This year will be a big one for determining a time frame for commercial development of large-scale carbon capture and sequestration, or CCS, a technology many policymakers say is vital to curbing emissions from coal-fired power plants, a new report finds.
The Emerging Energy Research study surveys the pace and funding for planned large-scale demonstration projects worldwide aimed at showing the viability of permanently storing greenhouse gases from coal-fired power plants and other sources underground.
How quickly large-scale carbon sequestration can be brought online is a crucial question because power generation from coal -- an abundant resource in countries including the United States -- accounts for roughly a fourth of global carbon dioxide emissions.
The report lists several reasons why 2009 will be crucial to determining the pace of commercial development. "Major carbon policy decisions that could mold the carbon regulatory landscape and economic framework for CCS for the next decade are hanging in the balance," it states.
Among the issues to watch this year, the report says, are the European Union's implementation of its ongoing emissions trading regime, the development of U.S. climate legislation and the ramp-up of international talks about a successor regime to the Kyoto Protocol.
The Cambridge, Mass.-based firm calculates that governments have already earmarked more than $20 billion for large demonstration projects, mostly in the United States, Europe, Canada and Australia. If all that money flows, it could support more than 30 large-scale CCS projects, the study states.
The funding figure could rise with funding in government stimulus packages, the report notes. In the United States, the new $787 billion stimulus bill contains $3.4 billion for various carbon-related research and demonstration programs.
More broadly, more than 110 sequestration projects of various types are under development in more than 18 countries, it finds. The report, which examines potential during the 2009-2030 periods, finds that if various demonstration projects worldwide are successful, CCS will be "well positioned" to scale after 2016. Enhanced oil recovery is the main driver in the earlier stages of these periods.
Under a "base case," CCS would reduce CO2 emissions by more than 700 million tons annually worldwide in 2030, accounting for about 6 percent of current power-sector CO2 emissions. Under a "high-growth" forecast, CCS would curb emissions equivalent to roughly 15 percent of current global power sector emissions.
Oil companies have for years been using industrial carbon dioxide for enhanced oil recovery projects, and expansion will be a key short- and medium-term driver, but the report also notes, "For sequestration to scale, long-term storage potential will require use of saline aquifers."
Overall, the report notes that the oil industry will help to advance -- and benefit from -- large-scale sequestration, citing the industry's engineering and technical capacity.
"Because of the embryonic nature of the carbon sequestration market, it is hard to predict which companies will ultimately succeed, although it is a fair bet that many of the large independent oil and gas producers and global 'supermajors' will control a large share of carbon sequestration activity, should the industry evolve," the report finds.
It cites several reasons. One is that major companies are increasingly looking toward carbon-heavy projects, such as Canada's oil sands, and sequestration provides a chance to build "competitive advantage."
"Sequestration can expedite permitting of these projects, and depending on how carbon regulations evolve, may become an opportunity to generate carbon credits," the report says.