CCUS is being promoted as a key way to meet climate goals, writes Ryan Stevenson in Edinburgh.
WHAT: Collaboration is urged to meet ambitious CCUS goals.
WHY: The IEA says that without CCUS the Paris climate goals cannot be achieved.
WHAT NEXT: The UK is seeking to lead policy in the field with a new flagship project due online in the mid-2020s.
Some of the oil industry’s biggest names convened in Edinburgh on November 28 for the start of a global summit on carbon capture, utilisation and storage (CCUS).
Royal Dutch Shell’s CEO Ben van Beurden and his counterpart at BP, Bob Dudley, joined UK Minister for Clean Energy and Growth Claire Perry and the International Energy Agency’s (IEA) executive director, Fatih Birol, to launch the event.
The summit’s aim is to identify practical steps to accelerate investment in and the deployment of CCUS, which has been tabled as a key way for countries to meet their climate goals. The summit is being held days before the start of the COP24 climate negotiations in Poland.
Perry said the presence of the CEOs of IOCs such as Shell, BP, Equinor and Occidental Petroleum showed how important the issue was for the oil industry and that it was now part of their business model. She went on to say that leadership in this area and the deployment of clean energy were a “fundamental part of post-Brexit Britain,” alluding to the UK’s impending departure from the EU. The minister said Brexit would not affect the UK’s ambitions to lead in the sector, saying it was not just a European problem, but one that required a global effort.
Commenting on the UK’s plans to expedite development of CCUS, Perry said the government’s action plan provided a “substantive pathway to do this at scale in a cluster” model with technology installed to extract and store carbon from several industrial plants in a single location.
Speaking to NewsBase Intelligence (NBI), the minister said the technology was no longer viewed as just being a bolt-on to a power station “but actually embedding it as part of a cluster.”
She said the government had initiated the cluster process and there was “financial interest in moving forward with scale projects, at first in Teeside [in northern England]”, where GBP1.3 million has already been invested to progress industrial carbon capture.
The minister added that the government was making GBP315 million (US$403 million) available for decarbonising industrial sites, including the potential to use CCUS. “I want us to push ahead with first plant commissioning by the mid-2020s,” she said, noting that next year the government would set out plans to enable the UK’s first CCUS facility.
The minister acknowledged that there had been issues with CCS policy in the past, but that there were several models under consideration as to how the government might work with the private sector to make CCUS commercially viable. “We haven’t identified a particular model, but there are several that could work,” she said.
Public-private collaboration is a key aspect, with van Beurden saying: “partnerships are needed to drive CCUS – we need to share technology and experience.” He noted that the “support of financial services and NGOs” was critical, stressing “we need to act fast, we need to act now.”
BP’s Dudley echoed the Shell CEO’s comments, saying: “Working together in strong public and private partnerships is critical.”
He also flagged up the recent launch of the Clair Ridge project West of Shetland (WoS) as an example of rapid technological advances and positive collaboration. BP operates the project, with Shell joining Chevron and ConocoPhillips as shareholders.
Birol said that research carried out by the IEA showed that “without CCUS we have no chance of meeting our climate goals.”
He said his agency would play a major role in the deployment of the technology, saying: “the IEA has long arms and we are ready to support CCUS strongly.” Identifying the need to have emerging economies on board, he noted the agency’s reach in countries such as China and India and said his goal was to instigate a “new era of CCUS support.”
Birol’s aims were applauded by the IOCs, with van Beurden saying Shell was “providing a monetary contribution to support IEA research into CCUS.”
The outcomes of the summit will be watched closely, particularly with respect to the financial models being discussed that might drive investment and avoid the problems of the past.
The UK government spent around GBP100 million (US$128 million) on a competition for developing CCS technology before it was cancelled in 2015. At the time of its cancellation there were two preferred bidders for a GBP1 billion (US$1.3 billion) contract. These were the White Rose consortium in Yorkshire, which wanted to build a new coal plant with carbon capture technology and Shell's project to fit CCS to an existing gas plant in Peterhead operated by SSE.
Perry said the government had learned from previous project cancellations, acknowledging that they “lead to higher costs of capital.”
Cutting cost and commercialisation is key, a fact noted by Perry who said the number one question to answer was: “What is that irreducible cost and risk that government has to take versus how to de-risk projects so that they can be more investable?”