MAC: Mines and Communities

"Clean" coal gambit fails to capture credibility - at least for now

Published by MAC on 2008-05-19
Source: London Calling

It's widely recognised (except by some climate change activist groups, and WWF) that using coal - whether for power or metals and cement production - is by far the biggest single contributor to global greenhouse gas emissions. Some of the world's biggest mining companies have sought to deflect growing alarm at this burning reality by investing in so-called CCS – “carbon capture and storage”.

The technology promises to transport carbon dioxide, spewed by electrical utilities, and bury it under the soil or the seabed.

On May 5th, yet another report, from Greenpeace Australia, condemned CCS as neither safe nor effective [see article below].

Last week, Rio Tinto, and UK oil producer BP, dropped plans (through a subsidiary called Hydrogen Energy) to construct an Australian coal-fired power generation plant using CCS, admitting there was no guarantee that rock formations, destined for the carbon, would seal-in the offending material. . This project was roundly criticised on our website a year ago. See:

Obama backs bill, as Bush runs for cover

Meanwhile, an even more ambitious US-based CCS proposal also hit stony ground, as costs overran. The FutureGen project is a public-private partnership, supported by both the US and Australian governments as well as Rio Tinto, BHP Billiton, Xstrata, and China's Huaneng Group, along with other coal and utility companies.

In February 2008, the Bush regime said it wouldn't back FutureGen any longer, but subscribe funding instead towards similar, less ambitious, projects. . However, on May 15, the US Senate Appropriations Committee unanimously approved a resolution to force the Department of Energy to continue financing the joint venture.

The money would come out of the "war supplemental package" - an omnibus cash cow that includes funding for the Iraq and Afghanistan wars, as well as domestic spending on hurricane recovery, veterans education, food aid, and federal highways. (These days it seems almost anything can be appropriated in the name of wreaking havoc on people and planet.)

Last week, the House of Representatives' version of the bill failed to get support, But it's slated to hit the Senate floor this week. . Among those backing it is presidential front runner, Senator Barrack Obama..

So much for the future White House incumbent’s green credentials.

Rio and BP ditch plan to build green power plant

Sydney Morning Herald

14th May 2008

RIO TINTO, the world's third-largest mining company, and BP, Europe's second-largest oil producer, have cancelled a plan to build a coal-fired power plant in Australia that was supposed to capture and store carbon to cut emissions.

The plant at Kwinana, which was being studied by the Hydrogen Energy joint venture between Rio and BP, would not be built after it was found that rock formations would not seal in carbon dioxide, said a spokesman for Rio, Nick Cobban.

The project would have cost $1.5 billion to $2 billion, according to the venture's estimates.

A London-based spokesman at BP, David Nicholas, said on Monday that the proposed reservoir was not understood "as fully as other formations". "Particularly considering this would be one of the first projects of its kind, we would want some very high level of certainty of the long-term storage of carbon dioxide," he said.

Mr Cobban said Hydrogen Energy, based in Weybridge, England, would still work on projects in California and Abu Dhabi.

In the US the venture is working to use hydrogen derived from coal or natural gas to generate power and capture carbon.

In Abu Dhabi it is working with Abu Dhabi National Oil - which controls the United Arab Emirates' petroleum reserves - to pump carbon dioxide into oil fields, forcing out more crude. Currently, natural gas is used to create pressure inside ageing oil reservoirs to increase recovery.

Hydrogen Energy, a joint venture company between the two companies, has spent the past two years investigating a site in Kwinana for the project, which aimed to convert coal into hydrogen and carbon dioxide.

The hydrogen was to be used to fuel a power station in the area, while around 4 million tonnes of CO2 per year would be captured and stored underground.

Greenpeace: 'carbon capture won't save climate'

Pip Hinman, Green Left Weekly (Australia)

10th May 2008

A new report released on May 5 by Greenpeace, False Hope: why carbon capture and storage won’t save the climate, puts the case against governments’ obsession with a technology they calculate will breath life into the dirty fossil fuel industry.

In just 44 pages, Emily Rochon from Greenpeace International sets out the science and technology of carbon capture, transportation and storage (CCS), and the financial and environmental risks and costs of adopting it on a large scale.

Protagonists for CCS technology (mainly corporate, but more recently the World Wide Fund for Nature has joined the chorus) take it as a given that fossil fuels will remain part of the new sustainable energy mix that countries who have signed onto Kyoto pledge to move towards.

CCS supporters say the negative impact on the climate of burning fossil fuels will be reduced by capturing CO2 from power stations’ smokestacks and storing it underground. For the coal industry, government leaders such as federal energy and resources minister Martin Ferguson and professor Ross Garnaut — whose draft report on carbon trading is due out by the end of June — CCS is an integral part of the justification for the construction of new coal-fired power plants.

“Coal is set to play a big role in future Australian prosperity”, Garnaut told a NSW government “clean coal” summit in Sydney on May 7.

But according to Rochon, “If current plans to invest hundreds of billions of dollars in coal plants are realised, carbon dioxide (CO2) emissions from coal would increase by 60% by 2030”.

The report argues that the heavily subsidised coal industry is pushing CCS as a way of ensuring its continued existence. This is despite the fact that the technology has not yet been proven and, importantly, won’t be ready in time to drastically cut carbon emissions to prevent catastrophic climate change.

As the Greenpeace report notes, “The earliest possibility for deployment of CCS at utility scale is not expected before 2030”. But according to Bill Hare from the Intergovernmental Panel on Climate Change, industrialised countries need to make significant cuts in carbon emissions by 2020. This makes reliance on CCS a dangerous gamble.

