WSJ.com - U.S. Digs Deep to Solve Emissions Problem

WSJ.com - U.S. Digs Deep to Solve Emissions Problem

The Future of Carbon-Dioxide Storage
Might Lie Under West Virginia
By JOHN J. FIALKA
Staff Reporter of THE WALL STREET JOURNAL
November 25, 2005; Page A4

Delegates attending next week's international climate-change conference in Montreal will attack the U.S. for pulling out of the Kyoto Protocol, which mandates steep cuts in greenhouse gases. Bush administration officials will respond that they are doing more than critics realize, but the real action lies deep beneath the surface -- in some cases almost two miles straight down.

The White House sees technological progress, more than regulation, as the key to limiting carbon dioxide and other emissions believed to cause global warming. A centerpiece of its effort is a 9,200-foot-deep hole in the ground in New Haven, W.Va. The hole, drilled next to a coal-fired power plant, marks the beginning of a Department of Energy experiment to see if CO2 can be safely injected into deep salt water-laden rock formations, where, experts hope, it will be trapped for thousands of years. It's one of seven projects in a $100 million, seven-year federal effort to figure out whether the method of CO2 burial works.

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"We wouldn't be doing this if we weren't serious," Samuel W. Bodman, secretary of Energy, often explains in defending the Bush Administration's approach to climate change.

In addition to the U.S., at least 17 industrial nations and several big energy companies are exploring this process, known as "sequestration." A recent United Nations report said carbon storage techniques could play an important role in limiting greenhouse gas emissions. Carbon-storage is a particularly appealing option for heavy coal-using countries, mainly China, India, and the U.S., which see it as perhaps less threatening to their economic futures than other strategies, such as energy conservation or large-scale conversion to solar and wind power.

Storing carbon is a significant piece of President Bush's alternative to Kyoto. Mr. Bush's alternative is a plan to reduce the intensity of U.S. CO2 emissions, measured against economic output, by 18% by 2012. It is linked to another Bush effort, a government-industry initiative to build a prototype for a new generation of clean-burning coal-fired power plants. Beyond those plans, the administration hopes that its incentives for nuclear power, including a new prototype nuclear reactor, will also help cut future CO2 emissions.

One goal of the West Virginia experiment is to give Congress and the White House an estimate of how much consumers' electric bills will rise by adding this extra step to generating coal-fired electric power. "This is not going to be free," warns Scott M. Klara, manager of the DOE's sequestration program.

The technology exists today to remove CO2 from power plant emissions and pump it into the ground, but in some cases it could raise the cost of electricity by as much as 100%, Mr. Klara explains. The injection program hopes to find ways to push the cost increase down as low as 10% by 2012.

Oil companies in Texas and Oklahoma have years of experience injecting CO2 into the ground to stimulate oil production, so pumping it into the newly drilled hole will be the easy part of the experiment. The harder part, Mr. Klara notes, will be figuring out where the CO2 goes amid the complex geology underlying West Virginia.

"We have all sorts of tools that, basically, use sound waves and electrical resistance," he explains, to monitor the path of the injected gas, which will be in liquid form because of the pressure at that depth. "It will be something like looking at the sonogram of a baby." Computer models of the underground reservoir predict the gas will be trapped for at least 5,000 years.

The utility industry must invest billions of dollars on new power plants that may some day face CO2 regulation. American Electric Power Co., which owns the New Haven plant, plans to build two new coal-fired power plants within the next five years that gasify coal before it is burned. The design makes it cheaper to separate and then bury CO2 emissions.


Then, if regulation happens, explains Pat Hemlepp, the company's spokesman, "we won't have to be retrofitting." The odd image of a power plant with a drilling rig boring a hole next to it, he thinks, may become a more familiar and necessary sight in coal country.

CO2 disposal may be cheaper in other regions. In southern Illinois, southwestern Indiana and western Kentucky, for example, there are hundreds of old oil wells dug into reservoirs that stopped producing years ago. "We're excited about the prospect that we can get more oil out of these old reservoirs," explains Robert Finley, director of an Illinois state agency that is working with the U.S. Department of Energy on a CO2 injection experiment there. Unlike Texas, where natural CO2 deposits are cheap and available, oilmen in Illinois couldn't inject it into reservoirs to push up more oil because they had no local sources of it. But now they do, explains Mr. Finley, who says his projects will inject CO2 purchased from two new ethanol plants, which generate the gas as part of the process of turning corn into a gasoline additive. Profits from increased oil output, he thinks, could help offset the eventual costs of piping CO2 from power plants to areas where more oil might be produced.

