Buried hope in carbon capture and storage

Funding and political priorities remain potential roadblocks for initial schemes

December 01, 2010

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A carbon capture and storage research facility near Redwater, Alberta. “CCS is required if we are to meet our climate change goals”
CP images

If the world’s top energy think-tank had anything to say about it, Alberta would be considered a climate change activist. Not because the oil sands can be made to match wind energy on the low carbon scale – but because the pragmatic International Energy Agency (IEA) recognizes that the world is too dependent on fossil fuels to imagine a medium-term future without them. The Paris-based arm of the Organization for Economic Co-operation and Development believes that Alberta’s priority cleanup strategy, carbon capture and storage (CCS), must be relied upon for a fifth of the greenhouse gas reductions needed to fulfill the world’s declared objectives for controlling global warming.

“CCS is required if we are to meet our climate change goals. In a lot of cases it is a barometer for how seriously people are taking climate change,” IEA analyst Brendan Beck said in an Alberta Oil interview. “It is probably not the first technology you would employ if you only have a marginal desire to address climate change, but if you are serious then it is a critical technology.”

Beck is a contributor to the IEA Technology Roadmap on CCS, part of a series fulfilling a G8 request to assess the mix of technologies needed to mitigate climate change. One of the more key findings of this report is that despite critics’ claims to the contrary, the inclusion of CCS in an emissions reduction strategy will lower the cost of halving CO2 emissions as of 2050 by as much as 70 per cent.

As with much of economics and forecasting, these types of declarations are only as good as the assumptions built into them. In this case, the emissions reductions strategy is based on an assertion by the Intergovernmental Panel on Climate Change (IPCC) that CO2 concentrations in the atmosphere must be maintained at or below 450 parts per million (ppm) in order to have a 50 per cent chance of stabilizing temperature rises to below 2°C. This is the loosest of the assumptions. It may prompt skepticism among policy-makers for whom a 50 per cent chance something will happen is also a 50 per cent chance that it won’t.

Beck is not among the doubters. He says the IEA is not a climate change authority and takes its carbon concentration numbers from experts in the field. So, 450 ppm it is. Currently, the CO2 concentration is at about 390 ppm, with a significant upward trend. Given global economic growth predictions, if left alone, energy sector emissions will increase by 130 per cent over 2005 levels as of 2050.

This necessitates an emissions reductions strategy. Here the numbers are also abstract, but considerably less so. The IEA sorted 1,000 different technologies into groups and compared them based on cost, resource availability and the CO2 sources that they tackle. Then the agency put together a scenario called Blue Map that charts the cheapest way to hit the 450 ppm carbon concentration target by 2050. CCS — in both power generation and oil production — makes up 19 per cent of that technology mix.

In practical terms, this necessitates 3,400 projects to be operational worldwide 40 years from now. Fully 100 projects would need to be up and running by 2020 to ensure that trajectory is met, Beck says. He admits, “Right now we are not where we had hoped we would be. But the way we look at it, it is not impossible to get to those projects.”

Funding and political priorities are potential roadblocks. Beck says he doesn’t see interest in CCS waning but rather people becoming more realistic in how they assess the technology. The biggest problem he sees is the lack of direction in the international climate change negotiations. “You look at the output of Copenhagen and the expectations coming out of Cancun and there doesn’t seem to be that international driver to fund the reduction of CO2.”

The financial crisis did its part in pushing down climate change as a priority but, as far as carbon emissions go, the credit crunch may have done more good than harm.

“The flip side is that economic development and economic growth have a very, very direct correlation with CO2 emissions,” says Beck. “What the financial crisis has given us is that we’ve actually had a dip in CO2 emissions, which has bought us a couple of years in terms of where we thought we would be at this time.”

A big opportunity for CCS lies in cleaning up natural gas. In the latest edition of its annual World Energy Outlook, released in November, the IEA casts natural gas in a “central role in meeting the world’s energy needs.” The shale gas boom, the growth of liquefied natural gas and China’s hunger for the resource inspire high expectations.

There are two ways to strip carbon dioxide out of natural gas: during production, and at power plants that burn the fuel. Production creates “a pure stream of CO2 that is funded through the market price of the natural gas,” says Beck. For CCS purposes this provides a “free” source of CO2. Norway’s national petroleum company, Statoil, is already stripping and storing CO2 from offshore natural gas in order to avoid a $50-per-tonne carbon tax.

Apart from highlighting the effectiveness of a carbon tax as a policy mechanism for reducing emissions, the Norwegian practice points to a carbon price or penalty that makes CCS economically viable. Beck estimates that CCS becomes economic at production sites at a carbon price of $15-$20 per tonne.

In order to reach the goals of the Blue Map scenario, it won’t suffice to curb emissions from coal-fired power stations. Gas-burning plants have to be cleaned up too. No one is currently doing that but there are some plans on the table, including plans to extract CO2 from natural gas power generation in Abu Dhabi.

But that’s still a while away. For now, it is important to get CCS back on funding agendas and work on building the first 100 projects.

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