Norway launches carbon capture and storage scheme

FT June 28, 2011 11:23 pm

By Andrew Ward in Mongstad, Norway

Perched on the edge of a fiord in western Norway, Statoil’s Mongstad oil refinery symbolises the tension between nature and the world’s thirst for fossil fuels.

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Covering four square kilometres of coast, the facility processes so much North Sea oil that it is Europe’s second biggest crude terminal after Rotterdam. Yet it is here that Norway is developing technology that some experts believe could provide one of the most important contributions to tackling climate change. This year Norway plans to open the world’s biggest test facility for capturing greenhouse gas emissions, from the Mongstad refinery and its neighbouring gas fired power plant, before they enter the atmosphere.

The $1bn project, most of it publicly funded, is part of a broader push by Norway to establish itself as a global leader in the field of carbon capture and storage (CCS). The prime minister once likened the effort to a Norwegian “moon landing”.

For Norway, CCS offers the hope of helping the world cut carbon dioxide emissions without undermining demand for North Sea fossil fuels. “We have to recognise that Norway is a big exporter of oil and gas and . . . we have to take our share of the responsibility for finding an environmentally friendly solution,” says Trond Giske, the trade and industry minister.

Oslo’s efforts are being watched around the world as countries consider how to balance rising demand for energy with pressure to curb greenhouse gases. While the Mongstad test is focused on capturing CO2 from oil and gas facilities, similar technology could be used to reduce emissions from coal fired power plants – not least in the two biggest coal using nations: China and the US.

At Mongstad, exhaust gases from the oil refinery and gas plant will be mixed with solvents to extract the CO2. In the test phase the CO2 will be released back into the atmosphere but the plan is eventually to store it in depleted wells beneath the North Sea. While some critics question whether CO2 can be safely kept beneath the ground for thousands of years without leakage, Norway insists that the concept is proven. Statoil has extracted about 13m tonnes of CO2directly from its Sleipner gas field since 1996 and buried it in undersea reservoirs.

As North Sea reserves decline, Norway even sees a commercial opportunity to use its emptying wells as a large scale repository for the world’s captured CO2. Yet, for all Norway’s enthusiasm, CCS remains deeply controversial.

Truls Gulowsen, head of Greenpeace Norway, calls it a “false hope technology” used by the fossil fuel industry as a fig leaf for business as usual.

He argues that if Norway were truly committed to tackling climate change, it would throw its vast oil wealth behind proven ways to reduce emissions, such as renewable power and increased energy efficiency.

“Lots of public funding is being channelled into CCS projects when we don’t know if they will work and which are much more expensive than anyone would be willing to pay,” he adds.

Other environmental groups are supportive. Frederic Hauge, president of the Oslo-based Bellona Foundation, argues that with 80 per cent of global electricity production coming from fossil fuels and China opening coal fired plants at the rate of almost one a week, it is crucial to find a way to burn hydrocarbons cleanly.

Mr Hauge’s only criticism of the Norwegian government is that it has not moved quickly enough. The Mongstad test facility was supposed to be followed quickly by full scale carbon capture at the gas fired power station but an investment decision for the multibillion dollar project has been delayed until 2016.

Statoil, which promised to install CCS at Mongstad as a condition for opening the power station for its refinery last year, says more research is needed The company insists it is committed to CCS to secure the future of natural gas in a low carbon world. “We need to succeed in developing renewables but we also need a power source that is there when the wind is not blowing or the sun is not shining,” says Hege Marie Norheim, Statoil’s head of climate affairs.

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