The Conservative government of the United Kingdom has been foolish in its treatment of carbon capture and storage, according to MP Angus MacNeil, a member of the Scottish National Party and chairman of the House of Commons Energy and Climate Change Committee. “I think our penny-wise, pound-foolish government at Westminster in the U.K. just think that they can get the technology off somebody else, without playing the responsible global citizen role of contributing to making sure that this comes forward,” MacNeil told GHG Daily’s Abby L. Harvey during a recent trip the U.S. to attend to the Global CCS Institute’s Americas Forum.
After the government announced in November 2015 that it would scrap a £1 billion carbon capture and storage commercialization competition, MacNeil and other proponents of the technology have been scrambling to find a way to hold to government accountable and to keep the technology alive.
MacNeil’s committee has been gathering oral and written testimony from those in the CCS industry regarding what effect the announcement will have on the future of CCS in the U.K. The result of the inquiry was published in a report Wednesday in which the committee called on the government to “devise a new strategy for carbon capture and storage in conjunction with a new gas strategy, taking into account the infrastructure challenge in the future.” The report also says the government “has already interrupted the momentum that had built up over recent years. It must not allow what is left to be lost.”
At the time of the cancellation announcement last fall, two projects remained in the running for £1 billion in funding. Both projects — Royal Dutch Shell’s Peterhead project in Aberdeenshire, Scotland; and the White Rose CCS Project in Yorkshire, managed by the Capture Power consortium, which would be a new-build coal-fired power plant with CCS — have since been put on hold.
According to statements made by government officials since the announcement, the decision was financial and does not reflect a disapproval of the technology.
The No. 1 question that we hear on the decision to scrap the CCS competition is, is there a way to get it back?
That is something U.K. government has not been clear about at all. The problem with the U.K. government energy level is that it doesn’t seem to be any strategic thinking. There is no man with a plan, and I say man with a plan just because it rhymes, but it’s actually more appropriate to say woman with a plan because of the two ministers there, Amber Rudd [secretary of state for energy and climate change] and Andrea Leadsom [minister of state, Department of Energy and Climate Change], since last June there have been a series of haphazard announcements, probably none more so than the CCS [announcement].
All sorts of promises were being made over all sorts of timescales. They first promised to Scotland through the referendum that it [CCS] would happen if we stay in the U.K., it was then a Conservative Party manifesto promise, [Rudd] herself said she was committed to it. In the energy reset speech again CCS was taken to be part of the coming policy. Then on the day of the autumn statement when the chancellor was announcing his spending it wasn’t even mentioned. It was announced in the city later.
They have no plan, they have no strategy. The best we’ve got out of them is that [CCS is] important for the future. Now, the future, as they see it, is an undefined period. With the work that’s happening internationally and the sharing of knowledge, I think our penny-wise, pound-foolish government at Westminster in the U.K. just think that they can get the technology off somebody else, without playing the responsible global citizen role of contributing to making sure that this comes forward, playing that part is not what they’re trying to do. They don’t see money spent today as an investment, it’s always a cost.
Is there anything that Parliament can do?
There will be a report out Wednesday [Feb. 10] from the House of Commons, from my committee. We will be making a number of recommendations. One of the things that the department has already said they would do would be to discuss the industry, look to the European money that was going to be involved, look to the money from the companies. But to be honest, given they’ve shirked their responsibilities so much at the U.K. government level, it doesn’t seem that they’re doing an awful lot at the moment.
Certainly when [Rudd] spoke to industry leaders at an event on [Feb. 1] at Westminster, the line was “it’s something for the future,” but there doesn’t seem to be anything concrete. Interestingly, the first two questions that came to the secretary of state on, it could have been any energy issues, were both about carbon capture and storage. I think that just shows the level of anger there’s been amongst people who have been seriously working for a number of years to bring it forward, and it didn’t happen because it suddenly [got pulled by] the U.K. government with very little notice for those involved.
If the competition can’t be restored, what’s Plan B, how does CCS move forward in the U.K. without it?
That is the 6-million-dollar question, the 6-million-pound question, the 6-million-euro question, whichever denomination you want, because I think that is incumbent on the government to spell out. I’m sure it’ll be no secret that it’ll be something that I’ll be asking the government to spell out … in one shape or another.
They do need to have a plan, and they need to make industry aware of that plan because there’s a supply chain and a body of expertise there and a body of academic knowledge that’s come forward, and if the government are seriously wanting to maintain that body of knowledge and possibility, they’ve got to give [the industry] a road map and there’s a lack of a roadmap at the moment, and it’s not good enough.
