CCS UNDERGROUND

ENGO Network Meeting in Scotland

by Guest Author on 06/06/13

This post was written by Chris Smith, coordinator of the ENGO Network on CCS. It originally appeared May 31, 2013 on Insights, a GCCSI online publication.

Members of the ENGO Network on CCS gathered last week in Edinburgh, Scotland, for their annual retreat, which coincided with the launch of Moving CCS Forward in Europe, a white paper examining the current status of CCS in Europe, why policy efforts have stalled and recommendations for improving momentum.

Lead author Chris Littlecott with E3G talked about the paper and how environmental NGOs could help advance public and political dialogue during a panel session on communicating CCS at Thursday’s Global CCS Institute Europe, Middle East and Africa Members' Meeting.

“To move CCS forward in Europe, we need to look beyond the limits of the current bureaucratic imagination,” Littlecott said, adding that politicians and policymakers could benefit from creation of new policies focusing on how CCS could boost low-carbon competitiveness and job retention.

ENGO members from Bellona Foundation and ZERO are co-contributors to the report, which also includes ideas on how EU-wide and Member States policy incentives could work together to accelerate action on CCS, as well as a look at how Norway might be able to cooperate further with the EU given its established CCS leadership aspirations.

Points of emphasis made at the ENGO retreat also seemed to parallel those made by speakers at the Institute's meeting. For example, discussions at both meetings included comments lamenting the lack of global political leadership around CCS; a recognition that public understanding of this technology could be improved through better and increased communication; and a collaborative desire to propagate messaging surrounding CCS’s integral role in overall energy and renewables discourse.

So what did we take away from our Scotland retreat and and the Institute's meeting? Comments and impressions include the following:

Perhaps the most important recurring theme to come out of the Institute's Members' Meeting in Edinburgh this year has been the pressing need for strong political leadership on CCS. Through targeted international collaboration and information sharing, the ENGO Network is working to address this need. It's goal: to work with political decision makers and other key stakeholders to provide the political commitment and regulatory frameworks so desperately needed to unlock investment in CCS.
Procrastination on CCS now will greatly reduce the performance and even the possibility of reaching effective climate goals later.
The ENGO retreat is a priceless experience to connect, learn, and collaborate with colleagues from around the world. The retreat framed my NGO work in an international context and I was able to learn from the experiences of other nations’ initiatives and regulatory experiences.
It is worthwhile noting that both meetings included discussion on the potential for emissions performance standards to be a critical driver of CCS.
We need to talk more about the role CCS can play in helping the natural gas sector reduce emissions.

My favorite quotes were from former executive director of the International Energy Agency’s Claude Mandil, who gave closing remarks at the Institute's meeting and a call to action for all attendees: “Be consistent, insistent and persistent. There is absolutely no future without CCS being a part of it.”

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Preferred bidders in UK CCS competition announced

by Guest Author on 03/21/13

This post, contributed by ENGO Network Member Paal Frisvold, originally appeared March 20, 2013 on Bellona's online site.

The UK’s Department of Energy and Climate Change (DECC) announced the two preferred bidders under its € 1.2 billion CCS (CO2 Capture and Storage) competition today, 20 March. “This will bring the UK to the forefront in the development of cost-competitive CCS industry in Europe”, says Paal Frisvold, Chairman of the Board, Bellona Europa, “the British developments will bring us one step closer to discover the costs and technological solutions needed to demonstrate CCS on a commercial scale”.

Today’s announcement is excellent news for Bellona and the whole CCS community. CCS projects taking off the ground is what is needed the most at the moment, especially after NER300 failing to deliver any CCS funding in its first round. It is clear that the UK will now be at the forefront of the European CCS investment, moving in the direction of cost competitive CCS industry.

The projects
The White Rose Project in Yorkshire, England, and the Peterhead Project in Aberdeenshire, Scotland, were chosen from a shortlist of four after an intensive period of commercial negotiations.

The White Rose is an oxyfuel capture project at a proposed new 304MW fully abated supercritical coal-fired power station on the Drax site in North Yorkshire. The project involves capturing 90% of the CO₂ from a new coal-fired power station, before transporting to and finally storing it in a saline aquifer beneath the North Sea.

The Peterhead Project would capture 85% of the CO₂ from part of the existing gas fired power station at Peterhead. The CO₂ would then be transported and stored in depleted gas fields beneath the North Sea. Peterhead has previously been considered for a CCS project in the mid 2000’s.

