KCARE ENVIRONMENTAL NEWS

SOIL CARBON AND CLIMATE CHANGE NEWS

From Kansas State University's:

Consortium for Agricultural Soils Mitigation of Greenhouse Gases

(CASMGS)

http://www.oznet.ksu.edu/ctec

Charles W. Rice, K-State Soil Microbiology, National CASMGS Coordinator

(785) 532-7217 cwrice@ksu.edu

Scott Staggenborg, K-State Extension Northeast Area Crops and Soils

Specialist (785) 532-5833 staggen@ksu.edu

Kent McVay, K-State Soil and Water Conservation Specialist (785)

532-5776 kmcvay@ksu.edu

Steve Watson, CASMGS Communications (785) 532-7105 swatson@oznet.ksu.edu

April 27, 2004

No. 33

This week's issue:

K-State:

* K-State’s Chuck Rice Discusses Bilateral Agreement On Climate Change With Canadians

Science:

* Using CO2 To Prolong North Sea Oil Too Costly

National:

* Chicago Climate Exchange, International Petroleum Exchange Join Forces On London Carbon Exchange

International:

* European Union Emissions Trading Scheme Will Influence Future GHG Reduction Efforts

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K-State’s Chuck Rice Discusses Bilateral Agreement

On Climate Change With Canadians

Chuck Rice, K-State professor of agronomy, recently attended the Bilateral Working Group on Climate Change in Ottawa, Canada. He represented the Consortium for Agricultural Soils Mitigation of Greenhouse Gases (CASMGS) at this meeting on climate change activities between the U.S. and Canada. The State Department is the lead federal agency for the U.S. in these discussions.

Rice made a presentation at the meetings, titled “Developing Reliable Methods to Estimate Soil Carbon and Greenhouse Gases in U.S. and Canadian Agroecosystems.” The full presentation can be found at:

http://www.oznet.ksu.edu/ctec/Outreach/powerpoint/US-Canadian%20Bilateral%20Talks-2004.pdf

Agricultural greenhouse gas mitigation, including carbon sequestration, is one of the bilateral activities between the two countries. This involves cooperation between CASMGS and the Canadian National Soil Carbon and Greenhouse Gas Accounting and Verification System (NCGAVS). Scientists within these two consortiums will collaborate on measurement, monitoring, and scaling processes for soil carbon and greenhouse gas emissions.

Additionally, the U.S. and Canadian delegations recently signed a “Statement of Common Interest and Intent to Work Together” between the respective scientific communities supporting or conducting carbon cycle research in the U.S. and Canada. This will expand cooperation in the development of integrated carbon cycle research, building toward a coordinated North American Carbon Program.

-- Steve Watson swatson@oznet.ksu.edu

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(Note: There are several methods of carbon sequestration: agricultural soils, afforestation and reforestation, deep ocean, shallow ocean, and deep geological. There are pros and cons to each of these methods, but one of the biggest concerns is cost. As this article mentions, the cost of sequestering carbon in deep ocean formations is extremely high. In contrast, the cost of sequestering carbon in agricultural soils is relatively low. -- Steve Watson swatson@oznet.ksu.edu)

Using CO2 to prolong

North Sea oil too costly

A UK proposal to inject carbon dioxide into ageing North Sea oil and gas fields, extending their life while reducing greenhouse gas levels, is too expensive for energy companies, a government study found recently.

The UK hopes to combine the two goals by using carbon dioxide (CO2) to pump extra oil and then keeping the gas underground in depleted reservoirs. The increased oil recovery could partially offset the cost of storing the carbon dioxide.

CO2 gas can be injected into an oil reservoir to reduce the viscosity of the crude oil, making it flow better and so become easier and cheaper to extract.

The UK government said last year that it would set up a plan to implement CO2-based enhanced oil recovery projects, one of several efforts to slow the decline of UK North Sea oil and gas production.

