UK: September 6, 2007


ABERDEEN, Scotland - Major international oil companies say carbon capture and storage is a way to curb carbon dioxide emissions while continuing to burn fossil fuels, but their critics say few are actually investing.


Carbon dioxide is the commonest of several manmade greenhouse gases widely blamed by scientists for heating the earth and so risking more extreme weather and sea level rise.

But these harmful emissions could be reduced if the carbon can be captured and stored, in depleted oilfields or saline aquifers, for example.

"Without CCS (carbon capture and storage), fossil fuel use would have to be cut by more than half," said Malcolm Brinded, executive director of exploration and production at Royal Dutch Shell. Commercialising the technology to capture and store carbon dioxide was a major priority, said Brinded, who was speaking at the OffshoreEurope industry conference this week.

But he said while carbon capture was not impossible, it would not be easy or cheap.

Environmental campaigners say the oil companies need to act on carbon storage, but have done little so far.

"New investments coming forward in this is pathetic," said Jonathon Porritt, who heads green lobby group Forum for the Future.

"The industry had better get serious about CCS...it's critical for big oil companies to take a lead," he said at the conference.

The UK government in its last budget launched a competitive process for various carbon capture and storage schemes. David Cairns, Scottish energy minister, told the conference, there were currently 6 bids in this competition and the possibility of a couple more.

But Scotland's First Minister Alex Salmond said the timetable for this competition had slipped.

"There has been a disturbing lack of urgency," he told the conference.

EXXONMOBIL

ExxonMobil, for long environmentalists' least favourite oil company, is looking at the viability of geological carbon storage working with other companies and the European Union.

"This initiative...is working to advance carbon capture and storage technologies by studying current projects at sites throughout Europe," said Robert Olsen, chairman and production director at ExxonMobil.

He said aside from the technological issues, carbon capture needed an appropriate legal and regulatory framework to allow private sector participation. Governments also needed to be confident that it would work and be secure long-term.

Another related issue is to how to establish the cost of carbon.

The European Union is already operating a cap-and-trade system in an effort to control greenhouse gas emissions.

Olsen said ExxonMobil's European businesses had operated under the cap-and-trade system successfully, but noted that carbon prices had fluctuated widely between a high of 30 euros and a low of less than one euro a tonne.

He suggested an upstream cap-and-trade system that would limit carbon at the point where the fuel enters the commercial world rather than at the point of emission, offered potential advantages in terms of efficiency and simplicity.

"It reduces the number of regulated entities and provides a uniform cost of carbon to the entire economy."

Alex Salmond met with EU Energy Commissioner Andris Piebalgs in the summer, and said Piebalgs is inviting a number of energy companies from the EU to Brussels in two weeks to discuss the financial framework for carbon capture and storage.


Story by Jane Merriman


REUTERS NEWS SERVICE