International Journal of Greenhouse Gas Control - KSA Climate

International Journal of Greenhouse Gas Control 11 (2012) 163–171

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International Journal of Greenhouse Gas Control

j ourna l ho mepage: www.elsev ier .com/ locate / i jggc

The role of CO2 capture and storage in Saudi Arabia’s energy future

Hengwei Liu ∗, Berenice Garcia Tellez, Tarek Atallah, Murad BarghoutyKing Abdullah Petroleum Studies and Research Center, Riyadh, Saudi Arabia

a r t i c l e i n f o

Article history:Received 2 April 2012Received in revised form 13 August 2012Accepted 14 August 2012Available online 4 September 2012

Keywords:Saudi ArabiaCCSEORStakeholder attitudes

a b s t r a c t

This paper aims to investigate for the first time the role of carbon dioxide (CO2) capture and storage (CCS)in shaping the future energy policy for Saudi Arabia. It begins with a broad analysis of the strategic contextfor CCS. It then reviews CCS development in Saudi Arabia, including CCS research activities, sources of CO2

emissions, and the potential for CO2 storage. Finally, it explores the stakeholder attitudes toward the roleof CCS in Saudi Arabia, through a survey targeting oil and gas professionals mainly working in the MiddleEast and North Africa (MENA) region. There is a widespread agreement by the stakeholders surveyedthat CCS is one of the priorities for managing carbon emissions, and it holds the potential as a “game-changer” in Saudi Arabia. Stakeholders believe that “high capital costs” and “technical uncertainty” areprimary barriers to CCS demonstration, and they generally do not regard the risks of CCS as particularlysignificant. Most of the stakeholders agree that the first large scale CCS demonstration project shouldbe supported by Saudi Government subsidy, and that this is the most appropriate incentive for CCSdemonstration in Saudi Arabia. There is substantial support for providing the same level of incentive forCCS as for renewables. There is also a common agreement that power generation, oil refining, and gasprocessing are the most suitable sectors in Saudi Arabia for capturing CO2. Most of the stakeholders favorpost-combustion capture technology, and are consistently more enthusiastic about combining CCS withenhanced oil recovery (EOR).

© 2012 Elsevier Ltd. All rights reserved.

1. Introduction

In a carbon-constrained world, carbon dioxide (CO2) captureand storage (CCS) is one of the critical enabling technologies thatwould reduce CO2 emissions significantly while also allowing fossilfuels to meet the world’s pressing energy needs (IPCC, 2005; MIT,2007). CCS can also be used in conjunction with enhanced oil recov-ery (EOR), which potentially offers a win-win opportunity by notonly storing CO2, but also increasing oil production in mature fields(ARI, 2008; IPCC, 2005; PNNL, 2010).

The Middle East and North Africa (MENA) countries, whichaccount for more than a third of global oil production and trade, areamong those with a crucial role to play in CCS. There are a numberof features that make this region unique (ARI and MC, 2010; Dooleyet al., 2005, 2006; Geogreen, 2011; IEA GHG, 2001; IEA, 2008a; IPCC,2005):

• Vast oil and gas reserves, which offer potential for CO2 captureand storage opportunities.

∗ Corresponding author. Tel.: +966 3 876 0478.E-mail addresses: [email protected], [email protected] (H. Liu).

• Significant potential for CO2-EOR, which provides a value addedapproach to CCS diffusion in this region.

• Significant low-hanging fruit opportunities for CCS demonstra-tion at low cost in oil and gas production.

• Greater understanding of CO2 storage in oil and gas fields.

A critical element in CCS development is to understand localstakeholder perceptions and effectively communicate the risks andbenefits (CCP, 2012; Kombrink et al., 2011; Malone et al., 2010).This paper aims to explore for the first time stakeholder attitudestoward CCS in Saudi Arabia, the world’s leading oil producer andexporter. The paper is formatted as follows. Section 2 analyzes thestrategic context for CCS in Saudi Arabia. Section 3 reviews CCSdevelopment in Saudi Arabia. Section 4 investigates the stakeholderattitudes toward CCS in Saudi Arabia. Section 5 draws conclusions.

