Sun, Jul 02, 2006 - Page 19 News List

The energy industry turns a shade of green

Royal Dutch Shell is piping waste carbon dioxide to rose growers who use it to nurture their crops. Could alternative projects offset the damage that energy companies cause the environment?


At the Pernis refinery near here, the stakes are clear and the search for how to compete is under way. Two 213m high stacks spew 6 million tonnes of carbon dioxide a year into the atmosphere, or 3 percent of the total emissions in the Netherlands.

Every day, the refinery processes about 412,000 barrels of crude oil that are shipped from distant places like Nigeria, Kuwait and Norway, and converts that oil into gasoline and dozens of other petroleum products.

The refinery, near the mouth of the Rotterdam ship canal by the North Sea, sprawls across 688 hectares with a dizzying array of stacks and chimneys, amid noise and vapor. There are 160,934km of pipeline, enough to go four times around the globe.

Shell aims to sell 500,000 tonnes of carbon dioxide a year. While a lot of the gas still ends up in the atmosphere, the reduction is a net gain for the environment: gardeners like van Os have stopped producing an equivalent amount of carbon dioxide to grow their crops.

"Climate will shape our business," said Chris Mottershead, an adviser on climate policy to the chief executive of BP, Lord Browne. Some of the largest oil companies, including BP, Shell and Chevron, are already planning multibillion-dollar investments in energy sources that emit little or no carbon, like wind and solar power, biofuels or hydrogen from renewable sources.

Part of the motivation is a mounting anxiety about their basic business.

As access to easily produced oil diminishes, executives realize that tomorrow's fuels are likely to be manufactured from a variety of sources that are much dirtier than today's conventional oil. Many researchers say this trend toward unconventional carbon-rich sources -- heavy oil, tar sands, shale oil, or processes that turn natural gas or even coal into transportation fuel -- will worsen global warming unless technologies are developed to curb emissions.

Global energy consumption is expected to rise by 50 percent by 2030, driven by population growth and rising economic prosperity in developing nations, according to the International Energy Agency. Most of that demand will be met with fossil fuels, like natural gas and oil, which all emit carbon when they burn.

"Either we manage these upstream carbon dioxide emissions," said Alexander Farrell, an associate professor at the University of California, Berkeley, who specializes in energy and climate issues, "or we're willing to accept very severe climate change."

David Friedman, research director at the Union of Concerned Scientists, argues that some oil companies fear losing control over the most profitable part of the business, oil extraction and production. "Some see alternative fuels as a threat to their business because they don't control the resources," he said.Executives at several other oil companies, however, are more active in addressing the issue, if only because they see it as the best way to extend the use of hydrocarbons in coming decades.

"If we can solve the CO2 problem," Van der Veer, of Shell, told an industry conference in Paris last year, "we can, in fact, produce green fossil fuels."

Green or not, the industry's future is still firmly tied to fossil fuels.

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