September 04, 2007: 02:08 PM EST
ABERDEEN, Scotland -(Dow Jones)- Developing commercially viable carbon capture and storage, or CCS, technology should be a major priority for companies and governments all over the world because renewable energy sources will not be able to replace oil and gas quickly enough, a senior executive at Royal Dutch Shell PLC (RDSB.LN) said Tuesday.
“Without CCS, fossil fuel use would have to be cut by more than half,” Malcolm Brinded, Executive Director of Exploration and Production at the Anglo-Dutch company, said at the Offshore Europe conference in Aberdeen.
“Nuclear would have to grow twice as fast … thousands more wind turbines would be needed. And a new vehicle fleet would have to run largely on biofuels and electricity, with petrol and diesel fuel almost completely phased out,” he said.
A change this drastic would be very difficult to achieve quickly, so CCS – which could reduce emissions from major industrial sources of carbon dioxide such as power stations by up to 90% – is necessary to smooth the transition to more widespread renewable energy, he said.
Brinded said cap-and-trade systems, like the European Union’s Emission Trading Scheme, are the best way to encourage the development of low carbon technologies in the long term.
Robert Olsen, Director of Production at ExxonMobil Corp. (XOM), disagreed that cap and trade is the way forward. The price put on carbon in the European Emissions Trading Scheme, which has varied from EUR30 a ton to less than EUR1 a ton, is too volatile to make large, long-term investments in clean energy technology, he said.
Energy companies need a more uniform, predictable cost of carbon across the whole economy, such as a carbon tax, he said.
Brinded said it was important that governments support the early stages of carbon capture technology with extra funding for demonstration projects. “These sort of transformations to a sector will not happen just through market mechanisms,” he said.
-By James Herron, Dow Jones Newswires; Tel: +44 207 842 9317; james.herron@ dowjones.com
(END) Dow Jones Newswires
09-04-07 1408ET
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