Green Investors: Stop Hating Coal; Carbon Capture and Storage Here to Stay

Why should any self-respecting “green” investor invest in companies developing carbon capture and storage (CCS) technology?

Because whether or not you hate coal, and whether or not you believe that CCS is a scam perpetrated by the fossil-fuel industry, if you want to make money, CCS looks like a very good sector to be in.

Fact is, governments around the world hope to clean up the atmosphere by spending many billions of dollars on the commercialization of CCS.

As Reuters news agency reported two weeks ago,

The world will need to have 100 large-scale carbon capture and storage (CCS) projects by 2020, with thousands more built over the following three decades, the head of the International Energy Agency said. . . . The IEA estimates $56 billion of investment will be needed in CCS globally from 2010-2020, followed by $646 billion from 2021 to 2030.

Add it up: the world may spend $702 billion on CCS in just 20 years. Moreover, with all that pressure on governments to control their coal-generated carbon emissions before global warming’s so-called “tipping point” is reached, the first company or companies that look like they really can commercialize CCS will be in line to make an absolute killing.

So who’s at the head of this line, at least as of today?

There are several big names that appear to provide investors with a good entry point. Alstom SA (AOMFF.PK) has some 10 CCS demonstration projects underway in several countries, including the U.S., where the Obama administration also appears to have drunk the CCS kool aid, having authorized several federally-funded projects to launch next year. Siemens AG (SIE) is another CCS technology leader, while Fluor Corp. (FLR) is heavily involved in project construction.

Among utilities on the frontier of CCS commercialization, the payoff could be big for Duke Energy (DUK) Spain’s Endesa SA (Symbol ELEYY.PK), and Italy’s Enel S.p.A. (EN). Companies providing chemicals, gasses and other components could also do well, including Dow Chemical, (DOW), Air Products & Chemicals (APD) and Praxair (PX).

Other potential winners include the giant oil and gas companies, led by Royal Dutch Shell (RDS.A) and ConocoPhillips (COP). Ironically, both are raking in billions in goverment grants to capture CO2 in order to produce more carbon-emitting oil (through secondary oil recovery).

Comments

[Freya:]

PGH, a CanRoy, is building an Oil extraction facility which will use CO2 instead of NG. Looks like a win-win situation.

Proprietary Tech.

Oct 27 10:07 AM

[bricki:]

One of the arguments against nuclear power is that costs for long term storage of the waste products are not properly included in the cost of the power.

Well it looks like we may be heading to the same situation with the coal industry, only the long term storage of carbon is a much higher volume problem.

Oct 27 10:38 AM

[Ferdinand E...:]

There is nothing that I love doing more than telling people how I was expelled from engineering school for failing everything my first year - twice. I think that I will have to start telling them however that later I was first in my thermodynamics class. Try this as an example:

CCS IS A THERMODYNAMIC TRAVESTY, although somebody apparently has a better name. That name is SCAM.

Oct 27 10:44 AM

[Mad Hedge F...:]

uue Peabody Energy’s (BTU) CEO, Gregory Boyce, says that the Chinese buying of coal is real, not stockpiling, and expects to see a 7.5% annual growth in sales for the next five years (click here for their website ). The big demand is for metallurgical coal used to make steel, which the Middle Kingdom is importing at a record rate. Investors have already figured this out, taking the company’s stock up 400% in a year. Coal has been the fastest growing energy source in the US for the last six years, and now accounts for 50% of our electricity supply and 85% of energy generation. The problem is that the industry is target numero uno with the environmental movement, which now holds significant sway in Washington. Thanks to a 150 year lobbying effort, the coal industry has already carved out preferential treatment in the upcoming cap & trade wars at the expense of other fossil fuels. They are also pushing hard for carbon capture & sequestration (CCS), which strips the CO2 out of emissions and pumps it down to 8,200 feet underground. All eyes are now on the first such plant to come online this week in New Haven, West Virginia (click here for link to the full New York Times story ). Industry analysts say it will cost $1 trillion to convert the country’s 400 plants to generate power 30% more expensive than we are currently paying. You might also get polluted ground water and earthquakes as part of the deal. Sounds like a high price to pay to save a few union mining jobs. I vote for a natural gas based solution, which is currently coming out of our ears.

Oct 27 11:00 AM

[Michael Fit...:]

CCS is a myth except in those cases where it

Oct 27 04:16 PM

[Michael Fit...:]

as i was saying... CCS is a myth except in those cases where CO2 can be pumped into the Earth in order to get something out (like natural gas). since the vast majority of existing coal plants are not near natural gas reserves, they will continue to spew pollutants into the air and water. even if sequestration works (it doesn't), what are you going to do with the cocktail of toxic remnants (mercury, lead, etc. etc.) leftover from burning coal? if you don't think this is a problem, go catch some fish in the Tennessee River and eat them. further, even if sequestration did work (it doesn't) wouldn't it be idiotic to start with a fuel (coal) that has 50% more CO2 emissions than does coal?? coal is a failed 20th century fuel. natural gas is abundant, clean, and cheap! make way for the 21st century clean gaseous fuels: solar, wind, natural gas, and hydrogen.

Oct 27 04:21 PM

[Michael Fit...:]

correction: "....than does??" should be "...than does natural gas??" point being, if sequestration is so expensive and works (i would agree with the expense, not the "works"), then natural gas is 50% more efficient without spending a dime (as compared to coal)!!

Oct 27 04:23 PM

[arrien west...:]

Why is the federal government doling out grants to companies the likes of duke, roysl dutch shell, and conoco philips. Maybe they want to run out of money so they can raise taxes again. all three are profitable and publicly held. these grants are subsidizing in vestors and insiders.
When does this silly wasteful giving stop?

Oct 27 11:06 PM

[jarco:]

The wasteful doling out of fed $ was bound to find carbon capture sooner or later since it legitimizes the free wheeling give away and puts a floor under Co2 reinsertion into the earth.

The folly of the technology is clear but the program marches on. Natural Gas, particularly when found in shale formations, is tightly held and difficult to break loose. So what does that say about the ability to pump Co2 back in and assure it stays there? As an educated scientist, I find it difficult to rationalize the creditability of the process.

Oct 28 01:41 PM

[richardsd3:]

Carbon sequestration is a result of the failed "Global Warming" scam that has been renamed to "Climate Change" or correctly "global cooling" resulting from solar sunspot related changes. The electrical pumping costs for storing CO2 in subteranean cavities is a waste of the resource. The real problem is reliance on foreign oil and the refusal to bite the bullet and go Nuclear Electric and Electric transportation. Lets burn Uranium.

Nov 03 11:32 AM

[Sudhakar2k:]

Anyone (like the poster above me) who denies the existence is the one partaking in the scam. At best they are ignorant, and at worse disingenuous.

Also the author of this article doesn't know what he is talking about. While some carbon capture technologies exist, an article by the NYTimes (see link below) talks about how difficult and expensive it is proving to capture carbon at coal plans. There really is one solution to save humanity (no the planet). Stop using fossil fuel (and equally destructive biofuel) technology as fast as possible and switch to clean renewable energy.


www.nytimes.com/2009/1...

Nov 09 06:17 PM