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StatoilHydro’s Climate Policy

CARBON CAPTURE AND STORAGE (CCS) A BUSINESS OPPORTUNITY Gøteborg, 27 January 2009 Kai Bj. Lima, Vice President StatoilHydro New Energy, TNE NE CCS . StatoilHydro’s Climate Policy. StatoilHydro recognizes the link between the use of fossil fuels and manmade changes in climate

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StatoilHydro’s Climate Policy

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  1. CARBON CAPTURE AND STORAGE (CCS)A BUSINESS OPPORTUNITYGøteborg, 27 January 2009Kai Bj. Lima, Vice PresidentStatoilHydro New Energy, TNE NE CCS 

  2. StatoilHydro’s Climate Policy • StatoilHydro recognizes the link between the use of fossil fuels and manmade changes in climate • StatoilHydro works actively to limit the environmental consequences of our activity by addressing: • Energy efficiency • CO2 capture and storage (CCS) • Renewable energy • Emissions trading • In the long term, CCS will be the main climate initiative within the oil- and gas industry. In the medium and short term emissions trading will be an effective way to reduce global emissions.

  3. The Tool Box Illustration source: Freund, Kaarstad “Keeping the Lights on”, Universitetsforlaget, 2007

  4. Key messages from the IEA • In the WEO 2008 Reference Scenario energy-related CO2 emissions will increase from 28 Gt in 2006 to 41 Gt in 2030 • World GHG emissions will increase from 44 Gt CO2e in 2005 to 60 Gt CO2e in 2030. The share of energy-related CO2 emissions increases from 61% to 68% • Some 97% of the increase in energy-related CO2 emissions arises in non-OECD countries. China, India and the Middle East account for three-quarter of this • Emissions in the OECD peak after 2020. However, only in Europe and Japan are emissions lower in 2030 than today • The “decarbonisation” of the world economy started to slow in the 1990’s and is now reversed due to reduced share of nuclear and increased share of coal in the fuel-mix • Power generation and transport account for 70% of the increase in energy-related CO2 emissions • Aggregate CO2e concentrations in the atmosphere is set to double by the next century, implying a global temperature increase up to 6º C

  5. IEA’s Perspectives towards 2050 Source : IEA (World Energy Outlook 2008

  6. 2,5 Mongstad Full-scale Test Centre Mongstad Snøhvit LNG In Salah Sleipner StatoilHydro’s CCS projectsAn industrial approach to climate change 0,7 0,6 - 1 1 1996- 2004- 2008- 2011/12- 2014-

  7. The Sleipner CO2 storageexperience • Left: Seismic from 1994 (before injection start) to 2006. • Right: Modelling results for dissolution of CO2 in the formation brine

  8. Carbon capture and storage Source: CO2CRC, Australia

  9. StatoilHydro priorities • Capture- become an educated customer- ”drive change” to reduce cost of implementation • Transportation- business with dedicated systems- draw on experience from Snøhvit and gas transportation in general • Storage- main business opportunity- operator and (co-)owner of storage sites- experience from Sleipner, Snøhvit and In Salah- draw on experience from offshore activities- financial strength - proven ability to handle large projects

  10. CCS - business opportunity with some major challenges • Cost of capture • Trust and public acceptance of CCS • An international framework covering issues as- liability for stored CO2- acceptance criteria for CO2 to be injected- cross border transportation- verification of safe storage sites • Technology development to reduce cost of capture • Commercial framework- licensing system- relation to relevant certificate systems

  11. Cost structure in the CCS value chain • Capture of CO2, 60 – 80%- huge installations- high energy demand • Transportation, 10 – 20%- depending on distance to storage- cross border transportation could increase cost • Storage, 10 – 20%- depending on location- reservoir structure • Utilities and preparation of site(s) are other additional cost elements

  12. Cost per tonne CO2 • Public funding • Technology development • Economy of scale • Trading systems (Kyoto/CDM) • Learning curve • Cost of emission • Cost of CCS • Duties/taxes • Emission volume limitations • Sustainability requirements Time CCS – the commercial challenge

  13. Anthropogenic CO2 Sources

  14. Summary • Climate change is happening – CCS needs to be part of the solution • CCS is proven and implementation can start now • Incentives and courage necessary to speed up development To become a vital tool, the CCS “venture” needs to become commercial

  15. PUTTING THE WORLD ON A LOW CARBON DIET

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