CCS CAN LESS BE MORE? AN INDUSTRY PERSPECTIVE

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1 CCS CAN LESS BE MORE? AN INDUSTRY PERSPECTIVE 1st February 2013 Peterhead, Scotland Bill Spence Head of Carbon Capture & Storage Shell 1

2 DISCLAIMER STATEMENT The companies in which Royal Dutch Shell plc directly or indirectly owns investments are separate entities. In this presentation the expressions Shell, Group and Shell Group are sometimes used for convenience where references are made to Group companies in general. Likewise the words we, us and our are also used to refer to Group companies in general or those who work for them. The expressions are also used where there is no purpose in identifying specific companies. The information contained in this presentation contains forward-looking statements, that are subject to risk factors which may affect the outcome of the matters covered. None of Shell International B.V., any other Shell company and their respective officers, employees and agents represents the accuracy or completeness of the information set forth in this presentation and none of the foregoing shall be liable for any loss, cost, expense or damage (whether arising from negligence or otherwise) relating to the use of such information. All copyright and other (intellectual property) rights in all text, images and other information contained in this presentation are the property of Shell International B.V. or other Shell companies. Permission should be sought from Shell International B.V. before any part of this presentation is reproduced, stored or transmitted by any means. 2

3 THE DOOR TO A 2 DEGREE WORLD IS CLOSING 3

4 THE GLOBAL CCS DEMO PROGRAMME BEHIND SCHEDULE If the definition of insanity is to do the same thing over and over and expect different results... what should we do differently? 4

5 FUNDING THE CCS DEMO PROGRAMME To project proponents... To Governments funding CCS... It can feel like a never ending lottery These are tough times to free up funds

6 THE CCS DEMO PROGRAMME QUANTITY OR QUALITY Maybe more... Maybe better /03/29/daily-circuit-obesogens isn t an option Is our only real option

7 THE SHELL DEMO PROGRAMME LEADERSHIP OR LUCK? ZeroGen OCAP Peterhead Barendrecht Quest Longannet TCM Draugen Gorgon

8 THE SHELL CCS PROGRAMME THE MANDATE Be ready to deploy CCS if / when needed. Build Competence 8

9 THE COMPETENCE BASED DEMO PROGRAMME Gorgon TCM Quest Peterhead Onshore storage Offshore storage Saline aquifer storage Depleted reservoir storage Pre-combustion capture Post-combustion capture Contaminated gas Heavy Oil Refining Gas fired power Enhanced Oil Recovery

10 THE SHELL CCS PROGRAMME THE METRICS Be ready to deploy CCS if / when needed. Competence Metrics $/Tonne Tonnes/Annum Knowledge/$ Experience/$ 10

11 A CCS PROGRAMME IN THE EU CONTEXT FROM TO Lottery like competitions Cash sinks to governments EU Leadership Clear EU level mandate Member State collaboration Scatter gun array of projects What is competence at EU level (Coal, Cement, Steel, Storage hubs, Capture hubs, Backbone pipelines) Tight demo portfolio with cross border impacts Metrics that deliver lowest cost abatement Metrics that deliver competence Metrics that encourage knowledge sharing 11

12 A CCS PROGRAMME IN THE EU CONTEXT Germany likes lignite... & the UK likes storage NL likes the RCI*... & Denmark likes EOR * Rotterdam Climate Initiative 12

13 THE KEY TO SUCCESS KNOWLEDGE SHARING To get up the learning curve ZeroGen OCAP Peterhead and down the cost curve Barendrecht Quest Longannet with a reduced demo portfolio will require extraordinary TCM Draugen Gorgon Knowledge Sharing 13

14 CONCLUSIONS CCS is essential in our response to the CO 2 challenge. Delivering a smart EU demonstration programme is the priority. EU COMPETENCE based programme design BUILD the necessary end to end demonstration projects OPERATE the facilities under all conditions SHARE the learnings from 1st wave of demos with 2nd wave FOSTER Investor confidence A robust CO 2 price can help to drive the next wave of demonstration. 14

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