Fossil Fuels and Sustainable Development: The Role of Carbon Capture and Storage

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1 Fossil Fuels and Sustainable Development: The Role of Carbon Capture and Storage Barbara N. McKee Chairman World Energy Council Cleaner Fossil Fuels System Committee International Symposium On Natural Gas and Sustainable Development 6-8 February, 2006 Doha, Qatar

2 Being all we can be: Human Excellence 2

3 18,000 16,000 Fossil Fuels in the World Energy Picture Renewables Nuclear Hydro Gas Oil Coal World 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Coal 23% Gas 21% 80 % Fossil Gas 25% 82 % Fossil Ocean Source: IEA, World Energy Outlook

4 Challenge: Make Fossil Fuels Efficient and Clean 4

5 Challenge: Develop New Technology 5

6 Challenge: Carbon Capture and Storage Source: Office of Clean Energy Collaboration 6

7 Early Markets for CO 2 Capture Transportation Methane Reforming Power Plants Cement & Landfills FUTURE GEN WHITE REFINERY INCREASING PURITY Ethanol Coke Gasification Fertilizer (Ammonia) Natural Gas By-product CO 2 Source: Melzer Consulting 7

8 Natural Gas and CCS 8

9 Natural Gas : Sustainability Pluses and Minuses Potential for CCS Infrastructure & Transportation Cleanest Fossil Fuel Lead Times Lower CO 2 Emissions Contractual Complexity Lower control costs Higher Efficiencies Associated Gas Flaring Public Acceptance 9

10 Challenge: Meet Capital Needs Needs: US$ 16.5 trillion to 2030 Oil and Gas US$ 6.2 trillion Power Generation US$ 9.8 trillion Goals Expand financing in developing world (US$ 7.9 trillion needed) Stimulate public and private investment in R&D Overcome barriers to commercial deployment Likely sources International financing institutions: 2-3% International capital markets: 15% Local / private capital: >80% 10

11 Challenge: Energy Security Energy security is critical to human welfare, economic development and political stability. Energy security means Long-term resource availability Short-term avoidance of supply interruptions Achieving energy security requires: Abundant supplies Diversification/redundancy Ongoing balancing of consumer and supplier needs Mechanisms for addressing threats to energy security 11

12 LNG Safety: A Public Acceptance Concern LNG safety record spans over 40 years Over 35,000 ocean voyages Containment at sea and on land well understood Risks from terrorism are similar to those for crude oil Risks and benefits not well understood by the public. Changing public perception requires: Continual improvement of safety procedures to minimize risks Benefit identification and creation (local/national) Public education at all levels and in all media Public information and education must be a priority. 12

13 Challenge: Meet Human Needs Indicator of Human Welfare Commercial Share of Total Energy 0-20 % % % Life Expectancy (Years) Probability of not surviving to School Enrollment (%) Children Underweight (%) No Access to Clean Water (%) Source: IEA World Energy Outlook 13

14 Challenge: Mobilize Resources Technology Firms Energy Companies Financial Institutions Government Environmental NGOs Academic Institutions 14

15 Challenge: Building Capacities and Expertise Countries expanding gas production and/or transportation need to build their capacities New gas importing countries have particular needs for expertise Technical Legal Regulatory Contractual International collaboration is needed to facilitate technology transfer and capacity building Both governments and industry need to be involved 15

16 Being all we can be: Human Excellence 16