The future of the UK CCS Competition
The € 1.2 billion of capital funding made available under the UK CCS Commercialisation Competition will support the practical experience in the design, construction and operation of commercial-scale CCS. More specifically the funding is meant to:

generate learning that will help drive down the costs of CCS;
test and build familiarity with the CCS specific regulatory framework;
encourage industry to develop suitable CCS business models; and
contribute to the development of early infrastructure for CO₂ transport and storage.

Following today’s announcement UK Secretary of State for Energy and Climate Change, Edward Davey, said that “[this] moves us a significant step closer to a Carbon Capture and Storage industry – an industry which will help reduce carbon emissions and create thousands of jobs”.

The Government will now undertake discussions with the two preferred bidders to agree terms by the summer for Front End Engineering Design studies, which will last approximately 18 months. A final investment decision will be taken by the Government in early 2015 on the construction of up to two projects.

For more information on CCS and prospective project, please visit Bellona’s CCS web.

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CCS and Carbon Budgets

by Guest Author on 01/22/13

This post written by David Hawkins, Director, Climate Programs at the Natural Resources Defense Council. It originally appeared January 21, 2013 on Insights, a GCCSI online publication.

The latest climate talks in Doha ended a month ago and the gulf between what science says is needed to protect the climate and countries’ commitments to cut emissions is larger than ever. Where might one find forces that could help break the logjam? Perhaps, in some surprising places.

First, a précis of how much of a jam we are in. Just a few weeks before the Doha meeting, the International Energy Agency (IEA), in its World Energy Outlook, accurately summarized the science of what needs to happen to global emissions if the 2^oC target is to remain an option. In short, the world needs a carbon budget. To preserve just a 50 per cent chance of keeping global temperature increases to no more than 2^oC, IEA concludes the world can emit a cumulative total of 679 billion metric tonnes (Gt) of CO₂ from energy use between 2012 and 2035. IEA calculates that 81 per cent of this budget will be consumed by equipment (power plants, factories, buildings, vehicles) already operating today, if these facilities operate for their normal useful lives at their current emission rates.

Now, having only 19 per cent of the 2^oC budget left for all new capital investments for the next two decades is daunting enough but IEA points out that this remaining headroom will disappear in a flash without additional policy action. IEA projects that the new investments under a future where the world’s governments carry out only the greenhouse gas (GHG) mitigation pledges made to date (what IEA terms the New Policies Scenario), means that the entire remainder of the 2^oC budget would be locked-in only five years from now, in 2017. Thus, if we delay just five more years, to keep the 2^oC option alive, even as a 50-50 proposition, “after 2017 any new power plants, industrial plants, new buildings, road vehicles or water boilers that consume fossil fuels could be built only if existing infrastructure were retired early to the extent necessary to offset emissions from the additional infrastructure” (IEA, WEO 2012 at 265).

The message from IEA is clear: the world’s major emitting countries cannot wait for international negotiations to wind their way to a potential new agreement before they step up the pace of their own efforts to cut emissions. And the IEA report points out some important no-brainer steps that could be taken immediately. Leading the list is a comprehensive program to adopt all known, technically-feasible energy efficiency measures that are also economically viable (IEA used a set of assumptions of reasonable payback periods for energy efficiency investments to define economic viability). IEA’s Efficient World Scenario summarizes what this program would achieve:

significantly slow the burn rate of the remaining 2^oC budget, buying another five year grace period to 2022 before the 2^oC budget would be fully committed
boost cumulative global economic output by $18 trillion through 2035, with the largest GDP boosts occurring in the world’s biggest emitting countries (China, US, India, OECD Europe)
cut growth in global primary energy demand in half compared to the New Policies Scenario
reduce oil demand in 2035 by 12.7 million barrels per day, cutting the oil-import bills of the five largest importers by 25 per cent (IEA, WEO 2012, Chapter 10).

This is an agenda that governments and private sector actors should get behind without delay. It requires policies to break down non-market barriers as detailed in the IEA report. But the environmental and economic payoffs are clear and do not depend on the willingness of countries to agree on next steps in international negotiations.

While energy efficiency is the long pole waiting to be picked up, as we take those actions, we need to increase our attention to other potentially powerful tools to protect the climate. Of course, this includes efforts to accelerate deployment of renewable energy resources. But today’s market share of these resources is so small that even phenomenal renewables growth rates mean that we will continue to use a great deal of fossil energy—much more than a safe carbon budget allows.

This prospect brings us to carbon capture and storage (CCS). My colleague, Camilla Svendsen Skriung, has blogged on a recent white paper describing what is required to help make CCS into a serious tool in the climate protection toolbox. The paper was authored by a number of environmental NGOs (including NRDC where I work).

