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Podcast 5 - How CCUS hubs accelerate decarbonization

How CCUS hubs accelerate decarbonization

Last week saw the official launch of Northern Lights, the most advanced carbon capture and storage hub in OGCI’s KickStarter initiative.

Susan Kish spoke to Martijn Smit, Business Development Manager of Northern Lights, to find out how this hub can support the decarbonization of European industry.

Susan:

Let’s start with the basics. What is the Northern Lights project, and how’s it going to help accelerate decarbonization?

Martijn:

So Northern Lights is an industrial scale offshore CO2 storage facility, which is linked with a ship-based transport solution. It provides a solution for European industrials, where we collect their captured CO2 and store it in Norway. We are currently building this facility. In the first phase, it will collect one-and-a-half million tons on the onshore facility side, and we are already scaling the offshore part, the pipeline and the permanent geological storage to 5 million tons per year.

We’re trying to set up a new value chain and business model that should allow all the European countries to reach their climate goals and the individual companies to reach their net zero targets. So it’s a new market, and we are extremely excited about it.

Susan:

When is this going to be in operation? When are you going to start putting CO2 in storage?

Martijn:

The current construction project will be operational in 2024. We have a 100 kilometers pipeline going offshore. And then, it’s 2.5 kilometers down under the sea bed. And the sea is, at that location, is 300 meters deep actually. So we’re not going to install a platform, it will all be a submarine solution on the sea bed. And we collect power etc from nearby offshore oil and gas platforms.

Susan:

This project is open source. Can you talk about what that means in this context?

Martijn:

We are supporting two industrials from Norway itself supported by the Norwegian government. It’s a waste-to-power facility and a cement factory close to Oslo in the east of Norway. We have ships collecting the CO2 there, and then sending to the west coast of Norway, 600 kilometers, where we offload the CO2 and then inject it offshore.

We are building spare capacity, so we will have additional ships that will collect the CO2 from anywhere in Europe. If there is an offloading jetty at the port facilities, we can pick it up and then inject it in Norway. Some countries don’t have good geology or easy access for a pipeline solution, and this ship-based solution provides a solution for industrials to access the Norwegian Continental Shelf.
We are convinced that without CCS, we’ll never reach climate targets, and we need to get going, quite frankly. Once we start, on our side, we will be able to reduce the costs, as we learn and as we find ways to do things faster and better. At the same time, we see that more and more countries in the European Union, the ETS price and national taxations on CO2 are increasing.

So we are convinced there will be a commercial business model, supporting the CCS going forward. But we’re not there yet, to be honest, we’re not there yet.

Susan:

Last week you signed an agreement with Climeworks, the Swiss company that does direct air capture about exploring, installing a direct air capture plant in Western Norway close to the terminus for the offshore storage. How does direct air capture interact with the model that you’ve got?

Martijn:

That is a collaboration we are extremely enthusiastic about. Direct air capture basically means that you take the CO2 directly out of the atmosphere and that you inject it. This is, in our view, the future because we are talking about reducing emissions all the time, but did we actually reach the climate targets? At the end of the day, we need to go to negative emissions.

Podcast 4 - Why OGCI is supporting natural climate solutions

Why OGCI is supporting natural climate solutions

OGCI has started exploring the role it can play in catalyzing natural climate solutions responsibly and on a scale that will create tangible tools to tackle climate change and bring meaningful co-benefits.

Susan Kish spoke to Viviana Coelho, head of the climate change division of Petrobras, who leads OGCI’s work in this area, to find out why oil and gas companies are interested in nature.

Susan:

So what exactly are natural climate solutions, and can you give a tangible example?

Viviana:

Natural climate solutions are when we make projects to enhance the capabilities of nature, with the specific purpose of tackling climate change. When you restore forests, for example, the forest grows and it takes carbon from the atmosphere to do so. But it also protects communities from weather events and even from climate change itself. So the concept of natural climate solutions is doingit deliberately – having projects that use the capabilities of nature to tackle climate change.

Susan:

How does NCS fit into the portfolio of the OGCI members in terms of de-carbonization actions?

Viviana:

Some companies actively operate in NCS markets. Other companies do voluntary projects for NCS as an extra contribution, but they don’t really take it into their climate targets. But as OGCI members, we have an agreement that it is a complementary lever to the decarbonization of the energy value chain.

Susan:

OGCI published a paper on NCS recently. Can you talk through the main issues that are covered there?

Viviana:

It says that it must be complementary. It also states that we support very high level and very high quality NCS. Because the trick about NCS is, that if you do a bad project that doesn’t consult with the local people or take care about biodiversity or water, it does retain carbon, but it doesn’t have all the other benefitsthat are involved. So in our position paper, we make it very clear that when we talk NCS, we are talking about high integrity NCS that really takes care of all the safeguards.

Susan:

There’ve been a lot of developments around measurement, whether it’s satellites or on the ground, soil measurements, sensors. Can you talk about the role of some of these technologies in terms of addressing questions of trust and integrity?

