The push for carbon dioxide (CO₂) capture and storage projects has cooled according to Emerson’s Alan Novak, leader of the Alternative Energy team. Here are his thoughts:

Carbon Dioxide is everywhere (0.0387% of the earth’s atmosphere by volume). Humans and animals exhale it, plants need it to live and a major debate continues worldwide as to whether we need to capture and store the portion produced by industrial processes (principally fossil fuel combustion). As recently as five years ago, the market appeared ready to move forward with large-scale CO₂ capture and storage (CCS) projects. Demonstration plants were planned in the UK and the US, generally associated with power projects and capturing CO₂ as a by-product.

It is important to note that CO₂ capture, compression and injection is not new. The oil industry has been using it for years to extract additional oil from declining fields through a process called enhanced oil recovery (EOR).

In fact, the US Department of Energy (DOE) estimates that EOR could produce an additional 240 Billion barrels of crude oil from existing US oil fields.

As the price of oil continues to increase due to global demand, the economics of capturing carbon for enhanced oil recovery will become more attractive. Currently most of the CO₂ used for this application comes from naturally occurring sources.

The other major driver for CO₂ capture and storage projects (CCS) in the last few years has been greenhouse gas mitigation. Demonstration capture and storage sites currently operate in Norway at a Statoil gas production facility and in Canada at the EnCana Weyburn oilfield (EOR that is planned to eventually be converted to storage).

The US was considering several demonstration projects but activity has slowed dramatically. American Electric Power recently (July 2011) cancelled a $668M CCS project, which would have captured less than 20% of total CO₂ emissions from its Mountaineer coal fired power plant. This occurred in spite of the promise of $334M in federal funding toward the project.

Per Michael Morris, AEP chairman and CEO, “It is impossible to gain regulatory approval to recover our share of the costs for validating and deploying the technology without federal requirements to reduce greenhouse gas emissions already in place.” Other US utilities have abandoned similar projects for much the same reasons.

The DOE does however continue to move ahead with CCS pilot projects. The first industrial scale site in the US, located in Decatur, Illinois, recently received $141M in federal funding.

In the absence of a Greenhouse Gas (GHG) mandate, private CCS projects will remain on the shelf until the price of oil reaches a level that makes them economical. Whether the Department of Energy should continue funding projects in this industry is still an open question.