CCS technology deployment needs to quicken, Shell executive says

As the United Nations Climate Change Conference Dec. 7-18 in Copenhagen prepares to consider general strategies, a Shell International Exploration & Production official continues to ask practical questions about a specific climate strategy: carbon capture and storage.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 1 -- As the United Nations Climate Change Conference Dec. 7-18 in Copenhagen prepares to consider general strategies, a Shell International Exploration & Production official continues to ask practical questions about a specific climate strategy: carbon capture and storage.

“We think CCS has a great future. We understand it, but its deployment needs to be accelerated. Otherwise, it will be too expensive to retrofit power stations and large industrial facilities,” John Barry, vice-president of unconventionals and enhanced oil recovery at the Royal Dutch Shell PLC division, said during a recent visit to Washington, DC.

Although EOR is part of his job title, Barry said the pumping of carbon dioxide into underground formations to loosen trapped oil is a good initial demonstration of CCS technology, but only represents 1-2% of the total storage necessary to meaningfully address climate change.

It also has provided an early opportunity to examine practical aspects of transporting as well as storing CO2, he suggested. “Several thousand kilometers of CO2 pipelines exist because of EOR. They could help as we try to store manufactured CO2,” he said.

West Texas EOR operations, which have used naturally occurring CO2 brought by the Cortez pipeline from Colorado since 1983, work because the formations are deep and the temperatures are cool, Barry said. “A few industrial companies are putting CO2 into other pipelines, but they won’t handle all that’s being produced,” he observed.

Shell and CCS
Shell has determined that its extensive oil and gas exploration and production experience could help it become a commercial CCS leader. It believes that energy efficiency should be the starting point for both existing and new assets, but that CCS also will be required. “We are not advocating it as a substitute for wind and other alternative energy technologies,” said Barry, who started his 27-year career at the multinational oil company as a reservoir engineer. “They should be pursued as aggressively as possible, but it will take decades for their contributions to become meaningful.”

Under one scenario, aggressive CCS deployment could cut 100 ppm of CO2 emissions from projected 2010 levels, he added.

Shell and other majors can bring relevant skills to CCS development, but governments also need to play a strong leadership role, Barry said. They can help by providing funding for early demonstrations, developing legal frameworks which address pore space access and long-term liability questions, increasing public acceptance, and reaching international agreements to ensure CCS occurs outside industrially developed nations, he said.

“We need a global rollout, a mechanism where countries using market-based processes have some allowances for early projects,” Barry said. “There are coalitions of the willing: smaller groups of countries willing to set agreements, finding ways to link trading schemes. Somebody pays in the end. The money isn’t magically created. But you get people supporting the most efficient CCS approaches. Politicians like it because it doesn’t require new taxes.”

Technical challenges include site selection (“I’m not proposing anywhere along the San Andreas Fault,” Barry said), storage capacity, contaminants, cost containment, and monitoring. Public acceptance and establishing a commercial framework are the chief nontechnical challenges, he said.

Government policymakers should also be prepared to look beyond coal, he suggested. “To have a number in mind, capturing carbon from refineries and chemical plants could cost half as much as from coal-fired power stations,” he said. Refineries and chemical plants’ concentrated CO2 have more early demonstration potential, according to Barry. “I see a whole lot of low-hanging fruit there,” he said.

Eight projects
Shell has eight CCS projects under way, four of which are industrial scale. Those include one which will take CO2 from the company’s Pernis refinery and transport it by pipeline for storage in two depleted natural gas fields near Barendrecht in The Netherlands. The Dutch government approved the proposed project on Nov. 19 despite local opposition. Barry said that Karl-Heinz Wolf, a civil engineering and geosciences professor at Delft University of Technology, was shocked when he was heckled and called a traitor at a public hearing earlier.

“With the benefit of hindsight, we underestimated the potential for misunderstanding there,” said Barry, adding that CO2 already is piped into many vegetable greenhouses. “Shell is doing Barendrecht because it’s cheaper to capture and store CO2 from the Pernis refinery. The project’s total costs per ton, with a small Dutch government subsidy, equal what we anticipate European carbon costs will be.”

CCS costs will need to be competitive and not require government subsidies once the technology is developed and deployed, he emphasized. “It should cost less than carbon taxes once enough projects have been rolled out,” he said.

Governments also will need to resolve the question of long-term liabilities, Barry maintained. “A company like Shell is frightened to take on open-ended liabilities,” he said. “Operations should be accountable during injection and for a couple of years after. But it’s more practical to have governments be responsible beyond that time. Australia already has passed a law assuming responsibility, and several European countries are considering it.”

As for the UN climate change conference in Copenhagen, Barry said that he was optimistic that some space for CCS to happen globally could be opened up there. But he also was not prepared to say how far the 170 countries attending will go in explicitly endorsing it.

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