Australia assumes long-term responsibility for Gorgon CO2 capture

This is almost two weeks old (as are many of the things I'm hopefully about to post - I have a long backlog), but still stands as an interesting data point in the aspirational to capture and sequester CO2 emissions.

Largely overlooked amidst all the hoopla over the huge $37 billion Gorgon natural-gas deal in Australia was the thing that may have made it possible in the first place: The Australian government’s willingness to shoulder the long-term liability for storing carbon emissions underground.

That is, one of the reasons that Chevron, Exxon, and Shell finally went ahead with the massive Gorgon project is because they won’t be saddled for centuries with the worry some of the carbon-dioxide could escape, with potentially disastrous consequences.

Under the terms of the agreement, the companies will be responsible for the storage of the carbon-dioxide resulting from the natural-gas project during its operating lifetime and for 15 years afterward, Bloomberg reports. After that, the Australian national and state governments will be responsible.

Releasing companies from the generation-scale liability for stored greenhouse gases certainly makes the project more palatable from an investment point of view (not to mention a short-term political point of view). By the time that liability begins to bite - say 50 years down the road - and the economic benefits have largely been extracted, I doubt voters will look on it so kindly. But ultimately, I have a hard time seeing any carbon sequestration succeed on a commercial basis without the government (or maybe a massive reinsurance firm?) assuming the long tail of catastrophic risk in the scenario that the gas escapes - both environmental, and economic if the world half a century from now effectively measures and prices greenhouse gas emissions.

Also, don't miss Geoff Styles' informed reflections for an insider's perspective on Gorgon.