THE Government has given the green light for Yorkshire’s heaviest polluters to use captured carbon emissions to extract oil from the North Sea in a move which will dismay environmentalists but could net the Treasury £5bn.
Adam Dawson, chief executive for carbon capture at the Department for Energy and Climate Change, told a conference in Leeds yesterday the idea of using captured CO2 emissions to pump extra oil out of depleted North Sea oil fields could be a “game-changer” as a method of funding expensive carbon capture projects in the UK.
Carbon Capture and Storage (CCS) is a still-fledgling technology whereby CO2 emissions are gathered from power stations and other major industrial sites and buried safely underground.
Yorkshire has long been seen as an ideal location to trial the technology due to its cluster of major polluters and its proximity to depleted North Sea oil and gas fields, where it is believed CO2 could be buried for millions of years.
Proposals are moving forward for a massive £2bn shared CO2 pipeline – the first of its kind in the world – calling in at every major polluter in the region before heading out to the Humber and the oil and gas fields beyond. The project could cut the region’s entire carbon output by up to 90 per cent.
Following the collapse last month of a proposed CCS power station at Longannet in Scotland, the UK’s most advanced project is now the Don Valley Power Plant project at Hatfield Colliery, near Doncaster, where proposals to develop the world’s largest “clean coal” power station have already won £150m in EU funding.
2CO Energy, the firm of former-BP executives who took over the project this year, plan to use their captured CO2 to push otherwise-unreachable oil out of depleted North Sea fields as they store it away, using a technique known as Enhanced Oil Recovery.
2CO chief executive Lewis Gillies told the conference this should make CCS a far more attractive proposition for Governments and private investors alike.
“We come at this from an oil perspective every time,” Mr Gillies said. “We don’t see CO2 as a waste product – we see it as a valuable commodity.
“If you can get the CO2 offshore and inject it into an oil reservoir, you can increase oil production from a field by 20 per cent. That is quite an economic lever for the whole CCS prospect.
“The North Sea has been a huge source of revenue. If you can make oil recovery work with CO2, you can probably double the remaining reserves in the North Sea.
“The tax revenue for the Treasury will be in excess of £5bn.”
The Government has set aside £1bn to help get CCS off the ground, and hundreds of millions of pounds are also available from the EU. But the cost of the untested technology remains the key obstacle preventing schemes from moving forward – hence the attraction of oil recovery.
Environmental groups such as Greenpeace have warned, however, that using CCS to extract yet more oil negates the whole point of the exercise – reducing global carbon emissions. But Whitehall CCS chief Mr Dawson said yesterday he believes the idea “has wings”.
“Oil recovery could be a game-changer for CCS,” he added. “CCS is a very complicated, expensive technology – and I’m keen we use whatever levers we can to get it going. It is helping us get down that learning curve make the technology structurally cheaper for all forms of CCS. So in that sense I think we have to embrace it as a way of getting things going.”
“The fact is the world’s demand for fossil fuels is insatiable. It will decline over time, but it’s not there yet. And there are alternative ways of getting that oil.”
Comment: Page 14.