Algeria spent most of the 19th-century and much of the 20th-century under French colonial rule. Since escaping from under France's thumb in 1962, it has struggled with instability: a coup, rebellion, civil war and Islamic militant violence.
Given its turbulent history, it comes as no surprise that up until a decade ago, Algeria was best known for social and political unrest. But the North African nation kicked off the 21st-century determined to shrug off its troubled past and look toward the future.
The oil and gas industry figures prominently in that future. Algeria is actively seeking foreign investment and development of its natural gas and crude reserves. While last week's signing of an accord between Algeria and sub-Saharan African nations Nigeria and Niger to build a $10 billion gas pipeline linking vast reserves in the Niger Delta to Europe is grabbing international headlines, a lesser-known project holds green promise.
A 10-hour drive south of the capital Algiers in an oasis of the barren Sahara Desert, a monumental experimental undertaking is in the works that is already helping trim emissions related to Algeria's fossil fuel ambitions. UK oil giant BP (NYSE: BP), Norway's Statoil (NYSE: STO) and Algeria's state-owned Sonatrach have constructed the In Salah Gas Project, a plant with one goal in mind: to cleanly remove the carbon dioxide (CO2) from gas produced by a network of fields and safely store it underground (instead of the usual practice of venting the unwanted byproduct into the atmosphere).
The project, the largest of its kind, is receiving high praise from the companies, who note that it currently prevents some 800,000 tons of CO2 from contributing to greenhouse gas pollution each year (the equivalent of taking 200,000 cars off the road)—it also happens to be a profitable enterprise. But critics argue there exists the danger of CO2 escaping into the atmosphere or contaminating nearby water supplies. The players involved don't seem to be worried, pointing to the fact that the layer of shale that caps the storage resevoir has already held the gas at bay for thousands of years.
Although the technology being developed is not suitable or economically viable for all gas projects (those without high CO2 concentrations or the appropriate type of resevoir), some do fit the bill. Forthcoming gas field projects by Total (NYSE: TOT), Repsol (NYSE: REP) and GDF Suez (EPA: GSZ) appear to be compatible, however, whether they opt to use the process remains to be seen. Abu Dhabi National Oil, one of the largest oil and gas producers in the world, has shown an interest in the project, sending a delegation to the facility last year.
While carbon capture and storage clearly will not solve CO2 problems, anything that helps curb hazardous emissions is a step in the right direction. And, it also spells good news for green-minded investors and Algeria's emerging economy.
Image courtesy of Martin Frost
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