Plenary Sessions Remarks
by
Mark R. Maddox
Chairman, Policy Group
Carbon Sequestration Leadership Forum
and
Acting Assistant Secretary for Fossil Energy

Second Ministerial Meeting
Carbon Sequestration Leadership Forum
Melbourne, Australia
September 13, 2004

Good morning everyone, and thank you for your welcome. 

To identify myself for delegates I have not met, I am Mark Maddox, the acting Assistant Secretary for Fossil Energy of the United States Department of Energy; and, the chairman of this Forum's Policy Group.    

In my official capacity, I want to join our previous speakers in welcoming one and all to the Second Ministerial Meeting of the Carbon Sequestration Leadership Forum, now grown to 16 sovereign nations and the European Commission.  

Formed only 15 months ago – and comprised of developed and developing nations alike – this group represents:

• More than two-thirds of the world's economic activity and projected growth;
• More than two-thirds of the world's energy demand;
• And, more than two-thirds of the world's greenhouse gas emissions whether present or projected.

Our association is voluntary and non-binding.  

Our objective is to establish carbon dioxide capture and storage as an internationally acceptable and desirable option for dealing with concerns about greenhouse gas emissions. 

Our purpose is to give the world a new and constructive means of doing things by showing the way forward in energy, economic development, and the environment. 

We are leading the world by doing.  This means every member nation is a leader on the world stage. 

This second Ministerial is more than a meeting of high-level officials.  It is a meeting of high potential.  It is the point at which the emphasis of our activities shifts from process to product, from promise to practical application.  And so, it's encouraging to see so many members and stakeholders here. 

As we begin, I want to expressly recognize the contributions of our Australian colleagues on two counts:

• First, for the enormous effort needed to conduct an international conference of this size and importance, which our hosts are doing superbly; 
• And, equally important, for volunteering to do a great deal of the conceptual and organizational work required to bring this cooperative initiative to its present state of readiness.  

In this regard, I should specifically mention the labors of my Policy Group Vice Chairman John Ryan and Tania Constable, whose Regulatory Task Force moved figurative mountains to prepare for this moment.  

In assuming these responsibilities, Australia made itself a leader of world leaders in the gathering movement toward a constructive global strategy to resolve shared concerns about carbon dioxide, energy and economic development.    

Some may call this the Land Down Under, but its international leadership is out of the top drawer.  It is of the highest quality. 

On behalf of all Forum members, thank you Australia.

Equal recognition is due my other vice chair, Professor Sergio Garribba, of Italy, from whom you'll hear later today, and those who worked with him. 

The purpose of our activities today is to complete work on items for Ministerial action tomorrow. 

Both the Technical and Policy Working Groups have produced strong recommendations and findings for consideration.  These items are meant to hasten developments that will contribute: 

• To transforming the way the world obtains energy, uses energy and sees to its energy security;
• And, to initiating and facilitating the cooperative, voluntary resolution of that triad of shared concerns which I mentioned a moment ago.   

To put these items in context for the full Technical and Policy Groups today, I want to briefly review the activities of the working groups from the Forum's founding last year to the present.    

CSLF is based on recognition of the undeniable truth to be found in the International Energy Agency's projections, which tell us:

• That world economic growth, especially in the populous developing nations, means there will be a corresponding and explosive rise in energy demand that cannot be denied or turned aside;
• That in the first part of this century, most of the energy for developed and developing nations alike will have to come from fossil fuels, which produce greenhouse gases;
• That much of it will have to come from increased coal use for electric power;
• That it is no wonder all countries will have to struggle to achieve significant reductions in global carbon dioxide emissions;
• That something more effective than present ways and means is needed;
• And that effective action requires an approach that can engage all nations in all stages of economic development to the mutual benefit of all.  

And so, CSLF was founded in June 2003 at Tyson's Corner in Virginia.  The Technical and Policy Working groups were made responsible for identifying new ways and means in technology and governance for development and deployment through cooperation and collaboration. 

