Santos Seeks Funding for Carbon Storage

SYDNEY, Australia (AP) - Australian energy producer Santos Ltd. said Thursday it is working on a plan to pump carbon dioxide into underground reservoirs in southern Australia as part of a national strategy to reduce greenhouse gas emissions.
Santos submitted a proposal this week seeking funding and support from the federal government for the 700 million Australian dollar ($588 million) Moomba Carbon Storage project, the company said in a statement. The company aims to create a storage space for more than 440 million U.S. tons of carbon dioxide.
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The proposal comes as the government prepares to set next year greenhouse gas reduction targets and a price on carbon pollution. A government-commissioned report on carbon trading last month recommended the government set a national limit on greenhouse gas emissions and by 2012 establish a market where major polluters can trade carbon permits at a price determined by the market.
The price of the permits would create incentives for businesses to reduce their pollution through such measures as burying their carbon underground.
The Adelaide Advertiser newspaper reported Thursday that Santos' submission to the government asked for a government contribution of A$275 million ($231 million). The company and the government would not confirm this figure.
Santos is planning to store about 1.1 million U.S. tons of its carbon dioxide pollution each year in the development phase of the project, scheduled to start 2010 if the proposal wins government support.
Ultimately, Santos plans to use its gas pipeline network in three states to pipe carbon dioxide to depleted or depleting oil and gas reservoirs in the Cooper Basin.
The company said the basin would provide "a secure storage solution for major emitters," such as coal-fired electricity generators.
Santos said its carbon storage project would not need ongoing federal funding because it would "rely upon the emergence of a carbon price under a well-designed emissions trading scheme."
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