Algeria's Carbon-Capture Experiment

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The CO2 is then whisked along separate pipelines and pumped a mile into the ground into a body of water beneath the gas field. The companies figure that by the time the gas migrates up into the gas part of the reservoir, the project's life will have ended.

Contamination Questions

The big question is whether the CO2 will somehow escape into the atmosphere or, perhaps, contaminate important nearby water supplies. One In Salah executive said that the biggest danger is that the CO2 could somehow escape into an ancient aquifer that lies above the gas field. The companies, however, are confident that this reservoir, which has a thick layer of shale forming a seal on top, will prove impervious. Their thinking is that if it has held gas for thousands of years, that's good reason to think it can do so in the future.

Although the environmental bent of former BP CEO John Browne is said to have influenced BP's decision to go ahead with In Salah, the international companies and Sonatrach are not altruists. They see economic potential in what they are doing in In Salah. Both BP and Statoil are heavily invested in the growing business of supplying gas to Europe. Algeria is one of Europe's key gas sources, accounting for about 10% of European consumption.

With the European Union pressuring industry to reduce carbon emissions sharply, projects such as In Salah that cut CO2 could prove increasingly valuable to their owners. Sahnoun, who oversees Sonatrach's many joint ventures with international companies, says what's being done in In Salah is "likely to be generalized to the rest of the projects in the area." In particular, he says upcoming gas field developments with Gaz de France (GSZ.PA), Total (TOT), and Repsol (REP) look like good candidates for carbon capture and storage. It isn't yet clear, though, how the EU will consider gas from projects outside its borders, such as In Salah.

What's more, not all gas projects may be suitable for the technology being pioneered at In Salah. Some gas fields don't have high CO2 concentrations. And having the right type of reservoir, such as the one that lies beneath Krechba, also helps make the project viable economically. Keddam, the In Salah vice-president, pegs the total cost of carbon storage at In Salah at about $14 per ton—which he thinks is substantially below what the EU is likely to charge for CO2 emissions. In Salah alone is not going to save the world, but it could prove a step in the right direction.

With Mark Scott in London

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Reed is London bureau chief for BusinessWeek.