DOHA: Imagine the biggest Ford pick-up truck you have ever seen, and in its tray is a sprawling concoction of tubes and boxes that make up what could be the world’s first mobile carbon capture and storage technology for vehicles
The prototype, cumbersome and inefficient, apparently reduces emissions from this gas-guzzling monster by just 10 per cent. When refined, a more compact version may achieve a 60 per cent reduction – and the bottled Co2 can be returned to the petrol station to be used as a feedstock for algae. This is either a work of genius in progress or an act of the greatest futility.
Did anyone think of an electric vehicle? In a country like Qatar, it is a silly question. The price of petrol is so low it is not even advertised (the cab driver told me it was 0.75 rial – or 20c a litre). An EV as a cost hedge on rising fuel costs simply doesn’t make sense when you can refill your SUV for less than $15 a tank. As a status symbol, though, you could buy the Tesla Roadster, perhaps the yellow one sitting under a solar-charging car-port about 100m away for the Ford pickup. Just the sort of car for those to whom money is no object – and in oil and gas rich Qatar, there there are plenty of those.
If you choose to hold the annual climate change negotiations in a country that is the biggest exporter of gas in the world, and has as its neighbour the biggest exporter of oil, it shouldn’t be hard to imagine what the dominant of many of the discussions should be – the promotion of carbon capture and storage as a fix for the world greenhouse gas emissions.
One quick glance at the Sustainability Expo that runs with the COP18 climate change conference confirms that. This is an exhibition – where the pickup and the Tesla could be found – that is dominated by the Gulf nations and a single technology, CCS, and overwhelmed by the corporate power of the fossil fuel giants that pervades over this conference, and are still desperate to burn as much oil and gas as they can. Renewables hardly get a look in.
It should be recognised that the world’s biggest exporters of fossil fuels are investing heavily in solar technologies, so much so that they might have the greatest influence of over the cost curve of new technologies such as large scale solar thermal and concentrated solar PV than any other country. But they do so with one single goal in mind – to free up as much of their oil and gas as they can so they can export it to other countries.
Here, there is no talk of leaving two thirds of their reserves in the ground, as the even the International Energy Agency suggests should be done to meet climate goals. At least, though, the Gulf nations recognize that emissions from fossil fuels need to be reduced. That much is progress. But if you want to produce (fossil fuels) and reduce (emissions), there is only technology that can offer a solution – CCS.
That’s why the CCS industry was looking pretty pleased with itself on Tuesday when 10 of the most influential environmental NGOs – including the Australian-based Climate Institute, announced that they were making what they must see as a Hobson’s choice – pledging their collective endorsement for CCS and for it to be bestowed with the kind of subsidies that cause Big Oil, Big Coal and Big Gas to howl to the moon when handed out to renewables such as wind and solar.
There were two principal rationales for their decision. One is that the fossil fuel industry simply cannot be moved, and supporting subsidies is the best way to strike a bargain with the Devil. The other is the acceptance of the argument that renewables cannot deliver the 2°C target on their own, and that CCS, in some form, will be needed beyond 2050 to deliver what is called “negative emissions” – a combination of biomass and biofuels and CCS.
Clearly, this is putting a fault line down the middle of the environmental movement. The renewables industry has long described CCS as a myth and the image of “clean coal” as a cynical marketing tool designed to protect their industry. They, and most environmental NGOs, suggest that if the fossil fuel industry was so convinced of its success, then it should invest in it itself. The least it could do was to pay to clean up its own mess. And it certainly has the resources – the four biggest fossil fuel giants in the western world generate annual profits of around $100 billion, the state owned firms in the Gulf probably much, much more. And, says the IEA and the UN, the fossil industry already receives more than $500 billion a year in subsidies – more than renewables by a factor of six.
So is this endorsement a tacit recognition that the fossil fuel industry has won the day through its tactics of obfuscation and delay, and downright hostility? And the NGOs were simply conceding defeat. David Hawkins, the head of the US-based Natural Resources Defence Fund, possibly the largest and most influential of the NGOs, conceded that it was a controversial topic among environmental groups.
