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« No significant trends in rainfall extremes | Main | The otherworldliness of Mark Carney »

CCS projects may be uninsurable

While looking to see what the insurance industry made of Mark Carney's speech (they seem to have ignored it so far) I chanced upon an article in Insurance Times about CCS.

Insurers will be reluctant to cover projects that capture carbon emissions and store them permanently underground, or they may charge “large risk premiums”, according to Royal Dutch Shell.

“Insurance will be able to address only part of the financial risk exposure,” Shell said in a report on its planned Peterhouse Carbon Capture & Storage (CCS) project that the company posted on the Department of Energy & Climate Change website.

“As the risk can currently neither be defined nor quantified, no insurance solutions are available,” Shell said.

(They mean Peterhead rather than Peterhouse I think). Another nail in the coffin, I would say.

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Reader Comments (20)

It means that like all new technologies, the initial pilot projects need funding and backing by a Government.

The problem is that the first mover advantage is very small and no-one really believes this CO2 thing will ever be a problem worth spending on.

Dangerous AGW is a zombie meme. All policies assume it's untrue but no-one can say it.

Sep 30, 2015 at 10:01 AM | Registered CommenterM Courtney

The "Three Uxorious C's"- Cameron, Clegg and Carney.
"But my wife says........."
This was inevitable knowing Diana's views !

Sep 30, 2015 at 10:11 AM | Unregistered Commentertoad

Surely CCS is purely academic, so Peterhouse is entirely appropriate.

Sep 30, 2015 at 10:17 AM | Unregistered CommenterIt doesn't add up...

What would they be insured against?

They do not do anything. They have no value. There is an economic GAIN, not loss, all the time they are NOT working. Money would be saved by not building them in the first place.

Business premises are more likely to be destroyed by fire, if the business is losing money..

Sep 30, 2015 at 11:09 AM | Unregistered Commentergolf charlie

insure against - all the CO2 coming out in a rush and suffocating all life in the nearest vicinity?

Sep 30, 2015 at 11:19 AM | Unregistered CommenterBarry Woods

Well it's just the storage part which is unpredictable and hence uninsurable. However the US, Canada & China are still going ahead. That the UK will end up copying someone else's tech rather than developing its own is nothing out of the ordinary nowadays.

The key is in trying to make money from the CO2; eg enhanced oil recovery, biochar, carbon briquettes for construction (, high strength lightweight cellular concrete (HPCC) via CO2 injection, intensive greenhouses,

and now enhanced water recovery:-

Someone famous once said that supply creates its own demand.

Sep 30, 2015 at 11:37 AM | Unregistered CommenterJamesG

The simple fact is that anyone offering advice along the lines of "YOU MUST SPEND BILLIONS/TRILLIONS BECAUSE OF MY WORK"... is taking on a totally uninsurable risk.

And anyone intentionally fabricating temperature data is making themselves, their University - and more worrying their whole country - the likely target of the biggest law suit in global history when/as this racket collapses.

Sep 30, 2015 at 11:40 AM | Registered CommenterMikeHaseler


Easy-peasy - just replace 1 C with four H
China can do anything from faking water to statistics
(do I really need to add /joke?)

Sep 30, 2015 at 11:52 AM | Registered Commenterdavidchappell

I can see the movie now. A cruise ship drifts dangerously towards a turbine field as the passengers on the upper decks try to work out how to get into the CO2 flooded engine decks. The crew were, with extreme bad luck, all in the lower decks trying to fix the electrical fault when the CO2 fog bank hit them. Despite a valiant attempt to get below the ship reaches the windmills. It survives the first strike which spectacularly rips through the ship killing many of the non stars but the good looking lead (probably the chef) predicts the next strike will wipe them all out. Blah, blah, blah... happy ending for all those not gassed or sliced and diced.

Cut to scene where some oil magnate strokes a cat and a balaclava covered minion says 'the sabotage went better than expected but there are survivors sir'. (Oh come on people, this is Hollywood, you know who will always cop the blame!)

Well, it makes as much sense as any disaster movie.

