Carbon capture and storage in the UK is close to being stalled, because there isn’t any single organisation responsible for making sure it happens, said Lord Oxburgh, honorary president of the Carbon Capture and Storage Association (CCSA), a former chairman of Shell and Rector of Imperial College London.
He was speaking at a Scottish Carbon Capture and Storage event in the House of Lords, London on September 15, to mark the release of its “CO2MultiStore” in-depth study into CO2 storage in the North Sea.
“Coal companies, power companies, oil companies say this [CCS] s a good thing. But no organisation is responsible.”
“Government is supportive, but doesn't take responsibility for [creating] structures that private industry can operate in. That framework is not there.”
“We started [carbon capture] more than ten years ago. It took the US ten years to go from a standing start to getting a man on the moon. But CCS is not rocket science.”
“If we put anything like the money and determination which went behind the [man on the moon] project, we would be there.”
“The difficulty is putting together a story which any investor is willing to put money behind,” he said.
“There are three components, capture, transport and storage. You can put transport and storage together, but the capture is something else.”
“If you try to put money into transport and storage, if CO2 is not there, it is not a credible story,” he said.
Similarly, if you make a business for carbon capture without a plan for transport and storage, it won’t work for investors.
“You have to do the virtually impossible and put both together,” he said. “Both are complex high capital intensive activities.”
“Some organisation must take an active promotional view of this.”
There have been plans to set up a UK government body to drive CCS before. The Gordon Brown government (2007-2010) had a plan to develop an organisation to manage CO2 in the North Sea, but after the recession, the government was in no mood for setting up such organisations.
“It was bonfire of the quangos at that time,” he said. “The Treasury said, ‘forget it’.”
“I don't believe there are credible or practical solutions to constraining emissions within 2 degrees without CCS. The globe is too tied to fossil fuels - we won't be rid of fossil fuels for 20-30 years - so if we care about emissions we've got to do something about CCS.”
“Now unless we do something dramatic quickly, nothing is going to happen and the effort is largely wasted.”
Stuart Haszeldine
The current uncertainty in the UK carbon capture market is “really not helpful”, said Stuart Haszeldine, director of Scottish Carbon Capture and Storage.
Everything is in place to start carbon capture projects in the UK, except the final “political signing”.
The perspective of the UK government is that it isn’t going to be a marriage broker and put projects together, it will let projects emerge, Mr Haszeldine said.
Currently there is a complex web of government bodies involved in carbon capture. In order to get a government “contract for difference” to partly cover the cost of running a carbon capture plant, first of all you apply to the Office of Carbon Capture and Storage (OCCS), which is within the UK government Department of Energy and Climate Change.
OCCS needs to subsequently apply to DECC for a Contract for Difference, and DECC will subsequently apply to the UK Treasury (UK government finance ministry) to see if money is available.
Meanwhile the Oil and Gas Authority (OGA) is responsible for giving away licenses to explore and produce oil and gas, and the Crown Estate (a body which looks after the property portfolio which was formerly administrated by the British monarch), has rights to lease you the subsurface pore space in the North Sea.
“It is a very complex diagram,” he said. “Industry likes to go to one place, ask a question and get an answer.”
It is possible that OGA (the UK Oil and Gas Authority) or OCCS (Office of Carbon Capture and Storage) could take on this central role of being in charge of getting carbon capture moving, he said.
The Oil and Gas Authority does not yet have any individual responsible for carbon capture and storage, he said.
Managing carbon capture and storage will prove different to managing oil and gas production, because the relevant reservoirs can be much larger, and there is a bigger possibility about CO2 moving from one area to another in the subsurface. So there is a bigger requirement to co-ordinate activities across a wider region.
One delegate from the National Grid said that the Office of Carbon Capture and Storage should have a stronger role in promoting carbon capture and storage and developing a national strategy around it. “OGA was developed to do something else - it is a completely different beast,” he said.
Lord Oxburgh said that it might be hard for OGA to focus on both oil and gas and carbon capture. “You have to recognise managing CO2 is a totally different game from exploiting and producing hydrocarbons,” Lord Oxburgh said. Exploration and production is “high risk, high return, high CAPEX.
“CCS is essentially garbage management - it becomes a utility. A totally different business mentality is required.”
“OGA is totally geared in one direction - more production.”