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INTERVIEW - CO2 Storage Grows; No "Silver Bullet" for Climate
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NORWAY: June 20, 2006


TRONDHEIM, Norway - Energy firms are stepping up projects to bury greenhouse gases but storage will not be a silver bullet to stop global warming, an International Energy Agency (IEA) expert said on Monday.


Capturing and pumping heat-trapping carbon dioxide underground costs too much to make sense for most industries at about US$35-$55 a tonne, Kelly Thambimuthu, chairman of the IEA's greenhouse gas technologies research programme, told Reuters.

"It's expensive...this can be one solution among many to global warming (but) it's not going to be a silver bullet," he said during a carbon dioxide conference in Trondheim, Norway. The IEA is an energy adviser to 26 rich nations.

Still, a handful of companies are getting involved in burying carbon, mostly in cases where it makes economic sense to filter and clean natural gas before sale from wells that naturally include high levels of carbon dioxide.

Three existing schemes -- by Statoil in Norway, EnCana in Canada and BP in Algeria -- currently bury three million tonnes a year, he said. High carbon taxes, for instance, make Statoil filter gas at its Sleipner field.

Other planned energy schemes, by Chevron in Australia, Statoil and Royal Dutch Shell in Norway and by BP in Scotland and California would bury a further 12.5 million tonnes of carbon dioxide a year.

The figures are a pinprick in world emissions of greenhouse gases from human activities -- mostly from power plants, factories and cars -- of above 25 billion tonnes. A 500 megawatt coal-fired power plant emits about three million tonnes a year.

Some experts say that burying carbon dioxide could prove an easy way to offset global warming. And the gas can in some cases be pumped underground into a subsea oil reservoir, for instance, to keep up the pressure and force oil to the surface.


KICK START

"If you look at the grand scheme of things...(the planned carbon storage projects) are going going to kick start things, they're going to tell us a lot about carbon dioxide storage," Thambimuthu said.

"But the real test in emissions reductions has to be in power generation and...the transport sector. Those are the big hitters," he said.

Companies needing to buy permits to pollute on Europe's carbon trading market, set up last year to discourage industrial emissions, now have to pay about 15 euros (US$18.89) per tonne. Thambimuthu said this was not enough to encourage investment in storage.

"You need to have a threshold of at least about US$30 a tonne or higher," he said.

He said that governments could cut carbon dioxide allocations to industries to push prices higher if they were serious about fighting climate change. Or they could give tax breaks or other incentives.

The scientific panel that advises the United Nations says that global warming caused by human activity could spur more droughts, heat waves, disease, erosion and drive up sea levels by almost a metre by 2100, swamping many coastal regions.

Thambimuthu said that burying carbon dioxide would typically raise electricity generation costs from a coal-fired power plants by 50 percent.

"At the same time the public demands cheap electricity," he said.


Story by Alister Doyle, Environment Correspondent


REUTERS NEWS SERVICE


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