Sep 30, 2015 at 12:13 PM | Unregistered CommenterTinyCO2
Sep 30, 2015 at 12:16 PM | Unregistered CommenterAndre

There already is a zero maintenance ,cheap to install Solar Powered Carbon Capture alternative which also provided a natural habitat for wildlife ,a supply of building material and certain food stuffs and could even be used for fuel and best of all blends in nicely enhancing the surrounding landscape.

Its called a tree

Sep 30, 2015 at 12:33 PM | Unregistered CommenterJamspid

For heavens sake don't mention trees or someone will suggest we build artificial trees:
"..A novel synthetic material that is a thousand times more efficient than trees at capturing carbon dioxide from the atmosphere ..."

Sep 30, 2015 at 1:08 PM | Unregistered CommenterJamesG

As a guest at the dinner I sat through the speech and it took all my strength not to get up and walk out. As a regulated person in the insurance industry I am subject to Mr Carney's jurisdiction so a deliberate insult would not have been helpful to my businesses.
However I can say that it was extraordinary for two reasons:
1 With all the live and pressing issues facing the insurance industry in particular and the financial sector in general, he chose to ignore all of them and focus instead on something for which there is no evidence of any immediate threat to financial stability.
2 His speech, which one of his colleagues was boasting of having written for him, was notable for its complete ignorance of climate science or of the current state of emissions reducing technology, and its espousal of creating new green financial instruments in the hope that they could provide a soft landing as we transition to a "zero-carbon" economy.

We heard a lot of cant about inequality, but if there is one financial policy guaranteed to increase inequality it is to suck money out of the functioning economy and divert it into synthetic financial instruments purporting to ameliorate the move to a zero-carbon world, but in reality lining the pockets of the same investment bankers who have rightly borne the lion’s share of the blame for the last financial crisis.

I was tempted to see if I could go to the basement and find the main fuse so I could plunge the room into darkness to give the distinguished guests a taste of a zero-carbon world.

Sep 30, 2015 at 1:09 PM | Unregistered CommenterDavid S

Carney is another Goldman Sachs placeman. It's clear what their climate game is.

Sep 30, 2015 at 2:33 PM | Unregistered Commenteroldbrew

Barry Woods, Andre:

Whatever happened to the Precautionary Principle?

Check out Nick Stern dipping into another porcine food container:

Sep 30, 2015 at 2:49 PM | Registered Commenterdennisa

The world’s first industrial-scale post-combustion carbon-capture project is at Estevan, Canada. It commenced operations in October 2014. A report on the project is here:

Capital cost: $917 million
Annual revenue from sale of carbon dioxide: $23 million
Annual cost of operation (including electricity) and maintenance: $28 million

Sep 30, 2015 at 3:50 PM | Unregistered CommenterDouglas J. Keenan

Douglas J. Keenan, of the capital cost $917 million, any clue how much went in professional fees? Obviously architects, engineers etc need paying, but what about the Green Blobby experts in CCS, without whom none of this economic loss would have been incurred?

In the best traditions of the RICO20, it would be helpful for everybody to know, who pocketed the most from bad professional advice.

Sep 30, 2015 at 10:15 PM | Unregistered Commentergolf charlie

Golf Charlie,

You can assume engineering permitting costs of around 25%, probably not the stated capital cost though. The Saskpower project is a disaster, CCS imposes an energy efficiency penalty in the order of 40 to 50%.

There is nothing approaching breakthrough technology in CCS, despite all the claims it is simply an adaption of acid gas scrubbing technology that has been used for approaching 100 years, it's just a technology adaption. The unique opportunity for Saskpower was an immediate market for tertiary oil recovery.

Oct 1, 2015 at 3:39 AM | Unregistered CommenterMike Singleton

Ironic too that the Saskpower project effectively became an oil industry subsidy.

Oct 1, 2015 at 9:19 AM | Unregistered CommenterJamesG

David S
Absolutely right. As an engineer I really cannot understand these numpties (a) believing in a low carbon world, (b) thinking that carbon dioxide is a pollutant and (c) thinking that CCS is a viable proposition. As Nigel Lawson says - the climate enthusiasts are in the throes of a new religion.

Oct 3, 2015 at 5:40 PM | Unregistered CommenterDizzy Ringo

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