Let me sketch some thoughts on the strategic importance of CCS, both to climate protection campaigners such as myself, and to those we are routinely combating, particularly fossil fuel producers. For essentially the entire period since the climate policy debate began more than two decades ago, our operating frame has been that of a zero-sum game: if fossil-fuel producers win, climate protection loses and vice versa. And there are powerful reasons for that paradigm to have taken hold. Indeed, the IEA’s latest report contains figures that reinforce that paradigm in many quarters. Consider this jaw-dropping comparison of the cumulative emissions budget for a 2^oC target with the CO₂ emissions embodied in today’s proven reserves of fossil fuels: to keep a 50-50 chance of holding onto 2^oC, IEA calculates the world can emit 679 Gt of CO₂ from fossil fuels from now to 2035 (with another 205 Gt out to 2050). But the public and private owners of fossil fuels have already proven reserve holdings of coal, oil, and gas with nearly 2900 Gt of potential CO₂ emissions. So today’s proven fossil reserves outweigh a sane climate protection budget by three to one.

Note we are not talking about abstract concepts of ultimately recoverable resources here. Proven reserves are assets owned by today’s operating enterprises and governments, which are capable of being brought to market with today’s technologies and prices. If these institutions perceive that protecting the climate means abandoning more than two-thirds of these assets, it is not difficult to explain their role as a primary roadblock to meaningful action on climate change. Similarly, it is easy to understand why the environmental community, in general, regards an end to the use of fossil fuels as the only plausible path for climate protection. The problem with this paradigm from the environmental perspective is that it encourages policy paralysis, which is what we have endured with rare exceptions for the past decades. The problem with this paradigm from the fossil fuel producers’ perspective is that climate disruption continues even if policy is frozen. Politicians may ignore climate change but natural systems do not; and nature bats last. Continuing to block meaningful action will not insulate fossil fuel reserve holders from the accumulating risk of 'anti-fossil fuel' policy responses to the inevitable harmful impacts of a climate that has been driven off the rails by accumulated CO₂ in the atmosphere.

In this context, CCS has the potential to be a disruptive technology. CCS can introduce a new degree of freedom into the solution set for human societies: climate protection need not be tied ineluctably to how fast the world reduces its use of fossil fuels. This is not to argue that we can or should continue the current level of dependence on such fuels. We should not. But if the availability of CCS as a tool can hasten the day when the world takes climate protection seriously, that is a good thing. But can CCS play a helpful role in bringing down the wall that separates the world of political action from the world of climate science? Many of my friends in the environmental community are sceptical that it can and there are ample grounds for that scepticism. To date, too many in the fossil fuel industry have used CCS as a shield against climate policy action rather than embracing it as an enabler of action.

But this could change if private and government fossil fuel reserve holders come to terms with the reality of a finite carbon budget and its implications. While the world today is not behaving as though there is a finite limit on the amount of carbon that can be released from fossil fuel use, this can change with little advance notice. Firms and governments that hold those reserves have no way to predict when that change will happen. And the reality of the finite carbon budget is that the later that change occurs, the more extreme will be the impact on the operations of fossil fuel producers. The world is not just burning up the carbon budget at an accelerating rate; it is burning up the lead-time that fossil fuel producers would like to have when the inevitable policy-awakening for climate protection occurs. Fossil fuel producers could gamble that the allure of their products will continue to be so powerful that policymakers and the public will just accept an increasingly disrupted climate rather than act to constrain fossil fuel use. But the more astute will recognize that this is an increasingly bad bet. For those actors, CCS can be understood as a powerful tool to reduce the carbon budget burn rate and provide a more manageable transition.

The broader investor community will soon grasp these facts. The value of their investments in fossil fuel producing companies is dependent in significant part on the assumption that each firm will be able to turn their proven reserves into a reliable revenue stream. Some of these investors, especially large institutional investors, may be quicker to understand and accept the reality of a finite carbon budget. For them, divestment of fossil fuel holdings becomes not just an ethical proposition but a way to reduce financial risk. If such divestment takes hold, it will become a powerful external force for fossil fuel owners to change their behaviour. In addition, regulators like the US Securities and Exchange Commission will be pressed to require more substantial disclosure and quantification of these risks. Similarly, shareholder resolutions pressing for action plans from company management are likely.

