Examination of Witnesses (Questions 300
- 319)
WEDNESDAY 14 DECEMBER 2005
MALCOLM WICKS
MP, MS BRONWEN
NORTHMORE, MR
BRIAN MORRIS
AND DR
GEORGE MARSH
Q300 Dr Iddon: Does the Government
have a view or a preference on whether we go for pre-carbon capture
or post-carbon capture?
Dr Marsh: Again, referring to
the same data, the numbers are too close to call and I think it
is a commercial judgment that will take into account not just
cost but the industry's perception of the risk associated with
different technology options, their confidence that it will work
and their confidence that they can build it within timescales.
I think that is better left to the industrial specialists to make
a judgment on.
Q301 Dr Iddon: As a chemist I was
against CCS until I met BP the other day. Their plant at Peterhead
will be pre-carbon capture which delivers two things: from the
gasification of coal it delivers chemicals (it is the old coal
tar process, essentially), and secondly it delivers hydrogen for
the hydrogen economy. That is pre-carbon capture. In post-carbon
capture it is too late; the chemicals are burned and the hydrogen
is not available. I put it to the Government that it seems sensible
to invest in pre-carbon capture rather than post-carbon capture,
for that reason.
Dr Marsh: That is an opinion that
we have heard as well and there are counter arguments about post-combustion
in terms of that technology being demonstrated to separate CO2
in other applications, and the fact that just about all of the
stock of power stations that exist at the moment would have to
have retrofitted post-combustion capture applied to them. So there
are strong arguments in favour of both technologies.
Q302 Dr Iddon: We are going to leave
it to the market and not give government guidance?
Malcolm Wicks: It is obviously
important that the Government understands these arguments at,
really, quite a technical level. My colleagues do and they can
give me advice on that. However, I think we have to be sensible
about this, and there are things that government do best and there
are things that the market does best. My own judgment would be
that on those issues we need to understand the arguments, but
surely we should leave it to the companies involved and to investors
to make appropriate judgments. As I say, there are things government
can do about giving some stability in the long term, giving the
priority to this area but I think for us to think we can give
an engineering or scientific judgment would probably be foolish.
Q303 Chairman: There is a worry,
is there not, here, Minister, that if, in fact, you are looking
in terms, for instance, of a hydrogen-powered, if you like, transport
system within 10, 15 or 20 years, then there is a crucial decision
to be made as to whether you have hydrogen producing plants on
their own and deal with CO2 separately or whether, in fact, you
do as Brian has suggested and try to bring them both together
in pre-combustion. Does the Government have a view?
Dr Marsh: I think that is asking
a question about the timing of two different sets of technologies,
which is a difficult thing to do. We have looked at carbon capture
and storage and our belief is that it will be used to produce
low carbon electricity to start with. There is time enough to
think about how to make hydrogen after that.
Ms Northmore: You can make hydrogen
from a range of different sources; you can make it from nuclear,
actually, alternatively you can make it from fossil coal and renewables.
Q304 Chairman: Brian Iddon's question
was about the advantage, in fact, of building this into the pre-combustion
phase in terms of dealing with carbon capture, storage and the
production of hydrogen at the same time. Is the Government actively
looking at that and other chemicals?
Dr Marsh: Just as in carbon capture
and storage, we have got capture, transportation and storage—whole
infrastructures. By extending to hydrogen you are bringing in
a whole additional set of infrastructures issues on how to store,
transport and deliver hydrogen and what kind of vehicles it would
be used in. I think there are a lot of open questions within that
that determine the timing and whether that timing matches with
the timing for the deployment of CCS for electricity generation.
Our own modelling studies suggest that that is probably a decade
or so after the use of CCS for electricity generation.
Mr Morris: Can I bring to your
attention that in the demonstration scheme that we are developing
at the moment we are linking carbon abatement technologies with
hydrogen production as well. So with the £40 million which
was announced in June—25 million for carbon abatement and
7.5 million for hydrogen—we are approaching that scheme
in a very flexible way. So if someone can bring in a project which
involves carbon abatement and hydrogen generation at the same
time then they could have access to both those bits of money.