2. Strategic context for CCS in Saudi Arabia

2.1. A looming challenge for domestic energy supply

The oil industry in Saudi Arabia has been and will continue toplay a crucial role in its socio-economic development. Saudi Arabiawas the world’s largest producer and exporter of total petroleumliquids in 2010, and the world’s second largest crude oil pro-ducer behind Russia (EIA, 2011). Saudi Arabia currently has an oil

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164 H. Liu et al. / International Journal of Greenhouse Gas Control 11 (2012) 163–171

Table 1Summary of Saudi Arabia’s power generation in 2010.

Average efficiency(%)

Installed capacitypercentage (%)

Gas turbine units 26 61Steam turbine units 35 32Combined cycle units 45 6Diesel generators 30 1

Courtesy of ACWA Power.Weighted average efficiency: 30%.

production capacity of 12.5 million barrels per day (mb/d) andproduces 9–10 mb/d of crude oil and natural gas liquids (NGLs).It exports 6–7 mb/d of crude oil, refined products, and NGLs (JODI,2012). Oil revenues have been the major source of income for SaudiArabia. The petroleum sector accounts for over 80% of budget rev-enues, 45% of GDP, and 90% of export earnings in Saudi Arabia,which makes the economy vulnerable to the volatile global oilmarket (CIA, 2012). In addition, the oil industry is heavily trade-exposed. In a carbon-constrained world, its development will bemore and more influenced by global climate change policy (WTOand UNEP, 2009).

While oil can help Saudi Arabia grow over the next few decades,looking strategically, there can be no sustainable development bymainly selling commodities. Recognizing this, the Saudi Oil Com-pany (Saudi Aramco) as a major contributor to the Kingdom’seconomic development has embarked on a massive initiative aimedat transforming itself from an oil and gas company into a fully inte-grated global energy enterprise (HSBC, 2012). Saudi Aramco willbe significantly expanding its investment in natural gas, oil refin-ing, and chemicals in the coming decade. Billions of dollars are alsobeing invested by the Saudi Government to diversify the economyaway from direct oil sale dependency and to increase the role ofthe non-oil sector in economic development.

Saudi Arabia’s domestic energy consumption is growing veryfast, and will continue to grow in the coming decades. Saudi Ara-bia is now the world’s sixth-largest oil consumer. According to theBP Statistical Review of World Energy 2011 (BP, 2011), the currentenergy mix of Saudi Arabia consists of around 62% oil and 38% gas,and the total primary energy consumption was 201 million tonnesof oil equivalent (Mtoe), which accounts for a record 39% of Saudienergy production in 2010. All natural gas produced in Saudi Ara-bia is consumed domestically. Gas currently fuels around 34% ofpower generation, with the remainder coming from a mix of diesel,heavy fuel oil, and crude oil (ECRA, 2010). Saudi Arabia continues toinvest heavily in finding more gas, but the foreseeable gas suppliesare unlikely to significantly lower the growing reliance on oil forpower generation. The increase in domestic energy demand maytherefore squeeze the export capacity and thus potentially jeop-ardize its ability to stabilize the global oil market and reduce oilexport revenues.

In 2010, power generation accounted for 39% of Saudi energydemand (HSBC, 2012). Only some 6% of the installed capacity inSaudi Arabia is fueled by high-efficiency combined cycle (CC) units.More than 90% of the total capacity is driven by single-cycle gas orsteam turbines, with an average efficiency of less than 35% (Table 1).Much of the literature on putting CO2 capture on power plantsassumes natural gas combined cycle (NGCC) or integrated gasifica-tion combined cycle (IGCC) or other advanced combustion systems(IEA, 2008b; IPCC, 2005; MIT, 2007). Even for these advancedpower plants, there is a significant energy penalty for capturingCO2. Given the vast majority of power plants in Saudi Arabia havelower efficiencies, the energy penalty for CO2 capture would behigher.

