Select Committee on Science and Technology Written Evidence


Supplementary evidence from Air Products PLC, submitted by R J Allam

1.  U.K. R AND D

  Air Products is a multinational company with R&D facilities in the United States, UK, in the rest of Europe (Germany and the Czech Republic), Russia and China. We have an R&D budget of about US$160 million per annum which represents about 2% of our turnover. Our budget in the UK is about US$6 million per annum. About half of this budget relates to technologies relevant to CCS. The strength of our position in the UK in the field of CCS is based on the location in the UK of our major world-wide engineering, project management and manufacturing base for all large scale Cryogenic, gas separation, hydrogen, energy systems and liquifaction facilities. The UK is also the headquarters of our European Operations Group and also our Administrative Headquarters. This complete capability from research inception to operation of the final developed system has enabled us to provide a wide range of technology solutions to the problems of CO2 capture from energy systems producing electrical power and hydrogen.


  We believe that CCS must provide the majority of the CO2 free electrical power and future H2 fuel produced worldwide if the CO2 concentration in the atmosphere is to be stabilised at tolerable levels to control global climate change. It is a matter of great concern to us that CCS is an option that is only understood by the small group of people working in the technology, the government groups and the industries focused on climate change issues. It is vital that this option for combating climate change is as vigourously publicised as the other major areas such as renewables such as wind, energy saving and nuclear. We would actively support the establishment of a Carbon Capture and Storage Authority. We are already one of the founder members of the recently formed CCS trade association. We would also like to draw the committees' attention to the need for an independent body of technical experts who can provide the government with the necessary comparative data on the various options for reducing CO2 emission. This could be one of the functions of the new Energy Futures Lab recently launched by Imperial College London under the direction of Professor Nigel Brandon.


  We believe that CCS technology exists now which can be used to provide CO2 free power from either natural gas fuelled gas turbine combined cycle systems or from pulverised coal fired power stations in the UK. Our assessment of the current technologies shows that it should be possible to separate CO2 at a fully costed penalty of £30 to £35 per ton. With current oil prices in the range of $50 to $60 per barrel for the low sulphur oils typical of the North Sea fields, the value of CO2 used for tertiary oil recovery together with CO2 credits obtainable under a future carbon trading regime would provide all of this CO2 penalty and possibly even lead to lower power cost. There are two major problems. The first is the need for the power companies and the oil companies to agree on a transfer price mechanism for CO2 delivered for storage. The second is the relatively small window of opportunity to set up a stable long term regulatory and price guarantee framework which will allow the huge investments need to implement CCS to be made before large numbers of North Seas offshore facilities are permanently decommissioned.

December 2005

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