Gassco Says Norway Govt CO2 Storage Projects Uncommercial

[Turbineguy]

This is interesting:

DJ Gassco Says Norway Govt CO2 Storage Projects Uncommercial

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Dow Jones Real-Time News for InvestorsSM
06:37 a.m. 06/08/2006



OSLO (Dow Jones)--Carbon dioxide storage projects on the Norwegian Continental Shelf are unprofitable based on current investment criteria, Norway's gas infrastructure operator said Thursday.

As part of a plan to jump-start a CO2 storage market that would reduce greenhouse gas emissions and increase oil recovery, Norway's government contracted three companies, including Gassco, to study potential CO2 storage projects.

Gassco said based on an oil price of $35 a barrel and a CO2 emission price of 200 Norwegian kroner (EUR25.67) a ton, the negative gap between costs and possible income for the projects would be between NOK4.4 billion and NOK11.8 billion.

The oil industry - which the government wants to invest in the storage projects - has consistently said carbon storage would be unprofitable without government funding, despite returns from higher oil recovery and the sale of carbon dioxide pollution credits.

By storing the CO2 in oil reservoirs, companies can sell pollution credits for each ton stored.

The government has said it will contribute to creating a storage market in Norway, but has declined to say how much it is willing to give.

In April, Gassco said 12 separate projects it had identified for six different fields would cost between NOK8 billion and NOK22 billion for CO2 capture and transport alone. Additional investments for development of the offshore oil reservoirs - where the greenhouse gas would be stored - would cost an additional NOK1.5 billion to NOK5 billion.

Gassco director of finance and commercial development said it used an average of investment criteria oil companies are currently using to decide the commercial viability of projects.

Norwegian oil ministry spokeswoman Sissel Edvardsen said the government hadn't yet determined a timeline for deciding an amount - if anything - it's willing to contribute.

In March, Statoil ASA (STO) and Royal Dutch Shell PLC (RDSB) announced plans to store CO2 from a new 850-megawatt gas-fired power plant at the Tjeldbegodden refinery in the Draugen and Heidrun fields.

Although well over its international pollution levels agreed under the Kyoto Protocol, Norway doesn't produce enough carbon dioxide for a storage and oil recovery project. Norway aims to meet a growing power deficit with new gas-fired power plants, which would also produce enough emissions for oil recovery and CO2 storage projects.

CO2 injection increases the pressure in an oil reservoir, meaning more oil can be extracted. Furthermore, the right to pollute is becoming increasingly costly, especially for energy intensive industries such as smelting, chemical, pulp and paper manufacturing.

European Union Energy Commissioner Andris Piebalgs has said storage of CO2 - the greenhouse gas thought to be the prime contributor in the theory of global warming - is essential for the E.U. to meet its international pollution agreements under the Kyoto Protocol.


-By Ian Talley, Dow Jones Newswires; [phone]; [email protected]




Dow Jones Newswires

06-08-06 0637ET

Copyright (c) 2006 Dow Jones & Company, Inc.

[LiberalEsto]

1. Incredibly risky approach to CO2

Greenpeace conducted an extensive study of ocean sequestration of CO2 and found that it might violate international law on waste dumping, do nothing to curb reckless use of hydrocarbon fuels, and potentially cause harm to ecosystems and to shipping.

Greenpeace: "The safety aspects of long term containment in this way also need to be addressed.
Rapid releases of carbon dioxide of volcanic origin have been reported. For example, a release from the crater lake Lake Nyos in Cameroon in 1986 killed more than 1500 people, and livestock was killed up to 14 km from the site (Hanisch, 1998). Even a slow seep of the gas from an aquifer could have serious implications for marine ecology, if not directly for terrestrial systems. If such a seep occurred at the sea-bed, it could cause widespread changes in benthic and water column ecology. Moreover,
to date, none of the proposals has addressed the potential ecological role of these deep formations or indeed described any of the associated ecosystems."


http://64.233.161.104/search?q=cache:lWA3uD9OagsJ:archive.greenpeace.org/politics/co2/co2dump.pdf+Greenpeace+carbon+sequestration&hl=en&gl=us&ct=clnk&cd=1&ie=UTF-8

[NNadir]

2. Of course, Greenpeace is against everything.

They are luddites, not people who offer any practical solutions. They are primarily people who raise objections but there is not one member of this bunch of middle class consumers who can offer a positive alternative. Greenpeace studying anything is generally useless and the conclusion is always the same: "This won't work; that won't work."

However, the morons at Greenpeace aside, I don't think that the waste problem for fossil fuels has an acceptable solution. Fossil fuels must be banned in short order or there will be tragedy. The risk minimized approach to fossil fuels involves eliminating them as quickly as possible.

The primary available solution is to advance nuclear power and renewables to the extent that they (renewables) are sustainable.

The ultimate solution will involve population reduction.