In the time since, world energy demand has increased strongly.  The resulting behavior of world energy markets is sending strong signals that the leading edge of the expected explosion in demand is probably with us now. 

World economic development has taken hold.  And concerns about carbon dioxide emissions are unabated. 

CSLF is based on the idea that technology and technology development can deliver an answer to these linked concerns.    

The instructions given by the founding Ministers in the charter are that CSLF shall seek to realize the promise of carbon capture and storage…making it commercially competitive and environmentally safe. 

The essence of our several enumerated goals and objectives can be broadly summarized as this: To link science and technology with a body of ready-to-use, non-binding concepts in legislation, regulation and financial incentives that individual nations can voluntarily apply to their needs and, at the same time, satisfy any obligations they may have under existing or proposed agreements between and among nations. 

Our emphasis is on collaboration and information sharing.  We want all interested nations to be able to make use of what we produce, not just Forum members. 

Potential benefits of this technology development include:

• Curbing and eliminating carbon dioxide emissions in the use of all fossil energy for electric generation, not just coal;
• Relieving the pressures now being felt in petroleum and, by some, in natural gas by enabling greater and more varied use of coal – the most abundant fossil resource;
• Enhanced oil and gas recovery, which will add to supply;
• Supplementing natural gas supply by harvesting methane displaced by carbon dioxide storage in unmineable coal seams;
• And, helping foster development of the hydrogen economy, which ultimately could stabilize energy markets and decarbonize economic activity. 

In the time since the Forum's founding, each working group has moved forward with a sense of urgency. 

Today the activities of the Technical Group will center on:

• The first 10 specific carbon-dioxide capture and storage projects recommended for Forum recognition;
• A roadmap that charts the research and development course forward;
• And related discussions. 

One of the 10 projects is the Weyburn Two storage project in western Canada. 

Just two weeks ago, the original Weyburn project produced a formal finding that large amounts of CO2 can be safely stored in oil-bearing geologic formations.  The finding was based on a four-year, multi-disciplinary study. 

Weyburn Two involves enhanced oil recovery and storage of 95 million cubic feet a day of carbon dioxide.  Its purpose is to measure performance and assess risks at commercial scale. 

The 10 projects – in their totality – cover most applications of energy use and all phases of carbon dioxide capture and geologic storage.  They include enhanced oil and gas recovery and the recovery of useable methane in connection with sequestration in unmineable coal seams. 

Projects were chosen to produce information that will allow other nations and stakeholders to judge how, where and whether carbon capture and storage can be of benefit.  Their broad purpose is to assist in the improvement of estimates of costs, future benefits and potential performance of a wider scale. 

The Technical Working Group also has prepared a Technology Roadmap which charts the steps and stages of future progress.

In much-abbreviated detail the stages are: 

• From now through 2008 – steps include setting cost goals and identifying the most promising technological pathways, the best reservoir types and the technological requirements of monitoring and verification; 
• From 2009 through 2013 – pilot demonstration projects on costs, understanding of world reservoir capacity and testing of monitoring and verification technology; 
• And, from 2014 into the future – capture and transportation at costs below goals, commercial availability of reliable monitoring and verification technology, and the initiation of large scale storage. 

Technology gaps in need of closing have been identified at this point as reliable monitoring and verification for safe storage, and advances in CO2 capture. 

In all of this, our nations are undertaking nothing less than the creation of a new tool for the world – the art and the science of industrial carbon management.  This means we must simultaneously create the means of governing the technology for the common good.  

The technology won't be widely used unless we develop the outlines of national and international frameworks for its application – a useable and useful template of legislation, regulation and financial incentive. 

Our Policy Working Group's objective has been to develop the basis for non-binding frameworks that will:

• Recognize the need to manage carbon;
• Establish carbon management as practicable and effective in varied forms and at each stage of the cycle – capture, transport, injection and post-closure;
• Ensure public safety and environmental safety at every stage and, thereby, ensure public confidence;
• Provide the combination of stakeholder confidence and investment incentives that will foster rapid development and deployment;
• Offer all nations common ground on which to proceed;
• Engender trust and confidence among nations;
• And provide for existing rights and obligations under international agreements and law. 

