Tamar Hallerman and Martin Schneider
GHG Monitor
9/20/2013
The Norwegian government announced Sept. 20 that it plans to discontinue development of a full-scale carbon capture and storage demonstration facility at Mongstad in favor of a separate CCS program that would seek to bring a project online by 2020. “The government’s revised CCS strategy will include a program for realization of full-scale CCS projects in Norway,” a release from the Norwegian Ministry of Petroleum and Energy stated. “The government will ensure the financial and other conditions necessary to result in at least one such project.”
In announcing the decision, Minister of Petroleum and Energy Ola Borten Moe said Mongstad—a planned CCS retrofit to a combined-heat and power plant that has been in operation since 2010 at Statoil’s Mongstad oil refinery on Norway’s western coast—had become “both challenging and costly” and that the Norwegian government has concluded “that the risk connected to the Mongstad facility is too high.” “The uncertainty of the project has increased, because, inter alia, the refinery industry in Northwest Europe is currently facing a hard time. At the same time, the development of the capture facility is now reaching a new phase, in which continuation would entail high costs,” the government said. Carbon capture technology vendors like Alstom and Siemens had been vying to be selected as Mongstad’s technology supplier under a government-run qualification program.
Gov’t Promises Cash Injection to TCM
The Petroleum and Energy Ministry vowed today that work at Technology Centre Mongstad, the separate high-profile carbon capture testing center run by Statoil and Gassnova, would be “continued and strengthened” with an injection of 400 million Norwegian krone ($67.56 million) in new funding over the next four years. The government also vowed to increase R&D funding through its Climit program by 100 million krone ($16.89 million) over two years. “The government will intensify its efforts in technology development. Our commitment and high ambitions for CCS remains as strong as ever,” Moe and Norwegian Minister of Environment Bård Vegar Solhjell said in a joint statement.
The announcement came less than two weeks after Norwegians elected a new center-right government following eight years of rule by the incumbent Labor Party. Prime Minister-elect Erna Solberg of the Conservative Party has said little publicly about her views on CCS but ran on a platform of lower taxes. Despite Norway’s pioneering status bringing the first large-scale CO2 storage project online at Sleipner in 1996, the country has stumbled in recent years in terms of retaining its status as a global CCS leader. The ruling coalition in 2011 delayed making a final investment decision on Mongstad until 2016, citing concerns about the potential toxicity of emitted amine solvents after they degrade in the atmosphere. Also adding to uncertainties were press reports indicating that Statoil was considering closing its Mongstad refinery—and along with it plans for the CCS demonstration project—due to higher than expected operating costs and overcapacity in the oil market.
‘A Manifestation of Incompetence’
Norwegian CCS advocates sharply criticized the government’s decision. “The abandoning of full scale CCS at Mongstad is a disaster for the climate and the Norwegian government,” Bellona Europa Chairman Paal Frisvold told GHG Monitor in an e-mail. “It is a manifestation of incompetence at the highest level and complete lack of management and leadership capacity. They had the money, the technology and a range of storage options, but were not able to connect the dots. We expect the new incoming government to investigate this scandal, to draw the lessons in order to succeed where their predecessors failed.”
