Comments on: A CCS project for Canada

By: Jiri

Jiri — Thu, 20 Sep 2012 09:48:26 +0000

Yes, current CCS is cheaper than $500 per tCO2 (perhaps $100) because it catches CO2 from processes which are optimal for that. If you have to decarbonise everything to the last drop it will start to bite. Anyway, it is just hypothetical discussion. I hope the CO2 price will be zero. Just look at catastrophic consequences of governenment regulation on flared gas and produced water. The oil&gas production in UK is dropping like stone, energy price skyhigh and economy double dips.

By: Jiri

Jiri — Thu, 20 Sep 2012 09:39:27 +0000

No, I’m not off. From William’s link the current estimates are around $100 mark for 1t of CO2 for CCS from gas production. And I based my assumption on that. This has potentiall to tripple gas prices in areas where the gas is cheap. It is questionable whether you can use CCS in areas where the gas is expensive. It is expensive there also because the local society is not supportive to fossil fuel production and it unlikely beeing supportive to CCS. You expect to push the price down in long term to $50. Could be. The price $500 is what UK government assumes to completely decarbonise economy. Even in most optimistic cases the price of gas should increase by 50% to pay for CCS. All of this for chimeric damage caused by CO2. But we are discussing engineering solution to non-existing problem. As long as people are happy to pay there is no problem. The problem for Shell would start once people force their governments to scrap CO2 tax/trading nonsense.

By: David

David — Tue, 18 Sep 2012 21:50:10 +0000

Jiri,
You are out by a factor of 10. Long term deployment of CCS may well be a $50/tonne of CO2 technology. Even today with the technology still in its infancy it is nowhere near $500/tonne of CO2.
David

By: Steve

Steve — Mon, 17 Sep 2012 16:25:21 +0000

Good to know about the project, David – encouraging news on the face of it.

Just to play devil’s advocate, would you consider applying your above justification to the idea of an EU carbon price underpin? The current low price doesn’t really secure the long-term investment signal for industry, and it’s important to build trust in a serious carbon price…

By: Jiri

Jiri — Mon, 17 Sep 2012 14:19:10 +0000

BTW, current analysys seriously predict CO2 price of $500/tCO2 or more to decarbonise economy. With fossil fuel emissions of 30Gt/year it is potentially $15trillion/year bussines. The global GDP is $62trillion so this effort would have to be truly massive.

By: Jiri

Jiri — Mon, 17 Sep 2012 14:01:33 +0000

To produce 1t of CO2 you need to burn about 400kg of Natural gas. This would cost about $56 in north america and several times more in Europe. So if the storage of this one ton of CO2 costs about $100 this would have to be added to the price of gas. It would cost $156 instead of $56. So this is an opportunity to tripple sales for the fossil fuel companies. All we need to do is to somewhow convince people to pay $100 for one tonne of gaseous plant fertilizer (which they can get for free in unlimited supply). The best option would be to run first plants on fully reimbursable government grants. People don’t mind paying for bigger nonsense than this.

By: David

David — Fri, 14 Sep 2012 15:24:25 +0000

William,
The project is about many things – reducing our immediate payment into the technology fund may be one of them, but that isn’t the core consideration. Long term, the oil and gas industry will have to proficient in the use of CCS and the public and government will have to accept that it can be delivered safely and reliably. The technology itself will also need to be at a more commercial stage of development than it is today. Commercializing the technology and building that experience and trust is a 10-20 year process, so it needs to start now. It may well be cheaper to pay up today, but that doesn’t really secure long term options for the industry.
David

By: Jiri

Jiri — Tue, 11 Sep 2012 12:39:28 +0000

Shell is certainly capable to invest a lot of money into the technology development. CCS certainly is technologically doable and I think that this particular application is one of the best. Unless I’m mistaken Shell and partners are ready to lose money here for exchange of some good PR and technology development. Some government subsidies (grants) were also involved. I’m wondering what price CO2 would have to be to make this profitable. Is it just one order of magnitude or more? The bad thing is that CO2 price is in hands of government legislation. One election could change this completely.

By: CCS news – Stoat

CCS news – Stoat — Tue, 11 Sep 2012 11:14:58 +0000

[...] fuels in our merry thoughtless way it inevitably appeals to the BAU crowd. David Hone reports on a A CCS project for Canada which is at base dependent on a $15/t (t CO2? t C? Not sure. The report he cites actually just says [...]

By: William M. Connolley

William M. Connolley — Tue, 11 Sep 2012 11:13:49 +0000

More seriously, http://www.globalccsinstitute.com/publications/costs-ccs-and-other-low-carbon-technologies says “The cost of mitigating, or avoiding, CO2 emissions for a coal power plant fitted with current CCS technology ranges from US$23-92 per tonne of CO2″.

If they’re right (and they’re pro-CCS, so I’d guess if anything their numbers are on the low side) why isn’t Shell just paying up the $15/t, since it would be cheaper?