Slide from ISGF India utility professionals seminar on carbon capture led by Michael Barnard, Chief Strategist, TFIE Strategy Inc.

UK To Pour $28 Billion Into Carbon Capture & Storage Over 25 Years

October 8, 20242 months ago Steve Hanley 0 Comments

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Elections have consequences. The newly installed Labour government in the UK announced this week that it will pump £22 billion (approximately $28 billion) into carbon capture and storage schemes over the next 25 years. The Guardian reports the move came after an extensive round of high pressure lobbying by fossil fuel giants ExxonMobil, Equinor, and bp (which used to be British Petroleum before it became BP but then had to change its public face after the Deepwater Horizon debacle in the Gulf of Mexico in 2010).

Those companies or their lobbyists attended 24 out of 44 external ministerial meetings to discuss carbon capture and storage in 2023, according to official records reviewed by The Guardian. Between 2020 and 2022, when Tory ministers held about half as many meetings to discuss the technology, oil and gas companies would 7 seven to 10 of these discussions each year.

“Today’s announcement will give industry the certainty it needs — committing to 25 years of funding in this groundbreaking technology to help deliver jobs, kick start growth, and repair this country once and for all,” Prime Minister Keir Starmer said in a statement. Assuming the carbon capture schemes work, that is. So far none have, at least in terms of doing so affordably. Industry advocates insist this is new technology that will take decades to achieve its promise, just as solar panels and wind turbines took decades to become commercially viable, but in fact carbon capture has been struggling to get a foothold for decades already and keeps getting more expensive instead of less.

3 Carbon Capture Schemes Will Be Funded

Whether the money will “repair this country once and for all,” is a matter of some conjecture. It almost seems that Starmer is suggesting it will undo the enormous damage to the UK economy that followed the decision to withdraw from the European Union. Originally there were 8 carbon capture projects under consideration but that list has been whittled down to just three. Those include a power plant under development by bp and Equinor, an energy to waste plant, and a project that will create hydrogen from natural gas, a process known to produce massive carbon dioxide emissions. The plan would allow various emitters to share pipelines that transport the captured carbon dioxide and the storage sites. The first two areas are the East Coast Cluster, including projects from bp and Equinor in the east of England and HyNet that would serve sites in the west of England and Wales.

Along with £8 billion of private investment, the carbon capture plans will directly create 4,000 jobs, according to a government statement. The funding from the government will be enough to build the transport and storage networks for both clusters, as well as capture technology at three emitting sites. Bloomberg says those projects will remove 3 million tons of carbon dioxide per year, which would fall far short of a previous government target to capture and store up to 30 million tons of carbon dioxide per year by the end of the decade. The UK currently is responsible for around 380 million tons of carbon emissions each year. If those are the only projects supported by this funding, it would represent a cost of about £300 per ton of carbon dioxide — roughly eight times the current price of carbon in the UK. While the fossil fuel companies executives from the projects hailed the announcement, there’s no clear indication when the final investment decisions will happen. The projects are already behind schedule, which raises the possibility that existing contracts will need to be renegotiated to account for higher costs.

Is Carbon Capture A Scam?

Critics of carbon capture respond that it is a giant boondoggle that has never worked and never will work. Just a few weeks ago, our own Michael Barnard posted an article in which he said carbon capture is “an overly hyped, overly hoped for solution that isn’t and won’t scale remotely economically.” He suggests when you are digging a hole for yourself, at some point it is best to stop digging and start facing reality.

Writing for The Conversation, contributor Mike Maslin said,

“I was one of several leading climate scientists who recently signed a letter to the energy security and net zero secretary, Ed Miliband, in which we pointed out the many issues with the current plans. This announcement represents a massive bet on a still unproven technology, and will lock the UK into fossil fuel dependence for decades to come. The Climate Change Act mandates the UK should achieve net zero emissions by 2050, yet this will be impossible if carbon capture leads to the UK building new gas power stations instead of wind and solar farms.

“Even if the technology worked perfectly, it still locks the UK into a reliance on natural gas (which is basically methane, a potent greenhouse gas) for generations to come. This will result in the UK being reliant on imported natural gas past 2050, which has significant upstream emissions from methane leaks, transport and processing. That then exposes the UK to the continued volatility of the global energy markets, which in part caused the country’s cost of living crisis. (Renewables don’t have this problem, since the wind and sun don’t need to be imported from overseas.)

“In the letter, we pointed out that carbon capture projects have a very poor track record of over-promising and under-delivering. Most current CCS capacity is within natural gas processing facilities, where carbon dioxide must be separated out to produce marketable products. Almost 80 percent of the carbon dioxide captured is re-injected into oil fields to facilitate oil extraction. The track record of adding carbon capture to power plants is much worse, with the vast majority of projects abandoned. Just two commercial scale coal fired power plants are operating with CCS — Boundary Dam in Canada and Petra Nova in the US. Both have experienced consistent under-performance, recurring technical issues and ballooning costs.”

“CCS is technically complex and difficult for anyone but industry experts to fully understand,” Lindsey Gulden, a former ExxonMobil climate and data scientist, told The Guardian.

“That means it can be easily spun to give cover to the oil industry as they attempt to navigate the growing public concern over climate change. Carbon Tracker said in a March report that building new methane fired power plants “could lock consumers into a high cost and fossil based future” and urged the UK to focus on deploying carbon capture in hard to decarbonize sectors such as cement. “These ‘low-carbon’ gas projects are not really low carbon if you look at the whole supply chain,” said the report’s author, Lorenzo Sani. “They also continue this paradigm that we have today of linking our economies with fossil fuels, whose markets are volatile and often controlled by external actors to the UK.”

Maslin adds, “As the world leaders agreed and declared at the most recent UN climate summit, COP28 in Dubai, we must transition away from fossil fuels in a just, orderly and equitable manner in order to achieve net zero by 2050. This will not happen if the UK and other countries lock themselves into a fossil fuel based pathway with inevitable upstream emissions, displacing genuinely zero or low-carbon electricity generation.”

The Takeaway

It seems fair to say that this scheme is fraught with challenges. In essence, it is the same old schtick the oil and gas industry has been touting for decades — Let us continue making obscene profits until the last molecule of coal, oil, or methane has be extracted from the Earth and we promise we will clean up our mess later. Governments fall for these duplicitous blandishments again and again, just like Charlie Brown always trusts Lucy will not take the football away at the last second. It’s essentially a shell game with the odds stacked in favor of industry by years of campaign donations to compliant politicians and the promise of “jobs.” All those jobs are essentially an illusion based on the notion that carbon capture is going to work. Which begs this question — what if that $28 billion were invested in renewable energy projects instead?

The industry has any number of tricks up its sleeve. It will make renewable fuels from algae or old soda bottles; it will capture all those nasty emissions and bury them deep underground or hide them in the pantry with their cupcakes; it will clean up its act while fighting tooth and nail against any responsible effort to transition to a sustainable economy. It can’t make that transition, of course, because its very business model is unsustainable. If all the oil and gas waiting underground is extracted and burned, a climate disaster of epic proportions will follow. The best way to control carbon emissions is to stop making the hole we have made for ourselves deeper.