In the Southwest, over a thousand miles of CO2 pipelines already serve oil fields, explains Brian McPherson, a professor at New Mexico Institute of Mining and Technology, which is a partner in another Energy Department experiment to use CO2 to enhance recovery from oil and gas fields in Utah. "If we were to use this system and substitute power plant CO2, it would go a long way to reducing U.S. emissions," he explains.

The southwestern CO2 pipelines, he thinks, could serve as a prototype for a national system of piping power plant CO2, once the economic and technical hurdles are overcome. However, Canada is more likely to develop such a system first. "We think you are going to see this happen because it can achieve big [CO2 reduction] numbers and will be able to achieve them at reasonable costs," predicts Malcolm A. Wilson, program director for a Canadian government/industry CO2 injection experiment at Weyburn, Saskatchewan.

At Weyburn, which is the prototype for the U.S. experiments, technicians are injecting 5,000 tons of CO2 every day to improve the production of older oil wells. The gas is piped from an experimental U.S. coal gasification power plant in North Dakota and technicians and scientists from the U.S., Canada and 16 other nations have deployed an elaborate series of monitors to see whether any of the gas leaks back out of the ground.

So far, it hasn't. "I believe we can design subsurface systems that are going to be essentially leak free," explains Mr. Wilson, a geologist. "You're talking huge investments," he notes, but adds that the cost of burying CO2 may prove to be cheaper in the long run than the cost of scaling up alternatives to oil and coal-fired power, such as solar and wind power.

Why Kyoto will vanish into hot air

World news from The Times and the Sunday Times - Times Online

By Bronwen Maddox



THE United Nations conference that began yesterday in Montreal and will stretch on for nearly two weeks will fail in its aim: to devise a successor to the Kyoto Protocol on global warming.

That does not matter; in fact, it is the best outcome. Kyoto has been an extraordinary piece of work. A treaty that its most important signatories have found impossible to meet, and which has changed behaviour very little, has still become a resonant global symbol.



The best way forward now is not a "successor" to Kyoto, which covers the years until 2012. Another treaty that attempted to set fixed targets for cutting emisssions could be economically very damaging — in the unlikely event that countries ever reached agreement.

The better answer is in the plethora of bargains between a handful of rich and poor countries, which some are already exploring. It is also in the development of new technology to combat global warming, and in deals to spread these quickly to poorer countries.

Some of these new suggestions for life after Kyoto have come from the US, China and India, which all found Kyoto unpalatable. For just that reason, they are more valuable than son-of-Kyoto would be. It is no surprise that European Union countries became so enamoured of the Kyoto Protocol, which finally came into force in February this year.

They have found its targets fortuitously easy to meet. For them, the treaty coincided with a revolution in energy supply.

Kyoto set the EU a target of cutting "greenhouse gases" by 8 per cent from 1990 levels by the period 2008 to 2012. Members divided up the reductions between themselves; some could see that they would find big cuts easier than others. They are slightly off course, but not by so much that they think they have surrendered the moral high ground.

The figures tell the political story. In 2003 Britain’s emission of greenhouse gases was 13 per cent down on 1990 levels, slightly ahead of its EU-appointed target of 12.5 per cent.

Of course, emissions are likely to rise between now and 2008. Britain is also missing the Government’s own target of cutting emissions of carbon dioxide by 20 per cent on 1990 levels by 2010. All the same, these drops have been made possible by the shift from coal-fired power stations to gas in the early 1990s.

Germany, similarly, is almost in line with its Kyoto targets, with an 18 per cent drop in 2003, on its target of 21 per cent. France is down by nearly 2 per cent, ahead of its target of no change. True, many smaller EU countries are not doing so well. But many of the new eastern members show sharp drops well ahead of target, because of the closure of old industries.

Those "achievements" of the EU have made Kyoto an irresistible tool with which to berate others, notably the US. But extending Kyoto would be difficult for the EU too.

The EU would be well advised to look more sympathetically on the new proposals coming out of the US, Britain and the conference hosts, Canada.

These include "intensity targets" — cuts in emissions per dollar of economic output. They are more attractive than Kyoto to poor countries as well as to the US. So are proposals for rich countries to invest in technology to filter out emissions and to share it with developing countries. Other suggestions include sector targets, which would set emissions standards for some of the biggest industries, such as steel and cars.

Under most of these systems of new, flexible targets, it might still be possible to set up markets in pollution, in which countries or industries could trade the right to release emissions.

Any agreement to curb greenhouse gases is worth little if the US, China and India do not sign up. Kyoto failed in that basic requirement.

For all the rhetorical mileage which some European countries have found in Kyoto, at the US’s expense, their own "success" — such as it is — is due to a quirk of history rather than to selfdiscipline or the powers of their leaders.

That gloating is no basis on which to move forward.

