Norway delays Mongstad Carbon Capture and Storage project

OSLO Sun May 2, 2010 7:23am EDT

OSLO (Reuters) - Norway said it would delay the decision to finance a top carbon capture project to 2014, after the life of the present parliament, in a major setback for a technology seen as key to mitigate climate change.

Building a Carbon Capture and Storage (CCS) facility at Mongstad in western Norway was proving too complex to do on schedule, said Oil and Energy Minister Terje Riis-Johansen.

"Given the big challenges we are facing in making the project good enough on an industrial scale, I don't think it is defensible to plan for an investment decision before 2014," he said.

The move means the present majority in parliament, which is to stand until 2013 and supports the Mongstad project, would not be able to take a decision on financing the scheme.

"The best evaluations now is that we need another four years after that," Riis-Johansen told state broadcaster NRK late on Saturday.

The decision is a setback for the development of a technology that the Intergovernmental Panel on Climate Change (IPCC) said could help mitigate global climate change.

CCS may cut the contribution of coal and gas-fired power plants to global warming by trapping and burying the greenhouse gas carbon dioxide (CO2), but it is untested on a commercial scale.

The Mongstad project, developed by oil firm Statoil, was seen as one of the first to start full-scale operation.

It is also a prestige project for Prime Minister Jens Stoltenberg, who once called it Norway's "moonlanding" project.

Some environmentalists condemned the government's decision as "a scandal".

"This is an environmental policy scandal, the worst one I have seen in my ten years in the Norwegian green policy debate," said Marius Holm, deputy leader of green group Bellona.

"It feels like being stabbed in the back," he told NRK.

(Editing by Mike Nesbit)

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