U.S. supermajor ExxonMobil has announced its vision for a massive $100 billion carbon capture and storage (CCS) project which it believes will be critical to meeting Paris Agreement emission-reducing goals.
Joe Blommaert , head of ExxonMobil’s Low Carbon Solutions division, said in a blog earlier this week that CCS could enable the United States to safely capture and store hundreds of millions of metric tons of carbon dioxide (CO2) each year that otherwise would be released into the atmosphere.
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According to him, that is one of the few proven technologies with the potential to significantly lower emissions from certain hard-to-decarbonise sectors, such as manufacturing and heavy industry.
For the past three years, ExxonMobil has been assessing the concept of multi-user CCS hubs in industrial areas located near geologic storage sites, such as depleted oil and gas reservoirs.
“ We believe the time is right for a large-scale collaboration in the United States between government at every level, private industry, academia and local communities to create an ‘Innovation Zone’ approach to dramatically accelerate CCS progress ”, Blommaert stated.
One of the locations assessed by ExxonMobil is Houston – one of the largest industrial emission sources in the country and a population of more than 2.3 million people but also a city very close to geologic formations in the Gulf of Mexico that could store large amounts of CO2.
The U.S. Department of Energy estimates that storage capacity along the U.S. Gulf Coast is enough to hold 500 billion metric tons of CO2 — more than 130 years of the country’s total industrial and power generation emissions, based on 2018 data.
ExxonMobil believes the United States could establish a CCS Innovation Zone – a pilot project of sorts – along the Houston Ship Channel which would have the potential to effectively capture all the CO2 emissions from the petrochemical, manufacturing, and power generation facilities located there and store them safely beneath the seafloor.
If the entire project is to be considered, it would require the collective support of both industry and government, with a combined estimated investment of $100 billion or more.
But, if this project comes to fruition, the Houston infrastructure could capture and permanently store about 50 million metric tons of CO2 annually by 2030 and 100 million metric tons by 2040. That’s the equivalent of taking nearly 11 million cars off the road. This could be huge for both Houston, which aims to be carbon-neutral by 2050, but the entire U.S. as well. Another positive consequence of the project, which can’t be overlooked, is the generation of jobs. Either by protecting existing ones or creating new ones.
Blommaert said that lessons learned from this Houston CCS Innovation Zone could be replicated in other areas of the country where there are similar concentrations of industrial facilities located near suitable CO2 storage sites, such as in the Midwest or elsewhere along the Gulf Coast.
Houston was not chosen at random for this ‘ pilot project ’ since it is the ‘ energy capital of the world ‘ and home to more than 12,000 ExxonMobil employees.
ExxonMobil also claims that it is uniquely positioned to help advance this Houston CCS Innovation Zone concept as the company has, up to this point in time, cumulatively captured more anthropogenic CO2 around the world than anyone else. The company’s massive experience in reservoir management and decades of operating large-scale projects is also quite handy. But something so big and extremely costly must come with support from the government.
Blommaert said that ExxonMobil applauded President Joe Biden’s decision to rejoin the Paris Agreement, a framework the company supported since its inception.
The point the two differ on is the use of CCS. ExxonMobil firmly believes that the CCS should be a key part of the U.S. strategy for meeting its Paris goals and should be included as part of the administration’s upcoming Nationally Determined Contributions (NDC) submission. Worth noting, the International Energy Agency stated previously that “ reaching net-zero will be virtually impossible without CCS ”.
The Biden administration is not so much sold on CCS since its stance was always to stop the use of fossil fuels permanently rather than mitigating the effects of its further use on the environment.
Nevertheless, ExxonMobil CEO Darren Woods did pitch the Houston pilot project idea to the White House as well as to Texas Senator John Cornyn and Houston Mayor Sylvester Turner .
But the CEO did have a hint to go along with the pitch. Namely, in an interview with Politico , Woods stated that the current tax breaks for every ton of carbon captured and sequestered are $50 or $35 for a ton reused in oil production – something often used for increasing production in ageing wells.
Woods, who stood behind the idea of carbon pricing in a blog post of his own back in March, told the media outlet that without new direct financial incentives, a price of $100 per ton of carbon would be necessary to make large-scale carbon capture business profitable. And for something this large, he believes that some sort of subsidy, be it tax incentives, new carbon tax breaks, tax credits, or low-interest rate loans, must be written into new policies for such projects.
Biden so far avoided proposing a price on carbon, either through a cap-and-trade system or an economy-wide carbon tax, and instead is calling for setting a clean energy standard.
Due to the country just returning to the Paris Agreement – after former President Donald Trump pulled out – the U.S. is required to issue its own climate goal which Biden revealed on Thursday, April 22, during a virtual climate summit of world leaders.
Namely, the Biden administration pledged to reduce U.S. economy-wide carbon emissions to around 50 to 52 per cent below 2005 levels by 2030.
The Electric Power Research Institute, an organisation jointly leading the Low-Carbon Resources Initiative (LCRI) with the Gas Technology Institute, said in an announcement on Thursday that the goal amounts to a 2 gigaton reduction in annual energy-related U.S. carbon dioxide emissions by 2030 – triple the rate of carbon reduction achieved from 2005 to 2020 when annual emissions were reduced by 1 gigaton.
Biden has also set out goals of 100 per cent carbon pollution-free electricity by 2035 and achieving net-zero greenhouse gas emissions by no later than 2050.
Ahead of the summit, the EU representatives also agreed – after 15 hours of talks – to cut emissions 55 per cent by 2030 compared to 1990 levels have now made a legal commitment to become climate neutral by 2050. This was announced by European Commission head Ursula von der Leyen on Wednesday.
ExxonMobil, unlike Shell , BP , Equinor , and others has not made any net-zero pledges and is not making a transition away from fossil fuels as one of its priorities since it believes that oil and gas will be key for decades in the plastics industry and the global expansion of electricity.
Instead, the company will attempt to devote its attention to capturing and storing the carbon emitted from oil and gas and capitalising on a new business opportunity.
This has lead to green groups calling out oil producers which are embracing carbon capture. In their estimation, this is nothing but a technology that will enable their oil and gas businesses to continue to operate in a carbon-constrained environment.
Regardless, ExxonMobil stands by its carbon capture plan and believes it is the way to go about the whole CO2 emissions problem and that a Houston CCS Innovation Zone could be a giant step towards meeting the goals of the Paris Agreement.
Just to add, ExxonMobil is not alone in developing such concepts which should store CO2 in wells offshore. Namely, Equinor, Shell, and Total are together developing their own carbon capture project which will store CO2 in wells in the Norwegian part of the North Sea.
The project is named Northern Lights, which in March received its development plan approval from the Norwegian Ministry of Petroleum and Energy, and is the storage part of the Longship carbon capture and storage project.
Another such project is the Acorn CCS , jointly developed by Storegga, Shell, and Harbour Energy, located in the UK.
So it is apparent that energy companies are very aware of the potential which carbon capture and storage can present both as part of the solution to climate change and as a business opportunity. With the energy transition being the focus of many companies and the need to meet Paris goals, we can only expect more such projects to be developed and executed in the future.
about 5 years ago
U.S. supermajor ExxonMobil has announced its vision for a massive $100 billion carbon capture and storage (CCS) project which it believes will be critical to meeting Paris Agreement emission-reducing goals.
