Britain Takes The Lead In Commercial Quest To Capture Carbon

Four companies have been placed on a very exclusive and very short list. BP Alternative Energy International., E.ON UK, Peel Power and Scottish Power Generation have found themselves in this after submitting plans to build the world's first. commercial power plant that will burn coal and gas without adding any greenhouse gases into the atmosphere. The concept is called Carbon Capture and Storage--CCS for short. CCS is an approach to help stop global warming by capturing carbon dioxide from sources such as fossil fuel power plants and storing it instead of releasing it into the atmosphere. Although CO₂ has been injected into geological formations for various purposes, the long term storage of CO₂ is a relatively untried concept and as yet no large scale power plant operates with a full carbon capture and storage system. Here's the rub: Capturing and compressing CO₂ requires much energy and would increase the fuel needs of a coal-fired plant with CCS by about 25%. These and other system costs are estimated to increase the cost of energy from a new power plant with CCS by 21% to 91%. These estimates apply to purpose-built plants near a storage location: applying the technology to preexisting plants or plants far from a storage location will be more expensive. Storage of the CO₂ is envisaged either in deep geological formations, in deep ocean masses. And here's another rub: CCS means an increase in capital costs and it also means power output is cut from 10% to 30%, depending on what technology finally gets used. Despite these challenges, the potential rewards for CCS are also just as great. The International Energy Agency says the amount of coal being burned worldwide will double to the equivalent of 5 billion tons of oil by 2030. This means a potential worldwide market worth trillions of dollars. While the four companies picked by Britain are getting ready to show their plans will work, companies in the U.S., Germany, the Netherlands, Australia, Canada and Norway are on the sidelines watching. Here is Texas, Railroad Commission Chairman Michael L. Williams recently said he favors a public-private partnership that will help develop the technology to capture CO2 and then store it and then let it be used by the energy industry to help restore dormant fields. So far, no one has made CCS work at a commercial scale and so, no one really knows the true cost of what CCS will be. More to come: Watch as CCS developments in the U.K. shape similar programs around the world. You can bet everyone from the energy industry to environmentalists will be watching to see how this turns out. –John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com