Viviana:

You have to have sound, robust monitoring and verification systems. To becredible it used to require a lot of people in the ground, people that go there and measure the trees. And it was a barrier, it was expensive, it was difficult to demonstrate.

The evolution of remote sensing, artificial intelligence and all of these technologies that OGCI wants to support gives more capabilities for us to address the issues that have historically undermined the trust in NCS. Because a lot of people get concerned on leakage or permanence.

Susan:

What do you mean by permanence?

Viviana:

Let’s imagine that you have a project planting a forest or restoring a mangrove, but then two years later it burns down or is cut. How can you address that? One way is something like an insurance. If your project is managed to have a hundred tons of carbon, you only consider 80 and the 20 tons is reserves if any of the projects has a problem. We really believe projects need to have the highest possible level of verification for these markets to operate.

Susan:

For natural climate solutions to meet this amazing impact and potential, collaboration has got to be a critical component of this, right?

Viviana:

Yes, it is one of those issues that really requires collaboration. Oil and gas is clearly not central, in the sense NCS involves other sectors, like forestry and agriculture. So, the way we work is in full collaboration. We have taken a lot of time
to listen to people, really engaging to understand what is it that OGCI can do to helpthis grow responsibly.

Podcast 3 - Taking a position on climate policies

Taking a position on climate policies

OGCI has published a set of papers outlining the position of its member companies on policy mechanisms and regulations that could accelerate climate action.

The papers cover: methane emissions, carbon capture, use and storage, natural climate solutions, carbon value and Article 6 of the Paris Agreement.

Susan Kish spoke to her OGCI colleagues, Paul Jefferiss (bp) and Kevin Massy (Equinor), to find out why they developed the papers and what they learnt along the way.

Susan:

Why is it that OGCI decided to develop and publish these policy positions – and why now?

Paul:

What we’re trying to do is amplify the effectiveness of our mission. We remain focused on action and delivery, but we believe that policy can help us to accelerate action. And so it’s important for us to communicate as clearly as we can to policy makers, what we need. This year, with COP26 in Glasgow, is the perfect year to do this – both through our own governments nationally and internationally.

Susan:

How do we know if these policy papers are going to have impact or if they’re useful?

Kevin:

We see and hear in our engagement with policymakers around the world, that they are looking for industry to step forward, both in terms of action, but also in terms of using our voice. This challenge is only going to be met through collaboration between industry, policymakers, and civil society.

At the end of the day, governments set the rules of the road and the framework conditions in which we can make investments and take the actions that Paul was talking about. But they need support, and they need signals from the business community that what they’re thinking of proposing in terms of regulation and policies is going to work.

I think we as industry, and as a large representative group of the oil and gas industry, can really show good faith and signal our support for policies that we think are important to achieving the goals of rapid de-carbonization.

Susan:

So how did OGCI pick the topics for these papers?

Kevin:

Some of them are perennial policy issues that need to be addressed such as carbon value. But others are specific to what we see as an opportunity this year to really have constructive input into the process that governments are going through as they put together their NDCs.

The five issues we focused on were really in the sweet spot between items that are high consequence in terms of making a difference in the fight against climate change, but also those where we feel like we have agency.

Susan:

Kevin, you led the paper on carbon value – we usually talk about carbon price, so why is the focus here on value?

Kevin:

There are legitimate arguments in favour of seeing carbon dioxide as an externality that the market needs to solve for. But I think that there are also ways of seeing carbon emissions as an opportunity to create a new kind of carbon economy. There is a good argument that if you ascribe a value to carbon and you can find uses for that carbon, whether it’s through storage or through other uses, recycling carbon and transforming it into usable products, then the carbon itself can be seen as having a value, not just as something that needs to be priced away.

So we do recognize that market mechanisms such as carbon taxes or emissions trading programs, the kinds of things that we see in Europe now, are legitimate ways to think about this challenge, but there are also other non-market based or implicit valuation approaches, which can also lead to a reduction in carbon dioxide emitted to the air, but that might see a different end use or a different destination for that carbon.

Susan:

Paul, it’s probably very different to work at policy at a single company like bp, where you are Head of Global Policy now, and to work on developing a policy with a consortium of 12 companies, all with different governance structures?

Paul:

It is quite difficult to reach agreement, not just on public policy positions, but on many issues to do with the energy transition, climate change, and action within the OGCI. Because as you say, each company is coming from quite a different perspective and from a different place in the oil and gas world. But actually, I think those different ingredients are what make for an interesting mix and lead to some quite innovative and interesting ideas and proposals.

I think there is real power in consensus in the sense that policy makers can be confident that they’re hearing not just from one company. They’re hearing from at least 12 companies. So policy makers can be pretty confident, both at a national and international level, that they can move forward on the basis of support from 30% of the oil and gas industry, if they choose to follow some of our recommendations. And I think that’s pretty powerful.