Lack of funds limits potential of carbon capture

By James Kanter
Published: July 23, 2008

PARIS: There is such a buzz around renewable energy that you might think these technologies are developing fast enough to meet the majority of our power needs in coming decades. Think again.
The use of wind, solar and geothermal energy is growing rapidly, but from very low levels in many of the most energy-hungry nations. Fossil fuels make up two-thirds of the global energy mix and would still make up almost half by midcentury - even under scenarios where annual emissions are kept at the same level as today. That is why many experts say developing technologies to capture carbon dioxide and store it deep underground in empty wells and aquifers is critical in the fight against climate change.
"There will be a dramatic increase in the number of windmills and solar facilities in coming years and there will be more nuclear, but this is not enough" said Cecilia Tam, an economist at the International Energy Agency. "We still will be dependent on fossil fuels to keep the lights on, and that means deep emission reductions simply won't be possible without using carbon-capture technologies."
Statoil of Norway is already pumping under the seabed significant quantities of unwanted carbon dioxide from a natural gas field. Sonatrach, the Algerian natural gas and oil company, has a similar project to store unwanted carbon dioxide at its In Salah field. In Canada, EnCana, an energy company, injects unwanted carbon dioxide piped from a coal gasification plant in the United States into its Weyburn, Saskatchewan, field to make it easier to recover hard-to-reach oil.
These and other experiments show that carbon dioxide can be trapped underground with little or no leakage. But commercial-scale facilities to capture and bury the carbon emitted by utilities and installations like refineries still do not exist. Two high-profile projects - one in Scotland led by the British oil company BP, and another in Illinois led by a consortium called FutureGen that includes the coal giant Xstrata - were dealt setbacks over the past year because of ballooning costs and shortfalls in public funding.

"The really striking thing is the tremendously powerful view that carbon capture has pride-of-place in the pantheon of low-carbon technologies, and yet it is the one that very little private money is going to," said Michael Grubb, the chairman of Climate Strategies and a professor at Cambridge University.
This seems odd.
Some of the wealthiest countries and companies in the world earned their riches producing and exporting fossil fuels. Some countries in the Gulf like the United Arab Emirates even are considering importing coal to meet their energy needs while selling their oil and gas at record prices on the global market.
If emitting carbon by burning fossil fuels becomes expensive or drastically restricted, then carbon-capture technologies could keep them in business. In fact, members of the Organization of Petroleum Exporting Countries have allocated funding for developing carbon capture. But generally, they say developing the technology is not their responsibility.
"We contributed to industrialization with cheap energy," Abdalla Salem el-Badri, the secretary general of OPEC, said in an interview this month. "The world should not forget our contribution."
OPEC members include developing and poor countries like Angola and Nigeria, and they "cannot solve the problems of the world," he added.
Companies like Royal Dutch Shell, the second most profitable company in the world last year after Exxon Mobil, also are contributing resources to carbon capture. But they say it is too soon to make the technology mandatory, and that public - meaning taxpayer - support is vital.
"The scale of this activity is simply enormous," said Graeme Sweeney, the executive vice president for future fuels and carbon dioxide at Shell. "It is difficult for private companies to solely shoulder that burden because the specific experiment they participate in may not be the winning experiment."
Sweeney is also chairman of the European Technology Platform on Zero Emission Fossil Fuel Power Plants, a coalition of European utilities, oil companies, scientists, and environmental groups that support technologies for carbon capture. According to that group, 10 to 12 demonstration plants - enough to test all the combinations of technologies to capture, transport and bury carbon dioxide, and choose the most efficient model - would cost as much as €10 billion, or about $16 billion.
Sweeney said he supported a proposal under consideration by the European Parliament to allocate free carbon credits to companies that participate in carbon-capture projects that can then be sold on the carbon market to raise funds for demonstration plants.
But that approach worried Grubb, the Cambridge professor. He said a more direct and transparent way to promote carbon capture in Europe would be for governments to allocate directly money that is raised from auctioning carbon allowances, rather than from an additional system of free allowances.
Beyond Europe, Grubb said, there could be further stagnation in the development of carbon capture technologies unless many more parts of the world moved swiftly to introduce laws making polluting more expensive.
Some fossil fuel companies and exporting countries "are not yet convinced that governments have the guts to impose a carbon price that would make carbon capture a viable proposition," he said.