Royal Dutch Shell Group .com Rotating Header Image

Royal Dutch Shell Seeks Funding For Carbon Capture Project

Screen Shot 2015-06-13 at 09.25.05

Screen Shot 2015-06-29 at 15.57.33

By: MICHEAL KAUFMAN: Jun 29, 2015 

Global warming concerns have been receiving more and more media attention, as major oil companies also plan to address the issue, considering its potentially adverse effect on the environment.

Goldeneye, an abandoned offshore natural gas production platform that is connected to the Scottish coast via a 100 kilometer long pipeline, could soon be used to deposit carbon dioxide well below the Earth’s surface. Once operated by Royal Dutch Shell plc (ADR) (NYSE:RDS.A), the project could become the world’s first carbon capture and storage (CCS) project that uses a power station, fuelled by natural gas. The European energy major is looking to the UK government to release one billion GBP in funds for the company to develop the project, the Financial Times has reported.

Carbon capture techniques involve capturing carbon dioxide from major sources of carbon emissions, like power plants that use fossil fuels, to transport it to an underground storage site to avoid their release into the Earth’s atmosphere. By storing waste carbon dioxide deep below the surface, the technology can reduce the amount of harmful carbon emissions, subsequently keeping temperatures from reaching dangerously high levels, according to Shell.

However, the technique does have its critics, who argue that CCS, in fact, encourages further use of fossil fuels. Among the critics of CCS is the global environmental organization, Greenpeace. The organization believes the “real goal” of developing the controversial technology is to spur oil extraction.

On the other hand, Shell Chief Executive Officer, Ben van Beurden, argues that CCS is essential. Despite the recent shift to greener and renewable sources of energy, oil and gas remain the primary source to meet the majority of the world’s energy needs, and they will remain so in the coming years, according to Mr. Beurden.

Bill Spence, who leads Shell’s Peterhead carbon capture project, believes the Goldeneye platform is in good condition, despite going out of operation in 2011. Mr. Spence told reporters that the Goldeneye project, once fully developed, can handle more than the emissions handled by the Peterhead project. If the project is successfully used for carbon capturing, other gas platforms in the North Sea may also be put to similar use, according to Mr. Spence, as it would save decommissioning costs.

“Scale favors cost. The bigger you can make it, the lower the cost. When we start to get into the second, third and fourth of a kind, when the operability and safety is proven, then you start to drive yourself down the cost curve,” Mr. Spence told reporters, according to FT.

However, moving down the cost curve could be challenging, as the technology has not previously been profitably developed.

The London School of Economics and the Grantham Institute have released a report on cost estimates for CCS. According to the report, the cost of installing 11 gigawatts of electricity with CCS in Europe by 2030 would be as high as 35 billion euros. Moreover, the currently prevalent carbon price in the EU is too low to make CCS projects financially viable.

On the other hand, Shell is anticipating that in the future, fossil fuels would become expensive to burn, increasing the company’s support for carbon capture technology.

The UK government has planned to give a £1bn subsidy to test CCS technology. For the technology to be a commercial success, capital grants will be required in the “short term,” according to Shell. The company expects to make a final investment decision by the end of the current year.

But Shell’s plans have not convinced environmentalists.

Doug Parr, Chief Scientist and Policy Director at Greenpeace’s UK chapter, said: “On paper, CCS looks like an important technology which could reduce emissions from existing high-carbon infrastructure.” “In practice, its main use seems to be as an argument in favor of building more high-carbon infrastructure,” Mr. Doug added, according to the FT.

SOURCE

This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Comments are closed.