Carbon capture & storage; the world’s most dangerous experiment?

Capturing CO2 and trapping it under ground in order to keep our own atmosphere habitable sounds like a concept out of an Isaac Asimov science fiction novel. However many groups of experts around the world have been working for years on developing carbon capture & storage (CCS) technology as a genuine real solution to save the planet. Certain areas in the US have large underground gaps in the rock where the depositing of CO2 at high pressure has been seriously under consideration from some time now, whilst the Scottish government has been planning to use the emptied north-sea oil fields for the very same activity. But how real is the science behind this, and how secure is it?

With global CO2 levels rising faster than ever, drastically affecting our ecosystems possibly beyond repair, global governments are dedicated to exploring every possible option for improving energy efficiency, developing sustainable renewable energy, reducing CO2 emissions in to the atmosphere and even removing CO2 from the atmosphere. Reducing energy consumption is a crucial exercise for the most immediate effect, whilst minimising CO2 production levels from ongoing energy production is the long-term goal, and CCS seems like the most adventurous concept. Nature itself has many natural devices it has developed to remove CO2 from the ecosystem, such as the world’s oceans and forests. We all know that planting trillions of trees would solve the problem, but implementing this globally is just proving completely impossible, and so now scientists have been working on other ways to remove or absorb the CO2 and keep our atmosphere liveable.

Concepts range from the wilder and wackier such as ”fake trees” to sequester much higher rates of CO2, through to simply trapping the CO2 generated (from standard coal-fired power plants) and rather than releasing in to the atmosphere, simply collecting, treating and hiding away. This has never seemed like a real solution, but more like a stop-gap, or a last-chance attempt by the fossil-fuel power plant owners to justify their continuing activity. Your domestic equivalent would be storing your household rubbish under the bed. The house will look tidy, but after a few days, weeks, months, years, at some point things will start to turn bad.

Storing harmful gases under high pressure under the ground on which we walk is not the most confidence-filling concept, however the scientists promoting the idea have always firmly stated that this was technologically feasible. However now some independent studies from un-biased scientists from Houston University have highlighted that there really are large flaws and look likely to blow a hole in the theory supporting the concept. Hopefully the world’s governments will not be so short-sighted as to continue with such a potentially dangerous activity without the highest level of independent scientific research for this particular experiment. For further details click here.

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Australia goes Green

Only a week after causing uproar amongst environmentalists by delaying their emissions trading scheme (despite Kevin Rudd’s election campaign focussing on immediate implementation of carbon-reduction schemes) Australia has doubled-back and now committed to fast-track to cut coal emissions.

Despite “clean coal” being a less popular environmental response, due to additional costs and energy-consumption involved with capturing and transporting CO2, with over 80% of Australia’s electricty delivered by coal-fired power stations this investment is vital.

With the World energy demand predicted to increase by 45% by 2030 according to the International Energy Agency, renewable energy source development will simply not proliferate fast enough to provide the full solution. For this reason the Australian Government are also joining with GE Energy in sponsoring carbon capturing projects worldwide by founding the Global Carbon Capture and Storage Insitute.

More positively, in affirmative attempts to develop renewable energy sources, a $1bn+ investment in clean and renewable energies will focus mainly on solar energy development programs and smart-grid technology, where residential electricity is delivered monitored and controlled digitally. Hundreds of millions of dollars will go in to solar technology projects as Australia obviously has the land space and hopes to become a global leader in these technologies. Prime Minister Rudd announced that 4 solar-power energy stations would be built to replace the alternative coal-fired power station. He also announced that Australia had joined the IREA International Renewable Energy Agency.

At the same time the Australian office announced the largest debt in its history with a deficit now stretching near to $60bn.

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Avoiding the Carbon Crunch

Our planet has entered a new era, an era where the actions of the dominant species now directly control the wellbeing of the planet itself. Luckily, as inherent with any species, we will do whatever possible to protect our own future.

We now know that the burning of fossil fuels produces Carbon Dioxide that directly effects the stability of the planet’s ecosystem. We also now know that deforestation has a double conseqence, burning of trees not only releasing Carbon Dioxide in to the atmosphere but also cutting down trees removes the essential function of sucking Carbon Dioxide out of the atmosphere. We also know that as a species we continue to grow, not only through reproduction but also due to improving healthcare and medical advances we are all living longer, with predictions suggesting we will reach 9bn in 50 years time. We know that the survival of 9bn will depend on certain fundamental needs being fulfilled; clean air, clean water, housing, food and energy, and we know that succeeding in this for 9bn people will be impossible unless we change our habits.

So as the responsible species we seek solutions, and we have the tools to be capable of doing so. Technology is advancing. We are developing better educational systems to outline the problems we all face. We are developing better methods of purifying and recycling water. We are developing more environmentally-friendly ways of constructing homes, communities, offices, factories, and implementing infrastructure to maintain our lives. We are working on global political movements to ensure that all humans live and work towards our common survival. We are developing new environmentally-friendly technologies to deliver the energy we need, harnessing solar, wind and bio-fuel energy, and methods of reducing our power consumption. We are implementing regulations to protect the existing forests of the World, and incentives to plant new forests for the World. 

We now face the greatest challenge, not just fast and smooth system implementation but most importantly how to integrate this in to our financially-driven societies. The rapid creation of the Carbon Markets is crucial and necessary, giving Carbon emissions (or the lack thereof ) a financial value across as many industries as possible. This illustrates our survival instinct not only as a species but at an individual level - the age-old desire to gain via trade. As Carbon Markets develop the greatest concern is how to develop them to perform their fundamental task, ensuring the health & safety of our grandchildren, whilst still giving us the platform to compete amongst one another.

The Carbon Markets are essentially derivates markets, buying and selling “futures” or ‘forwards”, aka the promise to deliver a Carbon Allowance or Credit at a set price at a set date in the future. The danger arises with the necessary inclusion of Carbon Offset Credits, in that these are “earned” for NOT emitting Green House Gases (GHGs). So they are not a genuine product. Issues have already arisen with dangerous GHG chemicals being produced and then destroyed purely to gain the Carbon Credits. Verification and assessment methods for quantifying volumes of GHGs emitted are still not perfected, and many industrial projects going ahead anyway will claim Carbon Credits despite not being intentional for that purpose. Welcome to Subprime Carbon. Alarm bells ringing yet?

Today over a third of Carbon trading is suspected to be Carbon Offset Credits, leaving the door wide open for Subprime Carbon. Traders and speculators make up the majority of the market place, with independent carbon indexes and carbon funds already structured not to help companies achieve their Carbon Caps, but purely for capital gain. Should this really be an open market-place, where speculators can roam free and where hedge-fund tactics will surely selfishly allow the bubble to form with no care for the serious need for a stable market? Securitization of various classes of carbon offset credit projects can easily be done, and is no different from the very same securitization of various mortgage products which led to the eventual downfall of the credit market. These two models will be the same, and it could easily be far more difficult to analyse the variation in carbon-backed securities, which would eventually lead to a collapse of similar magnitude.

Can we afford for this, probably the World’s largest but definitely most important, market to disappear down the same black hole into which our financial markets fell? Serious regulation is needed, united and inter-communicating, not self-regulating such as the debacle of Wall Street over the past decade. Conflicts of interest must be keenly investigated and whilst the development of sophisticated products will be unavoidable in the future, they must also be scrutinised and independently regulated. How corruption, political influence and Wall Street will be kept separate from destroying the environmental integrity of the market is yet to be seen. Emission-reduction target setting must be based on unbiased scientific opinions and emission tracking must also be analysed by effective and independent monitoring systems. Price and market transparency is also essential.

Where we will end up in the future we can not tell, what we do know is that the road to get there is a treacherous one, which we have no choice but to take.

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Montana; the World’s CO2 sink

In 2005, the entire global output of CO2 from human activities totalled 28bn tonnes. Recent studies by the “Big Sky Carbon Sequestration Partnership”, a US government-funded program in liaison with Montana State University, show that Montana - along with five neighbouring US States - could potentially store more than 200bn metric tonnes of CO2. Simple maths suggest that there is the potential to store up to 9 years worth of 2005’s global output some 2 kms under the ground in north west America.

