare us to the United States, which we tend to do a province with a fairly small population in Alberta, and yet there are 25 projects in various stages of development. And you can do that because it goes directly to your good point that you have that “pore space,” as it’s called.

You have that pore space underneath the surface where there is such a plentiful array of space to store the CO2 that we can take a leadership role in that storage going forward. And one thing I’d say, from a leadership standpoint, Canada has always punched above its weight when it comes to CCS. So if you look at the 30 projects that are operational globally, there are six between Alberta and Saskatchewan. So Canada generates 1.8 to 2 percent of the total global emissions. But with those six projects, we’re actually capturing 15 percent of that overall total. So we’ve demonstrated leadership in this area. I strongly believe we’ll continue to do that both in projects and, to your key point, showing leadership in the amount of carbon we can actually store underground because of our ability to use Mother Nature in the natural pore space we have.

RUDYARD GRIFFITHS: Talk to us about the technology that is being developed now. Where are we at in the cycle of innovation to try to get to carbon sequestration at scale? And how is that happening from an engineering and a scientific approach and discipline?

JAMES MILLAR: Well, the nice thing when you talk about scale is we are there now. It’s been proven with storage sites in Norway going back to the mid-nineties. And it’s been proven in Canada with Shell’s Quest project in Edmonton, Alberta, that has safely sequestered in the range of 7 million tons since 2015. And when you look at the Boundary Dam project that I have an affinity toward because of our organization, it was the first of a kind in the world, and it came on stream in 2014. So there’s been a number of years of analysis available there. And to your point, the technology has existed but it’s been proven. And anytime you do a project like Boundary Dam, for example, it was a 7,000-to-1 scale-up from a lab bench. So really a pretty gutsy move by the former premier of Saskatchewan to invest in that kind of a delta, Rudyard, of a billion dollars for the CCS facility and 600 million to upgrade a gas turbine. But really glad, I think, for the people of Canada and globally and other businesses looking at CCS, because we have that real-life project where individuals can come and view it and can come and learn about the process.

RUDYARD GRIFFITHS: So James, let’s help our listeners understand a little bit more about where this technology is at now. What you’re saying makes an awful lot of sense. We have something that’s proven; we have geology that’s going to work; we have some ambitious climate targets as a country. So where are we at in terms of being able to adopt this technology at a scale that would make for a meaningful impact on the country’s total emissions?

JAMES MILLAR: So we are there now. We have the technology. It’s been proven. I mentioned going back to the early seventies in Texas with injection underground, but even facilities that have been operational for, we’re getting into a decade. And let’s look at Boundary Dam, first of a kind carbon capture and storage and coal-fired facility. So it’s been proven close to a decade now at scale. So that’s a million tons per year. And we have close to anywhere between 100 and 200 projects in the queue and shooting toward, we need to achieve about 300, I’d say, by the end of the decade globally, and we’re at 30 now. So it’s a big lift, but countries are moving, especially in the United States.

So we have the technology; it’s proven we can sequester at scale. The fundamental issue becomes: Can we create the right business environment, the right policy environment, for companies to step off the curb and get approval from their boards of directors, their senior management teams to say, “Okay, you de-risk the project to a point with all the factors I mentioned, not the least of which is the cost.” And understanding truly what you’re going to build that we’ll finally get to the point where we get those approvals. Then you can start down the path of supply chain, and labour and ordering materials, and the best scenario of all is putting a shovel in the ground so we can actually get these facilities built. And as I started and stated off the top, instead of putting the carbon into the air, let’s put it under the ground, where it should be.

RUDYARD GRIFFITHS: So James, is part of the policy challenge right now one of predictability? Is it that industry needs a greater sense of, as you say, known unknowns as opposed to unknown unknowns, right? To figure out again how this works in the context of their own businesses, return on equity, the fundamental issues that they grapple with as corporations every day?

JAMES MILLAR: Yeah, you hit the nail on the head. It’s certainty. It’s predictability. And I think you saw a tectonic shift last mid-August when President Biden announced the Inflation Reduction Act. And not just in Canada; you saw people shift in their chairs in Australia, in the U.K., in the EU, because fundamentally, that was a game changer. And it’s very simple, and it’s very direct. “If you store a ton of carbon under the ground, I’m going to give you $85 for 12 years.” So you have that certainty where you can go to your board, you can go to your senior management team, and you can say, “Look, in addition to the other key financial elements you just stated, you have that predictability and certainty.” In Canada, the government has done a good job of putting the policy in place. So those policy levers have been put in place, and the government re-upped its game in the recent budget that came out just a few weeks ago. But the problem now is taking those policy ideas that industry likes and bringing those policy ideas to a conclusion.

