Gov. Polis hosts conference today on the topic. New MOU with Alberta explicitly mentions it as a topic for cooperation
by Allen Best
In December 2018, when Xcel Energy made its dramatic announcement at the Denver Museum of Nature and Science before Colorado governors both past (Bill Ritter) and future (Jared Polis), company officials spoke about reductions of emissions, not carbon, in coming decades.
Even then, that language begged the question of what future did Xcel envision for fossil fuels as we move forward on strategies to minimize risks posted by greenhouse gases? That question remains unsettled and not just in Xcel operations.
When we talk about decarbonizing our economies, do we really mean precisely that? Or are we talking about something else, ending or at least reducing emissions?
Consider the title of a conference being held today and tomorrow in downtown Denver. Hosted by Polis and Wyoming Gov. Mark Gordon, it is part of the Decarbonizing the West initiative sponsored by the Western Governors Association. The sessions will examine issues related to carbon removal technologies, including geologic carbon storage, carbon transport and – to the fury of at least some in the environmental community – direct-air capture.
The conference comes a week after announcement of an agreement with Alberta, a province that, like Colorado, has plentiful reserves of fossil fuels, and various research interests.
A future for natural gas is also hinted at in another announcement, the awarding of up to $160 million during the next decade to the Colorado-Wyoming Climate Resilience Engine by the National Science Foundation. The recognition allows the CO-WY Engine – a consortium of universities and others — to dive deeper on a handful of topics – including methane, the primary constituent in natural gas.
Many see the “natural gas bridge,” as it has been called, extending at least for several decades more. Xcel, Tri-State Generation and Transmission and Platte River Power all contemplate at least the potential for natural gas in their portfolios. In the case of Xcel Energy, the Colorado PUC commissioners in their December deliberations made it clear that they agree: there is a role for natural gas on a limited basis
Even more compelling testimony may have come from Bryan Hannegan, chief executive of Holy Cross Energy, a smallish electrical cooperative. It is, he reported at an event in October sponsored by the Vail Symposium, one one-hundredth of the size in electrical sales of the nation’s largest utility, Florida Power and Light. That’s 0.01%. His smallish utility has the brazen goal of achieving 100% emission-free electricity by 2030.
The bigger picture? A bit different.
“For at least the near term, we collectively are going to continue to use hydrocarbons for that balancing of renewable supplies,” he said. “It’s what we know. It’s very reliable, it’s easy to do. The economics are great. There will be some carbon in our portfolio for decades to come.”
Hannegan also spoke about the difficulty of getting from 90% emissions-free electricity to 100%.
“It’s that last 10% that’s going to be the hardest,” he said in a conversation about priorities and trade-offs. “Where is the dollar best spent on climate abatement? Is it putting yet more solar on my rooftop or is it empowering my vehicle to interact with the grid so that it can help create the flexibility that it needs? Or is it better yet doing something for steel-making or for chemistry or for oil and gas and using it for carbon capture and storage as opposed to that nth degree of up the cost curve?”
When Colorado begins having statewide conversations about those topics, he added, “I’ll know we’re in business.”
Colorado already has two carbon sequestration projects in the early stages, as was pointed out by Christy Woodward, the senior director of regulatory affairs for the Colorado Oil and Gas Association. She expects a zero-emission natural gas-fired plant on the Southern Ute Reservation near Ignacio to be under construction in 2025 or 2026. Occidental Petroleum is working with Lafarge-Holcim on its cement plant at Lyons.
Industry needs carbon sequestration to meet emissions reductions, she said, citing testimony to Colorado Air Quality Control Commission. Her industry, she said, believes in climate change but also sees need for carbon sequestration technologies.
“By working together, we can find solutions like carbon sequestration to make that transition faster,” she said.
Some research has been conducted into the geological formations in Colorado that can best sequester carbon. Drilling for example, was done adjacent to the Craig Generation Station. Formations near Pueblo have also been identified.
That’s the backdrop for today’s conference – and also last week’s announcement about the new agreement between the governments in Denver and Edmonton. The Polis administration press release described the memorandum of understanding with Alberta as intending to “align and improve regulation, enhance collaboration, and increase information sharing on best practices in key energy and environmental areas, including carbon capture, utilization and storage, methane emission reduction, hydrogen development and geothermal energy.”
The press release called it a “ground-breaking” agreement. Perhaps the pun was intended, but maybe not.
Alberta and Colorado have much in common. Both have strong oil and gas extraction from regions of the Great Plains that rise up to the princely peaks of the Rocky Mountains. But there are differences, too.
Colorado is fifth largest among the states in production of crude oil. Production grew five-fold from 2010 to 2022 thanks to hydraulic fracturing and other advanced drilling techniques. It was the nation’s 8th largest producer of natural gas, according to the Energy Information Administration.
Given these numbers, you might be surprised that Colorado got $5.4 billion in exports in 2022 from Alberta, primarily energy. Among Canadian companies with a Colorado presence is Suncor, which operates the state’s only oil refinery, located northeast of downtown Denver. It gets oil from Alberta, including some from the bitumen-carrying sands, called by many the tar sands. Suncor has been on the front page of The Denver Post frequently, once again yesterday after being fined for non-compliance with environmental regulations.
Alberta also seems to have strong geothermal resources and boasts of being the largest hydrogen producer in Canada. Although, given the state of the industry, that may not say all that much.
Alberta dwarfs Colorado in fossil fuels. Alone it accounts for 83% of Canada’s oil production.
“Today’s action is an important step in Colorado’s clean energy transition, moving us closer to our goal of 100% clean energy by 2040 and saving Coloradans money,” said Gov. Jared Polis in the release.
Will Toor, executive director of the Colorado Energy Office, said “Colorado and Alberta have a strong, complementary relationship. This is especially true when it comes to key emissions-reducing technologies, such as geothermal energy, hydrogen production, and carbon capture.”
The statement from Danielle Smith, the premier of Alberta, was an echo.
Tellingly, the release also had a statement from Jeff Robbins, chair of the Colorado Energy & Carbon Management Commission. Until last year, it bore the title of the oil and gas commission. Legislation expanded its purview to embrace all things underground under the heading of energy. That includes both geothermal and carbon sequestration.
“This agreement works perfectly with Colorado’s current efforts to advance carbon capture, hydrogen and geothermal energy and ongoing commitment to energy innovation,” he said.
Julie Murphy, director of the commission, said the partnership, through formal conferences or summits and informal conversations sharing best practices, methodologies, and mapping, “allows ECMC and Alberta to build on what we have individually learned and accelerate our collective understandings.“
The second announcement was that the Colorado-Wyoming Climate Resilience Engine had been given recognition by the National Science Foundation. The recognition allows the engine – a consortium of universities and others — to receive up to $160 million during the next 10 years .
Unlike the partnership with Alberta, this announcement made no mention of carbon but the website for the CO-WY Engine does specifically identify methane. Spearheaded by Fort Collins-based Innosphere Ventures, the CO-WY Engine looks to transform the region into a leader in the development and commercialization of climate-resilient and sustainable technologies to help communities monitor, mitigate. and adapt to climate impacts.
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