The in-situ coal gasification project will tap into a deep, unminable coalbed near Swan Hills and turn the coal into a synthetic gas (syngas) to be used to generate clean electricity. The project will also capture up to 1.3 million tonnes per year of CO2 to enhance the recovery of conventional oil in the area.

“Creating syngas from coal and sequestering CO2 achieves all three goals in the Provincial Energy Strategy,” said Energy Minister Mel Knight. “The gasification process is clean energy production; turning coal into clean burning syngas is wise energy use; and sequestering CO2 for enhanced recovery from existing fields will sustain economic prosperity in north-central Alberta while generating new long-term revenues for Albertans.”

The province will invest $285 million in the Swan Hills project, from its $2 billion Carbon Capture and Storage Fund. Construction is expected to begin in 2011 with carbon capture scheduled to start by 2015.

Swan Hills Synfuels President Douglas Shaigec says the Swan Hills project has the potential to increase the value of Alberta’s vast coal deposits. “This will position Alberta as a leader in adapting and integrating proven technologies that greatly reduce emissions and minimize environmental impacts on land, air and water, while generating reliable baseload electricity,” said Shaigec.

“This project uses proven processes in an innovative way and will demonstrate how Alberta’s vast coal resources can be used to develop clean power,” added Knight. “Not only is there great potential use for this method of electricity generation elsewhere in Alberta, but the technology could provide positive solutions to many other jurisdictions around the world.”

Building critical infrastructure for future economic growth is a key element of Alberta’s plan for a strong economic recovery. The Way Forward will bring Alberta back into a surplus position in three years by trimming government spending; using cash reserves to protect key programs; continuing to invest in public infrastructure; and ensuring that our province’s industries are competitive and continue to attract investment to provide jobs and prosperity.