Saturday, February 13, 2010

Upstart political party recommends scrapping Carbon Capture

The Province of Alberta is blessed with natural resources and (by Canadian standards) a relatively free-market attitude towards politics and economics.

In part due to the successful efforts of activist organizations to label Alberta's oil sands as "Dirty Oil" because its development footprint is insufficiently photogenic, the politicians of this province have already implemented carbon taxes and carbon capture & storage (CCS) initiatives in an attempt to create some green credentials for the province. When goofy US jurisdictions move to bar imports of crude derived from the oil sands, Alberta can say "Why? We are already taxing the emissions and are planning to capture and sequester the carbon dioxide. What are YOU doing?"

(As an aside, if anyone tries to tell me the Oil Sands represent Dirty Oil I respond "You are mistaken, it is actually Oily Dirt.")

In the provincial budget that was presented on Feb 9, the Conservative government included $100 million for this year's component of the CCS program, (down from $300 million previously planned) along with some redirection of money so that the burgeoning health care deficits could be covered. The plan remains to spend more than we make.

A new political party on the provincial scene named the Wildrose Alliance has gone public with a critique of the budget that includes scrapping the CCS initiatives altogether.

My half-wise prediction is that in 2010, around the world, when politicians have to make choices about where to slosh politically-tuned subsidies, they will be paralyzed in the area of Carbon Capture, Bio Fuels, Alternative Energy and Climate Change activities. Do they go with what was increasingly popular through the first decade of this century, the green path? Or do they acknowledge that the tide seems to be turning in favor of the skeptics and pragmatists?

Economic reality will prevail in the long run, but it is not hard to imagine some well-meaning politician figuring he can kill two birds with one stone by making CCS a centerpiece of stimulus spending, kind of a 21st Century Hoover Dam project. You could argue from ideology as to whether Hoover Dam was a make-work project or not, but the twin realities of its hydro power and Lake Mead's water management benefits are inarguable. CCS on the other hand involves a lot of real work to achieve climate benefits that are literally not measurable, if indeed they exist at all.

The rock to one side of politicians is that their economies are broke. Alberta is less broke than most jurisdictions, but its spending plans are not sustainable unless oil revenues continue to grow. The hard place on the other side of politicians is the need to get elected. In the past the most reliable way to get elected has been to promise expensive new benefits to enough voters to win the support of the media and a plurality of ballots, while being vague about where the money will come from.

If we are witnessing the rebirth of reality-based consumer attitudes, voters are beginning to see how stupid it is to be spending money we don't have on programs that create no value.

In this scenario CCS will come under increasing taxpayer scrutiny. Personally I think that unless CO2 is being used for tertiary oil recovery, there is no value in capturing, compressing, moving and injecting it. You? Your mileage may vary depending on your ideology.

If you were a politician, which side of this issue would you come down on? Spend money you don't have? Or risk being tarred with the brush of AGW alarmist criticism?

Which one will get you elected? Which one is actually wise?


JR said...

Excellent post, Halfwise.

I know Albertans are among the most skeptical of Canadians on AGW and I assume that the Wildrose Alliance is likewise - but I haven't seen any numbers lately. How's the WA doing in the polls?

Halfwise said...

Wildrose is ahead of the Conservatives in the polls. What I think is funny is the hand-wringing of those who think the Conservatives are a right-wing party and that the Wildrose is some sort of Wehrmacht. In reality I think the WA is just occupying some normal conservative turf and the Conservatives are in the living room of the Liberals, who are reduced to shivering in the garden shed.