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Norway ditches large-scale carbon-capture plan

Posted on behalf of Richard Van Noorden.

Norway’s government is cutting off support for a facility that by 2020 was to capture and store carbon dioxide emissions at a commercial scale. After years of delays and mounting costs, the plan to capture 1 million tonnes of carbon dioxide a year from an oil refinery and gas power plant at Mongstad would be halted, said oil and energy minister Ola Borten Moe on 20 September.

The failure at Mongstad follows hard on the heels of a series of disasters for European efforts to launch large carbon capture and storage (CCS) projects. While North American projects look set to switch on next year, Europe has failed to finance projects that were conceived at similar times in the early and mid-2000s – thanks to a mixture of political reluctance, the economic recession and its effect on carbon prices, and government bureaucracy (see ‘Europe’s untamed carbon’).

In Norway’s case, says the Bellona Foundation, an environmental non-governmental organization headquartered in Oslo, the Mongstad failure was “a reflection not of the technology involved, but rather the shoddy organization and perpetual equivocation on behalf of the Norwegian government.”

The latest decision followed a critical report on 17 September from the country’s Auditor General, which said that the government had overspent on the project and handled financial risks poorly. “The complexity of implementing CCS was underestimated in 2006,” it said. That was when Norway first embarked on efforts to support a large-scale CCS plant, by passing laws that new gas power plants would have to install CCS, and by setting up a state enterprise, Gassnova, to support research and demonstration projects in the area.

Since 2007, the government has spent 7.2 billion Kroner ($1.2 billion) on CCS research and projects at Kårstø and Mongstad, the report said. Some 3 billion Kroner ($500 million) was to have been invested just on planning full-scale CO2 capture at Mongstad, following the launch of a $1 billion technology centre last year.

Prime Minister Jens Stoltenberg had earlier called the Mongstad facility, a joint effort between Norway’s government and the domestic energy firm Statoil, a ‘moon landing’ project, according to Bloomberg. But the moon landing proved too expensive.

“There was too much risk associated with the costs we had in front of us – and that we couldn’t complete the project in the timescale given,” says Håkon Smith-Isaksen, a spokesperson for Norway’s energy ministry. Stoltenberg had admitted over the past few years that the costs of carbon capture had “unfortunately become much higher”.

The decision came in the dying days of Stoltenberg’s coalition government, which has held power for the last seven years but lost elections on 10 September. On paper, all of Norway’s political parties are still signed up to a climate package that a CCS full-scale plant be built somewhere in the country by 2020, says Smith-Isaksen — although it’s likely that the Mongstad project would have missed its 2020 target in any case.

Applications are now open for CCS projects elsewhere, and Gassnova, the Norwegian state enterprise for CCS, still has funding. Smith-Isaksen adds that some of the money spent on the plant at Mongstad had given results that could be used in other places around the world. But in the opinion of Keith Whiriskey, an advisor at Bellona, Mongstad was the best project, and a lot of the learning that Statoil put in to study the geology for carbon burial there may now be lost.

Whiriskey also argues that Statoil has dragged its heels on the project, not wanting to employ an expensive CCS facility at its Mongstad oil refinery, which would raise electricity prices. Statoil has been burying millions of tonnes of CO2 at the Sleipner and Snøhvit gas fields in the North Sea for many years, but that is because Norway puts a tax of €50 per tonne on offshore CO2 emissions, Whiriskey notes. There’s no similar incentive to trap CO2 emitted from onshore power plants, he says. Statoil were not available for comment.

The separate $1 billion technology centre at Mongstad, which supports research into how best to capture emissions, will continue, and the government will invest an extra 400 million kroner ($68 million) into the work. That is a joint venture between the Norwegian state, Statoil, and oil giants Shell and Sasol. The technology centre was itself over-budget by some 1.7 billion kroner ($290 million), the Auditor General said. (See ‘Norway opens carbon-capture test facility‘.)

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