Kirsty Blackman MP: [00:00:23] People keep saying that they're really thankful that I've come along today, and I'm actually really delighted to have the opportunity to come along, not just because I'm a huge supporter of CCS and this project in particular, but because it's an opportunity to talk about something other than Brexit. And as an MP it's been quite Brexit-focused in recent times so it's nice to have the opportunity to talk about something else. I just want to briefly say a couple of things about the project before we allow you the chance to ask your questions of the panel. I'm from the north east of Scotland and obviously this is a project that is looking to be run in the north east of Scotland. I think what this project so far has done is shown not just the viability of the project going ahead but the desirability of the project going ahead as well. As somebody from the northeast, from Aberdeen, I'm going to fight for my region at every opportunity and I think that there are huge benefits to having this project in the north east. We've covered the benefits in relation to the pipelines which I think are massive and cannot be understated. But the other benefits are about the level of expertise that we have, who are already used to working out of Aberdeen wherever it was that they were actually born. People are used to working out of Aberdeen on this and I think that we've got that subsea expertise that you would need in order to take this pipeline forward. So as I say, I've been a massive supporter of this project all the way along and it's something that's quite nice, to have something to be enthusiastic about just now, given the Brexit context that we have. The three people that we've got on the panel: we have Alan James who you've heard from already, from Pale Blue Dot Energy; we've got Keith Whirisky, again who you've heard from already from Bellona Europe; and Peter Brownsort from Scottish Carbon Capture and Storage.
Alan James: [00:02:10] The costs that we talked about there did not include any steam reformation of natural gas. So that would be part of the build out that we're envisaging. But you're right there is growing interest in hydrogen in particular and it's partly being driven by the recognition that two thirds to three quarters of our emissions are not to do with electricity generation, they're to do with heat and transport; and hydrogen is potentially an important vector to help us move into decarbonising that space. And that provides you with a big challenge of generating bulk hydrogen quickly, and steam methane reformation is a mechanism to start that. In the fullness of time that will all be driven by renewables and electrolysis. But at the moment the cost curve suggests that steam methane reformation is more cost effective. So that is a big driver for some of the investor interest that's come through.
Keith Whiriskey: [00:03:17] You mentioned that there was growing interest. So just to put the UK projects in European perspective. The Netherlands now is required to meet its Paris agreements, in reality and not on paper. They lost a court case against an environmental NGO, so that means that they currently had a period of roundtables, so discuss how much CO2 they have to reduce from each sector of their economy. The surprising answer to that was that the biggest reductions actually have to come from industry. So exactly like this: the conversation is turning away from power, that seems to becoming a solvable problem, and now industry is rising at the top. In the Netherlands that's steel and chemicals, primarily, and refining. The plan is currently, as it's being developed, is about seven million tonnes to be captured every year in the Netherlands by 2030 from industry alone. In Norway there is two projects currently progressing, one from a cement plant to capture just under a million tonnes of CO2 a year, and a waste incinerator just outside the city of Oslo that emits about 20 percent of Oslo's emissions. So again, once you have these targets of reducing emissions by 30, 40, 50 percent, you start hitting the bone and you get to these very difficult to decarbonise areas and that's when you start looking at industry and that's high employment and difficult to decarbonise. But CO2 transport and storage can give you much more options about how you approach that problem.
Peter Brownsort: [00:04:26] If I may just add to that, in terms of using hydrogen in industry. Hydrogen is one of the, perhaps the lowest barrier, ways of moving from natural gas consumption in industry to a low carbon energy source in industry. Because in some cases, not all cases, but in some cases, you don't actually need to change terribly much the technology: the burner technology may have to change but it's still a gas that can be used in similar types of weight to natural gas currently. So there's a big scope for all the high heat requirements in industry to be potentially changed to hydrogen over a period of time, as hydorgen supplies in the grid become available. So that's part of the market draw there.
