Get your calculator out. Rachel Reeves has announced £21.7 billion of government funding for carbon capture and storage projects. She justifies this saying it will create 4,000 jobs. That’s £5,425,000 per job. What’s more, she has adopted exactly the same plan that was developed by Rishi Sunak’s government.
At the North of Tyne our projects created 5,073 jobs while I was Mayor – people actually taking home a pay packet. Thousands more were in the pipeline. We budgeted £5,000 to create a job. Not £5 million.
Who is getting this £21.7 billion? BP, Equinor, and Eni, three of the world’s largest oil producers. Their announced profits for 2022 and 2023? BP $41.5 billion. Equinor $40.6 billion. Eni E17.1 billion.
They are spending it on two projects. A methane powered electricity plant, and a blue hydrogen plant.
Without going into details, blue hydrogen is made from methane – also called natural gas. The theory is you capture the carbon dioxide from the reaction, and pump it into a big cavern under the sea, locking it away forever, in a process called Carbon Capture and Storage, or CCS.
CCS is also the plan for the methane fuelled power station.
Unfortunately, the evidence shows that blue hydrogen releases more climate heating emissions than if you just burned the methane in the first pace. A peer reviewed engineering study in 2021, which I read, detailed all the actual leaks and inefficiencies in real world projects. They were typically 5 times higher than the initial project estimates. Research paper after research paper has reached similar conclusions – the claims are wildly optimistic.
Worse, the oil companies intend to pressurise this gas, inject it into oil seams below the sea, to force out the otherwise unrecoverable dregs of oil in a process called “Enhanced Oil Recovery”. Yep, that’s correct. In the name of climate policy, Rachel Reeves is giving three of the world’s richest oil companies £billions to extract otherwise economically unrecoverable oil. In exactly the same plan the Tory government proposed.
In March last year 700 engineers and climate scientists wrote to Rishi Sunak detailing how this policy is flawed.
In May this year, expert analysis showed the new CCS power plant would actually produce 20 million tonnes of carbon emissions. The government did not dispute the figures.
In August 2021 Chris Jackson, the chair of a lobbying group for blue hydrogen, resigned. He could “no longer in good conscience” continue. “I believe passionately that I would be betraying future generations by remaining silent on that fact that blue hydrogen is at best an expensive distraction, and at worst a lock-in for continued fossil fuel use that guarantees we will fail to meet our decarbonisation goals,” he wrote.
Is there really nothing better to spend £21.7 billion on? Insulating homes? Replacing gas boilers? Expanding public transport? They’d all create more jobs, lower energy usage, put money in our pockets, and reduce emissions. Unfortunately all the small local firms involved don’t have the lobbying power of BP, Equinor or Eni.