The actions fossil reserve holders need to take to reduce the risks of stranded reserves go far beyond contributing modest amounts to help finance the occasional pilot or demonstration CCS project. Rather, fossil fuel producers as a group must recognize that they actually need a climate policy regime that will leave space in the carbon budget by cutting the carbon burn rate now. That will include policies that enable commercial-scale CCS operations to become economically competitive. That will require some combination of performance standards, carbon pricing and probably initial subsidies for pioneer projects. If fossil fuel producers put serious political muscle behind adoption of such policies it would serve their own interests as well as help break down the wall of inaction on climate protection.

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New year, new resolve for carbon capture and storage?

by Guest Author on 01/11/13

Note: This post was written by Chris Littlecott, a Senior Policy Adviser at E3G and a Policy Research Associate with Scottish Carbon Capture and Storage, and originally appeared on the Greenpeace UK blog Energydesk.

She made her list and checked it twice, and finally decided who was naughty or nice. European Commissioner for Climate Action Connie Hedegaard played Santa just before Christmas, awarding €1.2bn of funding for 23 innovative renewables projects across Europe. But frozen out of this funding round were projects aiming to demonstrate carbon capture and storage (CCS) at commercial scale.

This is hugely embarrassing for European efforts to address climate change, and particularly for the UK. For the creation of the ‘NER300’ mechanism was agreed back in 2008-09 following British diplomatic efforts and cross-party political leadership. Indeed, the UK submitted 7 of the original 13 CCS projects originally under consideration. As late as October 2012 the UK still had 4 projects out of the 8 vying for funding.

So what went wrong?

One senior European Commission official (who should know better), has been heard to say that ‘CCS is dead’. This is simply not true. The technology for CCS is alive and kicking. Commercial scale capture projects are under construction in Canada and the USA. Injection of CO₂ into deep geological formations continues onshore in the USA and offshore by Norway. China is rapidly developing pilot projects of its own, and is set to invest $1bn in a CCS project in Texas. Of course there is still a long way to go, but the problem isn’t the technology.

Here in Europe, CCS projects looking to receive funding from the NER300 were scrutinised and ranked by the European Investment Bank (just as the renewables projects were). Then member states were asked to confirm which projects they would support, together with the level of co-funding they would contribute.

The French government confirmed co-funding for the proposed steel mill CCS project at Florange, only for ArcelorMittal to withdraw at the last minute. The Florange plant was the host location for a CCS demonstration on behalf of a wider consortium of European steel producers. CCS offered the prospect of job retention and a value-added, low-carbon product. The unions are right to be furious.

Other governments performed less well. The Dutch government came too late with a revised offer to support their proposed Green Hydrogen project. The Romanian government had taken positive steps by introducing a feed in tariff for CCS, but were unable to commit funding given an impending election and a fight with the European Commission about EU budget spending. The Italian economy is struggling and its project is behind schedule. Poland meanwhile has been staying close to its broader strategy and holding out for more funding. That leaves us with the UK: the EU member state best-placed to deliver CCS.

A promise unfulfilled

Let’s rewind to the closing months of the last Labour government. After the great success of the Kingsnorth coal campaign, Ed Miliband recognised that there would be ‘no new coal without CCS’. Energy Act 2010 was then enacted with cross-party support, creating a dedicated levy for CCS. This was projected to raise around £11bn over 15 years to support a programme of 4 CCS demonstration projects and associated infrastructure. The Act also required government to regularly report on progress made on power sector decarbonisation and the demonstration of CCS. The first report was quietly published on 20^th December 2012. It refers to the development of proposals for Electricity Market Reform, and presents data on power sector emissions in 2010 and 2011. But the real story of what has occurred is entirely missing.

When the coalition government took office in 2010, it promised not only to be the ‘greenest government ever’, but also that it would be ‘First Choice for Investment in CCS’. All-too-quickly, however, these aims were undermined by decisions from Treasury and delays from DECC.

The newly-agreed CCS levy was pulled by Treasury. The negotiation of the first CCS competition ended without award to the last-standing Longannet project. A further year was lost before a new CCS commercialisation competition was launched, but at last it looked like the timelines for decisions under the UK and EU competitions would align. But to great disappointment and surprise, the only firm decision made by DECC in October 2012 was to kick out 2CO’s proposed Don Valley project, with neither firm selections of projects nor confirmation of funding made to the other bidders. Doubts continue over the availability of capital funding in this spending period.

So when it comes to delivering on the agreed rules of the EU’s NER300 programme it is the UK government who has most visibly failed to deliver. Yes, CCS projects are different than renewables, and yes, the co-funding requirements are an order of magnitude larger. But EU funding was there for the taking, and the UK failed to grab it.