Alan James: [00:05:11] Well, it is fair to say that Feeder 10 is a regulated asset and conversations have started to explore with National Grid how such an asset may be moved from the natural gas regulated system into a different environment. And this is something that National Grid have been through in a huge amount of detail previously, so it's not a new discussion for National Grid. There's all kinds of different options open at the moment. National Grid have operated the pipeline for many years in gas phase and they've also in the past expressed an interest in operating it as a CO2 transportation system, so all of those things are possible. But the conversations are ongoing on that.
Peter Brownsort: [00:06:04] Just in terms of the status of the decommissioning plan for the Goldeneye line. You probably know this, but the plan has gone out for consultation and presumably then it goes back into BEIS and would be agreed, or not agreed, as the case may be. But the plan for the pipeline is to cut it and flange it, leaving it preserved so it can be reused for CCS in the future for the Goldeneye pipeline and that's a current plan we've responded to the consultation on. I know Alan has as well. So for the Goldeneye pipeline, that's probably the best we can hope for at the moment. But the Atlantic pipeline is still at risk because its decommissioning plan doesn't have that cutting and flanging, it just has a cut and leave open. So that would then lead to deterioration of the pipeline. So that's the one we probably need to be more concerned about. In terms of the platform, I'll maybe pass that to, well, Alan or Keith, I'm not sure.
Alan James: [00:07:03] So I think on the platform issue, what you have to bear in mind, of course, is that the cost of doing offshore modifications on a platform that - even if it's unmanned but you put people on from time to time, it's handling CO2 - the cost of that brownfield redevelopment is very high in itself. So the project fairly early on adopted what our colleagues in Norway call the Norwegian model, which is where the system is all operated from the beach with no platform. That's the technology that's used in the Snohvit project, it's the technology that is planned to be used for the Northern Lights project as well. And that helps us avoid the complexities around the platform modification costs. And the wells on platforms are optimally designed to be producing gas. What we need them to do is to be optimally designed for injecting CO2 and whilst there is an overlap between the two, you would design them to be slightly different. But I think also the costs that we're looking at here are significantly lower than the published cost for doing something with the pipeline that were part of the knowledge transition package from the competition work and that's part of the driver here, is to reduce those costs.
Kirsty Blackman MP: [00:08:40] And just on that, the benefits, it feels like to me, for my constituents and for people who work offshore is that they don't have to go on helicopters to go and do this kind of incredibly dangerous work that they currently do and actually I think it can still generate jobs without having people to have to be offshore on those platforms. I'm regularly informed by those people that go offshore that it is an incredibly dangerous job and they're very keen to make that point to me, so I think there's the benefit of that as well. The other thing that wasn't particularly mentioned earlier is about the CO2 benefits of not building the new pipeline. So the actual pipeline itself would cost a lot of CO2 to build: all of that metal that you need and the work to put that in, so actually you're saving CO2 as well as a massive cost saving from not having the pipeline being built.
Alan James: [00:09:36] Well, I think the whole issue around CCS, and the business model, and who pays for it, is central to all of this. And whilst it can be great to try and imagine ourselves into a position where we can get the other guys to pay for it, or the offshore operators to pay for it, or the onshore emitters to pay for it, the bottom line, at the end of the day, is whether it's through our gas price, our electricity price, through the products we buy and consume, it will be the citizens of the UK who will ultimately take on the cost of that contribution to reducing emissions and climate change. The exact mechanism of how that will happen has still got a little bit of travel to make. But I look upon this as a waste disposal activity to a large extent. So it's quite similar to the way that councils pick up the bins and all of us as citizens have to contribute through our local taxes to be able to achieve that. So I think that's where I am in this situation but there's room, there's distance to travel there.
Keith Whiriskey: [00:10:58] Just to make a point as well, when you're taking on legacy infrastructure it has to be done by a competent authority or group of people who have a certain amount of skill to represent the state's interest. You don't want to take on infrastructure that won't serve the purpose efficiently or effectively. So you can have lots of conversations about which pipelines you take, and which rigs might be of use, but you really have to understand that you want to make a very deep assessment of how useful that will be, because these also come with liabilities and some of these platforms should be decommissioned and they shouldn't be put forward for a longer term reuse. So selecting the good stuff and not the chaff is very important to this process.
