SINGAPORE – Governments and fossil fuel giants are pinning their hopes on capturing and storing carbon emissions from polluting industries, to allow them to keep producing more oil and gas while, hopefully, also addressing climate change.
But an analysis of two carbon capture and storage (CCS) projects in Norway, often touted as success stories, finds that both have troubled histories, and should not be used as models for future CCS projects because the geology of each location is unique.
Indeed, the two projects are a cautionary tale for investors, said the report’s author, Mr Grant Hauber, strategic energy finance adviser for the Institute of Energy Economics and Financial Analysis (IEEFA), a United States-based think-tank.
The 62-page study published on Wednesday draws on a wealth of information about the Sleipner and Snohvit projects. The subsurface areas are among the most studied geological fields in both oil and gas and carbon dioxide (CO2) storage globally, the report notes, and over 150 academic papers have been published about the projects.
CCS involves capturing CO2 produced from oil and gas extraction or from power plants and polluting industries such as cement and steel plants. The CO2 is compressed and piped deep underground for long-term storage in certain types of rock formations, such as saline aquifers or depleted oil and gas reservoirs.
The technology has long been touted as a climate solution, but in reality has proven to be costly, energy-intensive and problematic, with concerns about the CO2 leaking out.
Chevron’s A$3 billion (S$2.7 billion) Gorgon project in Western Australia, the world’s largest CCS project, has consistently failed to achieve its target of capturing 80 per cent of the CO2 in the project’s gas stream, according to IEEFA, underperforming its targets for the first five years of operation by about 50 per cent.
CCS projects intended to capture CO2 emissions from power stations have also struggled to take off because of costs and reliability issues. Only one project remains in operation, at the Boundary Dam coal plant in Canada, though China has been piloting a number of CCS projects at coal plants.
“Even with big investments and the best technology, there is no guarantee that CO2 will be stored reliably and permanently,” said Mr Hauber. “Each site has to be approached with fresh eyes. Each solution is unique. And each of those solutions will need to have redundancy, just in case,” he told The Straits Times.
His analysis comes ahead of the United Nations’ COP28 climate talks in December. Fossil fuel-producing nations, including conference host the United Arab Emirates, are eagerly promoting CCS as a way to reduce oil and gas sector emissions while pushing for billions of dollars in new oil and gas production.
Big CCS projects are planned around the globe, including in Malaysia and Indonesia, while Shell Singapore said in 2022 that it was exploring shipping CO2 captured from its operations in the Republic to Brunei for storage.
The renewed focus on CCS has angered climate activists and climate-vulnerable developing nations, who say it is a false solution because it will still lead to higher CO2 emissions, accelerating climate change. Burning fossil fuels is the largest source of greenhouse gas emissions heating up the planet.
Mr Hauber looked at the Sleipner and Snohvit offshore CCS projects in Norway, which capture CO2 from natural gas production and pipe it back underground.
Sleipner began in 1996 and is the world’s longest-running CCS project, while Snohvit began in 2008. Together, they have sequestered about 22 million tonnes of CO2 since they started operation.
Both have proven to be major challenges for Norwegian energy firm Equinor, which runs them.
At Sleipner, CO2 is injected more than 1km under the seabed. In 1999, CO2 unexpectedly began migrating in large amounts into a previously unknown upper layer. A thick layer of rock prevented the gas from leaking to the surface.
Snohvit’s problem was different. Within 18 months of its operation, the target storage area proved unable to take the projected amount of CO2. Equinor had to find new CO2 storage areas and in 2016 invested in another injection site.
“Even after extensive sampling and study, geological realities can be different from engineering plans,” said the report.
It said the history of both projects raises questions whether other governments have the technical prowess, strength of oversight and long-term commitment to ensure CCS projects work.
By 2022, only about 35 CCS projects were operational globally, removing 45.9 million tonnes of CO2 annually, according to the International Energy Agency (IEA). That is less than Singapore’s total annual greenhouse gas emissions.
But more than 200 proposals are under consideration worldwide. These include the plan by Malaysia’s Petronas to capture more than 3 million tonnes of CO2 per year from its new offshore Kasawari field in Sarawak. In Indonesia, BP and its partners plan to capture a total of 25 million tonnes of CO2 from the expansion of the Tangguh liquefied natural gas project in West Papua.
Yet, even with the current and planned projects, the IEA says this would lock away about 320 millions tonnes of CO2 a year by 2030 – about 8 per cent of CO2 produced annually by human activities. This underscores the challenge of trying to scale up the technology fast enough to make a real dent in carbon emissions.
Mr Hauber said CCS will not address the majority of emissions associated with the oil and gas sector: Scope 3 or customer emissions from using gas and petroleum products in cars, power plants or factories.
“Ramping up CCS for oil and gas does not mean scaling down Scope 3 emissions. The more oil and gas consumed, no matter if produced with renewables-fed electrification and CCS-equipped processing facilities, still leads to more carbon emissions,” he said.
“A key message for COP28 is: Focus on means to eliminate use of hydrocarbons and carbon-emitting processes. Stop trying to find workarounds to perpetuate hydrocarbon consumption.”
He said his report showed that CCS was costly and fraught with uncertainty, even with a government and energy firm prepared to back projects for the long term.
“With CCS, you are putting underperformance on top of risk on top of uncertainty in an attempt to definitively decarbonise the world. That sounds like a losing proposition for the planet.”