Kyoto Protocol and Beyond: The Economic Cost to Spain

http://www.iccfglobal.org/pdf/Spainfinal101705.pdf

Business faces pressure on climate change stance

Reuters AlertNet - RPT-FEATURE-Business faces pressure on climate change stance

By Gerard Wynn

LONDON, Nov 1 (Reuters) - Businesses are feeling the heat as the world warms up and investors demand to know what companies are doing to curb greenhouse gases -- adding a new element to financial risk that analysts say industry can no longer ignore.

In Europe, some 12,000 factories and power plants already have to audit their output of one greenhouse gas, carbon dioxide (CO2), under the European Union's emissions trading scheme (ETS), which charges firms if they exceed a CO2 quota.

However, investors are pushing for better public disclosure of these emissions.

"Climate change is one particularly striking example of an environmental factor that can badly damage wealth," said Karina Litvack, head of governance and socially responsible investment at F&C Asset Management, which manages 128 billion pounds ($227 billion) in assets.

"What is clear is that the damage caused by ever more severe and frequent weather events...ripples across the economy to the eventual detriment of shareholders," said Litvack.

Many scientists say that a build-up of heat-trapping gases from burning fossil fuels in places such as power plants and factories is pushing up world temperatures.

Hurricanes in the United States, drought in southern Europe and Asia's deadly 2004 tsunami have focused attention on threats from extreme weather. Although the link with global warming is still debated, this has stoked public calls for more action.

Shareholders worry about the effect of climate change on economies, and also about how the businesses they invest in will cope with increasingly complex environmental red tape.

GOING PUBLIC

The London-based Carbon Disclosure Project (CDP) is spearheading the drive to know more about companies' emissions. It seeks to make investors and public companies aware of the effects of carbon emissions on long-term company valuations.

The CDP has written annually for the past three years to the world's 500 biggest companies asking them about emissions on behalf of 155 investors with $21 trillion worth of assets under management.

Responses to their questions have created the world's largest database of corporate greenhouse emissions.

"It's a very exciting time and only going in one direction," said Paul Dickinson, CDP project director. Responses were up at 71 percent this year from 49 percent two years ago.

One company responding for the first time in 2005 was Kraft Foods Inc. , the largest U.S. food company. It disclosed its global CO2 emissions, and said it planned a 2006 strategy for the ETS, which is set to become more onerous under the Kyoto Protocol from 2008.

The U.N. protocol requires developed nations to cut greenhouse emissions by 2008-2012. The United States and Australia are the only two developed nations outside Kyoto.

Talks on a strategy to reduce global warming after 2012 take place in Montreal later this year.

Even in the United States, which does not regulate global warming emissions, many U.S. companies are beginning to prepare for greenhouse gas limits. This year 60 percent of more than 250 companies responded to the CDP, up from 42 percent last year.

GOING GREEN

Environmental laws influence many multinationals' overall strategies, including where they site overseas units, said Geoff Lane, a partner in PricewaterhouseCoopers' Corporate Social Responsibility (CSR) practice.

"For energy-intensive companies, the cost of carbon is now an important issue in determining business strategy," he said.

From next year, changes to disclosure rules in Europe will put further pressures on companies to go public on their environmental performance.

A European Union directive, to be adopted next spring, will require companies to reveal how upcoming issues, including changing rules on CO2 emissions, will affect their bottom line.

Britain has adopted the directive through its Operating and Financial Review (OFR), which companies are now drafting in readiness for introduction next year.

"OFR is upping the ante," said Douglas Johnston, a member of Ernst & Young's Corporate Responsibility team. "It's a report that will need to be signed off by the board."

OFRs tighten up voluntary disclosure under current CSR reports, which describe how companies integrate social, environmental and community demands with their business performance, for example taking into account pollution, carbon emissions, waste and health and safety issues.

"The OFR is elevating CSR reports to the boardroom," said James Stacey, head of KPMG's U.K. sustainability practice.

About 80 of Britain's top 100 companies produce CSR reports now, compared to a handful five years ago. Some critics say the reports are not audited with the same rigour as financial reports and are sometimes just public relations' exercises.

For more information on CDP, check www.cdproject.net.

