Select Committee on Trade and Industry Appendices to the Minutes of Evidence


APPENDIX 14

Supplementary Memorandum by The Confederation of United Kingdom Coal Producers

  Following the public session on 13 November, I believe it would be useful to make some further comments on the evidence given by witnesses. The coal industry presented its honest assessment, yet some important points could perhaps be explained more fully here:

    —  The future long-run cost of gas is not an unknown. The International Energy Agency (IEA) has published a cost curve showing estimates based on the costs of production and transportation to European borders; costs to the UK, and of course prices, would be higher. Clean coal technologies will be competitive with gas from Russia (attachment 1).

    —  The Committee rightly focused on generation costs and existing coal-fired plant, at 1.6p/k Wh, are undoubtedly the cheapest source. New, clean coal plants, at around 3p/kWh, would meet long-term environmental objectives for SO2, NOx, dust and other criteria pollutants; they can also achieve the deep cuts in CO2 demanded by the Royal Commission on Environmental Pollution. These are the conclusions of Jacobs Engineering Ltd, advisors to the current DTI cleaner coal technology review.

    —  Deep cuts can be achieved with carbon capture and sequestration. In this case, the cost per tonne of carbon saved is key. The IEA's Greenhouse Gas Programme, with support from the DTI, has carried out much analysis work to conclude that the cost would lie in the range £100-150/tC, and much less when linked with enhanced oil recovery (attachment 2). Compare this with the £312/tC cost of the proposed Renewables Obligation. The Programme's Director is Dr Paul Freund.

    —  The cheapest CO2 storage option for the UK is enhanced oil recovery (EOR) in the North Sea. In 1996, 723,568 barrels/day were recovered from 212 EOR projects around the world (84 using CO2 from a coal gasification plant in North Dakota is now being sold via a 320 km pipeline to recover oil from the Weyburn field in Saskatchewan, Canada, and will eventually store 20 million tonnes of CO2. BP has set up a project team whose aim is to recover an additional 336 million barrels of oil from the Forties field by extending its life using CO2 injection (it currently produces 60,000 barrels/day). Dr Tony Espie has presented BP's work at many national and international conferences.

    —  The Norwegian company Statoil is injecting 1 million tonnes of CO2 each year into a deep saline aquifer beneath the North Sea from its Sleipner gas field. The natural gas is contaminated with CO2 which would otherwise have been vented to atmosphere. The IEA is monitoring to ensure the CO2 remains in place.

    —  I was surprised that David Odling of the UKOOA dismissed enhanced oil recovery as being in its very early days, and confused this proven technology with the Sleipner project.

    —  All the clean coal technologies needed for deployment are available today—there is no development requirement. Carbon capture uses processes that are used widely by the chemical industry, and the oil industry has commercialised carbon dioxide sequestration. UK engineering contractors are well placed to construct clean coal power stations using these technology building blocks.

    —  We are convinced that the UK can become a leading light in deploying clean coal technologies to tackle climate change; a challenge that was not widely foreseen by those in the UK and USA who were developing clean coal technologies in response to past energy crises. The UK coal industry sponsors the IEA Clean Coal Centre, which, like the World Coal Institute, is based in London; the IEA Greenhouse Gas Programme has its offices at a former British Coal site near Cheltenham; and, the UK is home to many leading engineering consultancies.

    —  There is one clean coal technology that meets both the short-term and long-term environmental and security objectives at an affordable cost: integrated gasification combined cycle (IGCC). This is a view echoed in a recent United Nations report on sustainability written to inform Rio+10 by some of the world's leading energy experts, including, from the UK, John Baker (ex CEO National Power) and Dennis Anderson (Professor of Energy Policy and Technology at Imperial College). Whilst quite lengthy it contains a view on coal gasification in Chapter 8 closely aligned with our own, a view reflected by the combined judgement and scrutiny of the Editorial Board in their overview of the report (attachment 3).

    —  Like the generators, the coal industry would be happy to maintain today's status quo. However, we believe that environmental challenges must be faced. As energy professional, we will continue to promote viable solutions to these at every opportunity and are supported in this by very many credible authorities. A Clean Coal Obligation would put us on a clear path towards the long-term goal of near-zero emissions at an affordable cost to consumers (attachment 4).

16 November 2001

(ATTACHMENTS NOT PRINTED)

  1.   The Government's Clean Coal Review; a summary of UK COAL PLC's submission; Doncaster; September 2001.

  2.   Carbon Dioxide Capture and Storage, International Energy Agency/Department of Trade and Industry; Paris; September 2000.

  3.  Extracts from World Energy Assessment—Energy and the Challenge of Sustainability; United Nations Development Programme (accessible at http://www.undp.org/seed/eap/activities/wea/); New York; September 2000.

  4.   Affordable energy security from coal; a topical briefing from the Confederation of UK Coal Producers; Wakefield; November 2001.


 
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