The Greenpeace report argues that CCS technology not only wastes energy, its wide-scale application would erase efficiency gains and increase resource consumption. Rochon says that its expense could also lead to a doubling of plant costs, and electricity price increases to the consumer of between 21-91%.

“Money spent on CCS will divert investment away from sustainable solutions to climate change”, Rochon notes, something the report takes up in more detail in chapter 5.

CCS also poses a potential threat to health, ecosystems and the climate, the report argues. A big CO2 leak from CCS plants during storage or in transit could result in the asphyxiation of people or animals. Even small but ongoing leaks will negate the CCS process of limiting the amount of CO2 released into the atmosphere. Carbon dioxide also dissolves to form an acid. While it is unclear how severe these risks will be given that there is not yet an operational plant, they are potential hazards.

Rochon logs some now abandoned, but expensive, efforts to set up CCS plants in Norway and the US. FutureGen, the Bush administration’s flagship CCS project in the US, was hailed in 2003 as the first coal plant with near-zero emissions. Yet after delays and budget blow-outs the US government pulled the plug this January. The plant was supposed to be online in 2012, but never left the development phase.

FutureGen was a public-private project that included the US Department of Energy, American Electric and Power Service Corp, Anglo American, BHP Billiton, Rio Tinto and China’s largest coal-fired power company China Huaneng Group. Not only did the state of Illinois, where the plant was being built, chip in with a US$17 million grant, a sales tax exemption on building materials and $50 million for project loans, it passed laws to protect FutureGen from financial and legal liability in the event of an unanticipated release of CO2. The state government even agreed to indemnify FutureGen from lawsuits and to pay for its insurance policies, Rochon noted.

In 2007, the DOE reassessed the project after costs had risen by 85% in three years to $1.8 billion. “FutureGen collapsed despite being promised an unprecedented level of support: a total of $1.3 billion of public funds, and being shielded from any legal responsibility. The debacle should serve as a warning to governments and industry considering investing in CCS”, Rochon stated.

Australia’s first CCS project, the Otway Basin Project in south-west Victoria, was opened in early April. But there is widespread skepticism about CCS becoming a significant future energy source. Polling by the Climate Institute, reported in the May 8 Sydney Morning Herald, showed 74% of those polled said that new electricity should be generated from renewable sources and 60% wanted cuts to subsidies to the fossil fuel industry.

But as the fate of FutureGen reveals, the enormous public costs associated with technologies that are yet to be proven make CCS a risky proposition, given the need for big carbon cuts now to avoid dangerous warming.

“The real solutions to stopping climate change lie in renewable energy and energy efficiencies that can start protecting the climate today”, Rochon argued. “Huge reductions in energy demand are possible with efficiency measures that save more money than they cost to implement. Technically accessible renewable energy sources — such as wind, wave and solar — are capable of providing six times more energy than the world currently consumes — forever”, she concluded.

[The report can be found at]

Clean coal dilemma as US cuts $2b project

Sydney Morning Herald

5th February 2008

THE Government is facing a tough decision over whether to continue funding the world's leading clean coal experiment after the Bush Administration ended its commitment to the $US1.8 billion ($2 billion) project, citing massive budget blow-outs.

The US move is a grave setback for the Australian coal industry's hopes that a commercially-viable clean coal plant would be built in the foreseeable future.

The US-led FutureGen project was embraced by the Howard government which pledged $15 million to it shortly before last year's election.

Australian coal companies, Rio Tinto, BHP Billiton and Xstrata contributed more than $50 million to the project.

The Energy and Resources Minister, Martin Ferguson, must now decide whether to fulfil the $15 million pledge. He did not respond to questions about the funding last night.

Industry players yesterday expressed regret and concern at the US move which came weeks after the coal and power companies recommended building the showpiece plant at a site in the US state of Illinois rather than a competing site in Texas.

James Rickards, a spokesman for Xstrata, told the Herald his company had been given no warning of the US government move despite Xstrata putting $25 million into the fund.

Peter Cook, an adviser to the FutureGen project and chief executive of Australia's Co-operative Research Centre for Greenhouse Gas Technologies, said that US domestic politics may have undermined the project.

Illinois, a largely Democrat state and the home of presidential hopeful Barack Obama, was chosen as the site of the plant ahead of President Bush's Texas.

But overall the industry remains committed to FutureGen which has been restructured into a series of smaller projects. Similar experiments are under way in Australia.

"We're several years ahead of the US in some respects, especially commercialisation. It would be nice to think that some of the money being spent in the US could be spent here." said Dr Cook.

But a Greens senator, Christine Milne, called on the Rudd Government to pull taxpayers money out of FutureGen and other projects saying the Howard government's clean coal strategy had collapsed.

"All the government money in the project from the Low Emissions Technology Demonstration Fund has all come to nothing," she said. "Government funding for FutureGen and any other clean coal pipedreams should be withdraw in in favour of renewable technologies that are up and running now."

Senator Milne was backed by Greenpeace. "Public money shouldn't be going to subsidise the research of these vastly wealthy coal companies, it should be going into renewable energy projects," spokesman Ben Pearson said. "It shows the many uncertainties surrounding carbon capture and storage technology, we simply can't keep putting all our eggs in that one basket."

The Australian Coal Association believes the US decision was based on cost blow-outs that are being experienced across the energy sector. "No one would say this isn't a setback but it is far from the end of clean coal technology," said the executive director, Ralph Hillman.

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