Royal Dutch Shell Group .com Rotating Header Image

Difficult to fund project – Shell

Cost of carbon capture and storage could raise energy prices for consumers to offset costs of program

Posted By Conal MacMillan Sun Media

9 March 2009

Without government funding Shell’s carbon capture and storage project that would see nearly half of the CO2 emissions from the company’s Scotford site sequestered would be difficult to justify given the state of the economy, a senior official with the company told The Record last week.

The cost of complying with current emissions regulations is $15 per tonne of CO2 each year while the cheapest carbon capture and storage (CCS) projects come in at a minimum of $80 and reach as high as $140, Rob Seeley, general manager of sustainable development oilsands for the company, said.

“Knowing that the cost of compliance today is $15 per tonne and the cost to build one of these is $80 to $140, I think you’d pick the more economical route,” he said. “So, I think it would be very difficult to go ahead with one of these projects (without government support).”

Last July, Premier Ed Stelmach announced his government would be injecting $2 billion into three to five CCS projects that are expected to lower carbon emissions by 5 million tonnes over the next six years.

But the cost of the technology will drive up the price of energy for Canadian consumers, the chairman of the Alberta Carbon Capture and Storage Council warned last Wednesday. It will test Canadians to see how much they are willing to pay for energy with reduced carbon emissions, Jim Carter said.

However, the technology will eventually become commercially viable for companies, without the need for government subsidies, he added.

Enthusiasm from the oil industry to develop CCS technology is dampened by an incoherent regulatory framework which sees the Alberta, Canadian and American governments talking about different plans, he said.

“There’s a lot of ambiguity out there right now. And as we all know, capital markets don’t like uncertainty,” Carter noted.

The province currently has about 20 CCS projects shortlisted to receive funding, but not all will get a chunk of the change, Seeley said last Tuesday evening during a presentation to update city council on Shell’s local CCS project – called Quest.

The deadline for companies to apply is the end of March. It will take the government about three months after that to select the projects, said Seeley, who travelled from Calgary to speak with council.

Shell’s project, which Seeley said is on the government’s shortlist, plans to sequester 1.2 million tonnes of liquefied CO2 per year 2.3 kilometres underground in an area north of Bruderheim, which amounts to 40 per cent of the Scotford site’s emissions.

SOURCE ARTICLE

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Comments are closed.

%d bloggers like this: