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Cost, Safety Fears Threaten Climate Change Remedy

Date: 19-Sep-07
Country: UK
Author: Gerard Wynn

On Monday Canadian power company SaskPower withdrew its
plans for a "clean coal" plant, the third such cancellation in
six months on cost grounds.

Working like oil production in reverse, carbon capture and
storage (CCS) involves pumping the greenhouse gas carbon dioxide
into empty oil wells and other cavities, after trapping the gas
from the waste emissions of coal-fired power plants.

But no commercial-scale power plant uses the technology yet,
and a lack of public funding plus legal doubts and safety
worries are casting a shadow over mooted projects.

"Carbon capture and storage is very far from being a done
deal," said European Commission CCS expert Derek Taylor.

"The barriers...are huge. Without much greater political
will and much more public funding it won't happen," he told a
Euromoney coal conference in London.

Advocates say that CCS is a key energy option, because of
huge reserves of cheap coal worldwide which developing nations
are expected to burn regardless of global warming worries.

Its potential is dramatic. The International Energy Agency,
which advises 26 developed nations on energy, will publish next
month new figures which suggest that empty oil wells and other
spaces underground could store some 500 years' worth of manmade
carbon dioxide (CO2) emissions.

But the technology is estimated to add hundreds of millions
of dollars to the cost of a power plant, and it also reduces
their energy efficiency.

Such costs mean it could be years before developing
countries adopt the technology, and meanwhile new coal plants
proliferate, causing China's carbon emissions to soar.

TOO EXPENSIVE

SaskPower's cost estimates for a clean coal plant more than
doubled to C$3.5 billion (US$3.39 billion). The company may
reconsider the technology in 2009, said spokesman Larry Christie
on Monday.

A continuing US public-private partnership called
FutureGen is now at least 60 percent over budget, at US$1.5
billion compared to an original US$950 million estimate.

"We take it budget period by budget period and we'll just
have to see how the budget looks this time next year," said
Samantha Hoe-Richardson of Anglo American, one of the FutureGen
industry partners.

In June energy groups Statoil and Shell dropped plans for a
project under the seabed between Britain and Norway, saying it
was too expensive, and BP shelved similar plans in May, saying
it couldn't afford to keep an empty oilfield open while it
awaited public support.

European companies want government support to underwrite
some of the extra cost of at least 10 CCS demonstration plants
which the European Union says it wants by 2015.

The European carbon market was designed to support
climate-friendly technologies, penalising carbon emissions at a
certain carbon price, but some energy companies argue for a
subsidy, saying that the carbon price is too low and volatile to
give CCS enough advantage over dirtier, conventional plants.

"It's unrealistic to finance (CCS) through a fluctuating
carbon price," said Lord Oxburgh, a former senior executive at
Shell and now Chairman of biofuel company D1 Oils.

SAFETY

Legal barriers are another brake on actual burial of CO2 in
Europe. Later this year Brussels will propose tweaks to existing
water and waste rules, with 2010 slated as the earliest likely
date for those changes to come into force.

"Industry might feel it's a gamble, they're going to have a
nagging doubt until the law's in place," said the EC's Taylor.

And then there are safety fears.

In sufficient quantities CO2 suffocates people, simply by
crowding out an adequate supply of oxygen. A small worry is that
if it escaped from underground or from a pipeline, the heavy,
odourless gas may collect in a deep valley pocket, for example.

"People could walk into this cloud of CO2, not realise

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