Select Committee on Science and Technology Written Evidence


APPENDIX 33

Memorandum from EEEGR

INTRODUCTION

  The East of England Energy Group (EEEGR) is pleased to make this contribution to the Science and Technology Committee's investigation into Carbon Capture and Storage (CCS).

  EEEGR believes that it is essential that existing oil and gas pipelines are reused to provide transportation for Carbon Dioxide (CO2) from shore to suitable depleted offshore reservoirs. Failure to utilise these national assets would likely make the positive benefits of carbon capture and storage offshore both uneconomic and unobtainable.

EAST OF ENGLAND ENERGY GROUP (EEEGR)

  The East of England Energy Group consists of over 230 members across a wide spectrum of interests, whose common objective is to stimulate economic growth and ensure that energy in its broadest sense not only survives but thrives in the East of England. It represents every aspect of the energy industry from offshore oil and gas, through nuclear to renewable energy. It promotes the wise use of energy.

SUMMARY

  We can summarise this submission as follows:

    1.  Pipelines can be reused to transport CO2.

    2.  Carbon Capture and Storage in underground reservoirs is proven.

    3.  Southern North Sea (SNS) gas fields are best placed to provide offshore storage due in part to their proximity to shore relative to depleted oil fields further north.

    4.  The East Coast gas plants eg, Bacton, Easington/Dimlington and Theddlethorpe could be used for reception and transmission of collected CO2.

    5.  The SNS gas field offshore pipeline grid is such that gas production and CO2 injection for storage can be concurrent operations.

    6.  CCS to store CO2 is different to the use of CO2 for Enhanced Oil Recovery (EOR).

THE POTENTIAL FOR RE-USE OF PIPELINES IN THE NORTH SEA TO ENABLE OFFSHORE STORAGE OF CO2

  Over the last 40 years, the international oil and gas industry has invested some £170 billion in the infrastructure needed to develop the UK's hydrocarbon resources in the UKCS. Included in this is some 11,000 km of pipeline, installed at an estimated cost of £11 billion. This investment will not be repeated. As UK oil and gas production declines resulting in the decommissioning of offshore facilities, it is generally accepted that many of the offshore platforms have limited alternative uses and will be removed; this may not be the case for the pipelines. Many of these will remain in situ, with a potential lifespan of 200-300 years. Research undertaken by Cambridge and Cranfield Universities for EEEGR (Note 1) has confirmed that there is no technical reason why these pipelines cannot be reused to transport dry CO2.

  Pipeline transport of CO2 is common and the technology is proven. According to the International Energy Agency (IEA), in Paris, some 3,100 km of pipeline are in use, the majority of which is located in North America. The longest pipeline covers 808 km and has been in use since 1984 carrying 19.3 mt of CO2 each year.

  Geological storage of CO2 is being undertaken by Statoil in its Salah field in the North Sea and by BP in its Inshallah field in Algeria.

  The practice of re-injecting CO2—for enhanced oil recovery (EOR)—is also well proven in the US. A major EOR project reusing an existing pipeline for CO2 transportation is being advanced by BP for its Miller oilfield in the UK North Sea.

THE SOUTHERN NORTH SEA

  If carbon storage in geological reservoirs is going to occur in the UKCS, the most likely area for this to happen is the Southern North Sea (SNS) for number of reasons:

    —  The fields were the first to be discovered and developed and therefore will be amongst the earlier ones to become depleted and subject to decommissioning. A number of fields have already been decommissioned and others are currently in the decommissioning planning stage thus releasing pipelines in the near-term for reuse.

    —  The geology of gas fields with non associated gas is more suitable for long term storage of CO2 than fields that have produced either oil or gas associated with oil.

    —  In comparison to Central or Northern North Sea fields, SNS fields are relatively close to onshore infrastructure—averaging only 30-50 km from the coast.

    —  There are three onshore gas processing terminals connected with SNS gas fields, with three plants at Bacton and one each at Theddlethorpe and Easington/Dimlington. (Whilst we have focused on the SNS in this submission it should be noted that there are also gas fields and plants in the Irish Sea that could serve this purpose equally well.)

    —  Each of the East Coast terminals has a number of pipelines running into them from the offshore fields—for example Bacton alone has 11 pipelines coming into the area excluding the Interconnector from Belgium.

    —  Some of the individual fields have a number of pipelines connected to them and are independent of other operations. Hewett, operated by Tullow Oil, for example, has two pipelines from the field to Bacton, which theoretically could allow CO2 to move in one line from Bacton to part of the field for storage, while allowing another part of the field that was not depleted to use the other pipeline for gas transportation to Bacton. This would have the potential of improving the economics of CO2 storage through the sharing of costs with a producing facility.

THE TIMING OF DECOMMISSIONING

  According to the DTI, 60 small steel platforms are due to be removed in the period 2008-2015, coinciding with the period when up to 50% of UK electricity generating capacity is due to be replaced, which would allow carbon capture technology to be integrated in design.