So what I’m fundamentally saying is the legislation needs to be passed, and you need that level of certainty. More difficult in Canada. In the U.S., politics is a blood sport but the good thing about having a bipartisan bill passed, it’s there. So it’s there for 12 years. The issue that we can have in Canada is you can pass the legislation, but if we have a federal election in maybe as little as one or two years, does that become unwound? And when you don’t have that predictability, to use your word, that certainty, it becomes more difficult. So one aspect that the government of Canada announced a year ago in the budget, they doubled down in the fall economic statement. And that is an acronym, CCFDs, which stands for carbon contracts for difference.

So that’s something that needs more detail on. I know with one of the projects in Canada that likely will be the first to declare a final investment decision is by a company called Capital Power, and it’s a Genesee project. And I think it’s good that that’s on a power facility because it demonstrates what I stated off the top, that this is about all heavy emitters, Rudyard. This isn’t just oil and gas; this is cement, this is steel, fertilizer, power gen. So I think what you’re starting to see with the potential legislation and policy in Canada, is it’s becoming good for some emitters, but other emitters, I think, need to see that more detail of programs such as carbon contracts for difference and other aspects of another key piece of legislation that the government of Canada has put forward called the Investment Tax Credit. So more detail is needed before companies will be willing to step off the curb and say, “Okay, I’m going to invest one, two, or multiple billions of dollars in essentially approving these projects. And then moving forward to construction.”

RUDYARD GRIFFITHS: James, if we think into the future, what would it mean for Canada and our energy sector if we could, within a matter or a couple of decades, achieve net zero emissions through primarily this technology, but I’m sure other technologies too? How would that potentially change the Canadian economy, change the global relevance of Canada’s energy sector? And I guess I think to myself, “What if we were first? What if we were able to cross that finish line of net zero first? How big a national win could this be for us?”

JAMES MILLAR: I think it would be a huge national win for us. I think sometimes Canada, we self-flagellate ourselves in the energy industry, where, in spite of ourselves, we don’t find success. And sometimes I think we look at ourselves as second-rate rate to the United States or other countries, and we shouldn’t do that. With the fourth-largest oil reserves, and with the hydropower that we have and the intellectual capital, and how we’ve made steel and cement, we should be the front runners in this. The key though to 2050 and net zero in this race to reduce emissions is: How do we do it? And I think Canadians need to understand what are we willing to give up to achieve net zero emissions. It’s not just as simple as if we just will it, Rudyard, it will happen. We have to really consider the consequences.

And where I’m going there is you have to, I think, in parallel think about decreasing emissions, which industry is committed to do. So I think we’re on par there. But where we need to get to is, again, what are Canadians willing to give up and at what cost? I don’t think that the average person on a fixed income or a lower income would want to see their power bills triple or their fuel costs triple. I mean, that would be quite, quite burdensome. So we have to think about that. And let’s do a balance here. Let’s do a balance of ensuring that we create the right business climate so companies will take that step off the curb and do something to invest those billions of dollars in controlling their emissions. But then also think about the impact on Canadians. And then also, I think, the impact on industry.

And the thing I like about carbon capture on existing facilities is you can create jobs during construction. Even for one facility like Boundary Dam, that was 1700 jobs in a very small community. That was a boon for that community and even the full-time jobs going forward. So that’s the nice marriage I like about CCS is you can create jobs during construction, but you can maintain jobs instead of shutting facilities down. And of course, with the overall goal of ensuring that those facilities are as close to net zero as possible through CCS. You might have to layer in direct air capture on that last 10 to 15 percent so you get to that true 100. But that’s the narrative that I like, is we can have our cake and eat it too. We can create jobs, maintain jobs, protect Canadians from real shock to their fuel bills, and then do something for the climate all in one with large-scale CCS.

RUDYARD GRIFFITHS: And when you talk about doing something for the climate, I think it’s important to note Canada is the signatory of some major climate treaties that came out of Paris but have been reiterated by subsequent governments. Yet, if you look at our total emissions—our tonnage of greenhouse gases that we’re pushing into the atmosphere—we really haven’t even bent the curve. I mean, there was a substantial drop during the COVID period, but that’s because there was a global pandemic. It’s important, James, isn’t it, to think about this technology and the concept of actually doing something about those emission targets, those pledges. And I personally think we’re fooling ourselves if we can continue to think that we can just go along indefinitely, never meeting our climate targets, when other trading partners of ours, especially in Europe, are meeting those reduction targets. I’m somebody who really worries about maybe the future of green tariffs. Other countries that, simply and understandably, their domestic populations getting fatigued with climate laggards who share trade and other benefits with them but are not achieving their GHG reductions while other jurisdictions are. So I think we have to look at this technology in the context of some broader national interests that Canada has to actually move substantively to honour our treaty obligations.

