Posted on 14 June 2016 by Guest Author

This is a re-post from Simon Evans at Carbon Brief

The majority of fossil fuel reserves are unburnable if the world is to avoid dangerous climate change, but carbon capture and storage (CCS) could “unlock” greater use, a new study concludes.

The white paper, from Imperial’s Sustainable Gas Institute, challenges previous findings that CCS makes little difference to the quantity of fossil fuels that can be burned, within a 2C carbon budget.

Carbon Brief runs through the report’s findings and what it might mean for fossil fuel firms.

Fossil framing

CCS has a decidedly mixed reputation. Some strongly support it, whereas many view it with suspicion, as a technological fix that promises to allow existing energy firms to continue business as usual.

Indeed, oil and gas majors, such as BP, Shell and ExxonMobil, are among the loudest CCS advocates. So it’s worth noting that the Sustainable Gas Institute was set up in 2014 with an £8.2m grant from oil and gas firm BG Group, which was recently bought by Shell.

Setting out its purpose, the new report says:

“This white paper has considered whether carbon capture and storage (CCS) technology has the potential to enable access to more fossil fuel reserves in the future, where these reserves would otherwise be ‘unburnable’.”

Note that this explicitly frames the question in terms of enabling access to more fossil fuels, rather than in terms of securing the energy the world needs while avoiding dangerous climate change. Fossil fuels are useful, but using them is not an end in itself.

In contrast, bodies such as the Intergovernmental Panel on Climate Change (IPCC) have asked if the world could limit warming to 2C without CCS (the IPCC says it could), and whether the alternatives would be more costly (the IPCC says it would cost twice as much without CCS).

Unburnable carbon

Moving on from how it chooses to frame the issue, the Sustainable Gas Institute report follows a well-worn path that starts with the carbon budget. This is the amount of CO2that can be released for a given chance of remaining below a chosen temperature limit.

For instance, the IPCC says cumulative emissions must be no more than 1,300bn tonnes of CO2 (GtCO2) after 2011, for a 50-50 chance of staying below 2C. This is much less than the 3,683GtCO2 that would be released if all fossil fuel reserves were burned, leading to the concept of “unburnable” carbon.

An influential paper published last year found more than 80% of coal reserves, 30% of oil and 50% of gas is unburnable if the world is to avoid warming of more than 2C. This paper also said that CCS made little difference to the share of fossil reserves that would be unburnable.

It found that CCS would allow just 6% more of the world’s known coal reserves to be burned, with an even lower figure for oil and gas. It said:

“Because of the expense of CCS, its relatively late date of introduction (2025), and the assumed maximum rate at which it can be built, CCS has a relatively modest effect on the overall levels of fossil fuel that can be produced before 2050 in a two-degree scenario.”

The new report challenges this argument. While it agrees that CCS allows only a relatively modest increase in the use of fossil fuels before 2050, it finds a much larger impact by 2100: two-thirds of known reserves could be burned, if CCS is available, compared to just one-third without.

Share of known fossil fuel reserves that could be burned within a 2C carbon budget (GtCO2 and %). Note that the totals include cumulative emissions from coal, oil and gas between 2005 and 2050 or 2100. Without CCS, the amount of burnable carbon to 2100 is similar to the remaining carbon budget for a 50/50 chance of remaining below 2C, see above. Source: Sustainable Gas Initiative white paper.

The impact is particularly large for coal and gas, the study says. That’s because centralised coal- or gas-fired power stations could be fitted with CCS, whereas oil is used in millions of vehicles where carbon capture would be impractical.

Gas equivalent to 150% of current reserves could be burned by 2100 if CCS is available, it says, compared to 68% without CCS. For coal, the fraction of reserves that can be burned also more than doubles from 14 to 32%.

A summary of the report says:

“CCS technology underpins the future use of fossil fuels in scenarios that limit global warming to 2C.”

The amount of gas that could be burned within a 2C carbon budget would rise even further, the report suggests, if CCS technology could be improved. CCS doesn’t capture all of the CO2 emitted: in general, the higher the share captured, the more expensive it becomes.

Most models assume CCS would only capture 85-90% of emissions. This is a key constraint on the use of CCS because emissions need to fall to net-zero if global temperatures are to be stabilised. Even a 90% reduction in the CO2 emitted by fossil fuel burning might not be enough to get there.

If the capture rate could be increased to 95% or more, the report says, then the amount of gas that could be burned by 2100 would roughly double.

Interpreting the results

Before asking what the new findings mean, it’s worth raising an important caveat, which is that the study is based on the remaining carbon budget for a 50-50 chance of limiting warming to below 2C.

Many would prefer to aim for a likely chance — a 66% probability — of remaining below 2C. Moreover, the 2C limit is out of step with the Paris climate agreement, which says warming should be kept “well below” 2C and that efforts should be made to hold temperatures 1.5C above pre-industrial levels.

Meeting these aims would entail sticking within a smaller carbon budget, which in turn would mean much less of our fossil fuel reserves are “burnable”. The fact that CCS captures less than 100% of CO2emissions becomes more of a problem, if the carbon budget is tightened.

It’s also worth noting that the impact of CCS lies far in the future. Luke Sussams, senior researcher at theCarbon Tracker Institute, tells Carbon Brief:

“CCS only makes a meaningful contribution after 2050…But we know that the 2C carbon budget is spent by 2040 on our current trajectory. So CCS will do little to slow warming over the most critical next few decades.”

In terms of what the results mean for fossil fuel firms, this timeframe is significant, because investment decisions tend not to look further than a couple of decades ahead.

After sketching out a below-2C scenario for the first time last week, Shell said it had “no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10–20 years”.

The study’s central finding, that the burnable share of current reserves would double by 2100 if CCS is available, has little relevance in this context. Sussams explains:

“A reserve in 2100 has no value today, so companies cannot base any strategic decisions today around such a finding.”

He adds that there are “many outstanding questions” about the modelled findings based on today’s assumptions of the future cost and availability of technologies.

Another issue is that some experts argue against using CCS to decarbonise power stations, saying it should be reserved for industrial uses, or negative emissions.

Ben Caldecott, director of the sustainable finance programme at the University of Oxford’s Smith School of Enterprise and the Environment, tells Carbon Brief:

“Even the successful deployment of CCS for power generation – a questionable outcome and priority given the costs relative to other options – does not mean business as usual for carbon-intensive assets. Companies and consumers will have to pay directly or indirectly for the very significant costs involved.

CCS attempts to address risk on the one hand by extending carbon budgets, but creates it on the other hand through new and uncertain costs. It should not be seen as a deus ex machina that will ‘save the day’. Investors should view CCS for power generation with a healthy dose of scepticism.”

This seems to get to the heart of the problem with CCS. Modellers tell us it isindispensable if we are to avoid dangerous warming cost-effectively, but that the upfront development costs will be high. Meanwhile, others warn it should not be seen as an excuse to continue business as usual.

Given this context, and the fact that its potential benefits lies so far in the future, it is, perhaps, unsurprising that progress on developing the technology is stuttering in the UK, even if developments elsewhere show more promise.

Dr Sara Budinis, research associate at Imperial and part of the Sustainable Gas Institute team that authored the report, tells Carbon Brief:

“None of the technologies that we have available at the moment is the super-winning one. We think every technology has to play its role and CCS is part of the solution.

We are basically running out of carbon budget. I understand there are concerns about CCS but to me it is something that could help us to access fossil fuel reserves without endangering climate change even more.”

New Carbon Brief analysis shows just how quickly the carbon budget is running out, with around five years of current emissions remaining for a likely chance of staying below 1.5C.