The Australian Government has appointed the former president of the World Bank, James Wolfensohn, to head the advisory panel on its Global Carbon Capture and Storage Institute to be based in Canberra. Yesterday the Prime Minister formally inaugurated the institute and reaffirmed his government’s funding commitment of $100M per year.

Wednesday night the ABC reported that total research spend over five years would be up to $2.5B presumably including contributions from the corporate sponsors. These comprise the usual industry players such as Rio Tinto, Xstrata, Shell and Alstom et al. Martin Ferguson, the responsible Federal minister, claims the institute has the goal of delivering at least 20 commercial scale CCS plants around the world by 2020.

Recently in these pages, Australian Coal Association External Communications Director Peter Logue stated boldly that CCS “will work at scale and that a commercial scale power plant with CCS that gets rid of up to 90% of carbon dioxide, will be operating in Australia before 2017.” That is eight years away, yet today there is only one tiny demonstration plant in operation (a 30 MW plant in Schwarze Pumpe, Germany was due to open at the end of last year, but it is unclear if it is operational).

Meanwhile in the real world, the USA’s big plans for a demonstration project, the so-called FutureGen (now dubbed NeverGen) was cancelled largely due to sober realisation of the costs and the commercial partner’s realization that the US Department of Energy was not going to come to the rescue. There was also the small matter of discovering that the geology of the site was not suitable for containment and that no one would insure against future catastrophic gas releases. Last month there was chatter that the Obama administration is contemplating reviving FutureGen however its price tag continues to climb — apparently now US$2.3B — and makes its resuscitation seem unlikely.

None of this has convinced any informed observers of the likelihood of CCS ever being a commercial reality, at least not on a timescale that does not render alternatives a more rational choice. One horribly simple reason why CCS is a dangerous distraction is costs. The chemistry of carbon capture and technology of liquefaction and underground storage are nothing new. It can be done (though doubts continue about storage site availability and safety) but there seems no obvious way around the costs given the inescapable chemistry and laws of thermodynamics.

For example, the US’s current planned demonstration plant (after FutureGen’s demise) is the Mountaineer plant in New Jersey. But of its 8.5 million tonnes of CO2 release per annum, only 100,000 to 300,000 tonnes will be removed with the planned CCS plant. That is, only 1.2 to 3.5%. And this modest plant (i.e. the CCS component) is costing $100 million, which would make the capture of the full output of the coal power station about $2.8B (no one knows how much this might be reduced by scale).

It gets worse. This is only the capital cost of building the CCS plant and does not include the running costs, one of such costs alone would be crippling — the estimated 20% to 30% of the coal-fired energy that would be consumed by the CCS process!

So CCS may be possible but it certainly does not look commercially feasible. As Wolfensohn so silkily asked on Lateline, why would anyone be against the research proposed by this institute? But as taxpayers we are entitled to be suspicious of what the Australian coal industry calls research and believe Australian R&D would be better deployed elsewhere. Especially when the budget of this new institute does not cover the capital costs of even one, never mind 20, CCS plants.

Along with the very long timescale, the credibility of Clean Coal is looking terrible. Wind power already competes and it seems much more likely that solar-thermal would be competitive with coal-fired electricity with full CCS. Just why would one put all this money and effort into trying to clean up the dirtiest possible energy source when there are zero-emission and cost-competitive alternatives? That is, unless you work for the coal industry.

The author is a PhD Australian scientist and author of over 100 papers in international science journals.