Fossil fuels without global warming: the holy grail?

All major party politicians agree that ‘Green taxes’ are part of the solution to global warming. But all are equally nervous about actually specifying anything very punitive to force us out of our cars and our foreign holidays. So wouldn’t it be wonderful if the white knight of new technology could come galloping over the horizon, to save us from having to make too many hard choices?

Maybe it will. If only carbon capture and storage could be made to work, we could burn fossil fuels without putting CO2 into the atmosphere. At Peterhead near Aberdeen, BP are proposing to build a £500 million plant pioneering carbon capture and storage. It’s one of many such initiatives around the world, although the British are ahead of the game in some aspects of the technology. Yesterday on the Politics Show, Shadow Chancellor George Osborne took the opportunity to urge Gordon Brown to do what it takes to ensure this investment goes ahead.

You might think this would be a political no-brainer. Why on earth wouldn’t any politician wanting low-carbon energy back this technology? Well one reason is the expense of such projects, and at the liaison committee last week Tony Blair (while praising Peterhead) said that the subsidy was the reason the government hadn’t decided to back Peterhead yet. But in fact the pound of flesh BP are asking for (and George Osborne seems happy to provide) is something rather more complicated. At the moment the power companies are compelled by the government to meet a ‘Renewables Obligation’ – in effect, to buy a certain amount of their energy from expensive sources like wind power. BP say that if they are to build their plant at Peterhead, they need to be sure there will be a market for its product (which is, not surprisingly, more expensive than power produced where the CO2 is simply pumped into the air). So they want energy produced by carbon capture and storage to be included in the Renewables Obligation. That way, power companies would have an incentive to buy it. The only trouble is, this one plant at Peterhead will produce 475MW – as much as all the wind turbines in Britain put together. So who will buy the wind-generated energy, if the power companies have already met their Renewables Obligation from Peterhead?

Of course the government could simply raise the Renewables Obligation at the same time, and over time they certainly will, but this is not without cost – it means higher fuel bills, and more impoverished pensioners struggling to heat their homes. Carbon Capture Storage is still energy from fossil fuels, which are still finite, and still running out under the North Sea. And one hopes a Labour government would think twice before allowing BP and other oil companies – hitherto the villains of the story - to pitch their tent all over the renewables’ ground, crowding them out of the market painstakingly created for them. It seems superficially attractive, which is obviously good enough for superficial opposition politicians: but sooner or later they are going to have to face the fact that you can’t cloak yourself in greenery without having to face tough and unpopular choices.