In 2007, Carbon Capture and Storage (CCS) has received full political recognition in all major countries in the world as a key alternative in combating global warming. We have contributed experience and expertise and been involved in an advisory capacity in connection with EU directives concerning the approval of CCS and its inclusion in the EU emission trading system.
We submitted proposals for short-term CCS options to the G8 meeting in Japan in August 2008 through the Carbon Sequestration Leadership Forum, and are engaged in R&D activities as part of EU research programmes.
In collaboration with national oil and gas companies, StatoilHydro is focusing on reducing flaring, increasing energy efficiency in its operations and CCS. Endeavours have been made to win acceptance for CCS as eligible for CDM credits, but, due to resistance from some countries, this is still under consideration by UNFCCC.
The Mongstad carbon capture demonstration facility (TCM) is going ahead, with new industrial partners taking over part of the Norwegian State's ownership interest in the Joint Industry Partnership. This large and well-functioning project is instrumental in involving the technology supply industry in developing climate technologies and taking them to a new level.
The Halten carbon capture, storage and enhanced oil recovery feasibility project study carried out together with Shell International was terminated late in 2007 as being not economically feasible under current framework conditions.
On 20 October 2007, the first vessel with a cargo of liquefied natural gas from the Snøhvit field left port at Melkøya. For the first time StatoilHydro is supplying gas from the Norwegian continental shelf in a cooled state by ship. LNG gives us increased flexibility in terms of marketing gas globally. The plant at Melkøya is the first LNG production facility in Europe and it will be a key component in StatoilHydro's focus on LNG, which is the fastest growing gas market in the world. The LNG plant has suffered from operational challenges and there are still uncertainties related to the timing of regular and stable operations.
Energy efficiency has been improved through energy management, which is scheduled for implementation on all offshore installations in Norway in 2008, and by the installation of a new subsea system for the separation of sand and water from the hydrocarbons instead of more energy-consuming separation on surface installations
We are engaged in technology development and the development of demonstration facilities for offshore wind power, utilising our many years' experience of offshore oil and gas production. The potential for future offshore wind power production is great, but there are still technological and commercial challenges involved in scaling it to an industrial level.
Through StatoilHydro Venture, which has capital of NOK 1.2 billion, we have invested in 25 promising companies in the energy sector, and, through participation on their boards, we are actively involved in their development.
We have acquired a stake in a Lithuanian production facility for rapeseed-based biodiesel production, and we have entered into a collaboration with Petrobras in Brazil on sustainable biofuel production. Preliminary sustainability criteria have been defined for biofuel trading. We have started a comprehensive review of the environmental and social challenges and are developing standards and management tools to ensure sustainability in all parts of the life cycle of the product.
