Classification: Internal
Status: Draft
Building the CO2 Value Chain – Is it Possible?
Olav Kårstad
Special Advisor CO2
British – Norwegian Workshop on CCS
London 23rd April 2008
Classification: Internal
Status: Draft
3
StatoilHydro’s growth challenge is a climate gas emission
challenge
More CO2 intensive production in the pipeline – CCS necessary to reach targets
CO2 emission
[kg/tonne product]
Build new international
growth platforms
Maximise value
creation from the NCS
Norway Global
prod.
avg.
ReLNG
fining
Extra
heavy
oil
GTL
Extra
heavy oil
incl.
upgrad.
4
Large Stationary Sources of CO2 – Global View
Greater than 100 kt CO2/yr per facility
Cement
Oil power
Coal power
Gas power
Data source: IPCC SRCCS (2005) and IPIECA
5
- Global number of CO2-point sources* (green)
- Million tonnes of CO2/yr (black)
Number of sources or
This is about
56% of fossil
fuel related
CO2
millions of tonnes/year
14000
13294
12000
10539
10000
7495
8000
6000
4942
4000
2000
1175 932
639 798
269
646
470 379
0
Power
Cement
Refineries
* Larger than 0,1 million tonnes of CO2/yr from one source
Data source: IPCC Special Report on CO2-capture and -storage
Iron & steel
Petrochemical
Sum total
6
StatoilHydro’s CCS projects
Part-owner of 3 of 4* large-scale CCS project
* The 4th project is Weyburn – Midale in Canada
7
Sleipner – 11 years of large scale CCS demo
• Started in 1996
• CO2 from natural gas (Approx. 1 mill. tons CO2 annually)
• Stored in saline aquifer – sandstone formation with water
• Driver: CO2-tax (340 NOK/ton – $60/ton), corporate environmental strategy
• Learning and confidence building through a series of large EU-wide R&D programmes
8
Snøhvit LNG; CO2-pipeline reel-out
9
The In Salah gas processing plant with CO2-capture facilities
10
Proof of concept through monitoring and R&D
11
What does it take?
Simple economic rules will decide speed and volume of CCS roll-out
Cost
•Low hanging fruits
•Direct governm. investment
•Technology development
•CO2-EOR
•Kyoto mechanisms
•Environmental taxes
•Under-supply of credits
•Emission limitation
Cost of emitting
Cost of
removing/injecting
Time
12
The low hanging fruits in CO2- capture
13
The low hanging fruits in CO2-transport and -storage
14
CCS low-hanging fruits – “cheap”, already concentrated CO2
 more than 200 sites globally with CO2 > 100 000 tonnes/yr
LNG
production
Natural gas
purification
Ammonia
plants
Coal gasification
plants
Hydrogen
production
15
In Norway two low-hanging fruits has passed the point of
profitability due to the high CO2 tax on petroleum activity
•Low hanging fruits
•Direct governm. investment
•Technology development
•CO2-EOR
•Kyoto mechanisms
•Environmental taxes
•Under-supply of credits
•Emission limitation
Sleipner
Snøhvit LNG
16
And two “high hanging” CCS-fruits (in connection with gas fired
power plants) are planned to be built with state funding
•Low hanging fruits
•Direct governm. investment
•Technology development
•CO2-EOR
•Kyoto mechanisms
•Environmental taxes
•Under-supply of credits
•Emission limitation
Kårstø
Mongstad
17
CO2-EOR – profits from CO2 injection
• Income from extra oil production to pay
for CO2 infrastructure
CO2
• Onshore applications to happen first
• Free up natural gas resources by using
CO2 as injection gas
• Coexistence with storage necessary
• Sensible natural resource exploitation
Graphics : EnCana
EOR
18
Regulation and acceptance – perception of risk
What does it all come down to?
TODAY – certain emission
TOMORROW – safe storage
19
Summary: Building the CO2 Value Chain – Is it Possible?
• Climate change is happening – CCS one of five important solutions
• Making CCS happen is difficult under any circumstances, but in particular in today’s
high cost construction market and uncertain long term cost of emitting CO2 to the
atmosphere
• Low-hanging CCS fruits are there to be picked  useful to prove storage and CO2EOR as well as for gaining public enthusiasm
• Power plant CO2-capture  A number of demo-projects must proceed to avoid delay
in 2. and 3. generation deployment (technology lock-in of long life plants)
• In the shorter time frame carrot and stick incentives are necessary to initiate industrial
scale projects without which technology and frameworks will not develop