• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

China and India make carbon emissions reduction pledges ahead of Paris Climate Conference

China is to launch a national pollution trading system and finance poorer countries to shift away from fossil-fuel burning, according to a joint statement released by President Xi Jinping and President Obama during the Chinese head of state’s visit to the US in late September. The trading system, due to open in 2017, will include a cap on emissions of carbon from power generation, iron and steel making, and the production of chemicals, cement, and paper, as well as the processing of nonferrous metals. It is unclear at this stage if pollutants other than carbon dioxide will be covered. The finance package for poorer nations will amount to 20 billion yuan ($US 3.1 billion/€2.77 billion).  China has also set a target of producing 20% of its electricity from renewable sources by 2030, up from the current ~10%, and has pledged to reduce its role in financing and developing foreign projects which are heavily polluting (somewhat isolating Japan).

The joint announcement was aimed at providing global momentum in the lead up to the Paris Climate Change Conference in late November/early December, and was seen as something of a political coup for President Xi, considering that the US has not introduced a national carbon trading system of its own, and that its financing commitment to poorer nations is slightly lower, at $US 3 billion (€2.68 billion).

Meanwhile, also in the lead up to Paris, India has announced its own greenhouse gas emissions reductions targets. By 2030 it plans, with financial assistance from the UN, to reach 40% ‘non-fossil fuel’ power generation (which appears to point to a large role for nuclear power), and to reduce the intensity of its carbon emissions per unit of GDP growth by 33-35% (from 2005 levels). There was no commitment to a cap-and-trade emissions system, and the government stressed that coal “would continue to dominate its power generation,” in the words of Reuters.

Shell announces indefinite halt to Arctic oil exploration

Shell has announced that it will not pursue oil exploration in the Arctic for the foreseeable future, after disappointing results from initial exploration in the waters north of Alaska. The company had spent around $US 7 billion (€6.2 billion) on the deployment of the Burger J exploration well in the Chukchi and Beaufort seas, but found insufficient oil and gas to warrant further exploration. The US Geological Survey estimates that 30% of the world’s undiscovered natural gas and 13% of its oil lies within the Arctic, around 10 times the amount of oil that has been extracted from the North Sea to date, hence the attraction to oil and gas companies. However, the current low oil price, technical difficulties, and political uncertainty surrounding future drilling permissions (brought about by strong campaigning by environmental groups) contributed to Shell’s decision to halt, according to the opinion of various commentators. The company has signalled that it may return to Arctic exploration at some stage, however, with Shell USA president Marvin Odum saying “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US.” Gazprom Neft is the only oil company to be extracting oil in the Arctic at present, though Italy’s Eni may begin to do so in the Berents Sea within weeks.

Steel oversupply consequences ripple around the world

Oversupply in the steel industry has been having repercussions around the world as different nations struggle to keep their industries sustainable, as a series of stories has illustrated. In the UK, the second largest steelmaker, SSI UK (a subsidiary of Sahaviriya Steel Industries, Thailand’s biggest steelmaker), declared in mid-September that it would cease production, as falling steel slab prices, now at almost half what they were at the start of the year, bite. Its only plant, Redcar in Yorkshire, which employs 2,000 people, will close, though it will keep its power station and coke ovens running with an eye on restarting the steelmaking plant in the future. The Department for Business Innovation and Skills will continue to provide assistance in the form of relief from carbon pollution costs and in the extension of anti-dumping measures on some Chinese steel products, and has called a steel summit to discuss further options. Similar sentiments are being felt in the US, where the U.S. International Trade Commission has voted to continue an investigation into foreign cold-rolled flat steel, with the possibility that import duties may be raised. Findings are due this month and in January.  In Austria, steelmaker Voestalpine has said that it does not expect Chinese steel demand to rise for some time, with the consequences that steel prices will remain low and that Chinese steelmakers will continue to try to ‘dump’ steel. Prices are currently at their lowest in two decades, with Chinese steel demand falling for the first time since 1981 last year, dropping 3.3%, and the decline continuing this year. In contrast, Chinese exports rose a whopping 50% to 93.8 million tonnes last year, and have risen a further 26.5% so far this year, but are beginning to fall, presumably because of anti-dumping measures being put in place by other countries. From all angles, it appears the steel industry will struggle for the foreseeable future.

