New Zealand will need supportive regulation and wider public understanding if it is to include carbon capture and storage in its response to climate change, a Waikato University academic says.
Carbon capture and storage is proven technology, but its cost and potential opportunity varies by project and location and it is commercially challenging to deliver at scale, says research development manager Trevor Drage.
The fact the UK twice attempted and failed to get a project started in the past decade – with potentially £1 billion of state funding available - shows how hard that can be, he told delegates at the New Zealand Petroleum Conference in Queenstown this week.
The government there is still working on the commercial complexities involved in such projects and has considered options that include escalating carbon prices through to zero-carbon product certification for participating manufacturers. It is persisting in its efforts, he said, because it estimated the cost of meeting the country's emission-reduction targets could be £30-40 billion a year higher without CCS.
Drage, previously professor of efficient fossil energy technologies and carbon capture and storage at the University of Nottingham, said it would be good if New Zealand could draw on some of those lessons from the UK.
But he said any project here would probably need government support to bridge those commercial challenges, as well as a higher carbon price.
“The carbon price could be the key driver for it,” he said. “It is going to take some government support to make it happen in the first place.”
Carbon capture and storage – usually taking CO2 from an industrial process stream and injecting it into a saline aquifer or a depleted oil or gas field – has been undertaken for decades. Eighteen large-scale projects worldwide are storing about 40 million tonnes of CO2 annually and the International Energy Agency and the Intergovernmental Panel on Climate Change consider CCS technology a key part of the world’s emission reduction effort.
But the process requires a lot of energy and typically struggles to be economic without a strong revenue benefit, such as from an avoided carbon charge, increased gas or oil production from gas injection, or making ammonia into urea.
Drage observed that New Zealand has carbon separation expertise at the Marsden Point refinery and at the Kapuni gas treatment plant. The ageing Kapuni and Maui gas fields could be early candidate sites for injection.
But he noted that in the UK, plans to build new coal-fired generation with CCS had faced “huge kick-back.”
Without much greater public understanding, a similar kind of reaction is likely in New Zealand “even if it is a really a sensible technology solution that does get you to decarbonisation,” he said.
The government has been ambivalent on CCS to date and has resisted calls for new regulation to enable the technology.
Environment Minister David Parker, while sceptical of the technology, earlier this year said a CCS project should be consentable under the current regime. Greenpeace has dismissed CCS as a “distraction” and called 8 Rivers’ proposed Pouakai project – a combined power generation, CCS and urea development – as a “Trojan horse” to help keep the oil and gas sector alive.
Drage said all the component technologies of CCS are proven. But there needs to be much greater effort in developing projects at scale if it is to make a meaningful contribution to global emissions reduction.
Part of the problem, he said, was that academics like himself had tended to keep seeking ever-improved technology.
People need to “stop chasing unicorns” and get on with developing commercial projects at scale so that others can share in the cost reduction that comes from on-going development.
“We really need to get
on and build and demonstrate and get the learnings cycles of
real-scale operation. I think that’s really important to
take us forward.”