Select Committee on Science and Technology First Report


SUMMARY


Summary

As evidence of the harmful effects of climate change and ocean acidification accumulates, carbon dioxide (CO2) emissions around the world continue to grow. The UK is struggling to meet its targets to reduce CO2 emissions by 20% below 1990 levels by 2010 and 60% by 2050, while growing energy demand in countries such as China and India is expected to fuel a dramatic, and potentially disastrous, increase in global emissions over coming years. At the same time, domestic concerns over security of supply are increasingly dominating the debate about energy policy, reflecting unease over UK dependence on imported gas sourced from certain unstable parts of the world, higher and more volatile energy prices, and the need to replace the UK's ageing fleet of coal-fired and nuclear power plant.

In this inquiry we find that there is significant scope for Carbon Capture and Storage (CCS) technology to contribute both to reducing CO2 emissions in the UK and abroad, and to enhancing the security of the UK's future energy supplies. Most of the technology is already proven and available but there is a lack of experience in integrating the component technologies in single projects at the scale required. Multiple full scale demonstration projects using different types of capture technology and storage conditions are urgently needed.

In this Report, we conclude that the costs of CCS are comparable to other low carbon approaches to electricity generation and that there is the potential for substantial cost reduction due to technological development, increased experience and economies of scale. Enhanced oil recovery can also help to offset the cost of CCS by lengthening the life of the North Sea oil fields, as well as releasing stranded oil assets. We recommend that capture readiness be made a requirement for statutory licensing of new plant in order to maximise the opportunity to fit capture technology to new UK plant, and to promote the concept to other countries.

The available evidence suggests that geological storage is relatively safe and secure and that, with an appropriate regulatory framework in place and a concerted effort to communicate the risks and benefits of the technology to the public, CCS can achieve widespread acceptance. The Government must now redouble its efforts to secure clarification or amendment of the international conventions governing marine pollution, i.e. the OSPAR Convention and London Convention/Protocol, to ensure that geological storage of CO2 under the seabed is permissible under international law. In addition, there is a pressing need for the Government to address the regulatory barriers to reuse of the North Sea infrastructure for the purposes of enhanced oil recovery and CCS, before decommissioning of oil and gas fields begins in earnest.

We find that the UK is well positioned to play a leading role in demonstrating CCS technology. The UK has rich expertise in geology and in oil and gas exploration and production. It is also fortunate in having an abundance of well characterised potential storage sites. UK industry has made it clear that it is poised to make substantial investments in CCS and full scale demonstration projects could be up and running by the end of the decade. However, the Government will need to display much greater ambition and commitment than it has done to date in order to take advantage of this opportunity. This includes increasing investments in research, development and demonstration (RD&D) by an order of magnitude, in order to 'pump prime' the initial demonstration projects. All that remains is for the Government to put in place a long term incentive framework and a policy signal to give industry the confidence to proceed. We urge the Government to ensure that the Energy Review finally provides this.

The Government needs to respond to this challenge with the urgency it demands. The imperative comes not just from the opportunity to deliver benefits for the UK, but also from the danger that a lack of progress in demonstrating CCS technology could prevent it from being deployed in time to make any significant impact on the forecast growth in emissions from China and India, at a potentially heavy global cost.





 
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Prepared 9 February 2006