Comments for Government of…

Comments for Government of Ontario Regulatory Framework Proposed Changes
Prepared by Carbon Management Canada.

Carbon Management Canada (CMC) is a national, not-for-profit organization working to develop and deploy emissions reduction solutions and provide support to Canadian industry and the research community. We are experts in the carbon capture, utilization, and storage (CCUS) industry including implementation, monitoring, measurement, and verification (MMV) planning, risk assessment, and policy. We assist innovators in developing CCUS technologies, subsurface monitoring technologies, and provide techno-economic analysis to companies, investors, and governments to direct research, development, investment, and policy making. Our goal is to educate, support applied research, and influence policy implementation and changes. In addition, we aim to move solutions more quickly from research to market, thereby growing the Canadian economy, increasing Canada’s competitiveness in world markets, and supporting practical, feasible, and economically viable industrial emissions reductions.

We provide facilities and expertise to field test, develop, and demonstrate early-stage technologies and influence applicable policy. We offer access to scientists, engineers, and technologists who work with partners/clients to select and scale solutions for their facilities.
CMC’s competencies include:
- Provide expertise while educating industry, regulators, service and technology providers, investors, and the research and development community on carbon capture, utilization, and storage and measurement, monitoring, and verification solutions
- Supporting innovators with facilities and expertise to field test, develop, and demonstrate industrial emissions reduction solutions
- Providing access to scientists, engineers, and technologists to analyze, select and scale solutions for industrial and public sector partners’ facilities
- Advising companies and providing greater certainty around decisions to invest in emission reduction solutions

CMC has reviewed the Government of Ontario’s Ministry of Northern Development, Mines, Natural Resources and Forestry (NDMNRF) proposed regulatory framework changes to the Oil, Gas and Salt Resources Act and the Mining Act to allow CCS operations within the province of Ontario. As experts in the CCS industry, we hope these comments will assist Ontario in developing their regulatory framework so geologic carbon storage projects can be conducted in a safe and efficient manner.

The changes that narrow the prohibitions on the injection of CO2 going forward are an excellent step and as a pilot containment and confinement CO2 injection facility, we are pleased to see more availability for CCS development within Canada. By permitting carbon sequestration in Ontario, it is the first step forward in creating a new low-carbon environment for industries to flourish. In addition to the allowance for CCS, we have experienced a need for incentives for companies to invest, such as a provincial carbon credit program like the Provincial Technology Innovation and Emissions Reduction (TIER) Regulation in Alberta. This program incentivizes organizations investing in CCS by permitting them to trade carbon credits, which are earned on a per tonne of sequestered CO2 basis and can be sold to other organizations who have not met their emissions targets. By creating an environment where emissions reduction is awarded, the interest in clean technology, clean industry practices, and carbon offsets via carbon sequestration has greatly increased in the province. The carbon credit system would also act as a regulatory body for the essential emissions benchmarks to determine the amount of credits to be earned by CCS projects. Further, as part of the TIER program in Alberta, emissions producers pay into an innovation fund. Paying into the fund is mandatory for all organizations that participate in TIER. The funds are meant to be allocated to new technology development related to CCS. This type of fund helps promote and provide resources to technologies advancing CCS and the clean energy future within Canada, making us world leaders in CCS. Communication between the Ontario Ministry of Environment, Conservation and Parks that regulates the provincial emissions performance standards, the Ontario Ministry of NDMNRF, and the Crown is essential to ensure a CCS functioning system and to maximize the positive environmental impact. A successful CCS regulatory system requires cohesion between all involved parties to ensure public and environmental safety, and to have the most significant impact in emissions reduction. This includes the recognition of CCS within the provincially regulated carbon tax/credit program.

In addition, the changes to allow for companies to use wells “to explore, test, pilot or demonstrate new technologies (such as carbon storage) in relation to wells used for oil, gas, solution-mined salt as well as underground storage” is another step in the right direction. We understand there will be requirements within this change and from our experience, ensuring well integrity and adjacent wellbore integrity as well as proximity before testing is vital to the wellbeing of the surrounding area and the results of testing. One of the most significant risks to CCS is CO2 leakage through adjacent wellbores, therefore, ensuring wellbore integrity and an extensive monitoring program is essential. Currently, the Alberta Energy Regulator requires annual well integrity tests on all CO2 injection wells and analysis of adjacent wells prior to submitting initial applications for an injection facility. CMC recommends a similar approach to well integrity, adjacent wellbore proximity, and testing be implemented in Ontario. The changes mention projects occurring in southwestern Ontario’s oil, gas, and salt production areas. In Alberta, we have found that if the appropriate exploration and subsurface analysis has been completed, there isn’t a need to limit where CCS can occur. In addition, CO2 mixing with water creates carbonic acid, this is a different project than what oil, gas, and salt production wells would originally be designed for. If wellbores are reused, tubing and casing integrity should be assessed and the correct cement type for completions needs to be addressed. Alternatively, a more streamlined approach would be an assessment on a case-by-case basis with an extensive set of pre-selection requirements to be completed for the location and well type application. This would allow for greater growth as CCS technologies and schemes evolve.

CMC has extensive experience in creating and advising on Monitoring, Measurement and Verification (MMV) plans for CCS. Ensuring specific criteria is in place for MMV is important to be able to quantify the sequestered CO2 and validate the containment and confinement within the subsurface. MMV is important during active injection of CO2 however, it also plays a role in post-closure of projects. MMV ensures the CO2 remains permanently stored and is imperative in identifying potential leakage of CO2 in the subsurface. Furthermore, a long-term liability transfer to the government associated with injection post well closure should be investigated. The MMV plan and liability transfer ensures public and environmental safety during the lifespan of a CCS facility and for years afterwards.

Changes to the Mining Act allowing for premiant subsurface Crown land storage is the start of a robust CCS regulatory framework however, as mentioned, ensuring the transfer of liability post well closure is essential. Further, determining who (the Crown when in Alberta) will assume responsibility for the stored CO2 is important to advance both MMV design and project planning. Long-term liability is not appealing to individual businesses therefore, transfer of liability back to the Crown or government body after a time interval post-closure, is something to be addressed in the original project application and MMV plan. This will be pertinent to increasing interest and investment in CCS provided that the pre-injection, injection, and post-closure analysis and MMV is conducted properly, and transfer of liability will be based on a scientific supported approach.

Change in the regulatory framework to allow CCS within Ontario will result in many questions and concerns. These questions and concerns can be addressed and dealt with in a pilot projection in partnership with Energy Intensive Trade Institutions (EITIs) such as Stelco. Emissions reduction must occur as soon as possible for the Government of Ontario to achieve their commitment to reducing their emissions by 30% below 2005 levels by 2030. CCS is the only technology to make a monumental difference in emissions reduction. CMC’s Field Research Station (FRS) is the only pilot program for CCS risk assessment and feasibility and has been supported by the Government of Canada and numerous other institutions. The CMC FRS has influenced and supported every other CCS project in the world, and we are excited to put our expertise to use within Canada. A pilot project in Ontario would demonstrate the province’s desire to be a world leader in emissions reduction.

As leaders in the CCS industry, CMC is pleased to share our expertise and experience and we hope to be a resource for the Government of Ontario as these changes are made.

Sincerely,

Stephen Lougheed
President & Chief Executive Officer
Carbon Management Canada