So we are recognising that there are linkages there and it is
an opportunity to exploit them.
Malcolm Wicks: There are big developments
in the States on this. When I was in Washington I met GM (General
Motors) to talk about their big investment in hydrogen. Indeed,
foolishly, they let me drive their hydrogen car. So I have seen
the future and it works, to some extent.
Q305 Dr Harris: How safe do you think
carbon storage is? It must be safer than oil storage, I guess.
Malcolm Wicks: This is where we
need to learn from the demonstration projects, if I can call them
that, that we have already and where we need to, obviously, work
with BP and others very carefully on the Miller field project.
I think the Norwegian experience is, frankly, reassuring, but
we are talking about the development of new technologies. To some
extent this is unchartered territory and we need to approach this
very carefully.
Q306 Dr Harris: Would you agree that
we do not yet know enough about the consequences of leakage, particularly
in respect of local environmental concentrations, of CO2 from
storage facilities?
Malcolm Wicks: I think what we
know from the Norwegian experience, which of course is a good
experience for us because it is the North Sea, is that there has
not been a leakage problem and that the scientific community studying
there (that is the geologists) are highly satisfied about how
the CO2 is behaving. In other words, it is there; it is where
it should be.
Mr Morris: There is experience
from natural leakages of CO2. CO2 is stored naturally; particularly
if you look around the Mediterranean basin there is a lot of naturally
stored CO2. In fact, in Texas the CO2 used there for enhanced
oil recovery comes from naturally occurring CO2. You do get, in
some cases, some leakage from naturally stored CO2, so there is
some understanding of how it behaves when it does actually leak,
but obviously one has to transpose that into man-made storage
of CO2—
Q307 Dr Harris: There will need to
be some work, I guess, on a review of the potential health and
environmental consequences. That would just be sensible to do.
Who should do that? Do you think it should be industry and potential
investors looking at that, or should it be Government or should
it be someone else?
Malcolm Wicks: One aspect of this
is the need to revisit the London and the OSPAR Conventions, which
are about dumping at sea. I think there is a lack of clarity at
the moment about whether or not they allow for carbon storage
beneath the sea bed, and we are engaged in those discussions.
There would also be, I would judge, a need for a regulatory regime
here in the UK (probably elsewhere too) in terms of these storage
issues, which would look at some of these environmental factors.
Dr Marsh: As far as the engineering
aspect of carbon capture and storage is concerned, in other words
the power plant, the pipeline and the operation of the platform,
the regulatory standards for safety exist and are operated through
the Health & Safety Executive. In fact, I think BP have mentioned
that they are in discussions with the HSE about their Peterhead
Miller project. So the less defined area is the long-term storage
in the geological formation, and that is really a matter of establishing
the science and knowledge base to make a convincing case. Our
view is that with oilfields and gas fields that have been very
well explored in order to be able to exploit them, that knowledge
base is particularly strong, and able to show that they should
be successful sites for storage of CO2.
Q308 Dr Harris: You are assuming
that the storage facility will come under some external independent
regulation like the Health & Safety Executive, or will it
be judged to be so low risk that that will not be felt to be necessary?
Malcolm Wicks: As I said earlier,
I think there will need to be a regulatory regime, but as to the
precise nature of that, obviously, it is still very early days
to determine that.
Mr Morris: We are starting to
look at whether a regulatory regime is needed. We have already
set up a working group to look at that because we realise that
that needs to be investigated and we need to understand exactly
issues like the need to survey an area before you start to think
about storing carbon dioxide in it to make sure it is actually
going to be a safe and reliable store for carbon dioxide. One
of the things we have signed with the Norwegians is that agreement
we mentioned earlier to look into how we develop the principles
for regulating the management of carbon storage in the North Sea.
So we are very aware of the need to make sure that we will be
recognised to be taking a responsible approach storing CO2.
Q309 Dr Harris: Very soon—next
summer—the energy review is going to talk about significant
investment and plans for carbon storage. What engagement has there
been by the DTI with the public to prepare them for some of the
issues around carbon storage and capture?
Malcolm Wicks: We are thinking
this through and developing a communication strategy on this.
