Climate Change - CO2 emissions: Burying the problem

Michael Richardson, Straits Times 20 Sep 09;

CARBON dioxide is the main greenhouse gas warming the planet and causing potentially dangerous climate change. So why not remove it before or after fossil fuels are burned and bury it deep underground - a process known as Carbon Capture and Storage (CCS)?

The International Energy Agency (IEA) has described CCS as one of the most promising technological solutions to curb greenhouse gas emissions.

The need is certainly compelling. Nearly 70 per cent of the 30 billion tons of carbon dioxide spewed into the atmosphere each year is energy-related. Burning fossil fuels - mainly coal, but also natural gas and oil - to generate electricity accounts for more than 40 per cent of these emissions. Another 25 per cent comes from large-scale industry, such as iron and steel production, cement making, natural gas processing and oil refining.

With energy demand, especially in Asia, projected to grow by more than 40 per cent over the next two decades, keeping greenhouse gas emissions within tolerable limits will call for improved energy efficiency, increased use of solar, wind and other renewable energy, more nuclear power - and implementation of CCS on a wide scale.

CCS is currently expensive but technically feasible. Just last week, three of the world's leading energy companies, Chevron, Shell and ExxonMobil, agreed to invest US$37 billion (S$52.3 billion) to develop the giant Gorgon liquefied natural gas project off the coast of western Australia and include the world's largest CO2 capture and burial plan.

The Gorgon zone is estimated to contain 40 trillion cubic feet of recoverable natural gas beneath the seabed. However, about 7 per cent of this reserve is CO2. Traditional gas processing would strip the CO2 and vent it into the atmosphere.

At a cost of about US$1.7 billion, the Gorgon joint venture plans to compress and inject 3.4 million metric tons of CO2 per year into a naturally occurring reservoir more than 2,000m below the processing plant on an offshore island. Over the life of the project, 120 million tons of CO2 will be buried this way.

This will be the first commercial scale CCS project in Australia. There are four similar, though smaller, projects around the world, all linked to oil and gas production. Two are in Norway, one in Algeria and the other straddles the United States-Canada border.

The longest in operation is at Norway's Sleipner gas field in the North Sea, 250km from land. Since 1996, one million tons of CO2 per year has been removed from the natural gas and injected back into the seabed. By the end of last year, 11 million tons of CO2 had been stored this way with no leakage.

This is important. When consultant McKinsey & Company studied CCS last year, it found that public concerns about whether the CO2 captured and stored would remain isolated from the atmosphere in the long term was one of the barriers to application of the technology.

Other obstacles included: One, concerns about the safety of CO2 transported by pipeline or ships on the way to underground storage; two, whether there were enough locally available geological formations suitable for storage; and three, lack of legal frameworks and government support to encourage development of CCS.

Another barrier is cost. The IEA says about half of all CCS would be in power generation, with the remainder in heavy industry and energy processing. The uptake in power generation and industry has been slow because CCS raises capital and operating expenses substantially, while decreasing plant energy efficiency. This is a key consideration in Asia, where coal - the most carbon-intensive of the fossil fuels - is the dominant source of electricity supply.

The IEA calculates that for coal-fired plants it costs US$40-55 for each ton of CO2 captured, and for gas-fired plants US$50-90. McKinsey reckons that the extra costs of running a 300-megawatt CCS demonstration power plant over its full life could amount to between US$735 million and US$1.6 billion.

Still, Sweden's Vattenfall group, Europe's fifth largest electricity generator, started running a 30-megawatt CCS coal-burning plant in Germany a year ago. It aims to test and prove all aspects of the technology for at least three years before deciding whether to build two 300-megawatt demonstration plants. The company says the first, in Denmark, could be in operation by 2013 and the second, in Germany, by 2015.

Vattenfall believes that by then, or a few years later, the cost of CCS will be no more than the price of emitting CO2 under emissions trading schemes. It aims to develop 1,000-megawatt coal-fired plants with CCS by 2020.

The next decade will be critical for the future of CCS. The IEA says that if there are at least 20 commercial-scale CCS projects operating by 2020 in a range of power and industrial settings around the world, it will 'considerably reduce uncertainties related to the cost and reliability' of the technology.

This would be a practical validation of one of the most promising options for a fast and significant reduction in global CO2 emissions.

The writer is visiting senior research fellow at the Institute of Southeast Asian Studies.