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Lessons Learned in
     Alberta
       May 8,2012
 Mike Fernandez, Alberta Energy
Climate Change Strategy




           200Mt
           • 2050 -- 200Mt
             reduction or 50%
             below projected
             business as usual
             and 14% below
             2005 levels
Alberta’s CCS Program
MONEY
• Financial support of $2B to support 3-5
  commercial scale CCS projects and inject 5Mt
  of CO2 by 2015.
RULES
• New legislation in 2010, and 2011. Detailed
  regulatory audit in 2012.
Lesson 1 – Transparency is key.
MONEY
• Open and transparent process
   – Full Project Proposals and all materials were made public
• Fairness Monitor (Third party oversight)
   – Oversaw the entire FPP process
• Be clear in your announcement of who is in and who is out.
   – Absolute clarity of who we selected
RULES
• Regulatory work includes stakeholders.
Lesson 2 – Third party expertise is
              invaluable.
MONEY
• Financial and economic support used during our
  evaluation of proposals.
• Expert support on Knowledge Sharing provisions.
RULES
• Lots of consultants and stakeholders working on
  regulatory advice.
Lesson 3 - Address regulatory gaps.
MONEY
• So important to investors.
• Sort out long-term liability and tenure ASAP.
RULES
• Start with an Audit
  – Do a thorough analysis of all regulatory gaps and
    address them.
Lesson 4 - Contract negotiations
               are complex.
MONEY
• Front end principles around risk sharing save a lot of
  pain.
• Provide for amendments…you’ll need them.
• Parallel negotiations can be a positive or a negative.
• Defining “commercial operations” has been a hurdle.
• Be clear on Knowledge Sharing provisions.
• These discussions take a lot of time…plan for it.
Lesson 5 - Collaboration
MONEY and RULES
• Climate change is a shared outcome of many
  departments.
• Cross ministry Deputy Minister Committee to
  support CCS.
• Partner with industry
  – Alberta industry are vocal proponents and
    advocates of CCS
Lesson 6 – Making payments takes
                time…
MONEY
• Sort out financial security well ahead of time.
• If you use third parties to help certify a milestone:
   – Ensure the proponent helps scope
   – Start early
   – Be prepared for lengthy debates between engineers
• Do not link payments to your fiscal year end as
  it’s a serious constraint.
Thank-you
Mike.Fernandez@gov.ab.ca

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Lessons learnt from Alberta - May 2012

  • 1. Lessons Learned in Alberta May 8,2012 Mike Fernandez, Alberta Energy
  • 2. Climate Change Strategy 200Mt • 2050 -- 200Mt reduction or 50% below projected business as usual and 14% below 2005 levels
  • 3. Alberta’s CCS Program MONEY • Financial support of $2B to support 3-5 commercial scale CCS projects and inject 5Mt of CO2 by 2015. RULES • New legislation in 2010, and 2011. Detailed regulatory audit in 2012.
  • 4. Lesson 1 – Transparency is key. MONEY • Open and transparent process – Full Project Proposals and all materials were made public • Fairness Monitor (Third party oversight) – Oversaw the entire FPP process • Be clear in your announcement of who is in and who is out. – Absolute clarity of who we selected RULES • Regulatory work includes stakeholders.
  • 5. Lesson 2 – Third party expertise is invaluable. MONEY • Financial and economic support used during our evaluation of proposals. • Expert support on Knowledge Sharing provisions. RULES • Lots of consultants and stakeholders working on regulatory advice.
  • 6. Lesson 3 - Address regulatory gaps. MONEY • So important to investors. • Sort out long-term liability and tenure ASAP. RULES • Start with an Audit – Do a thorough analysis of all regulatory gaps and address them.
  • 7. Lesson 4 - Contract negotiations are complex. MONEY • Front end principles around risk sharing save a lot of pain. • Provide for amendments…you’ll need them. • Parallel negotiations can be a positive or a negative. • Defining “commercial operations” has been a hurdle. • Be clear on Knowledge Sharing provisions. • These discussions take a lot of time…plan for it.
  • 8. Lesson 5 - Collaboration MONEY and RULES • Climate change is a shared outcome of many departments. • Cross ministry Deputy Minister Committee to support CCS. • Partner with industry – Alberta industry are vocal proponents and advocates of CCS
  • 9. Lesson 6 – Making payments takes time… MONEY • Sort out financial security well ahead of time. • If you use third parties to help certify a milestone: – Ensure the proponent helps scope – Start early – Be prepared for lengthy debates between engineers • Do not link payments to your fiscal year end as it’s a serious constraint.