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Green Fools: Durban Deal To Help Finance Enhanced Oil Recovery

Probably not what the anti-energy mob had in mind

Partied-out ‘climate delegates’ don’t seem to know much about what they sign us all up to but the United Arab Emirates scored a win in Durban. They managed to get the EU, Australia and New Zealand (the only dills currently dopey enough to stick their citizens with “carbon trading”) to pay significant subsidy for enhanced oil recovery. That isn’t how it was expressed, of course, it was written up as ‘Carbon Capture and Sequestration’ or ‘CCS’ but the effect is the same – payments ostensibly to reduce carbon dioxide emissions subsidize extraction of more high-carbon fuels that will emit yet more carbon dioxide when burned. Isn’t this a fun game?

Carbon capture a UAE win
Florian Neuhof

The addition of carbon capture and storage (CCS) to the arsenal of measures that qualify for carbon credits will boost Abu Dhabi’s ambitions to develop CCS as a means to reduce emissions and increase the productivity of its oilfields.

Delegates at the UN climate change talks in Durban that ended early yesterday agreed that CSS will now be eligible for carbon credits under the Clean Development Mechanism (CDM), where developed countries pay for projects that reduce emissions to offset their own.

This will benefit Abu Dhabi, whose plans to create an extensive CCS programme appear to be hampered by lack of funding.

“The inclusion of carbon capture and storage in the Kyoto Protocol’s Clean Development Mechanism is undoubtedly considered as a breakthrough,” said Mari Luomi, a fellow at Georgetown University in Doha.

“Masdar’s CCS projects currently seem to depend to a large extent on the availability of external funding of some sort to lift them off the drawing board.”

CCS is appealing to Abu Dhabi as the carbon, once captured, boosts productivity of depleting oilfields by storing it in the reservoirs. (The National)

They are not the only ones licking their lips at the prospect of having society-wide taxation underwrite their costs:

Using Oil to Reduce Carbon Emissions

WASHINGTON — As futuristic projects designed to capture carbon from coal-burning industries and to store it underground have failed, the two largest consumers of the fuel, the United States and China, are looking toward the past for solutions.

Power generators, coal miners and policy makers had put faith in projects to capture carbon dioxide from coal-fired plants and pump it directly underground into geologic formations for permanent storage. The great hope was that the technology would prevent much of the world’s largest source of greenhouse gas emissions from reaching the atmosphere.

But so-called carbon capture and storage projects have collapsed in Germany, Scotland and West Virginia. The stumbling blocks have been the high costs for the technology and the bleak prospects that the world would put a high price on emitting greenhouse gases.

Fortunately for those seeking to cut emissions from coal, one industry has benefited for nearly four decades from setting aside carbon dioxide emissions. That industry, known as enhanced oil recovery, is hungry for more of the gas.

Companies including Denbury Resources and Kinder Morgan have piped carbon dioxide from naturally occurring sources into aging oil fields to push out crude that traditional drilling is unable to reach.

As natural sources of carbon dioxide run dry, many of these companies are looking to industrial sources. Power utilities and other coal-burning companies may find it wiser to link up with this mature industry than to plunge ahead with their own versions of carbon capture and storage.

Originally, enhanced oil recovery specialists thought aging oil fields could store about 100 billion tons of carbon dioxide, or about 5 percent of what would be needed to reduce the threat of climate change. (Reuters)

Bankers and other hot air-trading parasites are also happy:

Climate deal boost for carbon markets
By Pilita Clark

A global climate deal to extend the life of the Kyoto treaty and establish the parameters for negotiating a new pact by 2015 will provide a fresh stimulus to the world’s floundering carbon markets, according to bankers and analysts.

“The deal provides a significant boost for investors in low-carbon technology,” said Abyd Karmali, global head of carbon markets at Bank of America Merrill Lynch, adding this was an achievement amid the woes of the eurozone crisis.

In one of the more bullish business assessments of the new pact, which also includes a separate agreement to negotiate a new process aimed at legally obliging all countries to commit to cut their carbon emissions, he said the deal was “like a Viagra shot for the flailing carbon markets”.

Carbon prices have plunged to record lows in recent weeks as Europe’s emissions trading scheme, the world’s largest, has been hit by eurozone uncertainties and fears of an oversupply of carbon credits. (Financial Times)