Sherritt International is delaying its plan to build a $3.3 billion coal gasification project near Edmonton due to uncertainty over carbon dioxide regulations and the products the plant could make.
Sherritt’s original plan was to file its environmental impact assessment on the proposal this year and start construction next year, with production to begin in 2012.
A Sherritt official told The Canadian Press the new timeline would see the environmental report submitted next year with construction starting in 2010 and production to begin in 2014.
“Progress continues and we are now planning to submit the environmental impact assessment report and application once there is greater clarity on carbon dioxide regulations and we are able to better align our project with the timing of our potential customers,” the company said in a statement.
“We will be reaching out to the provincial government and regulators to discuss some of our concerns.”
Sherritt’s Dodds-Roundhill project would be the first commercial coal gasification plant in Canada.
The plan is to surface mine a 500-million-tonne coal deposit near Tofield, Alta., and build a processing plant that would break down the coal into a product called synthesis gas, or syngas. The gas would be sold as a fuel or as a petrochemical feedstock.
Before beginning its environmental assessment Sherritt plans to complete a “pre-feasibility study” that will look at other products the plant could produce, including clean diesel, methanol and synthetic natural gas, a company official said Friday. The report is expected to be complete by the end of the year.
“It will just give us more marketing flexibility,” the official said. “This just gives us more options just to figure out what is the best thing to meet our potential customers’ needs.”
Sherritt declined to explain what information it is looking for from the Alberta government and regulators regarding carbon dioxide regulations.
In July 2007, Alberta’s Climate Change and Emissions Management Act came into effect, requiring large emitters of carbon dioxide to reduce their emissions intensity by 12 per cent.
Corporations that can’t meet the cuts have the option of paying $15 for every tonne that they are over the target limit.
The Alberta government has also commissioned a task force to study carbon capture and storage - it is to hand down a report with recommendations this fall.
Alberta Environment spokeswoman Cheryl Robb said the province is trying to harmonize its climate change policies with the federal government’s climate change policies, which are still being developed.
“Alberta has given industry clear signals to where we are headed when it comes to greenhouse gas emissions. We are in discussions with the federal government to harmonize our regulations. But we aren’t waiting for the feds. We are still working with industry to have things in place so they have certainty.
“Alberta has been the regulator and we want to have one regulator when it comes to industry and will work with the federal government to ensure that Alberta continues to be that regulator.”
Sherritt has so far not filed environmental assessment documents with the province or filed an application for the project with Alberta’s Energy Resources Conservation Board.
The proposed gasification plant faces other hurdles.
Tofield residents, farmers and other landowners in the area 80 kilometres southeast of Edmonton held rallies in June against the proposed project.
Conservationists are also worried about how the mine and plant would affect a sanctuary near Beaverhill Lake just north of the site that is on a major migration route for snow geese and other birds.
In a newsletter to the community, Sherritt said it has begun negotiating to buy land for the plant site and has already acquired options on several parcels. Sherritt is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas and electricity.
Meanwhile, Epcor has said it has stopped work on its plan to build, operate and own a power plant, water and wastewater treatment facility at the proposed gasification site pending Sherritt’s assessment of the Dodds-Roundhill project.
An Epcor release said Sherritt is expected to give stakeholders an update early in the new year.