2.2. A more progressive role in combating climate change

CO2 emissions, mainly produced by combustion of oil and nat-ural gas, are growing very fast in Saudi Arabia. Compared to theUnited States, China, and India, CO2 emissions from fuel combus-tion in Saudi Arabia are small, representing only 1.4% of global CO2emissions in 2009. Saudi Arabia, with 16.2 t of CO2 per person, gen-erates some of the highest per capita CO2 emissions worldwide. Bycontrast, the CO2 emissions per person in the Middle East, OECD,and the world are 7.8 t, 9.8 t, and 4.3 t, respectively (IEA, 2011b).Although climate (e.g. desert environment) and other variables (e.g.vast land area) also affect energy use, the relatively high value ofemissions per capita highlights the need to decouple CO2 emissionsfrom economic growth in Saudi Arabia.

Saudi Arabia is a signatory of the Kyoto Protocol. It committed toshoulder a fair share in tackling climate change based on the prin-ciple of “common but differentiated responsibility,” but has deniedany policies that discriminate against petroleum or fossil fuels ingeneral (1Al-Naimi, 2011). There is a consensus in Saudi Arabia thattangible action needs to be taken now to address climate change(Al-Naimi, 2012). Saudi Arabia has concerns about the impact thata transition to a low-carbon economy will have on its oil revenue,particularly at a time when it faces enormous financing needs todiversify and transform its economy away from petroleum (IEA,2009; PME, 2011; Pershing, 2000; Vidal, 2010).

Although attention to climate change is growing in Saudi Ara-bia, it has not, and will not in the short term keep abreast witheconomic development as a policy priority. Energy is at the heartof Saudi Arabia’s climate mitigation actions. The focus is on improv-ing energy efficiency and promoting renewable and nuclear energy(PME, 2011).

3. Review of CCS in Saudi Arabia

3.1. CCS activities in Saudi Arabia

3.1.1. Domestic CCS activitiesIn recent years, there has been a growing interest in the MENA

region in CCS as well as the use of CO2 for EOR. Saudi Arabia’s offi-cial view is that CCS should be included in the Clean DevelopmentMechanism (CDM) by which developed countries can offset theiremissions (Al-Naimi, 2011). Current CCS activities in Saudi Arabiaare primarily focused on basic technical and policy research. CCSis mainly discussed by key stakeholders and experts. Several insti-tutions in Saudi Arabia are engaged in CCS research, including theKing Abdulaziz City for Science and Technology (KACST), King FahdUniversity of Petroleum & Minerals (KFUPM), King Abdullah Uni-versity of Science and Technology (KAUST), Saudi Aramco, and KingAbdullah Petroleum Studies and Research Center (KAPSARC).

• Policy and basic technical researchKAPSARC has adapted an early stage approach to conduct

research focused on CCS technologies, economics and policies.One of its inaugural projects “CCS Implementation Strategiesfor the Kingdom of Saudi Arabia” aims to develop a robust CCSimplementation strategy through a first order assessment of thepotential for CCS to be deployed in Saudi Arabia (KAPSARC, 2011).Additionally, several leading Saudi universities and research cen-ters, including KACST, KFUPM, and KAUST, are conducting basictechnical research on CO2 capture and storage. For example, theTechnology Innovation Center for CCS (KACST-TIC CCS) at KFUPM

1 His Excellency Ali Ibrahim Al-Naimi is the Saudi Minister of Petroleum and Min-eral Resources. The Ministry is responsible for executing the general policy relatedto oil, gas, and minerals.

H. Liu et al. / International Journal of Greenhouse Gas Control 11 (2012) 163–171 165

has been awarded KACST baseline funding of SAR 10 M/year(US$ 2.7 M/year) for a 5-year period (2011–2015). The ongoingresearch of the KACST-TIC CCS has been focusing on oxy-fuel com-bustion, mobile capture, site assessment and measurement, andmonitoring and verification (MMV) of CO2 storage.

