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The Office of the Auditor General's investigation of the State's work on carbon capture and storage (CCS)

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Summary

Background and objective of the audit

It is important to develop future-oriented and effective technologies for capturing and storing CO2 from the combustion of fossil energy. This can make CCS a key instrument in national and international climate policy.

In the period 2007-2012, the State has spent a total of NOK 7.4 billion on CCS projects at Kårstø and Mongstad.

The objective of the audit has been to assess how the Ministry of Petroleum and Energy ensures that the Storting's CCS target is realised, and to illuminate the causes of the development in the use of resources and progress of the CCS projects.

Findings and recommendations

The complexity of implementing CCS at Mongstad was underestimated when the agreement between the Ministry of Petroleum and Energy and Statoil on cooperation on CCS at Mongstad was signed in 2006

It has proven very difficult to plan and build capture facilities on a large scale near a refinery and combined heat and power plant in operation.

While the Technology Centre Mongstad (TCM) has been realised with a high level of ambition and high standards, high costs may reduce interest in greater industrial participation

The Office of the Auditor General (OAG) recommends that the Ministry of Petroleum and Energy ensure long-term use of the TCM, in part by, assessing further measures for reducing operating expenses and inspiring broader industrial participation.

The investment budget for the TCM partners was considerably higher than what was presented during the Storting's discussion of the investment

Proposition No. 38 (2008-2009) to the Storting specified an expected construction cost of NOK 4.2 billion. During the implementation of the project, the Ministry of Petroleum and Energy and Gassnova acted in accordance with an investment budget of NOK 5.9 billion, which also included a project reserve.

In the opinion of the OAG, the Ministry of Petroleum and Energy, during the discussion of Proposition No. 38 (2008-2009) to the Storting, should have presented information that the Ministry intended to enter into an agreement with Statoil with a plan to set aside a project reserve that in reality has been incorporated in the total cost framework for the project.

There have been weaknesses in the Ministry of Petroleum and Energy's risk management and Gassnova's internal control

The OAG recommends that the Ministry of Petroleum and Energy improve overall risk handling in the State's work on CCS.

There are few instruments for good cost management and rapid progress in the capture projects at Mongstad

The OAG recommends that the Ministry of Petroleum and Energy assess measures for strengthening Gassnova's work on exercising cost management and contribute to efficient progress in the planning of the full-scale project at Mongstad.

The legal and organisational framework for transport and storage of captured CO2 has not been determined

In the OAG's opinion, there is a risk that the transport and storage solution called for by the Storting will not be in place when the full-scale facility begins operating.

The OAG recommends that the Ministry of Petroleum and Energy step up its efforts to put in place legal and commercial framework conditions for transporting and storing CO2.

Timeline

2006:

  • Emission permit from the Climate and Pollution Agency with CCS requirement
  • Implementation agreement on CCS
    • 2007: Cooperation agreement on the Technology Centre Mongstad (TCM)

      2009:

      • Establishment of TCM DA and investment decision for building TCM
      • Masterplan Mongstad

      2008–2012: Study of possible storage and transport solutions for CO2

      2010 and 2011: Investment decision on full-scale facility is postponed

      2011–2013: Technology qualification of full-scale facility

      2012: Opening of TCM

      2014: Planned choice of concept and selection of technology for the full-scale facility

      2016: Expected investment decision on the full-scale facility

      Ministry/ministries:

       Related content

      The summary in poster format

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