I think I would say out of the energy review, and indeed during
the process of the energy review, we are going to be engaging
with the wider public as well as stakeholder groups on a whole
range of energy issues. My judgment would be that we need to take
the public with us on where we are in terms of energy and climate
change, and the rather difficult and sometimes controversial judgments
we are going to have to make. In fact, I have been rather encouraged
about the way in which the media, including television, has shown
a real interest in some of these issues about carbon capture.
Indeed, some of the best things I have seen with graphics etcetera
have been on some rather serious TV programmes explaining to the
public what this new-fangled stuff is all about. I think that
is very encouraging, and I think our work with the media is probably
critical to this.
Q310 Dr Harris: Some people have
said that it would have been better to have done more work on
this already in terms of public engagement. The Guardian
described the technology in a headline (one cannot blame the journalist
necessarily) last summer as "Carbon Dumping". There
may well be concerns and the public may well see this as the new
GM. Indeed, I think we were told by BP that public acceptability
was a potential show-stopper. Do you wish, in all candour, you
were further along the line of public engagement, or are you happy
with the amount that has been done so far?
Malcolm Wicks: I am very happy;
I am very relaxed about where we are on this. Dr Harris, there
are always those who seek to conjure up demons when it comes to
any new scientific development, but people like you and I need
to engage the public in a better informed debate.
Q311 Dr Harris: I think we would
like that in both our parties.
Malcolm Wicks: I am sure together
we will.
Mr Morris: When we launched the
carbon abatement technology strategy back in June, in the afternoon
of that launch we actually did have a meeting with some of the
green NGOs to explain the strategy and discuss it with them, because
we recognise that the NGOs are opinion formers and we need to
ensure they understand what we are trying to do and how we are
approaching it. So we are very aware of that, and we are doing
quite a lot of other activities as well in trying to engage people
on the issues in order to try and build understanding about the
technologies.
Q312 Dr Harris: I would agree with
what you were saying, Minister, that you can sometimes not satisfy
and you would not want to satisfy every NGO, but I hope you are
aware of what they said to us in evidence. When we asked the Green
Alliance how effective the Government had been so far in communicating
CCS technology to the public, Russell Marsh said: "Not at
all", while Doug Parr from Greenpeace asked us, in return:
"Has there been any communication about it? I must have missed
it". Has he missed it, or is he right?
Malcolm Wicks: I am bound to say
his remarks do not entirely surprise me. I think they are so hard
at work they have missed it, yes. I, myself, in my modest way,
have discussed this on 30 or so radio and television programmes,
so, sadly, yes, they have missed it.
Mr Morris: We have been engaging
the NGOs; we have been engaging them for two or three years now
on this. We invite them along to conferences and other events
where they can put their point of view and they can discuss it
with us. We have been trying to engage them for sometime now on
this; we realise how important they are and that they need to
be engaged and consulted.
Malcolm Wicks: I think the serious
voluntary organisations are genuinely very interested in this
technology because they may wish for an alternative to windmills
or tidal doing 100% of this. The serious players know that we
will be burning the fossil fuels as we have discussed and that
these kinds of CCS technologies are worth investing in.
Q313 Dr Harris: Do you agree with
BP that public acceptability could, if it is not well done, be
a show-stopper on this issue, like, to a certain extent, it has
been with other technologies?
Malcolm Wicks: My own position
on this, when I talk to people about this, is that this is very
new to people. Let me confess, Chairman, when I was pension minister
(whenever it was—nine months ago) I do not think I had heard
about this technology. Take that for good or ill, but that is
the truth. A lot of people I meet and talk to, a lot of broadcasters,
do not really understand it but I think that there is is genuine
intellectual interest in it—a bit of an intrigue about it.
I do not see people waving shrouds and saying: "No way";
I think the public are addressing this in a rather intelligent
way.
Q314 Dr Iddon: I have just one more
question in this section, and that is on liability. BP have told
us that they are prepared to accept the liabilities of CCS—the
chance of a leakage and dealing with it, for example—as
long as they are putting the carbon dioxide down into the storage
cavern. However, thereafter they are expecting the Government
to pick up the liability for eternity, essentially. Has the Government
entered into discussions with BP, or any other company, about
the potential liabilities beyond storage in this area?
