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6 September 2019

Deeply suspicious as we are of Carbon Capture – it may work – a bit

Equinor said this week that it was signing up international partners for its carbon capture operations, which include a live pipeline to store carbon  under the North Sea. It calls it the Northern Lights Projects and has signed up its first 7 European businesses. It has partnered to create the project with Shell and Total, and now has signed Air Liquide, Arcelor Mittal, Ervia, Fortum Oyj, HeidelbergCement AG, Preem, and Stockholm Exergi to enjoy its benefits.

We are getting to the point where we start shaking our heads the moment we hear the words “Carbon Capture”. It has already been well established that taking carbon from the air is exceptionally inefficient and expensive and that this will never happen at scale. There are some people who still operate research into this, and many of these are paid for by fossil fuel companies, who hope that they will be allowed to pollute the planet for another decade or so on the back of it – but most sensible people (with the exception of Bill Gates) realize it is a non-starter.

This is not what this release from Equinor is talking about and it specifically talks about taking carbon out of fossil fuels before they are burnt and capturing carbon emissions in industrial processes, like the manufacture of cement, and putting both types of carbon, back where we got them from , underground.

It is well established that natural gas can have the carbon taken out of it prior to burning, but it will cost an unspecified amount more. If steam forming of natural gas is done at sufficient scale, by a single company which shares the costs across many other customers, it may come down to a price that is cheaper than creating hydrogen from electrolysis, but we doubt it. Getting rid of the carbon afterwards, would be part of that cost and this is what Equinor is trying to develop.

All of these companies have a reason to need such a resource. Air Liquide supplies industrial gases, Arcelor Mittal is a steel-maker, Ervia operates an Irish gas pipeline, Fortum Oyj is the Finnish equivalent of Equinor, Germany’s HeidelbergCement is one of the largest building materials companies in the world, Preem owns Swedish petrol stations, and Stockholm Exergi supplies heat and air conditioning to MDUs in Sweden. Every one of the them has a full stop on their business as climate change begins to force legal challenges to CO2 emissions, unless they can do it without those emissions, and one way to do that is with a carbon storage process.

Our biggest fear about something like this is that someone along the way will suggest “re-using the carbon” and putting it into a new fuel or that some future regime suggests reversing the process and taking it out of the ground once more.

It seems cleaner and more straightforward to simply “stop” taking carbon out of the ground in the first place and that would mean that Air Liquide has to supply industrial gases which are not mixed with CO2; that Arcelor Mittal makes steel with a process that does not burn fossil fuels, that Ervia simply stops operating a gas pipeline, and that Fortum Oyj gets out of oil and gas markets and that HeidelbergCement finds ways of making building materials without outputting CO2, that Preem stops selling petrol and that Stockholm Exergi buys in hydrogen electrolyzed from renewables to heat homes and businesses.

We have to rely on this process of extracting carbon and putting it back under the sea being too uneconomic, and that it will place too great a financial burden on these players, and that their share prices fall sufficiently for them to get the hint.

Equinor instead believes it can make money out of the act of putting carbon back where it took oil (or gas) from, and then selling both the capacity to do it under the North sea and the expertise for others to do it elsewhere.

Equinor says it has signed memoranda of understanding with the seven European companies and will develop value chains in carbon capture and storage and well as working on its own storage plan with Shell and Total, under the Norwegian continental shelf.

The Northern Lights project will include transport, reception and permanent storage of CO₂ in a reservoir in the northern part of the North Sea. The storage project is part of the Norwegian State’s demonstration project Full-scale CO₂ handling chain in Norway.

CO2 is captured either from fuel combustion or industrial processes, and is then transported using ships or pipelines to be permanently stored underground. It goes into a pipeline and which is simply dug into the sea floor and then the carbon is released. How does anyone know that it will stay there? Or if it will leech into the sea above and cause a catastrophe. Well we presume there has been some science done on that, but who would trust a collection of oil companies to be sufficiently diligent on that? Remember what BP did to the ocean floor off the US coast.

The agreement says that all the parties will evaluate solutions for CO₂ deliveries and transport; develop a timeline for possible final investment and start of operations; cooperate on the CCS dialog with national authorities and the EU. In other words re-assure governments that nothing can go wrong.

The partners are currently reducing costs and further developing the Northern Lights project aiming for an investment decision in 2020 and over 150 people from Equinor, Total and Shell are currently involved in the project.

At the end of 2019, the partnership plans to drill a confirmation well for CO₂ storage in the Johansen formation covered by the Aurora licence to study the reservoir’s suitability and capacity for CO₂ storage. Earlier this year the Norwegian authorities decided to help fund the work on this well.

We remain super skeptical of carbon capture, especially when it involves unreconstructed oil firms, but Shell and Equinor have perhaps earned the right to at least try things like this, as they have both made commitments to climate change.