STATEMENT OF ROBERT PAGE OF
TRANSALTA CORPORATION BEFORE THE
ENVIRONMENT AND PUBLIC WORKS COMMITTEE
OF THE UNITED STATES SENATE
June 12, 2002
Thank you, Mr. Chairman.
My name is Robert Page. I am Vice President, Sustainable Development, for TransAlta Corporation, which is headquartered in Calgary, Canada. I have with me Paul Vickers, who heads up our offsets and emissions trading efforts.
We very much appreciate your kind invitation to provide testimony to the Committee today. As a Canadian, I feel privileged to share our thoughts on environmental protection with members of the United States Senate, a body that we in Canada hold in the highest regard. I am pleased to note that several Committee members represent states that are our immediate neighbors, including Montana, Idaho, Ohio, New Hampshire, Vermont and New York.
Before discussing TransAlta’s climate change strategy, some background on our company is in order.
TransAlta is Canada’s largest non-regulated electric generation and marketing company, with more than $7 billion in assets and 9,000 megawatts (MW) of generating capacity either in operation or under construction. We recently established a presence in the United States by purchasing a coal-fired power plant in Centralia, Washington. We also have generating units in Mexico and Australia.
Our company has an aggressive growth strategy in North America. We plan to increase our generation capacity to 15,000 MW by 2005 by building or acquiring additional power plants. We therefore favor government policies that accommodate growth in our economy and power supply while protecting the environment.
Our generation mix includes coal, hydro, gas, and wind. In our home province of Alberta, we operate three large coal-fired units and have a 50 percent interest in a fourth. We believe that coal is an essential resource for power generation in North America and are committed to operating coal-fired units on a long-term basis even as we further diversify our generation portfolio.
Environmental stewardship is one of TransAlta’s core values. We were recently one of four companies worldwide recognized by the World Business Council for Sustainable Development for voluntary approaches to climate change. We were also chosen in 1998 and 2002 as the top electric utility in Canada for leadership on voluntary greenhouse gas (GHG) reductions. In 2002, we received a national award for the best environmental reporting in Canada and Wall Street again chose us for the Dow Jones Sustainability Index.
Principles in Our Climate Change Strategy
As a company, we accept that climate change is a significant public concern that must be addressed. This means stabilizing and ultimately reducing emissions of CO2 and other greenhouse gases into the atmosphere. Because society is heading for a carbon-constrained future, our company believes we must seek out cost-effective means to manage carbon in the interests of our shareholders and our customers. We take this responsibility very seriously knowing that TransAlta is currently the second largest single emitter of greenhouse gases in Canada.
Based on this philosophy, TransAlta has developed a Blueprint for Sustainable Thermal Power Generation. Our Blueprint identifies steps that would enable TransAlta to achieve zero net emissions of greenhouse gases in our Canadian operations by 2024. We know that this is a very ambitious goal. Our success in reaching it is not a given but will depend on both the existence of the right government policies and programs and development and application of breakthrough, commercially viable technology that is not in use today.
Our Blueprint envisions two integrated strategies – one for the near- and medium-term and the second for the long-term. Under the first strategy, we will maintain emissions at current levels at existing units and any new units we build or acquire through a combination of offset projects, renewable energy, improved plant efficiency, and emissions trading. Under the second strategy, we will work toward developing and testing new technologies for combustion and for sequestering CO2 emissions and then deploying these technologies through the normal process of capital stock turnover and renewal.
We are committed to implementing these two strategies through voluntary actions, market mechanisms, and negotiated sectoral agreements. Our company does not support mandatory carbon controls. However, we do believe that government should provide clear market signals for new technology developers and policies and procedures that ensure the orderly development and functioning of emissions trading markets.
Two aspects of our program merit special comment.
Offsets and Credits. The first is the importance we attach to offsets and credits in achieving emission reductions. Short of premature plant retirements or costly repowerings, we can only lower emissions at plants using existing technology by improving fuel utilization or replacing equipment to increase efficiency. While we are committed to continuous improvement in plant efficiency, we can expect at best modest gains in emissions performance by this route. Therefore, it becomes important to look outside our system for emission reduction or avoidance measures that we can apply against emissions from our plants. Since CO2 is not a toxic chemical and its environmental impacts are long-term and global in nature, we believe government policies should officially recognize these "offsets" regardless of where they are generated. Carbon reduction activities conducted anywhere in Canada or the world should receive the same credit since they will achieve the same environmental benefit regardless of location.
One of TransAlta’s highest priorities is to create workable mechanisms for generating and trading CO2 offsets. Since 1996 we have assembled a portfolio of emission reduction projects that will deliver approximately 60 million tonnes of reductions over 25 years. We are currently assessing further additions. The reductions come from a variety of projects undertaken in Canada, the US and around the world. A major focus has been methane emission reduction since methane is considered to be a very potent greenhouse gas and there are cost-effective reduction opportunities. Projects in this area include landfill and coal mine methane recovery and use and ruminant methane reductions. Other offset projects we have pursued include fuel switching, forests and soils sequestration, and renewable energy generation.
We were also an early pioneer in domestic and international emissions trading and have executed groundbreaking trades with partners in North America, Europe and Japan. Amongst our many trades are transactions in the US with Murphy Oil (El Dorado, Ark.) and Entergy Corp. (Louisiana and Texas).