• CCS in Saudi AramcoSaudi Aramco has been actively engaged in carbon man-

agement initiatives within the oil industry. A comprehensiveresearch framework has been developed for CCS, including CO2capture (mobile capture, oxy-fuel combustion, and chemical-looping combustion), storage, and EOR technologies (Al-Meshari,2011). EOR is of particular interest to Saudi Aramco as it canbe a win-win solution to the challenges of rising world energydemand and climate change, by increasing oil production whilereducing CO2 emissions. Saudi Aramco is working on the firstCO2-EOR demonstration project in Saudi Arabia. This project willbe implemented in a small part of the ‘Uthmaniyah area of thegiant Ghawar field, which was discovered in 1948 and startedto produce oil in 1951. Ghawar, with over 88 billion barrels ofremaining reserves, is by far the world’s largest and most pro-ductive oil field with daily crude production of 5 million barrelson average (Shamseddine and Bakr, 2010). Geologically, the fieldis categorized as a fairly simple structure with a complete closure,a typical Middle East reservoir of porous limestone and dolomite.The oil comes almost entirely from a producing zone known asArab D, about 2100 m, on the average, below the surface (Bates,1973). While Saudi Arabia has abundant conventional oil reservesand EOR is not required at production scale for decades to come,the main objective of the CO2-EOR project is to assess the appli-cability to sequester CO2 in a mature zone within an oil reservoir.The project includes four injection wells, four production wells,and one observation well. It will use 40 million standard cubicfeet a day (MMscf/d) of CO2 that will be captured and processed

at the Hawiyah NGL Recovery Plant, and transported to the ‘Uth-maniyah field’, through a dedicated 80 km pipeline. The design ofthe CO2-EOR project is based on a reservoir simulation study andhas a comprehensive monitoring and surveillance plan. The con-cept of the intelligent field, which enables continuous monitoringand optimization of individual wells and overall reservoir per-formance, has been introduced to enhance oil recovery, improvehealth, safety and environment (HSE), and reduce operation cost.So far the project construction has been completed and CO2 willbe ready for injection by 2013 (Al-Dhubaib et al., 2008; PME,2011).

3.1.2. International collaborationSaudi Arabia is a member of the Carbon Sequestration Leader-

ship Forum (CSLF), a voluntary climate initiative of developed anddeveloping countries focusing on development of improved cost-effective technologies for the separation and capture of CO2 forits transport and long-term safe storage. In addition, Saudi Arabia,Norway, the Netherlands, and the U.K. launched the Four-KingdomCCS Initiative to seek potential collaboration on CCS among oil-producing countries committed to advancing its development anddeployment. The initiative aims to identify and address technicalissues, including gaps in knowledge, which could impede furthercommercialization of CCS, and to act in a coordinated manner toseek to enhance national expertise on CCS, while encouraging thesharing of knowledge and the transfer of technology (MPMR, 2011).

3.2. A preliminary assessment of CCS in Saudi Arabia

3.2.1. The sources of CO2 emissionsIn Saudi Arabia, power generation and desalination account

for 40% of the total annual CO2 emissions, and the vast majorityof the power sector emissions are from oil-fired units. Industry,

Fig. 1. Map of large stationary CO2 sources by type in Saudi Arabia.Courtesy of Google Earth.


Fig. 2. Map of the CO2 geological storage suitability in Saudi Arabia.Adapted from a portion of Fig. 66 in Geogreen (2011).

mainly including refinery, cement, and steel, contributes 34% ofthe total annual CO2 emissions, shortly followed by transporta-tion (IEA, 2011a). Both power generation and industry sectors offersignificant potential for CCS.

