Salmond: We Must Save Carbon Plant

By Eddie Barnes Political Editor

ALEX Salmond has called on Westminster to resurrect plans for a revolutionary low-emission power station in Scotland.

Oil giant BP announced last week that it was to ditch its scheme to build the world’s first carbon-capture power plant, in Peterhead, claiming it could not afford to wait on a government decision over the deal.

Salmond claimed that BP executives were "spitting tacks" over the delay, caused by the need to hold a competition to decide which firm should get a vast government subsidy to help pay for the project.

The First Minister spoke to Trade and Industry Secretary Alistair Darling last week about the collapse of the deal. He is now appealing to ministers to bring forward the competition in the hope of getting BP back on board.

But Salmond’s critics have hit back, arguing that it was "nonsense" to suggest BP had acted because of the delay. They believe Salmond is now providing political cover for the oil firm which, they claim, pulled out purely for commercial reasons.

Salmond has launched a fresh attack on Darling, accusing his department of presiding over a "cock-up" over the affair. He also claims Labour ministers reneged on several pledges made in parliament in which they declared openly that a decision on the subsidy for a new plant would be made quickly.

Salmond said: "I would urge Alistair Darling, now he knows the full extent of the loss, not from his decisions but his lack of decisions, to change his mind about the time-frame," he said.

On BP’s mood, he added: "I don’t think I’ve ever heard oil executives speaking like BP were in their attitude to government."

The row centres on a groundbreaking project in which North Sea gas would have been turned into a carbon-free energy source. All carbon from the gas would have been removed and then pumped into BP’s Miller oilfield in the North Sea.

However, BP needed a huge subsidy from taxpayers to go ahead.

"There was a clear expectation by BP that a decision would be taken by the end of the year," Salmond added. "The reason for the problem BP have with the timescale is that it’s costing them GBP 4m a month not to abandon the Miller field – and it would potentially cost them several hundreds of millions to make the Miller platform safe.

"BP had most certainly told the DTI that any further slippage in the timetable for a decision would result in the withdrawal from the competition."

BP had privately estimated a decision would be made by the end of January next year, but interpreted the energy white paper as meaning this date had now been pushed back to the end of next year, said Salmond.

"It was the straw that broke the camel’s back," he said. He claimed that behind the delays lay an apparent assumption by the DTI that since BP had already spent GBP 50m on the scheme, it would stick with the project regardless.

"I don’t think there’s a conspiracy here – it’s a DTI cock-up, a prevarication, an assumption perhaps that BP would stay in, regardless of circumstances," he said.

Energy experts do not believe BP will change its mind over the matter. They believe BP had already decided long before to ditch Peterhead in favour of another venture in Australia.

Asked whether Salmond was acting as a puppet for BP, former Labour energy minister Brian Wilson said: "Absolutely. For understandable reasons, he has picked this project up and run with it. But this is a commercial decision by BP not to go ahead with this."

Industry experts point to the fact that BP also last week announced it would be investing in another carbon-capture scheme, using coal, in Australia. There are suggestions BP had chosen Australia ahead of Peterhead for its own internal reasons, and not because of delays.

Wilson added: "BP has essentially decided to do it in Australia rather than here."

(c) 2007 Scotland on Sunday. Provided by ProQuest Information and Learning. All rights Reserved.