Malcolm Wicks: It is tempting
to commit the Government for eternity. During that time period
we could even have a change of government! I think the serious
point is this: what you are reporting has to be about right, does
it not? While it is a commercial matter the company has to take
responsibility, and we need to get the regulatory framework right.
There would then have to be careful consideration about a kind
of hand-over period so that when the responsibility was handed
over to the wider state we were sure that everything had been
done commercially. Then I think it is just plain common sense
that in terms of the very long term (and the very long term is
very, very long term, Chairman, is it not—millennia), then
it would be unrealistic to think that a company, even a very powerful
company that was a big player in the 21st Century, may necessarily
be there to manage it three million years later. Therefore, I
commit my successors in three million years to keep a careful
eye on this, and you must hold them to account, Chairman!
Q315 Chairman: We will make a careful
note of that, Minister, and it will be reported in the report—and,
also, that you forecast a change of government sometime.
Malcolm Wicks: During eternity,
yes. I am trying to be fair; I am seeking consensus.
Q316 Chairman: We are delighted there
is such forward thinking in the Government at the moment.
Malcolm Wicks: There will be new
leaders by then, Chairman.
Q317 Dr Turner: Can I ask about regulatory
issues? First of all, can I jump back to what we were talking
about before? Have you considered the possibility of making it
mandatory that future fossil fuel plant should be capture ready?
Mr Morris: We are working with
Section 36 of the Electricity Act 1989 and we are starting to
talk to colleagues in that part of the DTI about what we would
need to do to that. I think one of the things we would need to
be able to do is be quite clear how we define "capture ready".
We felt we could define that really well, but we have come across
some other ideas about what is meant by "capture ready".
So it needs to be thought about, but we have already started to
initiate action on that. George, you have done quite a lot of
work on defining "capture ready". Do you want to add
anything to that?
Dr Marsh: I thought I had developed
a clear definition of capture ready but industry is much cleverer
and pointed out that there might be other considerations. I think
Brian is right, there needs to be clarity on what is "capture
ready".
Q318 Dr Turner: You are on the case
already. That is the main point. It has been suggested that there
should be a carbon capture and storage authority to regulate and
monitor storage. Does the Government consider that a sensible
approach?
Malcolm Wicks: I do not think
we are there yet, I really do not. No doubt we will need to be
talking about that kind of thing. I am not committing myself to
a new quango or anything at this stage but, clearly, the promotion
of this, the regulation of it, the research and development—all
those things we will need to look at very carefully with industry,
but we are not there yet.
Q319 Dr Turner: At the moment, under-sea
carbon capture and storage, except for enhanced oil recovery,
is illegal until the London Convention and the OSPAR Conventions
have been renegotiated and amended. What is the progress on that?
Malcolm Wicks: I may be wrong
but I do not think it is entirely illegal. I think there is a
lack of clarity on which reforms need to be clarified. However,
I could be wrong so I will ask Mr Morris to comment on that.
Mr Morris: I will start but George
Marsh has done a lot of in-depth investigation into this. Enhanced
oil recovery is legal under OSPAR and London because it is a working
gas and, therefore, it is legal. I also think if you look at Sleipner
in the Norwegian sector that is also legal because it is actually
injecting the CO2 from the site rather than bringing it from shore.
Under certain circumstances, perhaps perverse circumstances, CO2
storage under the sea-bed could be legal but work we have stimulated
in the London and OSPAR Conventions themselves has actually concluded
that it needs to be clarified. Again, it is something we are engaged
in; it is something we have dealt with with colleagues in Defra
because they take responsibility for those conventions and the
UK interest in those conventions. We have been working to get
that brought up the agenda. It has now got to a point where both
conventions have set up working groups to look at it and see to
what extent it needs to be amended. It is generally accepted that
the conventions do need to be amended, and this is more likely
something which needs to be done and needs to be allowed.
Malcolm Wicks: My understanding—and
I am not an authority on them—is that they were about dumping,
perfectly properly. Technologically we are now in a new ball game
and they need to be sensibly reformed. I am relaxed that they
will be.
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