Fig. 1 is a map showing the locations of 99 major CO2 pointsources in Saudi Arabia that each emits from 100,000 to 8,000,000 tof CO2 per year. The data come from the most recent version ofthe publicly available IEA GHG CO2 Emissions Database (IEA GHG,2008). The combined annual CO2 emissions from these sources areestimated at 113 MtCO2. The majority of the sources are concen-trated around Yanbu, Jeddah, Jubail, and Dammam along the RedSea and Arabian Gulf coastal areas, with around 36% of the emis-sions on the west coast, 43% on the east coast, and 21% in the middleregion. This implies significant opportunities, by linking a numberof emitters in relative proximity via onshore pipelines, to developCCS clusters, which would offer benefits through the potential toshare the significant costs associated with the capture, compres-sion, transport, and underground storage of CO2.

3.2.2. The potential for CO2 storageThere are three types of geologic reservoirs that can be can-

didates for the long-term storage of CO2, including deep salineformations, depleted natural gas reservoirs, and depleted oil reser-voirs with potential for CO2-EOR.

While there are some studies of global CO2 storage capacityassessment that covers the MENA region, there is no country-specific assessment surrounding geologic CO2 storage potential inSaudi Arabia (ARI and MC, 2010; Dooley et al., 2005; IPCC, 2005). Afirst order estimate of the theoretical geologic CO2 storage capac-ity in the Middle East countries suggests a resource base that couldpotentially accommodate nearly 2511 GtCO2 (Geogreen, 2011). Thestudy shows that a substantial majority of the capacity is withinSaudi Arabia. Deep saline formations account for around 92% of thetotal calculated storage capacity, echoing findings in other parts ofthe world regarding the central importance of this class of reser-voirs for large-scale CCS deployment. Fig. 2 shows the map of theCO2 geological storage suitability of Saudi Arabia. Most of the areas

in Saudi Arabia are highly suitable for CO2 storage. This indicatesa potential advantage for Saudi Arabia to take a broad, large-scaleCCS deployment approach as an option of addressing CO2 emissionswithin Saudi Arabia.

4. Stakeholder attitudes toward CCS in Saudi Arabia

4.1. Methodology

The work described in this paper is based on a questionnairesurvey, which was conducted from February 6 to 29, 2012 to elicitstakeholder opinions regarding the role of CCS in Saudi Arabia’senergy future (KAPSARC, forthcoming). The purpose of the studywas to survey a range of stakeholders, i.e. not just those involveddirectly in the development or implementation of CCS technologiesin Saudi Arabia, but also those with a more general role or interest inenergy policy, climate change, and decision-making in Saudi Arabiaand other countries. The survey questionnaire was designed by theauthors. The questionnaire was pre-tested, and revised as neces-sary, to ensure that all of the questions asked were fully understoodby the respondents and that the data collected addressed the studyobjectives. The survey was completed online through a dedicatedwebsite.

Studies internationally have shown that the general public isunfamiliar with CCS relative to other clean energy technologies(Curry et al., 2007; Duan, 2010; De Best Waldhober and Daamen,2006; Gough et al., 2001; Miller et al., 2007; Shackley et al., 2009).To minimize pseudo-opinions from those who are inclined to givean opinion even on topics they know nothing about, the surveyonly focuses on perceptions of energy and environmental special-ists rather than the general public (Malone et al., 2010; Dooley et al.,2011). The survey was sent to various carefully selected regionaland international participants who have demonstrated knowledgeof the issues related to CCS. We also sent questionnaires to someselected respondents working directly on CCS in Saudi Arabia.

We received 137 valid responses from 24 countries in the MENAregion, Asia, Europe, and the Americas. Of these, about half of therespondents (51%) are Saudis. The majority of the respondents workin the MENA region. Most of the respondents (64%) come fromindustry, 18% from academia, 10% from government, and 8% fromnon-government organizations (NGOs) and international organi-zations. The majority of the respondents (78%) spend more thanhalf of their work time on energy and environmental issues, andaround a quarter of the respondents (24.8%) spend more than halfof their work time on CCS. Around 39% of the respondents claimtheir organization is “very positive” to CCS and a further 26% ofthe respondents indicate a “slightly positive” organizational posi-tion. Only 6% of the respondents take a “slightly negative” or “verynegative” posture to CCS. The majority of the respondents there-fore work for organizations which have adopted a positive stanceto CCS.