Harvard Study Shows Escalating Climate Change Impacts On Human Health, the Environment and the Economy

Harvard Study Shows Escalating Climate Change Impacts On Human Health, the Environment and the Economy: Financial News - Yahoo! Finance

Climate Change Futures Project Led by a Harvard Medical School Center with Sponsorship from Swiss Re and United Nations Development Programme
Findings are being announced today at 11:00 a.m., at a press conference at the American Museum of Natural History, New York


NEW YORK, Nov. 1 /PRNewswire/ -- The Center for Health and the Global Environment at Harvard Medical School, along with co-sponsors Swiss Re and the United Nations Development Programme, today released a study showing that climate change will significantly affect the health of humans and ecosystems and these impacts will have economic consequences. The study, entitled "Climate Change Futures: Health, Ecological and Economic Dimensions," surveys existing and future costs associated with climate change and the growing potential for abrupt, widespread impacts. The study reports that the insurance industry will be at the center of this issue, absorbing risk and helping society and business to adapt and reduce new risks.
"We found that impacts of climate change are likely to lead to ramifications that overlap in several areas including our health, our economy and the natural systems on which we depend," said Dr. Paul Epstein, the study's lead author and Associate Director of the Center for Health and the Global Environment at Harvard Medical School. "A comparable event would be the aftermath of flooding, contamination and homelessness witnessed after Hurricane Katrina hit the US Gulf coast in August. Analysis of the potential ripple effects stemming from an unstable climate shows the need for more sustainable practices to safeguard and insure a healthy future."

The Climate Change Futures (CCF) study is comprised of three primary elements: trends, case studies and scenarios, which detail and analyze current climate change related consequences for human health, ecological systems and the global economy. Through two scenarios, the CCF report examines possible impacts of climate change that may impose severe strains on the financial sector.

"As a reinsurance company, our goal is to evaluate and plan for the long-term," said Jacques Dubois, Chairman of Swiss Re America Holding Corporation. The parent company, Swiss Re, is a leading global reinsurance company and a co-sponsor of the study. Dubois continued, "Swiss Re has an ongoing effort to focus on potential economic impacts of climate change. This study adds to this by helping to review areas of increased vulnerability to climate change from a unique perspective. Whereas most discussions on climate change impacts hone in on the natural sciences, with little to no mention of potential economic consequences, this report provides a crucial look at physical and economic aspects of climate change. It also assesses current risks and potential business opportunities that can help minimize future risks."

There are 10 case studies within the report, written by scientific experts, that outline current effects of climate change with regard to infectious diseases such as malaria, West Nile virus, Lyme disease and asthma; extreme weather events such as heat waves and floods; and ecosystems such as forests, agriculture, marine habitat and water. Economic implications as well as possible near-future impacts are projected for each case.

The study shows that warming and extreme weather affect the breeding and range of disease vectors such as mosquitoes responsible for malaria, which currently kills 3,000 African children a day, and West Nile virus, which costs the United States $500 million in 1999. Lyme disease, the most widespread vector-borne disease, is currently increasing in North America as winters warm and ticks proliferate. The study notes that the area suitable for tick habitat will increase by 213 percent by the 2080s. The report also finds that ragweed pollen growth, stimulated by increasing levels of carbon dioxide, may be contributing to the rising incidence of asthma. Charles McNeill, Environment Programme Manager for the United Nations Development Programme, a co-sponsor of the study, pointed out that these costs will fall disproportionately on developing nations.

"While developed nations are not immune to the impacts of climate change, those populations that are already struggling with myriad social challenges will bear the greatest brunt of climate change," said Dr. McNeill.

Background

The CCF project stemmed from a common concern of the Center for Health and the Global Environment at Harvard Medical School, Swiss Re and the United Nations Development Programme. This concern was centered on the emerging threats to health from climate change and the implications of diseases of humans and Earth's life-support systems for economies and development. Unique aspects of the study include:


* Integration of corporate stakeholders in the assessment process
* Combined focus on physical, biological and economic impacts
* Anticipation of short-term impacts, rather than century-scaled
projections
* Scenarios of plausible futures with gradual and step-wise change
* A framework to deal with and plan for climate-related surprise impacts

In September 2003, a Scoping Conference for the CCF project was held at the United Nations in New York and involved more than 80 participants from multiple scientific disciplines, corporations, UN agencies and non-governmental organizations. Through the initial deliberations, follow-up workshops and teleconferences, a set of case studies and impact scenarios were developed.

In June 2004, a conference and Executive Roundtable were held at Swiss Re's Centre for Global Dialogue at Ruschlikon near Zurich, Switzerland. This gathering expanded the reach of the project to include more representatives from the financial sector, allowing deeper exploration of the links between health, environmental and economic consequences of the changing climate. Risks and opportunities were addressed, as were policies and measures commensurate with the magnitude of the possible futures envisioned.

In August 2004, a follow-up workshop was facilitated to standardize the methodology for the case studies and scenarios. The resulting study was released today at the American Museum of Natural History.

Organization Profiles

The Center for Health and the Global Environment, Harvard Medical School

The Mission of the Center for Health and the Global Environment at Harvard Medical School is to help people understand that our health, and that of our children, depends on the health of the environment, and that we must do everything we can to protect it.