It would also help the country reduce levels of CO2, which is blamed for contributing towards global warming.

"The level of support needed to bridge the economic gap and encourage investment in enhanced oil recovery is uncertain," the study concluded. "The main approach available to government would be to adjust the tax system applying to oil production in the UK North Sea to reduce any barriers."

The European Union and the United States also back so-called "carbon sequestration" techniques to fight global warming, having signed a pact last year to undertake research. The U.S. is the world's biggest emitter of carbon dioxide but pulled out of the Kyoto deal, saying it would hurt economic growth.

-- Reuters News Service, April 13, 2004

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Chicago Climate Exchange, International Petroleum Exchange

Join Forces On London Carbon Exchange

The Chicago Climate Exchange (CCX) and the International Petroleum Exchange (IPE), the London-based energy futures and options exchange, will work together to provide a marketplace for European Union (EU) emissions trading, the two parties announced recently.

As part of the agreement, CCX will grant IPE a license to list and market its EU products on IPE’s electronic trading platform, known as the Interchange. They intend to offer future contracts as well as cash products, and aim to have the system up and running by the end of this year.

The CCX opened for trading with voluntary carbon credits in the North American market December 1, 2003, where prices have been just below the $1 per tonne mark. It is this experience that made the IPE choose the CCX as its partner.

The two are not the first ones to announce plans for setting up an emissions trading exchange, but in setting a specific timeline for the development of it, that should put them slightly ahead of the pack.

The CCX has seen a reasonable amount of activity since its launch five months ago. It is based on a voluntary scheme, though, which is reflected in the rather low prices.

Running under a mandatory scheme, the exchange could see a fair degree of trades if it gets the necessary market confidence, and in itself contribute to a deeper EU ETS (Emissions Trading Scheme) market.

For more information, see:

http://www.chicagoclimateexchange.com

-- Point Carbon’s “Carbon Market Europe” April 23, 2004

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European Union Emissions Trading Scheme

Will Influence Future GHG Reduction Efforts

The European Union (EU) is on the verge of establishing an emissions trading scheme (ETS) 10 times the size of the Acid Rain trading program in the United States, according to a recent report from Resources for the Future titled “The EU Emissions Trading Directive: Opportunities and Potential Pitfalls.”

There are many potential problems and uncertainties as the EU ETS gets nearer to implementation. Regardless of the outcome, however, the EU ETS will be influential in future international efforts to reduce greenhouse gases.

The Introduction to the report explains some of the background:

“Almost a decade has passed since the U.S. began operating the first large-scale emissions trading program in 1995. The SO2 cap-and-trade program has been studied extensively and has become the benchmark for evaluating subsequent emissions trading proposals. Based on the success of this ‘Grand Policy Experiment,’ emissions trading has become an increasingly accepted approach for addressing air emissions.

“On January 1, 2005, Europe will launch a cap-and-trade program for greenhouse gases (GHGs) that is substantially larger and more complex than the pioneering U.S. effort. Although strongly influenced by the design of the U.S. trading program, the EU ETS will dwarf existing U.S. trading programs in size and complexity, and will encompass a variety of new features. Because of its size, scope, and multi-jurisdictional political structure -- and because it is the first large-scale attempt to regulate GHGs -- the EU program is in many ways the ‘New Grand Policy Experiment.’ As such, it has the opportunity to advance the role of market-based policies in environmental regulation and to form the basis for future European and international climate change policies. Should it not work out as planed, however, it could set back both efforts to advance market-based policies and to address global climate change.

“The EU ETS has in its framework all the elements of a successful program, but it is unclear whether it can be pieced together on schedule and whether a variety of uncertainties will allow European industry to plan effectively.”

The full report is available at:

http://www.rff.org/rff/Documents/RFF-DP-04-24.pdf

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MEETINGS OF INTEREST (All dates are 2004 unless otherwise noted.)

May 2-6

Third Annual Conference on Carbon Sequestration

Alexandria, VA