Some oil companies are calling for pricing mechanisms for carbon emissions and even carbon taxes after years of resisting such moves.
So far, the most fervent supporters of carbon pricing are based in Europe but there are signs the movement could spread. "Carbon pricing is essential," Hege Marie Norheim, the senior vice president of Norway's Statoil, told the ADIPEC oil conference in Abu Dhabi last week.
"The Norwegian carbon dioxide tax shows that it works. This has been quite a revelation." Ms Norheim not only defends Oslo's policy of taxing carbon emissions but also argues the tax should be substantial. Statoil supports a high government price on carbon because it enables the company to compete for carbon capture and storage (CCS) projects, with the aim of becoming a leader in the emerging carbon management sector. "For business, it must pay to be green," Ms Norheim said.
Large-scale CCS projects will be needed, along with many other measures to curb emissions, if a widely held informal target of capping atmospheric carbon dioxide levels at 450 parts per million is to be met, said Tim Bertels, the manager of the global CCS portfolio of Royal Dutch Shell.
Climatologists believe meeting that goal would prevent global warming exacerbated by man-made carbon emissions from exceeding an average 2°C worldwide. The concentration of carbon dioxide in the atmosphere stands at 386 parts per million, Mr Bertels said.
Shell, with industry partners including Chevron and ExxonMobil, is developing one of the world's first industrial-scale CCS project where the group of international oil companies plans to capture 4 million tonnes a year of carbon emissions from the huge Gorgon liquefied natural gas (LNG) project being built off northern Australia.
The gas reserves feeding the project naturally contain about 7 per cent carbon dioxide, which would otherwise be stripped out of the production stream and vented to the atmosphere before refrigeration of the remaining gas for transport as liquefied fuel. Instead, the carbon dioxide will be reinjected into the gas reservoir as it depletes. In a second large-scale project in western Canada, Shell is planning to capture 1 million tonnes annually of carbon emissions from a refinery that processes carbon-rich bitumen from Canadian oil sands.
The carbon dioxide could be piped to mature Canadian oilfields for use in projects to boost the country's output of conventional crude while providing secure, permanent underground storage for the industrial emissions.
But delays in Australian, Canadian and US government plans to introduce cap-and-trade schemes for carbon pricing could impede such developments. "Large-scale, integrated, frontier CCS projects are difficult to mature in the current business environment," Mr Bertels said. "They need significant financial support and public support and there are first-mover disadvantages to overcome."
Given the appropriate incentives to boost development, "the CCS industry could be as big as the oil and gas industry", Mr Bertels said. "We really need to start thinking about pipelines and infrastructure." Carlos Pimenta, the chairman of the investment group Novenergia II, based in Portugal, said the energy industry needed to sell the idea of CCS to the public as a new source of technical enterprise and jobs.
"Otherwise, you are only telling people they will have to pay more for electricity," Mr Pimenta said.
"Putting a value on carbon emissions at a global level should be a priority for the energy industry. If no concerted action is taken in the next couple of years, the scene will be grim."