These activities and our conclusions are covered in the Consensus Report Defining Legal and Regulatory Issues for the Ministers that will be discussed later today. 

As the working groups moved forward, the pivotal nature of early stakeholder involvement and acceptance made itself very clear. 

It is the stakeholders and potential stakeholders of industry and finance whose interest and acceptance is required if our technologies are to be effectively and rapidly deployed. 

And it is the stakeholders and potential stakeholders of the environmental and public interest communities whose acceptance will be required to achieve public approval of their deployment on a large scale.   

Stakeholder involvement is important if these technologies are to be used in either developed or developing nations. 

And so, the Policy Working Group's has also recommended the establishment of Stakeholder and Financial Task Forces to carry our activities forward in these areas. 

Acceptance and financial incentive are critical hurdles. 

Meantime, our activities have been underscored and reinforced by developments in other areas.   

One such development involves the combination of coal gasification and combined-cycle electric generation that is called IGCC – integrated gasification combined-cycle generation.  

As you recall, IGCC is a core technology for carbon capture and the heart of the FutureGen Project, which is part of this Forum's focus. 

It was good news last week when BHP Billiton, of Australia, announced at the World Energy Congress in Sydney that it is considering participation in FutureGen.  

FutureGen's objectives include the demonstration at commercial scale of:

• Carbon capture, transportation and storage at low cost;
• And, hydrogen production at low cost to support the evolution of fuel-cell transportation and the carbon-free economy. 

In the United States, the combination of sustained, high natural gas prices and rising electricity demand has caused a commensurate and keen rise in interest about IGCC. 

Earlier this month one of our largest utilities announced that it is considering a 1,000 megawatt IGCC facility.  Others are studying plants of up to 500 megawatts.  And there is discussion of constructing gasification facilities to serve natural gas generation that has been taken out of service due to fuel costs 

My reasons for mentioning this development are that: 

• Early commercial use is likely to advance the capabilities of IGCC technology across the board;  
• And, early commercial use is likely to hasten wider acceptance of the technology; 

IGCC that goes on line early in a world of rising electric-power demand will offer flexibility to those who have it.  It will be easier to retrofit for both the carbon dioxide capture and hydrogen production that are to be features of FutureGen when the time comes. 

IGCC can play this role in both the developed and developing nations. 

In the meantime, the Forum's activities have been followed with increasing interest by nations that are not members. And the Secretariat has received expressions of interest in participating in future projects – especially those centered on enhanced oil and gas recovery – as well as expressions of interest in joining our number.   

There's a sense of gathering momentum about carbon capture and storage as the world comes closer to the time in which we must resolve our concerns about energy, the environment and economic growth.

The sense of cooperation and common interests that prevailed last year at Tyson's Corner is on the rise again in Melbourne. 

Today we are at the threshold of energy and environmental breakthroughs. 

In his book The Prize Daniel Yergin wrote the history of petroleum and its role in the last century.  I believe this gathering of ours will provide to those who write this century's energy history a point of reference.  We are at one of those rare moments in time when the promise of a great enterprise transforms itself into an enterprise of great promise. 

I want to conclude now with observations my boss Secretary Abraham has made to the point of promise and purpose, and I quote him directly: 

"Energy is too precious a commodity to waste…

"Carbon sequestration…acknowledges a simple and indisputable fact: Fossil fuels will continue for the foreseeable future to be the world's most reliable and lowest-cost energy resources.

"When these technologies are developed, we all will exceed our targets.

"If they are not developed, we will all fail."

Let us resolve this morning to complete the work of this second Ministerial in the spirit of Tyson's Corner. 

The world is looking on and we have a great promise to fulfill.  Our work can help transform the way the world produces and uses energy and, in so doing, transform the world itself.  Where the nations of this Forum are leading, the world may soon find reason to follow. 

Thank you for your attention.