INDUSTRY INSIGHT
Carbon capture and storage - a technology in the limelight
THE UN IPCC REPORT , PUBLISHED IN EARLY AUGUST , PROVIDED A STARK WARNING OF THE NEED FOR URGENT AND CONCERTED ACTION TO ADDRESS THE REALITY OF , AND THREATS FROM , CLIMATE CHANGE AS WELL AS THE EXPECTED CONSEQUENCES OF FAILURE TO ACT IN THIS WAY .
Action will have to be taken on several fronts , with technology playing a key role . Within this suite , the part to be played by carbon capture and storage ( CCS ) has been widely signalled and accepted . The technology itself has been around since the 1920s , when the presence of CO2 in natural gas fields required it to be separated from the saleable methane gas . In the early 1970s it was used in Texas , where the captured CO2 from a gas processing plant was piped to a nearby oilfield and injected to achieve enhanced oil recovery .
The International Energy Agency ( IEA ) has been unequivocal in stating that ‘ CCS will be critical for putting the energy systems around the world on a sustainable path ’ and highlights four ways , in particular , that the technology can play a key role :
• Power generation - adding CCS to gas and coal generation plants would allow them to continue operating without pumping CO2 in to the atmosphere , complementing a rise in renewable generation .
• Heavy industry - CCS could tackle emissions in the so-called ‘ hard to decarbonise ’ sectors , where there are limited ( or no ) alternatives , such as cement and steel production .
• Hydrogen - CCS could enable the production of ‘ blue hydrogen ’ with hydrogen produced from fossil fuels , such as gas or coal , but with emissions captured which is , currently , a significantly lower cost option to ‘ green hydrogen ’ – hydrogen created from renewable energy sources .
• CO2 removal - direct air capture would extract carbon from the atmosphere , thereby offsetting emissions emanating from elsewhere .
As this is viewed in some respects by certain ‘ players ’ in the oil & gas sector to be the least disruptive measure / technology of those deemed to facilitate the energy transition , it has attracted particular favour – especially on the part of the US oil / gas majors .
We will now go on to examine some specific projects and progress to date / planned .
20 Fuel Oil News | October 2021
Projects / Progress : As of the end of last year , there were 21 operational CCS plants globally , capturing 40 million Mt of CO2 . Over the past 4 years , plans have been unveiled for just over 30 CCS facilities , principally in the US and Europe , but also some planned in Australia , China , Korea , the Middle East and New Zealand . If all these projects were to proceed , the amount of global CO2 capture capacity would more than triple , to around 130 million Mt per year . As of the end of last year , three new facilities were under construction , with 17 in the ‘ advanced development ’ phase . A further 24 were in the ‘ early development ’ stage .
In the US new projects with a total capacity of just over 35 million Mt have been announced over the past 4 years ( including 10 in the first half of 2021 ), mainly split between capturing emissions from power generation and industry ( e . g . cement and ethanol production ). One project , by Occidental Petroleum , will be the world ’ s first direct air capture , removing CO2 from the atmosphere and pumping it deep underground in to the Permian oil basin which , initially , will be used to enhance oil recovery . Operation is expected to start in 2023 , with an annual removal capacity of up to 1 million Mt of CO2 per year . Policy support , in place since 2018 , offers developers a tax credit of up to $ 50 per tonne captured & stored permanently . The Clean Air Task Force estimates that US capture capacity could expand 13-fold , to circa
290 million Mt per year by the mid 2030s with proper policy support .
Canada is pursuing incentives for at least two new , and massive , carbon capture projects by 2030 , with nearly a dozen oil and gas companies already pursuing rights to store carbon dioxide in Alberta ’ s vast underground caverns . The hubs to collect carbon from clusters of emitters would advance the government ’ s goal of cutting emissions by 40- 45 % from 2005 levels by 2030 .
To encourage private investment in CCS projects , the country is counting on its carbon price , which is set to rise to C $ 170 ($ 135 ) per tonne of carbon by 2030 from C $ 40 currently , plus a planned tax credit , and the Clean Fuel Regulation , which requires lower emissions intensity in fuel .
The cost of building the projects , and their locations , are not yet known . The two carbon storage hubs would be planned or under construction by 2030 , sequestering at least 15 million tonnes of carbon annually by that year in total .
The country ’ s four existing projects , representing 15 % of global facilities , currently capture 4 million tonnes per year .
In the UK the Government published a consultation paper , in February 2021 , seeking views on an approach to sequencing the deployment of CCS clusters - a ‘ cluster ’ being a reference to an industrial cluster to comprise carbon capture and carbon dioxide