The B.C. government is contributing more than a third of the cost to test a large-scale carbon dioxide capture and storage facility in northeast B.C. B.C. taxpayers are chipping in $3.4 million for a $12 million research project to drill two test wells near Spectra Energy's natural gas plant at Fort Nelson. If geological conditions allow, the project has the capacity to store one million tonnes of carbon dioxide each year two kilometres underground. Calgary-based Spectra, successor to Westcoast Energy, operates one of North America's largest sour gas processing plants at Fort Nelson. It can handle up to a million cubic feet of raw gas each day, removing contaminants including water, hydrogen sulphide, sulphur dioxide and carbon dioxide. If successful, the project could be in operation by the end of 2011. It would be one of the largest such facilities in the world, capturing greenhouse gas emissions equivalent to 250,000 cars.

Energy Minister Richard Neufeld said the project will help the province meet its goal of eliminating a third of its greenhouse gas emissions by 2020. It comes as interest in natural gas exploration in northeastern B.C. reaches new heights, with more than $440 million spent by companies on drilling rights in April. Spectra already has smaller-scale carbon capture and storage working at eight of its production sites in B.C. and Alberta, including the Kwoen gas plant near Tumbler Ridge. With vast new sources of gas expected to come from exploration in the region in the coming years, "now is the time to take some action," said Spectra Energy vice-president Gary Weilinger. Environment Minister Barry Penner said the project is the type that will be encouraged by a cap and trade system for greenhouse gas emissions, now in development with several U.S. states and Manitoba. Large industrial emitters will be charged for emissions and get credit for reductions they make through improved processes.

NDP environment critic Shane Simpson said the B.C. Liberal government is already providing more than $300 million in subsidies to the oil and gas industry, by reducing royalties until companies have recovered the cost of new production. "You have to wonder where some of those dollars are going and whether some of those shouldn't be going into this project," Simpson said. Natural gas is the cleanest of the fossil fuels, but it still releases carbon dioxide into the atmosphere when burned in stoves and furnaces. The carbon capture process would take out only the naturally occurring carbon dioxide mixed with the raw gas, and also catch the carbon dioxide released by burning natural gas in the processing plant. Northeastern B.C. is part of the Western Canada sedimentary basin, which contains nearly 20,000 gas wells and is by far the largest producing region in the province.

It is the only area of the province considered suitable for a carbon capture and storage project, because it has most of the large production facilities as well as suitable geology for storing carbon dioxide in high-pressure liquid form. The technique was developed by the industry to stimulate extra production from older oil deposits, pumping carbon dioxide into formations to push remaining oil out.