Japanese government mulls tighter controls on coal-fired power plants

A report from Reuters has looked at the Japan government’s potential tightening of rules regarding coal-fired power plants in the country. After the 2011 Fukushima Nuclear Disaster and subsequent turning away from nuclear power, Japan’s coal firing has increased dramatically, which has in turned raised concerns about heightened carbon dioxide emissions, particularly in light of the upcoming Paris Climate Change Conference. Japan’s industry ministry is considering bringing in rules to require new coal-fired plants to be at least 40-42% efficient, while the environment ministry is considering enforcing highly rigorous assessment, taking as long as four years, before construction. According to Professor Takeo Kikkawa at the Tokyo University of Science, the measures “may help reduce the number of small plants, but they won’t be enough for Japan to keep its emissions reductions goal,” as it plans to build 40 new coal-fired power plants over the next 10 years (including 10 smaller ones). Japan’s CO2 equivalent emissions reduction target is 26% from 2013 levels by 2030.

Drax to pull out of White Rose CCS Project

Drax, which has been working with Alstom and BOC on the White Rose CCS Project, has announced it will end further investment in the project after the current feasibility and technology development phase and withdraw from the consortium’s legal entity, Capture Power Ltd. It will, however, continue to make available the site for the project, which is based at Drax’s existing power station at Selby, Yorkshire, UK. The project involves an oxyfuel-based 448 MWe coal-fired power plant equipped with CCS capturing 90% of CO2 emissions, the storage site being under the North Sea. Drax’s Group Operation Director, Pete Emery, said in a press release that “We are confident the technology we have developed has real potential, but have reluctantly taken a decision not to invest any further in the development of this project. The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first.” The decision is an undoubted blow for the development of CCS, as the White Rose CCS Project had received EU grant funding, but does not bring the project itself to a halt. Bellona interpreted the announcement as a sign that the regulatory environment needs to be strengthened to support the development of CCS technology.

Dong Energy to launch IPO within 18 months

Dong Energy has announced its plan to release an initial public offering within 18 months. The Danish government will become the majority shareholder in the company, but sales of shares to private investors will enable the company to raise more capital. The IPO will come with some strategic repositioning, with divestment of its gas distribution network and oil and gas pipelines, along with a review of its oil exploration and production operations to “adapt to new market realities.” The focus of the public company will become “diversified renewables portfolio based on leading competences in offshore wind and biomass, as well as distribution and sales anchored in DONG Energy’s Danish home market.”

ClearSign wins contract with Aera and “Technology Company of the Year” at Petroleum Economist Awards

Seattle-based combustion technology firm ClearSign has gone from strength to strength this year, being awarded a contract with Aera and also being awarded the “Technology Company of the Year” at the 2015 Petroleum Economist Awards. The contract with Aera is to retrofit ClearSign’s low-NOx Duplex™ technology to a once-through steam generator used as part of Aera’s enhanced oil recovery operations. It marks the second time Aera has applied the Duplex™ technology, after a successful demonstration on another of their once-through steam generators, which achieved sub-5 ppm NOx emissions while improving energy efficiency. ClearSign CEO said of the deal “This strong entry into the upstream oil and gas market presents a significant opportunity for ClearSign, and we look forward to working with Aera and other companies in the EOR space on this, and future, projects.”

Cockenzie Power Station chimneys fall in spectacular demolition

The twin 149 m chimney stacks of Scottish Power’s former Cockenzie Power Station in East Lothian, Scotland, were demolished in late September in spectacular fashion, smashing into each other as they fell, making remarkable viewing. The power station was decommissioned in 2013 following 46 years of service, and the stacks were a landmark for the area. As the BBC reports, local resident Donald McCulloch won a charity raffle to have the privilege of hitting the detonate button. The turbine hall was also demolished with the chimney stacks, though the boiler room was not.