Carbon capture and storage:
A necessary climate mitigation tool

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Helge Lund, President and CEO of Statoil, an international energy company with operations in 40 countries, and a world leader in CCS development and application.

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Carbon capture and storage is the separation, capture, transport, and storage of CO2 that results from the production, processing and burning of oil, gas, and coal. In this illustration of Statoil's Sleipner project in the North Sea, CO2 separated from the project's natural gas production stream (on the left) is captured and then injected back into the permeable rock beneath the seabed (on the right).

A global challenge

Demand for energy is expected to increase by 40-50% over coming decades, driven primarily by population growth and increasing prosperity. A rising population creates a greater need for lighting, heating, transport, industrial production, and so forth. Around 1.5 billion people currently live without electricity. Their expect­ations of growing prosperity are legitimate.

All serious forecasts show that coal, oil, and gas will be the most important energy carriers for several decades to come. Even in the “two-degree” scenario from the International Energy Agency (IEA), the consumption of oil and gas is estimated to increase.

Emissions are an undesirable, but unavoidable consequence of the growth in energy consumption. The fundamental dilemma facing all of us is therefore how to supply the world with sufficient energy, while simultaneously reducing greenhouse gas emissions.

A wide range of mitigation efforts are required to reduce greenhouse gas emissions: energy efficiency, carbon capture and storage (CCS), fuel switching (e.g. coal to natural gas), nuclear power, renewable energy, etc.

Knowing that the world will be dependant on fossil fuels for the foreseeable future, there is a need to develop technology to reduce emissions from the use of these fuels. I cannot see how CO2 emissions can be reduced in the medium to long term without a major deployment of CCS. This is supported by many key analyses, including the IEA’s World Energy Outlook.

Industrial scale CCS

CCS is a climate mitigation tool that captures carbon dioxide (CO2) and stores it in deep geological formations, away from the atmosphere. CCS is already being used on an industrial scale, and Statoil is currently involved in three large CCS projects: Sleipner and Snøhvit (both off the coast of Norway) and In Salah (in Algeria). All of these are projects where CO2 is removed from the wellstream at high pressure in a closed system, as distinct from the capture of CO2 from the flue gases which are produced, for example, during the process of burning fossil fuels in power generation.

Although there are great expectations about full scale CCS, and a lot of good technology development is taking place, it is important to be aware that, so far, no large CO2 capture from flue gases has been realized. The costs of developing huge CO2-capture plants are currently too high, and further technology development is needed in order to make CCS a really significant way to reduce carbon emissions.

On the political level, the attention being paid to CCS is growing. The European Union’s new climate package includes a CO2-storage directive, as well as a revision of the EU emission trading system to provide financial incentives for CCS. CO2-reduction efforts in the United States, Canada, Norway, the UK, and Australia, also include substantial support schemes for CCS in this introductory phase.

In order to make CCS a part of the response to climate challenge, I see four main challenges:

• The costs of capture technology, which are currently way higher than CO2 emission costs
• The absence of a firm legal basis
• A lack of public awareness
• Some unsolved issues related to CCS infrastructure

A price on CO2 emissions

Mankind has been emitting CO2 into the atmosphere for centuries. So far, most emissions do not have a cost attached to them. Before CCS can realize its potential as a mitigation tool, industry must be convinced that the long-term cost of emitting CO2 into the atmosphere will be as high as, or higher, than the cost of CCS; i.e. CCS has to become commercially-viable in its own right. One important element here is the capital cost and energy use associated with CO2-capture, which have to be reduced. (The high cost of post-combustion capture is related to the need to first collect and store huge volumes of flue gas, and then to heat it in order to release and capture the CO2.)

One of the most important factors holding back the deployment of CCS – and indeed all climate mitigation efforts – is therefore the lack of a world-wide, sufficiently high, and predictable, CO2-price. The lack of such a price (as well as the absence of a global mechanism whereby the CO2 emissions that are stored are not counted as “emitted”) means the pace of large-scale global deployment of CCS is being slowed down. Financial and technical support is needed to make CCS affordable and transferable, particularly to developing countries where energy demand is growing so rapidly. The CCS project at In Salah in Algeria is a very interesting example as it is located in a developing country without a greenhouse gas limitation target. It is my belief that many more industrial CCS projects of this type could have been realized if a mechanism had existed to finance such projects. Over many years there have been attempts to include CCS in the Clean Development Mechanism (CDM), but this has so far failed to materialize.

To date, no large scale CO2 capture projects from flue gases (power plants, industrial flue gas) have been realized. Thus, we have no cost experiences to refer to, and cost estimates based solely on paper studies vary by several hundred percent, depending on country, company, site chosen, or whether it is a retrofit or new build. There is no database for this type of capture cost, and so far there has been little sharing of capital expenditure estimates between commercial power plant actors around the world.

Public-private partnership is necessary in a pre-commercial period until the mitigation cost has come down and the cost of emitting has gone up to a sufficient level. Most countries need to increase their pre-commercial funding for the early demonstration phase of CCS.

At the Mongstad refinery in Norway, our plan is to capture CO2 from the exhaust gases from the combined heat and power plant, and from different emission points at the refinery. This is technologically challenging. Statoil, together with the Norwegian authorities and other industrial partners, has therefore established a European Carbon Dioxide Test Centre at Mongstad. Here, two capture technologies for improving performance and reducing costs will be put to the test.

Legal issues

A substantial effort to establish a legal framework for CCS has been carried out in the EU, the US, Canada, and Australia. However, there are some important issues that are still outstanding. These include regulations regarding the transfer of long-term liability for storage sites between a commercial storage operator and the government, the licensing of storage acreage, work programmes to obtain such licences, and regulations concerning environmental, safety, and health issues.

One recent success has been to have the London and Ospar Conventions rewritten to allow CO2 storage in geological formations under the seabed, and to permit trans-boundary transportation of CO2. Much good work is being done by governments in this area; however the procedures for implementation of these Conventions makes for relatively slow progress in ratifying any changes.

Even with a legal framework in place, public acceptance and understanding will be essential for projects to go ahead. Industry and government must work to improve the awareness, understanding, and general acceptance of the merits of CCS as a viable mitigation tool.

CCS infrastructure

A framework for CCS infrastructure, in particular transport networks and storage sites, has to be in place in order to deploy full-scale CCS. If CCS is to be captured from many different sources, some sort of gathering system to transport the CO2 to the storage sites has to be developed. A CO2 transport network should be planned and set up in parallel with the large scale development of capture facilities. There is a pressing need to establish more operating storage sites in order to learn about the practicalities of storage and to demonstrate to the public that safe storage is possible under various geological conditions.

Statoil has more than 13 years of experience of CO2 storage at the geological formation at the Sleipner field in the North Sea. There the CO2 is prevented from seeping into the atmosphere by an 800 metre-thick cap rock above the actual storage location. By the end of 2008, eleven million tonnes of CO2 had been stored there. Statoil has been very open with the monitoring data from Sleipner, which has been mapped and analysed by various research projects partly financed by the EU. Seismic testing in June 2008 showed that the CO2 plume is behaving as planned.

Despite some unsolved issues, we believe CCS will be one of the central CO2 mitigation tools. We need pioneers from industry, governments, researchers, and environmental NGOs to explore this path. Climate change is the biggest challenge of our time, and finding sustainable solutions is a matter of urgency. Everyone has a substantial responsibility, and everyone must contribute.

For a long-term industry player like Statoil, a level playing field and good predictability are crucial. In this context, global political leadership must accept its responsibility, and not underestimate its actual room for manoeuvre.