Coal-fired power plant at dusk in Leicestershire, UK.
Getty Images
Takeaways:
· The US and the world have storage capacity for CCS that could last thousands of years
· CCS costs are high and will require a carbon-pricing mechanism to promote their application.
· If fossil fuels continue to over-produce, an enormous new industry for CCS will have to be created — at least as large as the present oil and gas industry and possibly twice as large.
· It makes more sense to reduce the actual production of oil and gas, because fossil fuel production and CCS together will be too cumbersome and expensive for energy firms to manage compared to renewable energies.
The goal of the Paris Agreement was to keep global warming to less than 2 degrees C and strive to keep it below 1.5 degrees C by the year 2100. This translates to the world cutting greenhouse gas (GHG) emissions to net-zero by 2050.
The oil and gas industry alone provides 57% of the world’s energy and 50% of the world’s greenhouse gases, so the industry is in the crosshairs.
The simplest way to address this problem is to cut oil and gas production. But 15 large fossil-fuel-producing countries are overshooting their production, including Australia, Russia, Saudi Arabia, the US and the UK. By 2030, these countries are planning to produce double the amount of fossil fuels that is compatible with a 1.5 C rise. Or worse, triple the amount by 2040.
In the US, pressure to cut back production of oil and gas seems like a slap on the wrist because of the tremendous success of the shale revolution of the past 20 years. Benefits range from cheap gas to energy-independence for the first time since 1947. And many millions of people across the world have been lifted into the middle class by cheap and reliable oil and gas energy.
So in the US, oil and gas thinking has turned to alternatives. Carbon capture and storage is viewed as an escape hatch. GHG, including its dominant component CO2, can be captured in different ways, using absorbing chemicals in smokestacks of power plants, or bottling up biproducts of steel or cement-making, or extracting directly from the air.
GHG removal from the air will be required as well as reducing GHG emissions, to meet the goals of the Paris Agreement.
The GHG are then injected into layers deep underground where they are trapped and eventually merge chemically with the rock. These layers can be old oil and gas fields or saline aquifers, or volcanic rocks such as basalt.
The practical questions are related to scaling up to meet the goals of the Paris Agreement. Can CCS be scaled up to accept the enormous GHG volumes needed, and the associated costs? How large will the CCS industry become and will it be manageable?
USA.
From New Mexico Tech, Robert Balch stated that CCS is the only method that could be scaled up to meet the requirements of the Paris Agreement.
What Balch meant by “scaled up” is that there are enough geological sites around the world to store the GHG volumes.
He is right. The US has plenty of storage capacity just in old oil and gas fields. US now emits about 6 Giga-tons/year (6 Gt/year or 6 billion tons/year) of GHG and this entire amount could be stored for 23 years.
On a worldwide basis, the numbers for CCS are large. After evaluating 715 CCS sites in 18 countries, the total capacity found was 13,000 Gt. Since OGCI reported that CCS of 5 -10 Gt/year will be needed by 2050, this converts to a supply that would last 1300 – 2600 years.
Petra Nova was a CCS demonstration out of Houston, supported by the federal government, where CO2 was captured from a coal-fired power plant smokestack and injected into an old oil field to boost the oil production.
It was a technical success but when the price of oil fell below $50/barrel, the project was shelved. So, CCS is expensive, and many think it will require carbon-pricing to implement on a wide scale – certainly if the GHG are just stored and not used to improve oil production.
Norway.
Globally, CCS in 2020 stored only a puny 40 Mt/year (Mega-ton or millions of tons per year). Rystad Energy predicts it will need to be 400 Mt/year by 2030, an increase by 10 times, and 8,000 Mt/year by 2050 – a total increase by 200 times.
This would represent a 20% growth in CCS year-over-year. The numbers are staggering, but to make it happen a CCS industry would, by 2050, end up in size as big as the present-day oil and gas industry. This is hard to grasp.
Iceland.
An alternative source of GHG is the atmosphere itself. Rather than burying GHG that are generated by burning fossil fuels, the GHG can be vacuumed out of the air. It’s harder to do since the concentration of GHG in the air is much smaller than GHG in power plant chimneys or in steel or cement plants.
But it can be done, and a company called Climeworks in Iceland is showing the way. Called Orca, the plant is the largest “direct-air-capture” plant in the world and uses giant fans to collect 4,000 tons/year of CO2. It’s a miniscule amount compared with what GHG the world emits: over 30 Gt/year.
The CO2 is collected in large boxes where it accumulates on a filter, then is injected into underground zones of basalt where it combines chemically with the rock formations within a couple of years.
The first question of scale is cost.
The Iceland process is expensive at $500 – $600/ton of CO2 captured. But observers predict this could fall to about $200/ton in the 2030s. Costs are similar for the Carbon Engineering method below.
Such high present costs will require a carbon-pricing mechanism to promote their application.
The US government have weighed in by announcing recently a goal of $100/ton to remove and store CO2. They will set up joint ventures with industry, academia, and local communities to encourage pursuit of the goal.
The second question of scale is volume of CO2.
This refers to the volume of CO2 removed from the air and buried, if we focus on direct-air-capture.
Daniel Egger, chief commercial officer at Climeworks talked of plans for scaling up by increasing capacity by ten times every three years… an astonishing rate of growth.
Another method of direct-air-capture is being built by Carbon Engineering in Canada for Occidental Petroleum’s
OXY
On a global basis, roughly 9,000 tons of CO2 are removed from the air now. Julio Friedmann of Columbia University said by 2050 what will be needed is a new worldwide industry that is twice as large as the oil and gas industry. This is another incredible prediction for a future CCS industry.
And it’s similar to the predictions of Rystad Energy: a CCS industry would, by 2050, end up in size as big as the present-day oil and gas industry.
Experts say it makes more sense to reduce the actual production of oil and gas, as proactive European-based companies like bp are doing.
It is likely that fossil fuel production and its escape hatch CCS, together, will be too cumbersome for energy firms to manage. Fossil fuels will become too expensive compared to renewable energies.
