when it comes to actions over Georgia 

(3) THE RETURN OF OLD KING COAL

Investors Chronicle, 28 August 2008

http://www.investorschronicle.co.uk/Companies/ByEvent/TradingTechniques/Inbrief/article/20080828/f339b544-6ae4-11dd-b4c7-00144f2af8e8/The-return-of-Old-King-Coal.jsp

Mark Robinson and Martin Li

At least one noteworthy policy directive emerged from the recent G8 forum in Japan. It now seems that the preferred option to meet the energy needs of the 21st century is for all of us to start burning coal again. What's being proposed is a reappraisal of the use of coal as a power source for developed economies, with a particular emphasis on carbon capture and storage (CCS) technologies.

The consensus from policy makers seems to be that, regardless of proposed investment in renewable power sources, many industrialised nations (including the UK) still face shortfalls in generating capacity. This alone is forcing a reassessment of the issue, but rising energy costs and coal's relative abundance are also leading to changes in strategic thinking.

Many CCS technologies are already used in other industrial and mining applications. CCS involves isolating and then compressing CO2 released as industrial emissions, with the CO2 then permanently stored in underground geological formations. The main point about CCS technologies is that, if successfully implemented on an industrial scale, they could effectively transform coal into a carbon-neutral fuel source. This has obvious implications for future coal demand in a world where so many economies are struggling to meet emission targets and where other fossil fuels are rapidly being exhausted.

Can it be done?

Commercial exploitation of CCS technologies within the next two decades is certainly possible, but won't come cheap. Intervention, through state or regional government subsidies and tax incentives, will almost certainly be needed for early stage development. Several regional authorities have already expressed an interest in supporting this technology. In Canada, for instance, the Alberta provincial authority recently announced a C$2bn (£1bn) initiative to drive CCS technologies. The Canada-Alberta ecoEnergy CCS Task Force estimates that CCS has the potential to eliminate 600 megatonnes (mt) of greenhouse gas emissions every year. This is roughly 40 per cent of Canada's projected emissions by 2050 and is equivalent to storing all Canada's current industrial emissions, without compromising economic growth.

Milton Catelin, chief executive of the World Coal Institute, is understandably bullish about coal's emerging eco-status: "All expert analysts predict a rising demand for coal. The greatest challenge faced by coal is how well it can respond to climate change. In this regard, numerous projects, like the Sleipner Project* in the North Sea, have demonstrated that CCS technologies can safely bury large quantities of CO2 that would otherwise escape to the atmosphere. The support from G8 governments recognises that while there may be no silver bullet to combat climate change, there will equally be no effective response to it without CCS".

FULL STORY at

http://www.investorschronicle.co.uk/Companies/ByEvent/TradingTechniques/Inbrief/article/20080828/f339b544-6ae4-11dd-b4c7-00144f2af8e8/The-return-of-Old-King-Coal.jsp