New year, new approach

Early action on CCS would have helped European policy makers accelerate decarbonisation of both power generation and industrial emitters. This would have increased political confidence in the desirability and deliverability of European climate policy. But the economic crisis has accentuated the foot-dragging approach of many fossil fuel interests and highlighted weaknesses in the policy framework. Smarter policy choices are required to rebuild momentum and unlock political support for CCS.

At EU level, there needs to be a pause for breath rather than a headlong rush into the second round of NER300 funding. The original approach favoured CCS projects on coal and lignite, but a focus on CCS on gas and industrial emitters would provide greater value to the European economy and support existing technological leadership. Adjusting these criteria would take a few months, but the wait could be worth it. With the EU looking to strengthen the ETS in the meantime, not only could the business case for CCS be improved, but additional funds might become available from the auctioning of the remaining 100 million allowances in the NER300 pot. Member state co-funding would be easier to secure too with more time available.

In the UK, decisions in the new year can also make all the difference. After losing the strong hand of cards it held just 2 years ago, DECC needs to craft a can-do approach that strengthens its chances of success. It must lift its eyes to the bigger picture and communicate a vision of how CCS will play a catalytic role in enabling the low-carbon economy. It must start by supporting all 4 of the UK’s remaining projects through the next stage of detailed engineering development, and fast-track action to create regional CCS development zones. The Energy Bill should complement this by bringing gas plant into the scope of the Emissions Performance Standard by 2030 at the latest.

Policy choices along these lines would inject some new energy back into the CCS sector. And a fresh approach that focuses on industrial benefits, job retention potential and a clear commitment to decarbonisation would also help win new friends. 2013 begins with a need for strengthened resolve to make CCS happen in Europe. Let’s make it happen.

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Response to Accompany MITs PNAS Letter

by Guest Author on 12/13/12

Note: This post is written by Bruce Hill, Ph.D., Senior Geologist with the Clean Air Task Force.

In the December 2012 issue of the Proceedings of the National Academy of Sciences (PNAS), a published letter by MIT researchers Ruben Juanez, Howard Herzog and Brad Hagar (see: http://www.pnas.org/content/early/2012/12/05/1215026109.citation) provides several geophysical counter-arguments to a 2012 PNAS Perspectives piece by Stanford researchers Mark Zoback and Steve Gorelick questioning the viability of sequestering commercial volumes of captured CO2 and an attendant potential risk of induced seismicity.

Zoback and Gorelick maintain that much of the deep basement rock across North America is at critical stress – a point at which a perturbation, such as commercial CO2 injections, could cause failure and induced seismicity. However, in their letter, Juanez et al. counter that most of the earthquake hypocenters (the focal point of the rock rupture and earthquake in the subsurface) are far deeper than the saline formations that would accept CO2 for storage, and that the rock properties in the shallow crust would accommodate stress rather than rupture. Moreover, they point out that in highly seismic areas, such as in southern California, that geologic traps have held buoyant CO2 for millions of years.

Finally, Juanez et al. point out that the Mountaineer project example that Zoback and Gorelick cite is not representative of the many excellent saline formations that could accept commercial volumes of captured CO2 and that site selection is essential to successful storage. Zoback and Gorelick have, themselves, responded with a letter countering Juanez et al.'s views. However there is more to the debate than the rock mechanics.

While this healthy scientific debate focuses on the geophysical aspects of injection of commercial volumes of CO2 into saline aquifers, there is a broader set of considerations that must be incorporated into a rational dialogue on the ability of North American geology to accommodate commercial-scale carbon storage. For example, injection of CO2 into depleted petroleum reservoirs, with known capacities, injectivity and infrastructure could accommodate many decades of captured CO2.

According to a 2012 National Academy of Science report, there have been no cases of observed humanly perceptible induced seismicity associated with CO2 injections associated with enhanced oil recovery, which has successfully taken place for four decades. Moreover, associated with these formations are brine formations that offer large volume, "stacked storage"–managed CO2 injection and storage in sandstones or carbonate rocks above or below the producing intervals in oil fields. Other storage options include offshore reservoirs in the Gulf Coast, being studied presently by the University of Texas, or management of subsurface reservoir pressures via production of formation water such that they never reach a critical state of stress. Furthermore, specific EPA geologic sequestration rules require that operators inject CO2 at pressures that would not induce rock failure.

All told, while regulators should take care to ensure that significant induced seismicity does not occur, there is ample evidence, beyond the geophysics, that many decades of CO2 can be accommodated by North America's geologic resources.

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