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House of Commons Business, Energy and Industrial Strategy Committee - Carbon Capture Usage and Storage

The House of Commons Business Energy and Industrial Strategy committee launched an inquiry into Carbon Capture Usage and Storage.

Details of the inquiry can be found on the committee website.

The submission produced by the Geological Society can be found below:

Submitted 24 August 2018

1. The Geological Society (GSL) is the UK’s learned and professional body for geoscience and a major international Earth science publisher with about 12,500 Fellows (members) worldwide. The Fellowship encompasses those working in industry, academia, regulatory agencies and government with a broad range of perspectives on policy-relevant science, and the Society is a leading communicator of this science to government bodies, those in education, and other non-technical audiences.

2. The Society has been active in the area of Carbon Capture (Usage) and Storage (CCS) for some time and it has formed a key part of our events, policy and outreach programme including a series of technical workshops organised with the American Association of Petroleum Geologists that concluded in 2014.

3. We are not best placed to respond to all of the questions outlined in the inquiry but have instead responded to questions as and where they relate to geoscience research and industry.

How essential is CCUS for the UK to meet its carbon emission reduction targets to 2050?

4. Implementation of CCS is key to meeting the 2008 Climate Change Act, which commits the government to reduce greenhouse gas emissions by at least 80% of 1990 levels by 2050. The need for CCS was underlined in the March 2017 report from the Committee on Climate Change (CCC) ‘The infrastructure needs of a low-carbon economy prepared for climate change’. The CCC report states that ‘deployment of CCS is crucial to meeting the 2050 target at least cost’ and that ‘Post 2050, CCS will also be needed to reduce emissions to net zero, as set out in the Paris agreement’. The need for CCS was also reiterated in the House of Commons Energy and Climate Change Committee (ECCC) Report on the Future of Carbon Capture and Storage, published in 2016. 

The committee concluded the following: ‘Without CCS it may be necessary to find large and potentially more expensive carbon savings to meet the legally binding targets set out in the Climate Change Act as well as the more recent challenging ambitions set out at the Paris climate summit’. The report also stated that if we stick to the 'with gas and without CCS' scenario we will not remain on or near the least cost path to our statutory decarbonisation target. This was again reiterated in the Report of the Parliamentary Advisory Group on CCS which stated that ‘carbon capture and storage is an essential component in delivering lowest cost decarbonisation across the whole UK economy’ and that ‘heavy costs will be imposed on current and future UK consumers by a continued failure to enact an effective CCS policy’.

5. Currently, the government’s policy in this area is hanging in the balance following the cancellation of the CCS commercialisation competition in 2015. The most recent approach outlined in the 2017 Clean Growth Strategy focuses on cost reduction together with a commitment to invest a further £10 million in the CCS programme that has been running since 2012 and up to £20 million being made available through the Energy Innovation Programme for a Carbon Capture and Utilisation demonstration programme. These commitments fall significantly short of the £1 billion CCS commercialisation competition. 

Officially, CCS continues to have a ‘potentially important’ role in this government’s energy policy, although there is no indication of what would fill its place should it not be delivered at scale by 2030. It is the view of many in the geoscience sector that CCS is critical infrastructure for secure access to energy in the future, and for meeting decarbonisation targets. The retraction of the funding allocated to the CCS commercialisation competition damaged the relationship between Government and industry and resulted in a loss of knowledge around the technical implementation of CCS. 

This hesitant approach to CCS policy from the UK Government has not been conducive to investor confidence in CCS, or in the energy sector as a whole, as highlighted by the ECCC’s 2016 report on investor confidence (and in the Geological Society’s submission to this inquiry). If a clear and effective strategy is not set out very soon then knowledge, investment, assets (including depleted hydrocarbon reservoirs and associated infrastructure, predominantly in the North Sea, which will otherwise soon be decommissioned) and expertise will be lost.

6. A significant part of the government’s stated move towards decarbonisation is the electrification of heat and transport. This increased reliance on electricity generates would be supplied in substantial part by burning gas as we displace coal and renewable sources continue to come online. Gas-fired power stations in the UK currently function at approximately 35% (Source: IEA ‘Tracking Progress: Natural gas-fired power’ 2017 report) efficiency and therefore a move towards electrification could result in an increase in gas consumption and related CO2 emissions. 

This would make CCS development even more necessary. A more varied, or different approach to decarbonisation of heat and transport could result in a lesser impact – however, increase in industrial processes such as cement production and petrochemicals process industry are expected to grow as the nation grows thus expounding the need for CCS roll-out.

What would be a realistic level of cost reduction to aim for - and by when?

7. We are not best placed to comment on many of the approaches to cost reduction around CCS but we instead seek to highlight the somewhat unique case of CCS development and how it would benefit from a sustained commitment of government investment. Following the cancellation of the £1bn CCS commercialisation competition in late 2015, there was a prolonged period over 2 years where there were very few announcements regarding next steps for development and investment. 