What are the effects of the loss of Peterhead and White Rose both on climate and in an economic sense?
Peterhead was going see a £500 million investment in the area. It was going to potentially provide expertise in a cluster and a diversification out of oil. We see now that in the oil industry, that the price of oil is $30 a barrel, a lot of people are losing their jobs in oil. This was providing another route for that type of person with that type of expertise and the chance.
The prime minister came to Scotland the other week and after billions and billions a year have come from Scotland’s oil to help the Westminster treasury he’s offered £250 million, which is half of what he already cut the last few months out of Aberdeen. [MacNeil is referring to a recently announced deal under which the U.K. government will invest £250 million in the city of Aberdeen. The deal “will address a number of proposals from the region including a new energy innovation centre, supporting the industry to exploit remaining North Sea reserves, as well towards the expansion of Aberdeen harbour, enabling the city to compete for decommissioning work,” according to the government.]
So, I’d say the impact on not carrying on with the planned Peterhead has been significant, similarly for the White Rose, but the Peterhead one is the one I’m most aware of due to friends and contacts who work in Aberdeen and who need other alternatives in Aberdeen as a way of diversification that the government has not taken.
The explanation that has been given for the decision to scrap the competition is that it was purely financial, that the economics just aren’t working. In your opinion, is that a sufficient explanation?
No, it’s not a sufficient explanation because they were told and there’s evidence there that shows that you’d need to build about three [CCS projects] before it starts to have economies of scale. Now, the prime minister said it was important, it was crucial. They’ve run between the technology and the economics.
We know the technology works. We know that, yes, it is expensive but we know the price will come down the more we do it and the more the [we have] expertise of doing it [we can get] industry geared up to start producing these more cheaply. We know with mass production, to produce one mobile phone would probably cost a billion pounds, but to produce a billion mobile phones costs hundreds of pounds. We know that if industry geared up, and even from the operating space, having built one or two, the third one would be cheaper and the fourth one would be cheaper again. Inevitably then, as technological ideas come along people would see things start to change.
Then, there’s a global collaboration going on at the moment, so they could have been feeding into that as well as building expertise. A crucial thing is that David Cameron doesn’t understand that he’s not going to meet his own carbon targets. Gas is producing 450 or 400 grams [of CO2] per megawatt hour. He needs to be at 100 grams. The Lord Deben [John Gummer] of the climate change committee, the chair of the climate change committee, has said that the U.K. has got an issue if it doesn’t have carbon capture and storage by 2030. I suppose the current penny-wise, pound-foolish government imagines they will not be in office come the year 2030, and that’s 14 years down and they don’t care.
Both of the projects that were affected by this were on power generation, but a lot of focus in the CCS area is shifting to industrial sources. The U.K. has the Teesside project that’s currently being developed. Is the Teesside project, or other industrial projects, are they as vulnerable to political whim as Peterhead and White Rose were?
I wish they weren’t, but the difficulty in the U.K. is that everything’s vulnerable to political whim. Those in the solar sector will say they’ve been subject to political whims, those in onshore wind will say they’ve been subject to political whims. Certainly what we’ve seen with White Rose and Peterhead have been subject to political whims and the changing winds.
Unless the U.K. government comes out with very firm commitments, they have to be a lot firmer than they’ve had in the past, people will be nervous and investors will be nervous of just what a promise from the Conservative government at Westminster means, because at the moment it’s changing and it’s changes in the wind.
We think sometimes that they’ve done surely their last unexpected announcement and, no, you’re onto another one. The day after the CCS announcement was the day of the fifth carbon budget, I mean, even from a spin management point of view, the timing was terrible so this government. [The U.K.’s Climate Change Act established a goal for the nation to reduce its emissions by at least 80 percent from 1990 levels by 2050. To this end, the act established a system of five-yearly carbon budgets, each increasing in ambition. The fifth carbon budget, the target of which was announced in November, will cover the years 2028-2032.]
I keep saying the only explanation I have is penny-wise, pound-foolish. They don’t see spending today as being an investment. They see it just as a cost. Of course, it’ll be greater costs in the future because to meet the targets they’ll have to move to costlier routes.
The further backdrop of this is the U.K. economy looks to be flatlining or downturning and they need to create demand in the economy. They should be spending. They’re not spending. They believe in austerity. [The CCS Competition] would actually help the economic narrative in the U.K. as well as helping them meet their legally binding carbon targets.
