Saudi, Norway back carbon capture for CDM: paper

OSLO (Reuters) - Oil exporters Saudi Arabia and Norway will cooperate to get carbon capture and storage (CCS) -- burying greenhouse gases -- recognized as a way for rich countries to offset their emissions, a Norwegian daily reported.

CCS involves trapping carbon dioxide (CO2) from industrial processes, such as power generation from fossil fuels, and storing it underground or below the seabed. The technology is still in a pioneering phase and is not yet commercial.

Norway's aim is to get CCS projects included in the Clean Development Mechanism (CDM), which gives investors in projects that cut greenhouse gas emissions in developing countries carbon credits that can be used to offset emissions elsewhere.

Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) have supported developing CCS.

Norwegian Oil and Energy Minister Aaslaug Haga asked for Saudi Arabia's support for CCS in meetings in Riyadh on Sunday with Saudi Oil Minister Ali al-Naimi.

"Both Saudi Arabia and Norway are concerned about the environment and want to reduce emissions with all possible means. CO2 capture and storage is an excellent way to reduce emissions," al-Naimi said, according to Monday's edition of Dagens Naeringsliv.

Haga told the newspaper: "We had very, very useful discussions. I am delighted about the effort that Saudi Arabia will make in this area."

How CCS can be included within the CDM is still under discussion around the world, and some environmental groups and countries oppose inclusion as they say CCS detracts from developing renewable energy sources and boosting efficiency.

A U.N. climate conference in Bali, Indonesia, in December postponed a decision on inclusion in the CDM scheme pending further talks this year to clarify safety, legal and commercial viability issues.

LOBBYING EFFORT

"We want to get as many countries as possible with us to lobby for this," Norway's Deputy Oil Minister Liv Monica Stubholt told the newspaper.

"One part of the cooperation on climate is that Saudi Arabia and Norway want carbon capture and storage to be approved for carbon credits," Stubholt said.

The Norwegian government is promoting CCS projects at gas-fired power plants at the Mongstad refinery and the Kaarstoe gas-processing and export plant on Norway's west coast.

Norway's oil and gas company StatoilHydro has been burying carbon dioxide from the natural gas stream below the seabed at its Sleipner field in the North Sea since 1996.

If CCS were accepted within the CDM, it would help create a global market for the technology, although offset schemes on their own would be unlikely to provide sufficient incentives.

Norwegian companies developing CCS, including industrial group Aker ASA and engineering group Aker Kvaerner, have pinned hopes on the emergence of a market.

Aker predicted in January that building CCS plants could become a $1.5 trillion to $2.0 trillion per year business as important globally as the construction of oil platforms.

Haga's visit to Saudi Arabia continues on Monday with a visit to the national oil company Aramco.

(Reporting by John Acher, editing by Anthony Barker)