Reply by S. Kasim 2 Oct 2008

Dear All,

Re: item 3 in the latest UKCCSC News:

“Tullow plans to bury CO₂” Independent (Sept 30)

“”We’ve looked at this from a corporate social responsibility view, but it’s a £200m investment for us. It has to be viable in the long term and we’ll probably end up making a reasonable return from it,” Aidan Heavey, Tullow’s chief executive said.”

Mark wondered  “if the return is dependant on winning the competition?”

My comment:

No, I don’t think that Tullow needs to win the competition to make the project viable.  Indeed, it’s my considered view that the sustainability of EU-ETS depends on this kind of project.  When reality dawns, and the EU-ETS is reformed (e.g. along the lines of mandating companies to return rather than sell extra EUAs), only market participants who have truly removed anthropogenic CO₂ from the atmosphere (through sequestration) would have emission allowances to sell.  As a step in the right direction, provisioning for CCS in EU-ETS as from the Third Phase (2013) implies that every sequestered tonne of CO₂ is a EUA that Tullow can sell.  With tightening emission rights limits, Tullow will be in business several times over.

Best wishes,

Sola