The European Union (EU) is reported in Reuters to be preparing to debate laws that would require all utilities to capture and store carbon dioxide (CO2) by 2025. According to the article, Carbon Capture and Storage (CCS) would eliminate a third of global greenhouse emissions. Such a step would take a substantial bite out of what scientists at the National Academy of Science, the American Association for the Advancement of Science, the Royal Society, and the International Panel on Climate Change assert is causing climate change, global warming, and will cause substantial to the Earth and future generations. Whatever the science, the EU has established and is moving forward with more restrictive greenhouse gas emission limits and restrictions. A future requirement for power plants to capture the CO2 they emit would reduce the emissions, but some parties question the technology to capture and store the gases and the impact of any potential leakage back into the atmosphere.
In CCS, the CO2 can be used to enhance oil and gas recovery. CO2 has long been used for this purpose over many decades. Much of this CO2 is from natural sources. Already many small scale and a few larger scale CCS projects are in operation or under construction.
Alliance Bernstein, a US investment firm, has conducted a study on climate change and investment opportunities and has found that CCS is a necessary step to address climate change. Moreover, the firm has identified those industries that will likely prosper in this new CCS and carbon-constrained world, and those that will likely suffer in such a new world. Those entities that can invest in, develop, and profit from the construction of collection, pipelines, and injection facilities for CCS, will be highly profitable.
The potential for a European plan would certainly spur investment in research and construction to achieve this goal. Oil company representatives believe the injection and storage of CO2 is a well-established technology, based on many decades of experience. Others question whether the much larger scale of CCS will pose new challenges.
One of the challenges is the concern of liability if the CO2 leaks and returns to the surface, say into someones home. In Texas, the Legislature seeking to gain selection for the FutureGen project that was to be in large part funded by the US government, passed a law providing liability protection for the project. Some industry experts have called for a sort of "Price-Anderson Act" that protected or at least set a cap for nuclear power plants in the United States.
The initial proposal was to only require new power plants built after a certain date to install CCS. It appears there is some talk about requiring all plants to retrofit by 2025. The cost may be steep, depending on the approach used. One estimate was a $1.5 billion investment per plant, which may be hard to finance without government assistance.
Other technologies and approaches may in fact be able to achieve CCS for much less. The area is still in initial development, and new ideas and innovative approaches may make CCS a reality. To achieve the goals suggested by the IPCC, CCS would have to be required more globally, in the US, China, India, and perhaps other countries.
At a recent climate change seminar in Austin, Texas, the Chairman of the Texas Railroad Commission spoke out in favor of taking steps to assist the oil and gas industry in finding ways to implement a system of installing a system to use capture CO2 in enhanced oil and gas recovery programs. The Lieberman-Warner bill that will be debated in the US Senate in June of this year contains provisions for encouraging CCS. Thus, whatever political argument exists over climate change, the concept of CCS to attempt to address this issue has some support on more than one side of the political spectrum.
In Australia, the State of Victoria, which has about a 500-year supply of coal, is considering investing $120 million Australian dollars in CCS.
If the EU passes a law with future deadlines for installing CCS, this industry will take off, and investment capital will follow--assuming the right incentives, and perhaps public financing, are used to spur this new approach to reducing greenhouse gas emissions.