An Ambitious Policy for Carbon Dioxide Capture and Storage in Norway

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Dear Workshop participants,
It is a pleasure for me to address this technical workshop on our way to the establishment of the European CO2 test centre at Mongstad! I am pleased to see that the companies that you are representing are interested in the Mongstad project.

The background of this initiative is that the Norwegian Government has stated that Norway shall be a leading nation in environmental and energy policy. Norway will follow up its commitments under the Kyoto protocol and reduce emissions nationally as well as internationally. Furthermore, the Government is working persistently to develop a new technology that will reduce the emission of greenhouse gases from energy production. On this background we have decided to collaborate with the industry in order to move from the research phase to actual construction of large scale test facilities for CO2 capture at Mongstad.

In its World Energy Outlook, The International Energy Agency has forecasted a massive increase in global energy demand, including a doubling of electricity demand, between 2004 and 2030. The share of oil and gas in the world energy mix is expected to rise from around 55 percent today to about 60 percent in 2030. In reality this means that even if the world is successful in considerably increasing the use of renewable energy sources, we will still be heavily dependent on fossil fuels for the foreseeable future.

From a Norwegian point of view, experience from recent years have clearly illustrated that a secure energy supply requires an energy system that has increased production capacity and is less dependent on hydropower. In this context, an important element in the Norwegian energy policy is to create favorable conditions for developing environmentally friendly alternatives to hydropower. Reduced energy consumption, increased energy efficiency and use of renewable energy sources such as wind and biomass have been introduced as necessary measures. Furthermore, building of gas-fired power plants with carbon capture and storage is launched as a possible solution for a secure and sustainable energy system in Norway.

Our worries about climate change were recently confirmed by the UN’s Intergovernmental Panel on Climate Change. Their report highlights the scientific consensus regarding the quickening and threatening pace of human-induced climate change. If no action is taken, there could be a continuing increase in global temperatures and, by the end of the century, all regions of the world could potentially face serious consequences for their economies and ecosystems. Consequently, we are faced with a major challenge that requires us to take actions.

As a major producer of fossil fuels Norway has an important role in contributing to technology development.

In order to meet the Norwegian – and the worldwide – energy and climate challenges, I am convinced that we need both to increase the use of renewable energy sources and find sustainable ways of using fossil fuels. Furthermore, we need to use the available energy more efficiently. By developing efficient carbon dioxide capture and storage technologies we could increase security of energy supply and significantly reduce greenhouse gas emissions. I guess all of you agree with me when I recognize carbon dioxide capture and storage as a very tempting way to meet our major energy and climate challenges.

Norway has extensive experience in storing CO2 in geological structures. Since 1996, one million tonnes of CO2 per year have been separated from gas production on the Sleipner Vest field in the North Sea for storage in a geological formation 1 000 meters below the seabed. Storing CO2 in such formation is unique. This is the only facility in the world where large quantities of CO2 are stored in a geological formation under the seabed. When production of natural gas, NGL and condensate will commence from the Snøhvit field in the Barents Sea, 700 000 tonnes of CO2 will be separated annually from the natural gas and re-injected and stored in a formation 2 600 metres under the seabed.

Most elements of the CCS chain are to a large extent proven technology. CO2 capture technology is, however, not yet applied in full scale power plants. A vital challenge in this respect is to significantly reduce the cost of capturing CO2.

In an effort to speed up the development of commercial viable CCS technologies, the Norwegain centre for sustainable gas technologies, Gassnova, is supporting demonstration and pilot projects. Together Gassnova and the Research Council of Norway administer about 17 million Euros annually to support research, development and demonstration of such technologies. Joint efforts with industry could bring up the rate of activity to a hundred million euros per year. This is a considerable effort in an international context.

Gassnova focuses on a broad portfolio of different technology options. Following this strategy we could succeed in realizing more cost efficient technologies in a relatively short time horizon, while simultaneously working with less mature technologies that could decrease costs in the more distant future.

Furthermore, I would like to mention the efforts within the CCS field made by The Norwegian University of Science and Technology and the largest independent research organization in Scandinavia, SINTEF. Both the NTNU and SINTEF take active part in some of the most important international R&D projects on carbon dioxide capture and storage.

In order to realise CCS technologies on a commercial basis as soon as possible The Norwegian government and Statoil launched the Mongstad agreement to establish a full-scale CCS project in conjunction with the projected combined heat and power plant at Mongstad.

The project is to be fully operational by the end of 2014. The technology development stage of the project will – as you are aware of – be in place in 2010. This is a unique agreement. And the decision to execute is taken!

The main objective of the technology company that is to be established at Mongstad is to perform testing, verification and demonstration of – and encourage development of – CO2 capture technology capable of wide national and international deployment. Several technological solutions will be tested in parallel in the first phase of the project. This could be of great interest to any other future fossil-fuelled power plants. With the Mongstad CCS project this we move from the research phase to actual construction of a full scale CO2 capture facility.

Alongside the Mongstad project, Shell and Statoil work towards developing a very interesting project using carbon dioxide for enhanced oil recovery offshore – The Halten CO2 project in Mid-Norway. The concept involves capturing CO2 from power generation and utilizing it to enhance oil recovery at the Draugen and Heidrun oil fields. Investment decision is to be made 2008.

Furthermore, planning of a retrofit CO2 capture facility at the Kårstø gas-fired power station is given high priority by the Norwegian Government. The Norwegian Water Resources and Energy Directorate’s work related to verification of CO2 capture technology and costs concluded that a CCS facility could be in place 2012 at the earliest.

In order to succeed in realizing technologies for carbon free energy production we have to collaborate between borders. In this respect I appreciate the recently launched energy and climate change package proposed by the EU Commission.

The Commission states that much cleaner coal technologies and a significant reduction of CO2 emission will be necessary if the EU is to achieve its long term climate change objectives. In order to make sustainable fossil fuels a reality after 2020, the Commission propose to establish a favorable regulatory framework for the development of these novel technologies, invest more, and more efficiently, into research, as well as take international action. The EU Emission Trading Scheme will also need to incorporate capture and storage in the future.

The Commission will within this year start work to design a mechanism to stimulate the construction and operation by 2015 of up to 12 large-scale demonstrations of sustainable fossil fuel technologies in commercial power generation in the EU.

As a Norwegian/EU co-operation, I think the CO2 test centre at Mongstad would fit in perfectly as one of the European large scale demonstration facilities.

Summing up, the world is in need of concrete actions to curb CO2 emissions. Carbon dioxide capture and storage could play an important role in the portfolio of mitigating actions for stabilization of atmospheric greenhouse gas concentrations. However, we have to acknowledge that realizing carbon capture and storage on a large scale is still a very challenging task, which requires close cooperation with the institutional and commercial players.

The Norwegian Government has ambitious goals regarding capture, use and storage of CO2. The commitment to develop gas-fired power stations with carbon capture and storage in Norway is an important element of our energy policy. Succeeding with our efforts, we will achieve a more secure energy supply and through technology development contribute to substantial reductions in greenhouse gas emissions.

Norway has decided to take an important step towards more sustainable energy technologies. I hope you will join us!

Thank you!