Carbon capture and storage: dead and buried?

Energy experts say it will be near-impossible to curb global warming without it, so why has carbon capture and storage stalled?
Smoke from an industrial plant/ Credits: Reuters, December 2013

Article at a glance

It was to be Norway’s “Moon landing” said Prime Minister Jens Stoltenberg in 2007 – a world-leading project demonstrating how to burn fossil fuels without warming the planet.

Carbon capture and storage (CCS) technologies fitted to Statoil’s Mongstad oil refinery and gas power plant would trap emissions of CO2, compress the gas and pipe it into old gas wells offshore. This would prevent 80-90% of Mongstad’s carbon emissions from ever reaching the atmosphere. If deployed worldwide, Norwegian know-how might just make coal ‘clean’.

But in September 2013, Stoltenberg’s outgoing government pulled the plug, blaming high costs, low carbon prices and dwindling commercial interest.

Mongstad is the latest casualty in the fledgling CCS sector, which has shrunk from 75 to 65 projects worldwide in the past year, according to ‘The Global Status of CCS: 2013’ report published by the Canberra-based Global CCS Institute. Not one is a full-scale commercial deployment.

Moreover, it is generally projects specifically designed to reduce emissions, like Mongstad, which are being shelved. Conversely, of the 25 most advanced surviving projects, 17 are capturing CO2 primarily to maximise oil production rather than tackle climate change. The gas is injected into the ground to squeeze out hard-to-get deposits in a process known as enhanced oil recovery (EOR).

This helps explain why it is the United States which now leads the CCS market. New projects in 2013 include the Coffeyville Gasification Plant, which recovers CO2 from a fertilizer operation and then pipes it to an oil field, and the Lost Cabin Gas Plant, which also uses the gas to recover oil.

As things stand today, CCS applications seem closer to business-as-usual than a Moon landing.

The case for CCS

Why does this matter? Well, in a world where coal is gaining market share as the developing world industrializes and fossil fuels will still power the bulk of electricity generation in 2035, a chorus of expert opinion believes CCS is essential.

The Intergovernmental Panel on Climate Change (IPCC) in a 2005 special report concluded that CCS would reduce power plant emissions by 80-90%. Norwegian environmental NGO The Bellona Foundation calculates that widespread adoption could reduce CO2 emissions by 54% in the EU and 33% globally by 2050. The International Energy Agency (IEA) ranks CCS third behind energy efficiency and renewable energies as the most promising way to cut carbon emissions, ahead of nuclear power. China has integrated CCS into its 12th Five-Year Plan and has 12 plants in the pipeline.

“CCS is not an optional technology if we’re to address climate change,” stated Gareth Lloyd of the CCS Institute at a press conference launching the 2013 report. The study argues that without CCS it is unlikely that the 2°C target limit to global warming is achievable, in part because “CCS is the only large–scale technology available to make deep emissions cuts in several industrial sectors (such as iron and steel and cement).”

CCS also builds on mature technologies, says the Institute. After all, EOR has been around since the 1970s, Statoil has been burying CO2 at the Sleipner and Snøhvit gas fields offshore for years, CO2 pipelines are an established technology, as is the process of separating CO2 from other flue gases.

The case against CCS

Greenpeace disagrees, arguing in a report titled ‘False Hope’ that CCS is “a dangerous gamble” that remains commercially and technically unproven at scale. Consequently, it will be too late to prevent dangerous climate change – only 1% of global fossil fuel-fired power plants will be CCS-equipped by 2035, predicts the IEA.

CCS wastes energy and drives up electricity costs, says Greenpeace, citing IPCC estimates that powering a CCS-equipped plant means burning 10–40% more fossil fuels to get the same amount of electricity. That means more mining and drilling, generating methane emissions and diverting investments from energy efficiency and renewable energies.

It will also add 2 to 3 eurocents per kWh electricity produced, estimates Bellona, which has suggested Mongstad failed in part because Statoil was worried its electricity would become uncompetitive.

Another issue is the sheer volume of compressed liquid CO2 that large-scale deployment of CCS would produce, requiring energy-intensive and costly pipeline construction and geological exploration to find suitable storage. Then there is that extra oil from CCS-enabled enhanced oil recovery that would otherwise have stayed underground.

Greenpeace contends that CCS is being used to greenwash new coal and gas-fired power plants, with government and industry selling them as ‘capture-ready’, a largely meaningless assignation. But not all green groups reject CCS. Bellona, WWF and Friends of the Earth suggest that it has a role to play but only if all new power stations are fitted with CCS from the start.

Policy support wanted

”There is no direct incentive for any commercial organisation
to undertake CCS”

(Scottish Carbon Capture & Storage)
The main obstacle to CCS development is “insufficient policy support”, says the CCS Institute report. Governments have withdrawn $7bn of promised public funding since 2009. A European Commission fund designed in part to support CCS did not finance one CCS project last year because of lack of co-funding from national governments. The money went instead to renewable energies, which also benefit from grants, subsidies and feed-in tariffs that CCS cannot access.

"Continually, governments just kick the can down the road in the UK and in Europe," Professor Stuart Haszeldine of research group Scottish Carbon Capture & Storage (SCCS) told the BBC in November, adding that scientists are "depressed that their message is not being heard.”

Another culprit is the excessively low price of carbon. Utilities building CCS plants were supposed to be rewarded with excess carbon credits they could sell on the European carbon market. As the carbon price rose, the theory went, installing CCS would become standard practice. But the carbon price has instead collapsed, leaving SCCS to conclude in a consultation to the European Commission:

”There is no direct incentive for any commercial organisation to undertake CCS ... carbon price alone cannot be relied upon to provide meaningful incentive for early CCS deployment ... It is clear that requesting Member States to voluntarily develop and deploy CCS has not happened successfully.”

SCCS recommends targeted taxation or a price increase on the emissions from burning fossil fuels. In Norway, the reason Statoil currently injects CO2 underground is because there is a tax of €50 per ton on offshore CO2 emissions. Yet there is no similar tax on onshore emissions such as those from Mongstad. This situation could be equalized. Grants, preferential loans, investment tax credits, feed-in-tariffs, and other subsidies are also options.

Bellona recommends a variation on the Californian Emission Performance Standard (EPS), which limits power plant emissions to 500 grams of CO2 per kWh electricity produced. Modern coal power plants cannot match this, so they would have to install CCS. But gas-fired plants will be allowed. Bellona argues that CCS must be mandatory for both and so proposes an emission ceiling of 150 grams CO2 per kWh for new power plants built after 2010 and for existing plants from 2020.

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