THE UK Offshore Operators Association (UKOOA) has joined calls for the government to stop dragging its feet over a technology that a number of industry experts say could significantly affect climate change and extend the productive life of the North Sea.

A number of large energy companies, including BP, Shell and E.on, are putting major investment into carbon capture and storage projects around the world but in the UK plans are on hold as the government has yet to announce how it will regulate the sector. Carbon capture involves pumping carbon dioxide (CO2) into oil fields, where its impact on global warming is negated. At present other gases are pumped into oil fields to help extract reserves.

The government has also to announce whether it will offer upfront grants and/or introduce a pricing scheme for the volume of CO2 stored.

A UKOOA spokesman said: "There is an urgent need for both the regulatory and fiscal treatment of carbon capture and storage projects to be clarified."

Pat Neve, managing director of oil and gas consultancy Senergy, who has worked with BP on its proposed hydrogen-fuelled power plant at Peterhead, believes CO2 capture could enhance recovery rates from North Sea oil fields.

He said: "The Peterhead project, if it goes ahead, has the potential to delay the decommissioning of the ageing Miller oil field by around 20 years. The technique could also improve recovery rates from suitable oil fields by between 7% and 15%."

In the past few weeks a growing number of companies, including power utility Scottish and Southern Energy, engineers Doosan Babcock and opposition politicians such as shadow chancellor George Osborne and SNP leader Alex Salmond have urged the government to make a speedy decision.

Their call came as UKOOA challenged the government to address signs, set out in a report last week, that UK offshore oil and gas was losing competitiveness.

Malcolm Webb, UKOOA's chief executive, said falling oil and gas production, cost pressures and a risk of falling investment could shorten the productive life of the UK continental shelf.

However, UKOOA appears to be out of step with some sections of the industry in that it says it remains to be convinced that the technique could have a significant impact in extending the life of the North Sea.

Its spokesman said: "The government needs to address the poor economics of carbon capture and storage before significant progress will be achieved in this area. At present, in most cases, we believe that the benefits from carbon capture and storage are marginal in terms of enhanced oil recovery."

Significant investment would have to be ploughed into platforms that are nearing the end of their design life.

However, using fields that have been decommissioned for storing CO2 will need higher investment.

A BP spokesman confirmed the Miller field was nearing the end of its life with production down at around 10,000 barrels per day (bpd) from a peak of 150,000bpd. At this rate it would face decommissioning in one or two years.

Neve attacked the delay in arriving at a decision on a suitable mechanism for supporting carbon capture.

He said: "It's a lack of leadership and commitment. The technology is 30 years old. The oil industry regularly pumps CO2 and other gases into oil fields to enhance recovery. But the real driver for this is the impact the technique could have on climate change."

He added: "Industry would like to see a floor where the government guarantees a minimum price. The frustration is that we have had the energy white paper, The Stern Report and the preBudget report all pointing to the need to advance these technologies. The issue has been studied to death.

"If you look at the history of the renewable obligations certificate system to promote wind energy you see that it took around 14 years for the UK to develop the first gigawatt of electricity from wind. It then took 20 months to produce the second gigawatt. The pace increases with a stable framework."

BP, which is behind the Peterhead project, has a similar carbon capture and storage project in the US. In collaboration with Edison Mission Group (EMG) it is building a $1 billion hydrogen-fuelled power plant in California.

The plant would be located alongside BP's Carson refinery, south of Los Angeles, and would be capable of producing 500 megawatts (MW) of low-carbon generation electricity. Crucially, the project will get a $90 million tax receipt as support from the federal government.

BP and EMG hope to bring the new power plant online by 2011.

A DTI spokesman said: "We recognise that carbon capture and storage (CCS) has potential to reduce carbon emissions. We have been active in exploring ways to develop it including an appropriate regulatory framework on which we will be consulting later in the year.

"As an untested and uncosted technology, it is only right that government ensures that the UK taxpayer gets value for money.

"A decision on whether to give the go-ahead for a demonstration CCS power plant is due later this year."