Technology. I also want to comment on the importance we attach to the design, demonstration, and application of new clean coal combustion systems and the permanent sequestration underground of CO2 and other emissions.
Our objective is to have a commercial scale retrofit unit in operation by 2007 and a Greenfield facility operational by 2010. Several technologies are being evaluated in development programs: coal gasification and power generation from hydrogen, advanced emission capture technologies and oxy-fuels technologies. Our objective is to reduce the production cost of electricity to levels comparable to today’s technologies while dramatically reducing atmospheric emissions of not just CO2 but conventional pollutants as well. To reach this goal, CO2, or exhaust gases, would be sequestered underground in oil reservoirs (EOR), deep coal seams (CBM) or in aquifers.
We are exploring these approaches in a number of ways. TransAlta is participating in a Canadian-based program managed by the Clean Power Coalition (see Appendix 1), whose members include coal and power companies, the Canadian Federal and several Provincial Governments as well as EPRI. Since 1997, TransAlta has participated in a number of research and development efforts targeted at developing commercial opportunities for sequestering power plant exhaust and/or CO2 in underground oil and gas reservoirs. These programs have focused on developing understanding of reservoir characteristics that affect economic application of CO2 stimulation; developing a ranking of potential reservoir stimulation opportunities; and field testing of injection techniques and reservoir responses. Starting with a one-well trial in 2000, we expanded to a five well program in 2001. In 2002, the program is being further expanded to include a detailed, Province-wide study of CO2 supply sources, pipelining economics and routing and reservoir stimulation.
While we are hopeful that these technologies will be ready for deployment in the next two decades, we have no assurance that this will occur. The initial results of our work are promising and appear to confirm our commitment but many uncertainties need to be addressed before we can be confident that carbon capture and sequestration techniques can be incorporated in new (or retrofitted) coal plants at a reasonable cost. A concerted effort by government and industry will be essential for the substantial progress that we know will be required.
Generalizing from TransAlta’s experience in Canada is risky because our two countries – while sharing a common language and border – have different cultures, laws and political institutions. One obvious difference is that Canada intends to ratify the Kyoto Protocol while the US will not. In all candor, the prospect of Kyoto implementation in Canada has been a major factor in designing TransAlta’s carbon management strategies. Clearly, a different set of considerations applies to US-based power producers.
We do believe, however, that we can offer some observations that are useful to this Committee as it considers proposals for multi-pollutant legislation:
Because of our Centralia, Washington operations, we are participating in a group of US power producers – Energy for a Clean Air Future – that developed a multi-pollutant proposal last fall for review by Congress and the Administration. Many of the concepts I’ve discussed in my testimony are reflected in the portion of the ECAF proposal addressing GHG emissions. I’m attaching relevant sections of the ECAF proposal (Appendix III) so they're available to the Committee.
In conclusion, I appreciate the Committee’s consideration of my testimony and welcome any questions.
Overview of Clean Power Coalition ‘s (CPC) Clean Coal Research and Development Program
PURPOSE and OBJECTIVES:
To develop a proposal for a retrofit of an existing coal fired electricity-generating plant to low or zero emission technology such that a commercial installation could be commissioned no later than 2007.
To develop a proposal for a new zero or low emission coal fired electricity-generating plant such that a commercial installation could be commissioned no later than 2010
Funding of up to $ 5,000,000 (Canadian) is in place now. This is sufficient to allow the development of the feasibility study of the alternative technologies under consideration. This phase of the work will be completed one year from now (mid summer 2003).
Participants in the CPC to date are:
Nova Scotia Power
Ontario Power Generation
Federal Government (Natural Resources Canada)
Government of Alberta through the Alberta Energy Research Institute
Saskatchewan Government (Industry and Resources)
Nova Scotia Government (Department of Natural Resources)
. Coal Gasification
. Syngas production
. CO2 capture and separation (amine extraction)
. Hydrogen fueled combined cycle power plant integrated with gasification and syngas
. Air separation
. Combined air / oxygen firing steam boilers
Target is to develop a design for a retrofit and a design for a new power plant such that the costs (capital and operating) are within the costs of a conventional pulverized coal steam plant with equivalent air emissions control technologies and CO2 capture.
The research efforts will be directed at developing dramatic improvements in the following areas:
. Reduction of auxiliary power requirements
. Dramatic improvement in the capacity, reliability and flexibility of amine systems for CO2 capture
. Elimination of the air separation plant or dramatic reductions in energy consumption
. Improvement of the reliability of the integrated systems to the levels achievable today
Robert J.D. Page
Calgary, Alberta, Canada (1997- present)
Former Dean, Faculty of Environmental Design, University of Calgary (1990-1997)
Currently Adjunct Professor, Environmental Science
Chair, Board of Directors, International Emissions Trading Association (Geneva)
Chair, Board of Directors, BIOCAP Canada Foundation (National Climate Change Sinks Research Program)
Member, Board of Directors, International Institute for Sustainable Development
Member, Business Environmental Leadership Council, Pew Center for Climate Change (Washington DC)
Calgary, Alberta, Canada (1996-present)
Prior to 1996; Shell Canada Ltd; varied assignments in refinery and chemical plant management, business development, research, chemicals marketing and environment and safety
Board of Director, Emissions Marketing Association (Washington and Milwaukee)
Member, Public Advisory Panel of the Vinyl Manufacturers Association of Canada