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Cicerone 6-2005

Viewpoint: The big CO2 game

It’s a game where no one to want to be stuck with the Old Maid and have to take a risk and bear the costs.

Statoil has done it, the Petroleum Directorate has done it, the Water Resources and Energy Directorate has done it, the Pollution Control Authority has done it, Bellona has done it, GassTek has done it, many research institutes have been involved in it, and there are surely many others I’m not aware of who have done it. Done what? Over the last one or two years they have conducted research on, or produced reports on, storing CO2 in the sea bed or underground. Everyone agrees that it is possible to be rid of large amounts of CO2 in this way, but there are variations in estimates of how much it is worth the effort.
The technology has been shown to work. It has been used in the United States for at least 30 years to increase oil production from wells in Texas. Pushed by the carbon tax, Statoil has over the last few years rid itself of about a million tons of CO2 per year at the Sleipner field by putting it back into the reservoir. The same will be done at the Snøhvit field. With all this knowledge and practical experience you would think that there would be a solid foundation for making a decision about investing in carbon capture and storage as a climate policy instrument. But the decision appears to be difficult to make; it’s a game where no one wants to be stuck with the Old Maid and have to take a risk and bear the costs.
Both Bellona and GassTek (along with the Federation of Norwegian Process Industries and ZERO Emission Resource Organisation) claim that developing carbon capture and storage as a value chain from emissions source to oil well will pay off if there is enough CO2 available to exploit the potential for enhanced oil recovery. Injecting CO2 can increase oil production by up to 10-12% depending on the geological conditions in the well. Given an oil price of USD 30, a carbon permit price of about EUR 20 per ton, and a cost of capturing CO2 of about NOK 250 per ton, storage will be profitable, as reflected in these reports. But then more CO2 must be produced – read: build more gas-fired power plants. Amazing! Bellona and GassTek claim that too little CO2 is produced in Norway to reduce emissions.
Let us set aside for the moment that the reports from Bellona and GassTek must be examined more thoroughly and tested out, and that there is a need for even more thorough analysis. Even so I would have still expected the statements from the directors of the two major oil companies in Norway to be somewhat more deferential than what we have seen in the press recently. My question is: why weren’t Norwegian industry or government the ones to launch the idea of a CO2 value chain? The possibility was evident for everyone to see and anyone to grasp. I would like to see more enthusiasm and proactive will to face this challenge from those who actually have power and authority. Many have had the opportunity to demonstrate corporate social responsibility. Vattenfall, BP, and American companies are currently developing coal- and gas-fired power plants with carbon capture and storage. They are clearly not doing this because it is economically profitable already. Where are the Norwegian companies?
What we need now is concrete action and trial projects – not more reports! Let the enormous project proposed by Bellona, GassTek and others remain a vision of the future – It cannot be planned in detail now in any case. Start with small steps with Kårstø and other gas-fired power plants with carbon capture and storage. Let us first see whether that can work before we go any further; we can make reports and analyze as we go. It is clear that the government has to enter the picture to shoulder some of the risk and share some of the expenses. It is just as clear that industry also has to take on its share of the responsibility.
If this is to succeed, we have to believe that the climate problem will exist for a long time and accept that emissions have to be reduced more than 50% over the next decades. Given this perspective, it is hard to believe that carbon capture and storage won’t pay off for society – even without enhanced oil recovery. This is why the IPCC, the IEA and the Norwegian Pollution Control Authority recommend that this is worth investing in. And it is the only measure I can see where Norway can make an international contribution in the fight against global emissions.

Last updated: 31.12.2005

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