Delegates from 190 countries are in Bali, Indonesia this week hoping to strengthen Kyoto’s commercial mechanisms aimed at mititgating climate change, although no breakthrough is expected to impact the oil and gas industry.

“A road map” toward a better, more comprehensible treaty which locks in major polluters the United States, China and Australia is hoped for. No support yet exists to grant entry into the United Nation’s clean development mechanism, or CDM, for the oil and gas industry’s carbon capture and storage projects, or CCS.

The CDM bestows tradeable carbon-dioxide emissions credits on clean-air or energy-saving projects — hitherto mostly small projects and technologies — under a Kyoto-negotiated UN plan.

“On CCS in the CDM, I think its increasingly unlikely that we’ll see anything happen before post-2012, but I guess we’ll know more after Bali”, a source with a stake in the negotiations told Scandoil.com at a recent policy-maker event.

The European Union’s mandatory emissions trading gets underway in early 2008, although major polluter Norway won’t have its tally of industry emissions ready before February. Norway’s delayed entry into more globalized trading is expected to produce a wildly fluctuating price for a tonne of carbon in early 2008, just as the North America contemplates how to go about trading emissions credits.

Meanwhile, North Sea CCS projects are stalled pending a reliable price for carbon that’s real or subsidized. Major CCS projects, as at Sleipner offshore Norway, are expected to one day play havoc with the price of carbon.

The United Nations Climate Change Conference in Bali wraps up 14 December 2007, and Scandoil.com will report any relevant news.

Tags: CCS