Deep underground geological formations such as the Bowdoin Down in Montana are primary targets for carbon sequestration. It is considered that as they have held hydrocarbons such as oil or gas for eons, they are the perfect candidate to do the same again. The inherent dangers of such projects has yet to be fully ratified from a physical practicality, safety and environmental aspect, however this is why the Big Sky Carbon Sequestration Partnership has been developed. Over $12m has been received from the Federal Government to assist the research and development of the technologies crucial to making CO2 sequestration a reality.

The projects next major test will be an eight-year test to see if there is potential in the region to store up to 100 years worth of Carbon emissions. One million metric tons of CO2 will be captured and stored underground in Wyoming to test porosity of rocks to see how the future potential of this amazing development may pan out.

Despite these perceived positive movements, being a major coal-source and with a forecasted 1 billion tons of coal underground Montana still condones coal-fired power stations. Currently half of the US electricity is produced from coal-fired power stations, which in turn generates over 2bn metric tons of CO2 in to the atmosphere. So the financial gain for the coal-fired power stations is obvious, whereas the potential financial gains from underground storage is considered to be only hundreds of millions through the sale of “storage permits” to CO2 emitters.

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Soros invests in carbon capture technologies

George Soros has a reputation for spotting a good trend. One of the wisest investors in the World is now putting his cash down in to what could become an enormous industry, carbon capture and sequestration (CCS). With over 50% of US energy delivered from coal-fired power plants, and with the new Obama regime doing all they can to implement strict new GHG emission reduction programs, Carbon Dioxide capture technology will become very big business.

With many complaining that the energy used in capturing, re-distributing and storing the CO2 could increase power stations energy demands by up to 30%, development of efficient CCS technology is crucial in making it cost-effective. Certain to be enforced by the US administration to some degree, these advancements are essential to all energy companies, and when successfully designed it is hoped that CCS technology will be able to retain up to 90% of CO2 emissions from coal plants. This captured CO2 will also then be able to be sold to other firms needing to reduce their Carbon deficit.

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Scotland plans to store CO2

With global initiatives for Green House Gas emissions reductions reaching an all-time high, more and more financial incentives are coming in to play for organisations to reduce their  CO2 emissions.

Carbon Capturing and Sequestration, or CCS as it is known, involves the capturing of CO2 before it is released from coal-fired power stations and its storage miles under ground in suitable geological locations. Technologies are still being tested and proven, however the theory is accepted and billions are being invested globally to make the process as efficient as possible in order for existing energy companies to survive incoming legislation. CCS is becoming very big business.

As such, Scotland has recently conducted research in to its depleted North Sea oil and gas fields and has ringfenced 29 sites, already closed or closing during the next 20 years, suitable for CO2 storage. Altogether these porous rock formations could potentially store up to 50bn tonnes of CO2 making Scotland one of the most important Carbon Capture and Storage centres for Europe.

Not only creating 10,000 jobs and doing wonders for the Scottish economy, this could also become proftable business for Scottish Power who could sell their storage rights across Europe. Scottish Power hope to have a full test facility in operation within 5 years.

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Masdar’s Abu Dhabi carbon capture initiative

Masdar are famous for their “zero carbon city” in Abu Dhabi, a renewable energy challenge taken up by Sir Norman Foster to deliver the worlds first completely sustainable, car-free city.

Masdar are now moving forward with their green initiatives, having commenced negotiations with the national Abu Dhabi oil company ADNOC with regards to carbon sequestration initiatives. As one of the largest oil producers in the region, Abu Dhabi has a heavy carbon “footprint” and so Masdar’s plans are welcomed by the international community.

Masdar hope to collect CO2 from 4 different sites around Abu Dhabi, sell the CO2 to ADNOC for their carbon credit value and also additionally for the gas to be injected in to ageing ADNOC oil-fields to increase the oil field pressure and improve oil extraction. CO2 will then be stored underground as per sequestration strategies being considered and adopted in global regions from Montana to the North Sea.

Masdar have a long way to go in the CO2 acquisition, and need to lay the transportation pipes, and the cost and sales price to ADNOC still need finalising, however this is at least a positive step in Abu Dhabi towards reducing their CO2 emissions.

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