Keith Whiriskey: [00:11:44] Just a little bit on the scale: the effort required to do anything remotely enough on climate change - so one point five, two degrees - is massive. And I don't think we're at a point where we we're going to have excess CO2 transport pipelines and excess CO2 storage, when you look at the amount we need. So you can either talk about solely industry, maybe some hydrogen; or if you talk about carbon negative that will also most likely be required unfortunately. So we're not going to run out of a need for things like CO2 transport and storage. So be it hydrogen CO2 that we put in, or CO2 shipped in from continental Europe, let's say coming from cement production, these are key strategic infrastructures that we require. And the fact that we're developing in Scotland means that it becomes something that Scotland can contribute to Europe's decarbonisation.
Alan James: [00:12:26] Yeah, I think hydrogen here is just really an indicative potential future customer. There are other big emitters around themal power generation, industrial, petroleum refining, gas processing and these industries will also be producing emissions which will run through the system. So it's not all about, "phase two is entirely driven by hydrogen". That may be the case, but we feel it's very likely that hydrogen will be one of the customers in phase two.
Peter Brownsort: [00:13:10] Transport of CO2 by ship is an existing operation. There is a small number of fairly small CO2 transport ships that work around European waters around the North Sea Basin in particular, transporting CO2 for the food and drink industry mostly, and other industrial uses. But CO2 is usually produced as a byproduct from ammonia manufacture, from the manufacture of hydrogen for going into ammonia. And that's often wasted and vented, but some is collected, captured, and there is a market for liquid CO2. And that's moved around Europe by road tanker; it can be by rail tanker; but also by ship. The bulk deliveries from one country to another are obviously by ship. So there are a number of import terminals in the U.K. and also there is export from Teesside of CO2 into the European market as well. But the total market is quite small: it's only about, I think, about 3 million tonnes a year in Europe - if anyone has got a better figure than that I'd love to hear it because it's really difficult to pin down. So the shipping technology is all established, but as I say, it's a small scale. So the ships are only of the scale of maybe one or two thousand tons of CO2 maximum at the moment. That's not going to be enough to be worthwhile on a climate mitigation scale. So for the Norwegian project, the Northern Lights project, I think they're looking at a 10,000 tonne scale of shipping, as their larger of two scales of ship. And that, or even larger, would be the sort of scale that we're talking about for shipping into Peterhead. So the technologies are all there: they're all in existence, all established. There's all regulations and codes for the construction of the ships and things like that are all in place. The scale will need some new design of ships but it's not unfeasible. So there is some detail. I can give more if anyone wants to hear more.
Kirsty Blackman MP: [00:15:19] I think it's another reason why this location for this project is really, really helpful because it's so close to the harbour at Peterhead and I understand that the port have been very on board with assisting, and actually quite keen to have more ships coming in and out of the port.
[00:15:42] So I think our perspective on this is that the Peterhead project was an innovative design project for a particular programme, that was the CCS commercialisation competition. And it was one of the final two projects there, and it was highly qualified through that stage. It was built around existing assets that were available at that time including the platform and the power plant at Peterhead. I think the big difference with the Acorn project is it's not connected to power plant and it is mainly being led by the transport and storage infrastructure piece, with just enough capture - almost being agnostic to the type of capture that's used - at the St Fergus gas terminal in order to initiate a piece of infrastructure that then can be used by others, both in the region and around other regions. And we're very hopeful that if we can keep the costs of this low and a sensible level, then the cost for other regions to start to decarbonise and send some of their early inventories to Acorn by the ship route helps them get started early until they build to scale and put their own local transport and storage infrastructure in place.
Keith Whiriskey: [00:17:14] Just on the concept of the evolution of the debate around CCS. I think for many years we were stuck in this chicken and egg: will you capture first or will you store first? And that was going on for too long. And a project like ACORN shows that if you take a focus on transport and storage you can break the chicken and the egg, and then there is no shortage of CO2 sources that we can then target after that.
Kirsty Blackman MP: [00:17:34] Thanks very much. Can I thank the panel. Can I thank you all for asking the questions. Thanks everybody.