It is worthy of note that the survey has a number of limitations.The number of the respondents in different stakeholder groups isunevenly spread. In particular, the numbers of the respondents inacademia, NGOs, and international organizations are too small toallow a meaningful analysis of any difference in perceptions amongdifferent stakeholder groups.

4.2. Results, analysis, and discussion

4.2.1. CCS as a key solution to climate changeAs shown in Fig. 3, CCS is perceived as one of the key solu-

tions to climate change in Saudi Arabia. The most popular optionis energy efficiency, with around 90% of the respondents in favor.This is closely followed by solar photovoltaic (solar PV, 70%),


Fig. 3. Views on solutions to climate change. Question: what in your opinion are the most practical options to address carbon management in Saudi Arabia? (multiple answersare allowed).

concentrated solar power (CSP, 58%), oil and gas to electricity (com-bined cycle) with CCS (47%), and CO2-EOR (45%). A sizeable portionof the respondents also shows a positive attitude to onshore wind(39%) and smart grid (37%). Other technologies including nuclearpower gain weak support (less than one-third). This confirms awidely shared view that there is no silver bullet to tackle climatechange. A portfolio approach tailored to each country is necessaryto prepare for more ambitious emissions reductions.

4.2.2. CCS as one of the game-changing technologiesAs shown in Fig. 4, there is a positive support for solar power,

CCS, and CO2-EOR. A substantial majority of the respondents con-sider solar power to be a potential game-changer (67.9% for solarPV, 56.9% for CSP). This is followed by CCS and CO2-EOR, equallyfavored by almost half of the respondents (46%).

4.2.3. Challenges and risksFig. 5 shows major challenges for integrated large-scale CCS

demonstration in Saudi Arabia. “High capital costs” is perceived bymost of the respondents (60.6%) as the most challenging factor forlarge scale CCS demonstration in Saudi Arabia. “Technical uncer-tainty” is considered the second challenge by more than half of therespondents (53.3%). This implies that although the individual tech-nologies are not considered new for most stakeholders from the oiland gas industry, they are still not confident about an integratedCCS project. To demonstrate the full chain of CO2 capture, trans-port, and storage on a commercial scale is therefore an essentialrequirement to provide the necessary investment confidence and

promote ongoing learning-by-doing that will decrease costs andmake CCS more competitive with other mitigation technologies.

In addition, slightly less than half of the respondents (46%)regard “lack of a price on carbon” and “regulatory frameworks”as major challenges for large-scale integrated CCS demonstrationin Saudi Arabia. This is reasonable because no firm will undertakethe added cost of a CCS project unless emitting CO2 has an eco-nomic cost attached to it. A comprehensive policy and regulatoryframework is a practical approach to ensuring safe and long-termCO2 storage. It is also important to deal with the challenge of “CO2leakage from sequestration,” which is perceived as a major chal-lenge by 36.5% of the respondents. Public acceptance is accepted asa major challenge by 33.6% of the respondents. Around a quarter ofthe respondents claim pipeline infrastructure (24.1%) and financialmechanism (23.4%) are major challenges.

Fig. 6 compares stakeholders’ perceptions of the main health,environmental, and safety risks arising from carbon capture, trans-port, and storage. It can be seen that the respondents as a wholedo not consider that the risks of CCS are particularly large. Themost common response is “minimal risk.” “Very serious risk” neverappears as a prominent response for the respondents as a whole.A stakeholder survey in Europe reveals the same perceptions ofCCS risks (Shackley et al., 2007). Two major concerns are “contam-ination of underground water resources from CO2 storage,” whichis perceived as “very serious risk” by 35.8% of the respondents,and “leakage from CO2 pipeline transport,” which is perceived as“moderate risk” by 39.4% of the respondents. While “CO2 leakagefrom geological storage” has long been cited as a major risk of CCS,

Fig. 4. Views on game-changing technology. Question: what are potential game changing technologies for Saudi Arabia? (multiple answers are allowed).