JAMES MILLAR: Yeah, agree. And I go back to my analogy I used in our last back and forth. We absolutely do need to look at meeting our commitments that came out to Paris. We actually do need to look at meeting the targets that have been put in place by the government of Canada, not the least of which is a 40 to 45 percent reduction compared to 2005 levels by 2030. But I would also inject the word realism. Let’s be realistic about it, and let’s ensure that the targets that we set are achievable. And again, achieve that balance in, as you put out there, we need to demonstrate a responsibility to the world, and I think Canada’s always done that. Could it be better? Yes, it could. But let’s balance that ability and that necessity that we have to the world with also looking out for our citizens and the impact that it may or may not have on them, whether it be through jobs and higher fuel bills.

And when you look at a balance globally, I sure wish China and India would stop building coal plants because we’ve done a great job since the mid-2000s in shuttering coal plants; there are only about nine left, where there was significantly more than that a decade ago. So we’ve done a very good job of moving in that direction. And yet you look at China with 1200 coal plants and India with 300, and even Germany, who shut down their nuclear fleet, which totaled, I think, about 27 percent of their capacity. And then we had the issue with the Russian invasion and a lack of natural gas, they had to fire up coal plants, and their coal usage was the highest, I think, in close to a decade last year. So Canada needs to do its part. Absolutely. I think industry agrees. I think we as Canadians agree, and we should, but I’d like to see other countries, some of the biggest emitters, so China, India, Germany, one, three, and seven, pick up your socks. Pull up your socks, gals and guys, because we’ll do it here. I’m confident we will, but this is a global problem. It’s got to be a global solution, and everybody needs to pull their weight.

RUDYARD GRIFFITHS: So James, let’s end just by having you explain to listeners because we’ve got a lot of people in the C-Suite and leading businesses and enterprises across Canada who are regular listeners of our Hub podcast, and we really appreciate that. What’s the role in the mandate of the International CCS Knowledge Centre that you lead? And if there are other businesses and companies that are interested in learning more that want to support this kind of transition and journey that you are on, how could they conceivably do that?

JAMES MILLAR: So the Knowledge Centre started in 2016. So a couple years after Boundary Dam came into play. It was originated by BHP Global Mining giant, 80,000 employees, a large organization, and also a crown-owned utility in Saskatchewan called SaskPower, where some seconded employees with that intellectual property gained from a first-of-a-kind CCS facility came together with a small team in 2016. But Rudyard, basically, we spent the next six and a half, and now we’re into seven years travelling the world—to China, to the Vietnam, to Thailand, to the U.K., to the EU, to the U.S.—and talking about CCS. So we were talking about CCS when it wasn’t cool to do so, and people didn’t know what the heck we were even talking about. But that was what BHP wanted, and kudos to them for their leadership in wanting to take their involvement with the government of Saskatchewan and SaskPower in the facility and then essentially going forth around the world and sharing what CCS is.

We continue to do that today, but it’s shifted in the sense that that was always an altruistic way of sharing the knowledge. Now, we get companies calling us up and either saying, “What is CCS?” or “Can you help us?” And so we’re doing that with cement companies, and we’re doing that with mining companies, and we’re doing that even with certain companies in the U.K., and Phillips 66 and VPI, and SSC. So we’re getting out there the way that we’ve done for six years, but now we’re actually helping companies, working with their engineers, to help them de-risk their project to lower risk, reduce cost, and, in the end, improve performance. Because if we can do that, then we help increase the probability for these countries or these companies, sorry, in these countries to make a final investment decision to get these projects built and to keep the carbon in the ground instead of putting it into the air.

So we actually had one of my former haunts in TC Energy was out at our facility in Saskatchewan and touring, and we did a workshop with them, and so, through the summer, we literally have someone out there every week. There’s nothing like seeing a facility that’s eight stories high and the size of three U.S. football fields; it’s something to behold. But then you get a sense of the size and scope of what you need to tackle. And then we’ll sit down with them after sometimes for a half day, sometimes for a day and a half, and we’ll just go back and forth, back and forth. They’ll ask questions, and they really find it beneficial. But we feel good about that because we’re making a difference.

RUDYARD GRIFFITHS: Yeah. So I urge listeners to check out www.ccsknowledge.com for the latest information on what is happening at the International CCS Knowledge Centre that James leads. So, James, thank you so much for your time today. Great work that you are doing. I feel like I did exactly what I hope we would do in this half-hour together, which is learn from each other, and certainly learn from you. So thank you for sharing your wisdom and insights with our Hub listeners.

JAMES MILLAR: You’re welcome. And thanks for the great work that you do, Rudyard, with this podcast. I think it really makes a difference. It’s thoughtful. It’s focused, and I find it very engaging. So thank you for the good work you do.

This content was produced as part of a paid promotional partnership with Pathways Alliance.

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