Alberta Government Pulls Plug on Funding for Swan Hills Underground Gasification Project

Researched by Industrial Info Resources (Sugar Land, Texas)--Swan Hills Synfuels LP (Calgary, Alberta) has taken a hit on the development of an underground gasification project, after the company and the government of Alberta agreed to cancel an arrangement under which the province was to have helped fund a carbon capture and storage project.

In 2011, the Alberta government committed to pay $285 million over 15 years for the capture of CO2 produced by the underground gasification of coal. The CO2 was to have been sold for use in the region's enhanced oil recovery.

The reason for the snub is that it is cheaper to buy natural gas in today's market than to manufacture a synthetic product from underground coal seams. "It's a deferral of our project, and it's certainly not cancelled in any respect," said Swan Hills President Doug Shaigec.

The Swan Hills project was one of four projects earmarked for funding when the Alberta government announced a $2 billion commitment to accelerate carbon capture and storage projects back in 2008.

The other project to get a snub was the TransAlta Corporation (Calgary, Alberta) carbon capture and storage project at TransAlta's Keephills No. 3 coal-fired power plant in Duffield, Alberta.

Both projects represented more than $1.1 billion of the funding earmarked for carbon capture-type projects by the government.

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