Norway Drops ‘Moon Landing’ as Mongstad Carbon Capture Scrapped

Norway dropped plans for a full-scale carbon capture plant at its Mongstad refinery after cost overruns and delays, ending a project that was dubbed as the country’s “moon landing” by Prime Minister Jens Stoltenberg.

The full-scale project will be halted, Oil and Energy Ministry Ola Borten Moe said today at a briefing in Oslo. The government will increase spending on a carbon test center at the plant by 400 million kroner ($68 million) and will seek to build a full-scale plant in another location, he said.

“I fear that Mongstad would have been a project where we demonstrated that we’re willing to spend a lot of money on one project -- not that this is an example to follow for the rest of the world,” he said.

Stoltenberg, who has likened the project to the U.S. effort in the 1960s of putting a man on the moon, said in 2006 it would create the world’s biggest venture for full-scale carbon capture and spur technology that may become an important export for Norway. The premier’s coalition was ousted in the Sept. 9 general election and he will resign next month.

“This is some of the worst form of incompetence I’ve seen from the government,” Frederic Hauge, head of environmental group Bellona, said in an interview. “This will stand as the symbol of this government’s total failure on climate policy.”

The effort was criticized this week by the nation’s Auditor General, which said the test center project was 1.7 billion kroner over budget, according to a statement on Sept. 17. In total, the government said it has spent about 7.2 billion kroner on carbon capture, including 1.2 billion kroner on the full scale project.

Complexity Underestimated

“The investigation shows that the complexity of implementing CCS was underestimated in 2006,” the auditor said. “Among other things, it has proven very difficult to plan and build capture facilities on a large scale near a refinery and heat and power plant in operation. This has entailed high costs and a longer implementation period.”

The center was part of a Statoil ASA (STL) project to build a power plant at its Mongstad refinery, approved by the government in 2006. The company was given permission to emit carbon dioxide from the plant between 2010 and 2014, when a full-scale carbon capture and storage system had to be in place.

Utilities and energy companies are seeking ways to extract carbon dioxide from emissions and store it underground rather than release it into the air. Norway, western Europe’s biggest oil producer, has wanted to lead the way in such methods.

The project has been dogged by delays. Then Oil and Energy Minister Terje Riis-Johansen also in 2010 fended off a vote of no confidence as the country’s four opposition parties said the government withheld information that the project was delayed until after the September 2009 election.

To contact the reporter on this story: Jonas Bergman in Oslo at jbergman@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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