Fig. 5. Views on challenges for CCS. Question: what are the major challenges for integrated large scale CCS demonstration in Saudi Arabia? (multiple answers are allowed).

Fig. 6. Views on risks for CCS. Question 31: please indicate your opinion to each of the following potential risks to health, safety, and environment arising from CCS (onlyone answer per risk is allowed).

only 27.7% of the respondents believe that it is “very serious risk,”and around one-third of the respondents (32.8%) accept it only has“minimal risk.” The responses may be explained in part by greaterawareness and knowledge on CO2 storage in the oil and gas indus-try.

4.2.4. Financial mechanismsOne of the major barriers to the widespread deployment of CCS

is the investment risk that larger CCS commercial demonstrationprojects are likely to face. As shown in Fig. 7, an overwhelmingmajority of the respondents (86.1%) consider the first large scaleCCS demonstration project should be subsided by the Saudi Gov-ernment. 41.6% of the respondents state grants from multilateral orbilateral banks or organizations should also be one of the financialoptions. It is also suggested by some respondents that Saudi Aramcoshould have a direct involvement in financing CCS demonstration.

CDM will also facilitate developing countries to obtain fundingto support their domestic CCS projects. However, in practice, fewtypes of CCS projects are likely to become popular under the CDMpipeline if international carbon prices are low. Only projects withlow incremental costs (i.e. where the incremental costs are lowerthan the expected CDM benefits) would show up in this case, suchas some EOR projects or ready-to-capture CO2 stream projects (IEA,2007).

4.2.5. Policy incentivesThe incentive policies for CCS demonstration are used to

overcome technical and economic barriers and support learning-by-doing. Fig. 8 shows the most appropriate incentives for largescale CCS demonstration. Except for cap and trade, which receivedrelatively weak support (24.8%), all other options are perceived asimportant incentives. The respondents regard the most appropri-ate incentives for large scale CCS demonstration as government

Fig. 7. Views on financial mechanisms. Question: for the first large scale CCS demonstration project in Saudi Arabia, what are the most appropriate financial options? (multipleanswers are allowed).


Fig. 8. Views on policy incentives. Question: what are most appropriate incentives for large scale CCS demonstration? (multiple answers are allowed).

Fig. 9. Views on incentives of CCS vs. renewables. Question: should CCS receive similar subsidies to those used in renewables development? (only one answer is allowed).

subsidy (51.8%), mandate emissions targets for major emitters(50.4%), carbon tax (49.6%), and launching a national CCS roadmap(48.9%). A sizeable portion of respondents (40.1%) also state per-formance standards are one of the most important options. Thisimplies that a market-oriented mechanism (e.g. carbon tax or capand trade) alone is not enough to induce private investment inCCS demonstration, considering the current carbon prices are wellbelow CCS costs (IEA, 2012). A broad policy mix with an emphasison both market-oriented mechanisms and command-and-controlapproaches is needed to create incentives for CCS demonstration.

4.2.6. CCS vs. renewablesThe strategy for reducing global CO2 emissions must be a com-

bination of (a) enhanced energy efficiency, (b) more renewableenergy production, and (c) a wide deployment of CCS. So it wouldbe necessary to establish stronger incentives favoring energy effi-ciency and renewable energy as well as CCS. As illustrated in Fig. 9,the respondents support that the incentives for CCS should eitherbe set at the same level as those for renewables (46%) or at a higherlevel (17.5%). By contrast, 13.9% of respondents consider that incen-tives should be lower than those for renewables and 5.8% of therespondents feel that incentives for CCS are not needed at all. Asizable fraction of respondents (16.8%) is not sure about the issue.

