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The results of four government-funded pilot projects are crucial for Big Oil to develop technology to reduce carbon emissions and support the Biden administration’s goal of achieving a net-zero emissions economy by 2050. Potentially important.
In February, the Department of Energy’s Clean Energy Demonstration (OCED) launched $304 million in taxpayer funds to reduce carbon emissions at power plants and industrial facilities in Kentucky, Texas, Wyoming, and Mississippi. Allotted to new technology designed to recover. This is part of a larger $12 billion effort through the 2021 Infrastructure Bill to develop carbon reduction technologies across the United States.
If the pilot project is successful, more than 500,000 tonnes of CO2 emissions could be prevented from entering the atmosphere each year, equivalent to the annual emissions of more than 110,000 gasoline-powered cars combined. OCED says.
An oil rig on federal land near Fellowes, California, April 15, 2023. As oil producers look to scale up efforts to reduce carbon emissions, the results of four government-funded projects to capture and store pollutants are (Nicola Groom/File Photo/Reuters Photo)
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Given that the power and industrial sectors account for roughly half of U.S. carbon emissions, a shift to recovery and storage in oil production could dramatically reduce these emissions.
However, the path to implementation is fraught with challenges, as carbon capture and storage technologies are expensive and logistically complex. It’s also frowned upon by some climate change advocates who want coal, oil and gas energy to be phased out and eventually stopped altogether.
This technology, also known as carbon capture, utilization and storage (CCUS), uses chemical absorption to capture CO2 from the smokestacks of industrial plants. According to the International Energy Agency (IEA), the captured CO2 is compressed and transported via pipelines, ships, trains and trucks and injected into deep geological formations such as depleted oil and gas reservoirs or saline aquifers. be done.
There are currently approximately 40 commercial recovery facilities in operation around the world and more than 500 projects in various stages of development.
One of the four government-backed projects is in the early stages of development at International Paper’s mill in Vicksburg, Mississippi.
Amazon is a partner in the project, sourcing cardboard from the mill for boxes and packaging. The company is partnering with SLB, the oilfield services giant formerly known as Schlumberger, to design and engineer the carbon capture system in collaboration with RTI International, the nonprofit organization that developed the technology.
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A crude oil pumpjack in the Permian Basin in Loving County, Texas, on November 22, 2019. The results of some carbon capture and storage projects could be critical to helping oil producers reduce carbon emissions. (Angus Mordaunt//File Photo/Reuters Photo)
Fred Majkut, SLB’s senior vice president of carbon solutions, said the goal of the project is to demonstrate that carbon capture and storage is technically and economically viable. Masu.
“The economic viability of carbon capture and sequestration is a challenge today because the construction costs of most plants for carbon capture are very high,” Majkut told CNBC. Renovating industrial plants can cost hundreds of millions of dollars, he says.
The project at this factory is also a potential way to produce low-carbon products for climate-sensitive consumers, and could also help consumers benefit economically through the sale of carbon credits. be.
Chevron, Exxon, Baker Hughes, SLB and others are now betting that the technology will help reduce emissions, the news organization reported.
For example, Chevron and Exxon aim to spend more than $10 billion and $20 billion, respectively, on emissions reduction technologies, including carbon capture and storage, at major projects being developed along the Gulf Coast.
They hope new technology will help expand carbon capture capacity.
Late last year, Exxon acquired carbon dioxide pipeline operator Denbury for $5 billion, and Exxon expanded more than 900 miles of pipeline. through mississippilocated near at least 10 storage locations in the region, Louisiana and Texas.
President Biden speaks at a press conference at the COP26 United Nations Climate Change Conference in Glasgow on November 2, 2021. (Brendan Smialowski/AFP/Getty Images)
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Exxon currently owns and operates more than 1,500 miles of CO2 pipelines, the largest network in the U.S., and has the potential to reduce CO2 emissions by more than 100 million tons annually, the company said after the deal. It was announced in November. Had made.
But reaching net-zero targets will require a major expansion of the country’s carbon pipeline.
The Department of Energy estimates that the current network of 5,200 will need to be expanded to between 30,000 and 90,000 miles, but Magikat told CNBC that pipelines often cross state lines and span multiple jurisdictions. He said the permitting process is difficult because it requires lengthy approvals from the district.
“The key is the right geology near concentrated emissions,” Jeff Gustafson, Chevron’s vice president of low-carbon energy, told CNBC.
“Initially we think we can expand here most rapidly, but over time we will build out more CO2 infrastructure to be able to transport CO2 over much longer distances to access the same storage. We’re going to have to build it.”