  Given that it takes three to four years of planning and approvals before actual decommissioning takes place, reuse for CO2 storage needs to be built into the decommissioning process now. The forthcoming Energy Review should consider this recommendation.

  EEEGR hopes that this submission will add to the knowledge gathered by the Committee in this vitally important area.

IN SUPPORT OF THIS SUBMISSION THE FOLLOWING NOTES ARE PROVIDED

NOTE 1—EEEGR REPORT "ENABLING THE REUSE OF OFFSHORE PIPELINES" DEC 2005

  EEEGR will shortly be releasing a report sponsored by the DTI and Industry and undertaken by the Universities of Cambridge, Cranfield and East Anglia, entitled "Enabling the Reuse of Offshore Pipelines", which includes use for CO2 storage. The report contains a number of recommendations for further action, including;

    —  Changing the 1998 Petroleum Act to permit re-use for CO2 and to resolve the perpetual residual liability issues.

    —  Resolving London Convention and OSPAR issues pertinent to CO2 re-injection underground (ie"dumping") as quickly as possible.

    —  Building potential re-use for CO2 into the DTI decommissioning process as a requirement.

    —  Considering setting up a Re-Use Unit in the DTI to enable specific pipeline ownership transfers and the resolution of residual liability issues.

    —  Intensifying work to identify geological structures suitable for long term CO2 storage.

    —  Identifying fields in the SNS that might be suitable for CO2 storage.

    —  Undertaking a major study of fields approaching end of field life as possible candidates for CO2 storage.

    —  Undertaking a study on how to move captured CO2 from source to established onshore gas processing terminals for onward transmission offshore.

NOTE 2—THE DECOMMISSIONING PROCESS

  The end of field life process is managed by the Decommissioning Unit of the DTI located in Aberdeen. Current legislation—principally the 1998 Petroleum Act—does not consider the use of North Sea infrastructure in general and pipelines in particular for anything other than hydrocarbon production and the DTI's structures and procedures reflect this legal requirement. Thus the presumption is that all facilities will be decommissioned relatively quickly after their use for oil and gas production is over, with infrastructure being removed in line with international obligations covered by the London Convention and OSPAR. Moreover, most oil and gas companies, through the mechanism of perpetual residual liability clauses in their original exploration licenses, would have an incentive to reduce this potential liability—however small—to as little as possible by removing as much infrastructure over and above the legal requirement as quickly as possible.

  In their decommissioning proposals, companies are currently required to carry out a comparative assessment to determine the best decommissioning options. Reuse is considered as part of this assessment, but no extra weighting is given to it. However, current legislation provides a disincentive for reuse for CO2 storage, due to ownership and liability issues attributed to a change of use.

NOTE 3—GENERAL BACKGROUND—REDUCING CO2

  Through its current Presidency of both the G8 and EU, the UK government has highlighted environmental issues in general and global warming in particular during its term. This environmental focus has also been a major theme running through UK domestic energy policy for the last few years, in particular as outlined in the 2003 Energy White Paper.

  As part of this focus, the UK has made a number of stretch targets to reduce its emissions of CO2 in excess of that required by the Kyoto Protocol. The latter requires the UK to reduce its greenhouse gas emissions by 12.5% below the 1990 level by 2010, but the domestic goal is 20%. However, the UK has also stated in the Energy White Paper that it intended to show global leadership by putting itself on the path to a 60% reduction in CO2 emissions by 2050.

  Given the widespread recognition that achieving these goals will not come through a significant and short term reduction in fossil fuel burn, attention has been drawn to the potential for using carbon capture and storage as a way of reducing emissions of CO2. This potential has been recognised in the UK through the publication by the DTI in September 2003 of its "Review of the Feasibility of Carbon Capture and Storage in the UK" and by "A Strategy for Developing Carbon Abatement Technologies for Fossil Fuel Use" in June 2005.  Scottish Enterprise has highlighted the market opportunities offered by CCS in its report in September 2005.  Internationally, the IEA published "CO2 Capture and Storage in Geological Formations" and most recently, the Intergovernmental Panel for Climate Change (IPCC) assessment concluded, with a number of caveats, that CCS could play a major role in minimising climate change.

  These reports highlight many issues but two points relevant to this submission are identified:

    —  There are few technical reasons why CCS cannot be undertaken, but there are many political, economic and legal reasons—both national and international—why it may not happen for a long time to come.

    —  From a UK perspective, if the country is going to have any chance of meeting even part of its 2050 target, CCS has to be up and running to a significant extent by 2020 at the latest. In this context, it is significant that up to 50% of the UK's current installed electricity generating capacity is due to be retired between 2008 and 2015. This capacity will need to be replaced during this period.

  EEEGR believes strongly that the re-use of existing North Sea oil and gas infrastructure as outlined in this submission to recover and store CO2, is required to meet the 2020 target. However, for this to happen, the window of opportunity must not be missed and decisions regarding North Sea infrastructure need to be taken sooner rather than later.

November 2005





 
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