Fossil Fuels and Sustainable Development: The Role of Carbon Capture and Storage

Barbara N. McKee Chairman World Energy Council Cleaner Fossil Fuels System Committee International Symposium On Natural Gas and Sustainable Development 6-8 February, 2006 Doha, Qatar

_____________________________________________________ Cleaner Fossil Fuels Systems Committee

Being all we can be: Human Excellence

_____________________________________________________ 2

Cleaner Fossil Fuels Systems Committee

Fossil Fuels in the World Energy Picture 18,000

16,000

W orld

Renewables Nuclear Hydro Gas Oil Coal

14,000

12,000

10,000

Gas 25%

8,000

6,000

Ocean 82 % Fossil

Coal

4,000

2,000

80 % 23% Fossil

Gas 21%

2002

2030

Source: IEA, World Energy Outlook 2004 _____________________________________________________ 3

Cleaner Fossil Fuels Systems Committee

Challenge: Make Fossil Fuels Efficient and Clean

_____________________________________________________ 4

Cleaner Fossil Fuels Systems Committee

Challenge: Develop New Technology

_____________________________________________________ 5

Cleaner Fossil Fuels Systems Committee

Challenge: Carbon Capture and Storage

_____________________________________________________ Source: Office of Clean Energy Collaboration 6

Cleaner Fossil Fuels Systems Committee

Early Markets for CO2 Capture Transportation Power Plants Cement & Landfills

FUTURE GEN “WHITE” REFINERY INCREASING PURITY

Methane Reforming Ethanol Coke Gasification

Fertilizer (Ammonia)

Natural Gas By-product CO2 _____________________________________________________ Source: Melzer Consulting

Cleaner Fossil Fuels Systems Committee

7

Natural Gas and CCS

_____________________________________________________ 8

Cleaner Fossil Fuels Systems Committee

Natural Gas : Sustainability Pluses and Minuses Potential for CCS Cleanest Fossil Fuel

Infrastructure & Transportation

Lead Times Lower CO2 Emissions

Lower control costs Higher Efficiencies

Contractual Complexity Public Acceptance

Associated Gas Flaring _____________________________________________________ 9

Cleaner Fossil Fuels Systems Committee

Challenge: Meet Capital Needs z

Needs: US$ 16.5 trillion to 2030 „ „

z

US$ 6.2 trillion US$ 9.8 trillion

Goals „ „ „

z

Oil and Gas Power Generation

Expand financing in developing world (US$ 7.9 trillion needed) Stimulate public and private investment in R&D Overcome barriers to commercial deployment

Likely sources „ „ „

International financing institutions: International capital markets: Local / private capital:

2-3% 15% >80%

_____________________________________________________ 10

Cleaner Fossil Fuels Systems Committee

Challenge: Energy Security z

Energy security is critical to human welfare, economic development and political stability.

z

Energy security means „ „

z

Long-term resource availability Short-term avoidance of supply interruptions

Achieving energy security requires: „ „ „ „

Abundant supplies Diversification/redundancy Ongoing balancing of consumer and supplier needs Mechanisms for addressing threats to energy security

_____________________________________________________ 11

Cleaner Fossil Fuels Systems Committee

LNG Safety: A Public Acceptance Concern z

LNG safety record spans over 40 years „Over

35,000 ocean voyages „Containment at sea and on land well understood „Risks from terrorism are similar to those for crude oil z

Risks and benefits not well understood by the public.

z

Changing public perception requires: „Continual

improvement of safety procedures to minimize risks „Benefit identification and creation (local/national) „Public education at all levels and in all media

Public information and education must be a priority. _____________________________________________________ 12

Cleaner Fossil Fuels Systems Committee

Challenge: Meet Human Needs

Indicator of Hum an W elfare

Com mercial Share of Total Energy 0-20 % 21-40 % 41-100 %

Life Expectancy (Years) Probability of not surviving to 40 School Enrollment (%) Children Underw eight (%) No Access to Clean W ater (%)

59.8 69.0 69.5 21.7 9.4 9.1 52.4 65.4 76.9 40.9 15.1 11.9 20.9 22.8 12.8 _____________________________________________________ Source: IEA World Energy Outlook 13

Cleaner Fossil Fuels Systems Committee

Challenge: Mobilize Resources Technology Firms

Government

Energy Companies

Environmental NGOs

Financial Institutions

Academic Institutions

_____________________________________________________ 14

Cleaner Fossil Fuels Systems Committee

Challenge: Building Capacities and Expertise z z

Countries expanding gas production and/or transportation need to build their capacities New gas importing countries have particular needs for expertise „ „ „ „

z z

Technical Legal Regulatory Contractual

International collaboration is needed to facilitate technology transfer and capacity building Both governments and industry need to be involved

_____________________________________________________ 15

Cleaner Fossil Fuels Systems Committee

Being all we can be: Human Excellence

_____________________________________________________ 16

Cleaner Fossil Fuels Systems Committee