A most frequent concern is that CCS will compete with renew-ables for R&D resources and capital, thus preventing the rapiddevelopment of renewable energy. As illustrated in Fig. 10, aboutone in ten respondents believe investing in CCS will be “slightlynegative” to renewables, and only a minority of the respondents(5.8%) consider it would be “very negative” to renewables. In

contrast, more than half of the respondents believe investing in CCSis “very positive” (29.2%) and “slightly positive” (26.3%) to renew-ables, respectively.

4.2.7. Technical pathwaysWhen asked which sectors currently are most suitable for cap-

turing CO2 (multiple answers were allowed), the respondentsanswered generally that all sectors are suitable for capturing CO2.A substantial number of respondents tend to regard power gener-ation (85.4%), refining (77.4%), and gas processing (64.2%) as themost suitable sectors for CO2 capture.

Among the three major CO2 capture technologies, most of therespondents (67.2%) favor post-combustion capture technology.This may be due to the fact that the post-combustion technol-ogy can deliver deep CO2 reduction, given that all the powerplants are based on combusting oil and gas instead of gasification.Pre-combustion technology is particularly relevant to IGCC powerplants. Although pre-combustion capture is also favored by 48.9%of the respondents, there are currently no IGCC power plants inSaudi Arabia, and so far there are no clear plans to build any inthe future. What is interesting is that only about one-third of therespondents (32%) show interest in oxy-fuel combustion capturetechnology, while Saudi Aramco and KFUPM, as previously stated,are quite enthusiastic about this technology.

Although saline aquifers represent the largest storage capacity,an overwhelming majority of the respondents (89.1%) prefer stor-ing CO2 combined with EOR. About half of the respondents (50.4%)also favor depleted oil or gas reservoirs as a storage method.

Fig. 10. Views on impact of CCS investment on renewables. Question: the impact of investment in CCS on renewables would be? (only one answer is allowed).


5. Conclusions

The oil industry is heavily trade-exposed, and Saudi Arabiais highly dependent on oil exports, which account for most ofthe government’s budget. In a carbon-constrained world, CCS canpotentially help the Saudi Government in its efforts to introducenew energy technologies and to proactively diversify the econ-omy away from petroleum. In particular, combining EOR with CCScan potentially be a win-win solution to the challenges of growingdomestic energy demand and climate change policies, by increasingoil production while reducing CO2 emissions.

Currently, energy efficiency, renewable energy, and nuclearenergy are of particular interest to the Saudi Government whichhas launched major initiatives in support of all three areas. CCS ismainly discussed among key stakeholders and experts. At present,there are no stated plans to develop integrated large-scale CCSdemonstrations with the exception of the CCS-EOR demonstrationbeing spearheaded by Saudi Aramco. The experience to be gainedfrom this demonstration project will help in sharpening Saudi Ara-bia’s carbon management roadmap.

The majority of the CO2 sources are concentrated around Yanbu,Jeddah, Jubail, and Dammam along the west and east coasts of SaudiArabia. This offers a distinct advantage to develop CCS clusters,which would offer benefits through a shared infrastructure. Also,Saudi Arabia has huge potential for CO2 underground storage, andmost of its area is highly suitable for storing CO2.

In the absence of a clear policy and regulatory framework forCCS at the global and local levels, a realistic policy goal at this pointfor Saudi Arabia is to demonstrate the commercial viability of CO2capture, transport, and storage with EOR at large-scale in a fullyintegrated chain.

Acknowledgments

The authors are grateful to James Dooley, Bashir Dabbousi, andthe two anonymous reviewers for their comments and suggestions.The authors are also grateful to Dr. Xi Liang at the University ofExeter for his help with the survey design and providing valu-able comments. Appreciation is also given to the researchers atSaudi Aramco, King Fahd University of Petroleum and Minerals,Geogreen, IFP Energies nouvelles and BRGM, who through ourcollaborative CCS research project have also contributed to thedevelopment of this work. Finally, we extend special thanks to allof the survey respondents, and to Mairi Ball and Phil J. Embletonfor editing and checking the manuscript.

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