While the funding announcements outlined earlier in this response are welcome, they are not of the magnitude required to develop and establish the level of CCS needed to attract significant private investment and address the decarbonisation targets outlined in the Climate Change Act.

8. As with many innovation projects, early on the costs are high but this decreases significantly over time as technology deployment matures and infrastructure is adapted and developed. The concentration of skills and infrastructure in the North Sea could create the conditions for the UK to become a world leader in CCS research and development. There is also scope to use exhausted oil and gas reservoirs around the UK in the North Sea and elsewhere as ‘storage tanks’ for gas as part of a focus on new energy storage technology. CCS falls into an increasing number of areas where there is significant uncertainty around liability for very long-term risk (beyond human lifetimes). 

Current market and regulatory structures pose a significant deterrent to commercial companies wanting to invest in such initiatives, as they find themselves facing unknown and very poorly constrained liabilities over timeframes which existing risk strategies cannot easily accommodate. Government is in a unique position to underwrite much of the long-term risk around areas such as CCS development where industry is reticent to undertake such risks, and indeed is not set up to do, to benefit the UK economy as well as meet social and environmental needs. If government could take on such liabilities it could unlock the stall in progress and incentivise investment. 

The need for upfront government investment is also outlined in the CCC 2017 report: ‘There are initial risks that cannot be borne by the private sector. Strong public involvement will be required in the early years’. We note that the North Sea oil and gas industry of the last half century was not simply the product of uncoordinated commercial entities responding to market forces and emerging knowledge of natural resources – government provided vital stimuli, underwriting and ‘system design’ for elements of the energy system. The resulting economic benefits to the UK have been enormous.

CO2-Enhanced Oil Recovery

9. The outturn of the UK petroleum industry has been declining for some times yet estimates suggest that more than 50% of the oil in any one field (on average) remains in the ground. One option as part of a cost-reduction strategy could be the initiation of a CO2-Enhanced Oil Recovery (CO2-EOR) industry, stimulated by the government, to address some of the early costs for CCS development. 

This is where CO2 is injected into a partially depleted reservoir which causes the oil to expand and flow more readily to production wells. This would involve CO2 being turned from a cost element to a commodity (as it is in the US) to drive improved recovery of oil and gas from North Sea reservoirs. Use of CO2 to enhance both oil and gas recovery from aging North Sea Reservoirs has been demonstrated to be technically viable and would substantially ease the UK’s energy crisis as well as substantially cut overall CO2 emissions1,2.

10. CO2 EOR could reinvigorate the industry and deliver cost reduction for the early stages of CCS development but will need to be applied in the next 5 years. Injection of CO2 into the subsurface to produce more oil and gas is almost carbon neutral and as such the nations emissions of greenhouse gases would be reduced.  

This would essentially render CCS cost positive, supplying income to the nation through increased oil production (as much as 300,000 barrels of oil per day) and associated taxes rather than having to buy petroleum from sources outside the UK and for which there is no financial benefit. It would also, however, remove the ability of CCS in the early stages to deliver negative emissions or to make significant inroads into the overall reduction of CO2 in the atmosphere if this capture and storage is offset by the CO2 emissions generated from the newly extracted oil and gas through enhanced recovery.

If CCUS costs do not come down “sufficiently”, what alternatives should the Government consider to meet the UK’s climate change targets? How might the cost of these compare with CCUS?

11. We are not well placed to provide evidence on the specific costs of alternatives to CCS in terms of meeting UK Climate Change targets but we instead wanted to raise the potentially significant role that geothermal energy could play in a future low-carbon energy mix. Development of the UK’s deep geothermal resource offers the potential to generate low carbon electricity and heat with the potential to significantly offset gas consumption currently associated with heat production.  

As noted in the response from Professor Jon Gluyas in his combined submission with the Institute of Mechanical Engineers, the UK resource of geothermal heat could provide over 100GW of heat. Research into the UK’s geothermal resource has already been carried out in a number of locations across the UK such as Glasgow and Newcastle as well as an established district heating scheme in Southampton. The Brit Geothermal research partnership whose consortium members include the British Geological Survey, and the Universities of Durham, Glasgow and Newcastle have mapped the geothermal prospects across the UK. These include sedimentary basics in Cheshire, Wessex, Worcester and Eastern England as well as the radiothermal granites in Cornwall, Devon and Scotland, the latter of which are being investigated at the British Geological Survey UK Geoenergy site. Since half of the energy consumed in the UK is used for the production of heat, geothermal could have a significant impact on the amount of gas used for domestic heating in the UK, estimates suggest it could displace gas in heating systems for at least 100 years. It could also make a significant contribution to power generation.

12. There was significant discussion of the UK’s geothermal potential in UK Parliament on 19th June 2018 which referenced important work by Professor Jon Gluyas and Professor Charlotte Adams of Durham University (