Copenhagen (Platts)--18Mar2009

Carbon capture and storage technology has developed to the point where it
can now deliver up to 55% of the emission reductions needed to fight global
warming worldwide up to 2100, World Coal Institute CEO Milton Catelin said
Wednesday on the sidelines of a carbon industry conference.

There is "no solution to climate change without CCS" and--combined with
coal-fired power plant operational efficiency improvements--the technology
is ready for wide-scale deployment in the EU, US and elsewhere as a means of
combating climate change, Catelin said in a presentation at Point Carbon's
Carbon Market Insights 2009 conference in Copenhagen.

"The belief in WCI is that the [CCS] technology is ready now. We have all
the technology we need to build CCS power projects. There are, of course,
first of a type, but we expect the efficiency of the units to improve
dramatically after the first tranche of power plants," Catelin said.

Catelin, whose group is the world's leading non-profit organization
funded by the coal industry, also said the potential leakage risk from deep
saline basins and other types of CO2 emissions storage sites in places like
the Middle East is less than 1% and that, according to the International
Energy Agency, there is a potential global storage capacity of as much as
9,000 gigatonnes in deep saline basins alone.

But many experts contend that CCS storage capacity is a moot point if
coal-fired power plants equipped with the technology are not built near basin
sites that can hold the amount of gas being produced, and that governments
will have to build costly pipelines as a means of indirectly funding
low-emissions electricity production.

Catelin said CCS pipelines are "a major area of concern" and are an area
where "major government action" is needed. "Pipelines in Europe will need to
cross national borders with a spine running down Europe connecting with
smaller feeder pipes. But this is not unusual, this is what happens in the gas
industry at the moment and oil industry," he said. "It's going to require
government subsidies."

Catelin, however, said he believes the costs will be worth it. "If I find
anything frustrating it's that governments for 15 to 20 years have been
telling us what a crisis climate change is. When the financial crisis comes
along, they discover trillions of dollars to invest in the banks," he said.
"If climate change is a crisis, government should be investing a fraction of
that in climate change, and maybe if we had a fraction of the money we have
today to spend then on climate change we wouldn't have a climate change
problem."

Catelin also said he is satisfied with EU efforts to date to fund
development in CCS technology as the US government was set to do last year
through the FutureGen power project, which was eventually killrf by the US
Energy Department due to spiraling costs. "The EU is already doing
FutureGen-like projects ... they're a FutureGen equivalent," he said.

"What happened to FutureGen wasn't an accounting error. I believe it was
a decision by an energy secretary in the United States to kill a project he
didn't like because he was a nuclear enthusiast," Catelin added in reference
to a recent US Government Accountability Office report that concluded the Bush
administration miscalculated FutureGen's expected costs. "I think FutureGen
will now go ahead. I think [Obama administration advisor] Carol Browner
... has been told to make FutureGen a reality, and I think Europe is doing the
right thing in agreeing to start up 10 to 12 [CCS] demonstration projects."

Catelin also said that while the US "has everything ready to go" in the
international race to win the near-zero CO2 emissions power plant competition,
he said China will likely be the successor in creating the first viable plant
and that companies and the Chinese government will take the lead in sharing
high-end CCS technology with the rest of the world. "For years we've been
talking about exporting technology to China, and we may be in a position in
Europe of being supplicants and asking for technology from China," he said.

--Russell Dinnage, russell_dinnage@platts.com