97- www. energy- future. com 6.3- Understanding oil and gas big again as today's oil industry. If a high enough economic value can be attached to decarbonising energy supply, you don't have to be Warren Buffett to work out that this could be big business. But how do you assign a value to low- car-bon energy that is high enough to get the necessary finance flowing? One option is to tax carbon emissions: that's worked at the North Sea's Sleipner West gas field. For over a decade, Norwegian energy company Statoil has been removing CO2 produced with natural gas from the Sleipner field and reinjecting it into an aquifer more than 800 metres below the seabed because that is cheaper than releasing the CO2 into the air and paying the taxes that this would incur. Cap and trade Another approach, being favoured by many governments around the world, is to create a marketplace in which carbon allow-ances - essentially the right to pollute the atmosphere with CO2 - can be bought and sold. Known as cap- and- trade schemes, the higher the price of the carbon allowances goes, the more expensive it becomes to pollute and the more profitable it gets to in-troduce pollution- saving technologies and equipment ( see p111). Another way of incentivising investments in CCS - and indeed other, expensive low-carbon energy systems, such as solar power - would be to provide subsidies from pub-lic funds. Yet another would be simply to ban power plants that aren't equipped to capture and store CO2. Why power plants? Because they're the best place to start fighting climate change. The power sector accounts for around 33% of greenhouse- gas emissions and 45% of CO2 emissions, says World Resources Institute, an environmental think tank. And over 40% of energy- related CO2 emissions come from coal, according to the IEA. That's because coal, when burned, produces twice as much CO2 as natural gas. Beyond carbon capture Carbon capture and storage ( CCS) is not the only way of cleaning up the coal indus-try. New clean coal- burning technologies - some of which can be applied not only to new capacity, but also to some exist-ing plants as they are upgraded - can cut coal's environmental footprint significantly. Part of the solution lies in improving ther-mal efficiency, so enabling plants to gener-ate more power from less feedstock. Germany's Siemens, for example, is planning to build what it calls the world's " most efficient coal- fired power plant", for power company E. On in Wilhelmshaven, Germany. The plant, which could be up and running as early as 2014, will oper-ate at a steam temperature of 700° C, com-pared with today's maximum of 600° C, giving it an efficiency rating of more than 50%, says Siemens. That improved effi-ciency should translate into 40% less coal being used than in a typical coal plant - and 40% less CO2 being emitted. Another idea is to mill renewable bio-mass, such as forestry residues and left-over agricultural products, into a powder and mix it with the pulverised coal before combustion - a process known as co- fir-ing. The UK's Drax power station is devel-oping what it claims will be the world's larg-est biomass co- firing project of its type: scheduled for completion in the first half of 2010, the facility will boost the plant's co-firing capacity to 500 megawatts of power and cut emissions from the North Yorkshire power plant, which has a total capacity of 4 gigawatts, by over 2.5 million tonnes a year. That, it says, is equivalent to the CO2 saving that would be achieved by generat-ing power from 600 wind turbines. Carbon- efficient fossil- fuel technolo-gies are applicable elsewhere, too. US oil company ExxonMobil, for example, has adapted a combined heat and power tech-nology called co- generation for use at some of its refineries - reducing its own energy bills and cutting CO2 emissions from its plants. ??

98- www. world- petroleum. org 6.3- Understanding oil and gas The other reason to tackle power plants and industrial facilities first is that a large amount of CO2 is being emitted from a single point, so there's more to capture from one place. A power station called Drax is the UK's biggest emitter of carbon emissions, with an output of 21 million tonnes a year of CO2. That's equiv-alent to the CO2 output from something like 6 million cars. But capturing CO2 from a sin-gle, static point is obviously much easier than capturing it from 6 million mobile ones. Could we just stop using coal? No: it is forecast to account for 8.67 trillion kilowatt hours of the power we generate globally in 2010 - that's 42% of total power produc-tion. In India, Germany and the US it ac-counts for around half of electricity genera-tion. In China the figure is about 80%. Other fuel sources, such as oil, gas, nuclear and renewables, couldn't fill this sort of gap over-night. Besides, coal is relatively cheap, it is abundant in some of the world's most stable countries and it is generally easy for energy-deficient countries to buy - so it's econom-ically and strategically attractive. For the moment, we just can't do with-out it. And that reality won't change much for decades: 13.6 trillion kilowatt hours - or 43% - of our fast- rising energy require-ments will still be met by coal by 2030, ac-cording to the US government's Energy Information Administration. Unless greener coal technologies are de-ployed, either the world won't have the en-ergy it needs or it could find itself facing an environmental catastrophe. Going underground Thankfully, greener technologies are be-ing developed. Reducing coal plants' envi-ronmental footprint partly depends on find-ing more efficient ways of burning coal to reduce the amount of coal burned - and CO2 emitted - per unit of energy gener-ated. But taking coal and other fossil fuels to the next level of cleanliness will have to involve CCS. There's good news on the technical side: the technologies that make up the various stages of CCS are already proved. CO2 is BP is working with Statoil and Algerian national oil company Sonatrach on a big CCS project linked to the In Salah gas development in the Algerian desert © BP plc