GLOBAL CCS INSTITUTE

THE STATUS OF CCSBob Pegler, General Manager – EuropeCCS, Legal Framework Development and Supply Chain Perspectives, Rome, 18 October, 2011

WWW.GLOBALCCSINSTITUTE.COM

Wormser Energy

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RELEASED 4 OCTOBER 2011

The Global Status of CCS: 2011 report.

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MEASURED PROGRESS OF LARGE-SCALE INTEGRATED PROJECTS SINCE 2009

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GLOBAL SPREAD OF PROJECTS

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PROJECT NUMBERS CONCENTRATED IN THE NORTH AMERICA AND EUROPE

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CONCENTRATION ON POWER GENERATION

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PROJECTS ARE SPREAD ACROSS TECHNOLOGIES

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POWER PROJECTS UNDER CONSTRUCTION

Boundary Dam Retrofit post-

combustion capture EOR

Kemper County IGCC with capture

(pre-combustion) EOR

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FUNDING STILL TO BE ALLOCATED

91Does not include UK commitment to projects 2-4.

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CO2 IS BEING CAPTURED AND STORED

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REGIONAL BIAS TOWARDS STORAGE SELECTION

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THE ISSUE OF LONG TERM LIABILITY

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REGULATORY QUESTION RESPONSES

Question: Do the current regulatory requirements facilitate an investment decision

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Issues raised:

• Incomplete in nature or delay to regulation• Uncertainty surrounding long-term liability• Uncertainty surrounding the regulation of CO2• General site-specific regulatory issues

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PUBLIC ENGAGEMENT STRATEGIES ARE IN PLACE 75% of projects have or are developing public

engagement strategies. An increase in the sophistication and quality of

tools and resources to assist:– Public Engagement Self Assessment Tool

– Social Site Characterisation Report

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MAKING THE BUSINESS CASE FOR CCS

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Clear business case

Clear business case due to climate policies

Business cases that requires government support and other revenue

CCS related project features

•Industrial separation already takes place

•Storage site known–oil field

•Industrial separation already takes place

•Some previous knowledge of storage site

•CO2 separation at relatively high cost (power) and storage site known–oil field

or•Development of a greenfield storage site with industrial separation

Business case drivers

•EOR revenues •Reduction in future/current carbon cost liabilities

•Potential carbon credit markets

•Government funding•Reduction in future/current carbon cost liabilities

•EOR revenues•Risk sharing

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KEY MESSAGES

Early mover projects - industrial applications and EOR storage.

Two power projects under construction - with government funding and EOR revenue.

A number of power projects are on the verge of FID but making the business case is difficult.

Greater collaboration and transparency between government and industry is needed.

Storage assessments in deep saline formations can have long lead times – need to start now.

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