Carbon Capture and Storage Climate Change and Sustainable Development: New Delhi, April 7-8, 2006 Pernille Holtedahl, PhD, Norad NORWAY

Outline CCS – what is it? A history Projects Storage CCS in a portfolio Challenges International Agenda The Future

CCS – What is it? CCS is a process consisting of the separation of CO 2 from industrial and energy-related sources transport to a storage location long-term isolation from the atmosphere (IPCC, 2005)

IPCC, 2005

CCS – what is it? Suitable for large point sources: –CO 2 -emitting industries –natural gas production –large fossil fuel/biomass plants Electricity sector most promising candidate (IPCC, 2005)

A history of CCS: EOR as a starting point Inspired by experience with enhanced oil recovery (EOR) Large-scale injection of CO 2 for purposes of EOR started in 1972 in the US (Permian Basin) – thus initially a commercial justification Many new projects started in the 1970s as oil prices increased Today, more than 70 ongoing CO 2 EOR projects and almost 40 Mtonnes CO 2 injected each year (OSPAR, 2005) Benefit of EOR: additional income stream (USD 30-50/tonne CO 2, with oil prices USD (!), Torvanger et al.)

CCS: Current projects - Weyburn Weyburn – Canada EOR Transport of 95 million cubic feet per day of 95 % pure CO 2 from a North Dakota coal gasification facility through a 320 kilometer pipeline t CO 2 /day Total planned storage: 20,000,000 t CO 2 Copyright © EnCana Corporation. All rights reserved

CCS: Current projects – In Salah In Salah – Algeria CO 2 content in gas extracted is too high for commercial use Separation of CO 2 from natural gas in amine contactor towers Storage in gas field t CO 2 /day Total planned storage: 17,000,000 t CO 2

CCS: Current projects - Sleipner Sleipner – Norway Gas extracted contains 9 % CO 2 and must be reduced to 2.5 % to satisfy commercial standard Motivation for injection/storage: Norwegian CO 2 tax, Storage in saline formation (200 m thick, at m depth) 3000 t CO 2 /day (1 Mt annually) Total storage planned : 20,000,000 t CO 2 Courtesy of Statoil ASA

Sleipner

Storage potential Utsira formation covers km 2 Storage capacity in aquifer estimated at 42 billion tonnes CO 2 Estimated storage capacity in oil and gas reservoirs and aquifers in Western Europe: 833 bn. tonnes CO 2 (Torvanger et al. 2005) Could theoretically store all of EU’s emissions for 67 years (ibid).

CCS: the broader picture CCS is but one answer to the problem of climate change A portfolio approach is the way to go. IPCC estimates inclusion of CCS in portfolio to lower overall cost of CO 2 stabilization by 30 % Pacala & Socolow (2004)’s Wedges Model: –Def: A simple quantification of carbon mitigation as the need for seven wedges –A wedge is a strategy to reduce carbon emissions that grows in 50 years from zero to 1.0 GtC/year.

Billion of Tons of Carbon Emitted per Year Currently projected path Flat path Historical emissions 1.9  GtC/y 7 GtC/y Seven “wedges” Wedges O

The Wedges Model The Carbon Capture Wedge (1 wedge) could consist of CCS at –800 GW coal power plants OR – Mt CO 2 /year

CCS Challenges Leakages –Uncertainty about magnitude... –... but likely to be very small (0.1% - 1% in different studies) –intergenerational issue, but fraction retained in appropriate locations likely to exceed 99 % for over 1000 years (IPCC, 2005) Monitoring Infrastructure needs: Large and long-term investments required for transportation and separation Lack of rules in Climate Convention and Kyoto Protocol context

CCS Challenges Costs: –Capture: varies depending on CO 2 concentration (USD 10-60/tonne CO 2 ) –compression and transport: varies depending on mode of transport and volume (USD 5- 28/tonne CO 2 ) –injection and storage: varies depending on type of resevoir (USD 1-16/tonne CO 2 ) –Economies of scale apply, and R&D will bring costs down over time –EOR income helps: ~USD 30-50/tonne CO 2 (Torvanger et al., 2005)

Opportunities for near-term adoption IPCC, 2005

CCS: future projects Gas processing plant at Kårstø (Norway) New technology could reduce the costs of CO 2 capture substantially The ambition is to halve the costs of carbon capture, which means USD 30/t CO 2 Replication possibilities exist

CCS: future projects Tjeldbergodden: Shell and Statoil have signed an agreement would be the world's largest project using CO 2 for enhanced oil recovery (EOR) offshore. project consists of a gas-fired power plant and methanol production facility, providing CO 2 to two offshore oil and gas fields.

CCS and the International Agenda Intergovernmental Panel on Climate Change (IPCC) published its report on CCS in Sept 2005 Carbon Sequestration Leadership Forum (CSLF), Carbon Sequestration Initiative, various research efforts (EU, US) IPCC guidelines currently in use do not specifically include CCS, but revision likely to change this Not specifically mentioned in Kyoto Protocol CDM

CCS and the Clean Development Mechanism (CDM) SBSTA meeting in May to discuss guidelines for application of CDM to CCS projects – based on COP/MOP1 decision Various issues to be settled: who is responsible for monitoring (and potential leakages): Annex 1 or Non-Annex 1 country? Norway’s position: –CCS is a viable option under CDM... –...but leakage and liability issues need to be settled –careful selection of sites is key –monitoring is key –Forthcoming 2006 IPCC guidelines for National Greenhouse Gas Inventories should be used as a basis

The Future ”...models indicate that CCS systems are unlikely to be deployed on a large scale in the absence of an explicit policy that substantially limits greenhouse gas emissions to the atmosphere” (IPCC, 2005)

The Future Price on CO 2 will have to exceed USD 25-30/t CO 2 (or equivalent limit on emissions). Most current scenarios predict range of USD 3- 16/t CO 2 Conclusion: A more comprehensive/ambitious climate regime needed or projects likely to be limited to EOR