“Some groups are hostile to the technology, and some are indifferent,” he said, and he agreed that many fossil fuel companies were opposing the very policies that are needed to make CCS a reality – specifically a high price on carbon and further subsidies to defray the high upfront cost of the technology. (Like wind and solar, CCS will have a high capital cost. Unlike wind and solar, it does not have a low cost of fuel).
“That (the opposition to carbon policies and clean energy policies by the fossil fuel lobby) is still the case in far too many industrial sectors, especially the United States,” Hawkins said. “By and large there is still… a disconnect between the analyses of what is required and the position of the fossil fuel industries which are opposing the kind of policies which are necessary.
“That makes it difficult for environmental organisations. Many with good reason in the environmental community, who look at the industry positions, say that you who are supporting for CCS are essentially trying to do something that will prolong life in industry that is opposing the very policies that they now want. They ask, why are you doing that?”
The answer may lie in the report released today by the 10 NGOs on CCS. This document accepts that fossil fuel generation is still growing rapidly, and the sheer size of the market makes it impossible to budge and replace with truly sustainable pathways such as energy efficiency and renewable energy. Even if it were technically possible, it accepts that there is significant “economic and political inertia” that would need to be overcome.
And, the report suggests, it is “not prudent” to bet wholly on such a large-scale transformation of the world’s energy system. Instead, it calls for a “balanced and hedged” approach. Some may say that they are calling the battle between renewables and fossil fuel interests, and declaring the fossils to be the victors. And then hoping like hell that this technology works.
Certainly, Lord Nicholas Stern said that to meet climate goals, emissions had to be cut by a factor of 7 or 8 within 40 years. “If you’re trying to change the world, you’ve got to understand how it works and where it is going. In 25 years, our energy will still be 75 per cent carbon. You might wish it was different,” he said. But it was not.
And he suggested CCS was cost-competitive, at least with other emerging technologies such as solar thermal. The industry reckons it can deliver the technology at $50/tonne of emissions reduced – about the same as the carbon price in a decade’s time. But don’t count on that coming at zero cost to energy users, because it seems pretty clear that the price of fossils fuels is going up, not down.
Brad Page, the CEO of the Australian-based CCS Institute, was clearly delighted by the support of these “far-sighted” NGOs, and said it was not about CCS being against renewables, but working with them. As he noted, CCS actually has a smaller role than renewables to play in power generation, as well as abatement, by 2050, according to various IEA scenarios. It should be noted that CCS has been successfully deployed in industrial uses, mostly by regulation, but not yet on a commercial scale for power plants. The first two installations for power plants – one post combustion and one pre-combustion, are only being built now in north America.
Page insisted that without CCS, deep cuts were not possible, and would be vastly more expensive if CCS were not deployed. The Climate Institute said the policy environment for CCS in Australia was not supportive enough, and suggested that CCS technologies, particularly when linked with bioenergy, should be funded by the Clean Energy Finance Corp.
But let’s be clear about exactly what the IEA has actually said. It painted various scenarios of how to reach 2C target in its Technology Perspectives report released just a few months ago. Yes, it said the CCS was critical to reaching the target in the most cost effective manner, but all was not lost if CCS could not come to the party, because the gap could be made up by a greater deployment of renewables. And it did note that CCS was not progressing as planned.
Importantly, the IEA said the cost difference between a 2C scenario with CCS (providing 14 per cent of power plant generation), and a 2C scenario with no CCS was not that great – just 7 per cent once you take into account the cost savings from reduced use of fossil fuels. If you took into account investment costs and fuel savings with CCS deployed, that delivers a total of $26 billion in saved costs. Without it, the savings are still $24.1 billion. So there is no need to panic quite yet – unless, of course, you are a fossil fuel producer.
This graph below from the IEA publication sums it up. It’s a whole lot of numbers, but the key ones are at the bottom, where it outlines the investment required in various scenarios, the fuel cost savings from having a heap more renewables, and the bottom line.
(The “6DS”, 4DS and 2DS refer to 6C scenarios, 4C etc etc. )