Hard-to-abate industries, particularly oil and gas, are working to increase their carbon capture capacity while working to decarbonize their operations. Despite being among the largest emitters of carbon, many oil and gas majors are optimistic that they can significantly reduce their emissions by using carbon capture and storage (CCS) technology. This is, realistically, one of the few ways that oil and gas companies can reduce their emissions while keeping their fossil fuel production high. However, energy experts and environmentalists now worry that big oil companies are becoming too reliant on CCS technology instead of striving to make meaningful changes toward a green transition.
CCS technology has been around for years but has so far failed to capture carbon dioxide at the rate required to decarbonize large-scale, hard-to-reduce operations. Companies and governments around the world have poured huge amounts of funding into CCS in recent years in an effort to develop the technology needed to efficiently capture and store huge amounts of CO2 from industrial, oil and gas operations. However, scientists still don’t know whether current technology can capture the massive amount of carbon emissions that many oil majors promise.
The International Energy Agency (IEA) has deemed CCS technology “essential” to achieving net zero emissions globally. It is considered one of the few possible ways to decarbonize hard-to-abate industries, which we continue to rely on until alternative production methods and materials are developed. The IEA also warned that it is not viable for oil and gas companies to mitigate major new fossil fuel projects simply by integrating CCS technology into their operations. Many oil majors have invested heavily in CCS technology to justify their ongoing exploration activities and huge oil and gas production, which is expected to continue for decades. But the IEA has repeatedly said this is at odds with a net zero emissions scenario by 2050.
CCS typically works by using chemical absorption to capture CO2 emitted from a facility’s stack. The emissions are then condensed into a liquid that will be transported through a pipeline and stored thousands of feet underground in depleted oil wells or geological formations. This process is anything but simple and deploying CCS technology on a commercial scale is both complicated and expensive. According to the IEA, more than a billion tonnes of CO2 will have to be captured each year by 2030, or more than 20 times more than in 2022. This figure rises to six billion tonnes in 2050, or approximately 130 times more than in 2022.
Despite big promises, many companies are failing to meet their carbon capture targets. To date, only five percent of announced CCS projects have reached a final investment decision, according to the IEA. There is still little evidence to suggest that CCS technology can be economically deployed on a commercial scale.
Oil and gas companies have earmarked significant funds for CCS technology over the coming years, in hopes of being able to continue pumping oil and gas for decades. Chevron plans to spend $10 billion on emissions-reducing technologies, while Exxon has committed to investing $20 billion. Total projected spending on CCS projects is approximately $241 billion globally by 2030. The United States and the United Kingdom are currently leading these efforts with investment pipelines of $85 billion. and $45 billion, respectively, by 2030.
Many energy experts and environmentalists fear that the rush to fund CCS technology is a dangerous distraction. Oil and gas companies have been forced to accelerate their ESG efforts due to pressure from governments and international organizations, as well as high consumer expectations. However, most of these companies expect oil and gas production to continue to be their primary business for decades to come, meaning they need a rapid way to decarbonize their operations without reduce their production. Without proven track record, this approach could be dangerous when it comes to decarbonization, because if CCS technology does not meet expectations, it could have disastrous repercussions.
CCS technology remains extremely expensive and fails to perform as efficiently as expected. A 2022 study of CCS projects found more failures than successes, including Chevron’s Gorgon liquefied natural gas facility in Australia. It is the world’s largest CCS project to date, costing $3 billion, and was found to be operating at only a third of its planned capacity. At this rate, it will be impossible for companies that rely on CCS technology to meet their climate goals in the years to come. Nevertheless, oil and gas companies around the world continue to make bold claims about the potential of CCS technology, without sufficient evidence to support them. The failure of CCS technologies in oil and gas operations could be catastrophic, leading to far higher carbon emissions than expected and helping to delay the global green transition.
By Felicity Bradstock for Oilprice.com
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Hard-to-abate industries, particularly oil and gas, are working to increase their carbon capture capacity while working to decarbonize their operations. Despite being among the largest emitters of carbon, many oil and gas majors are optimistic that they can significantly reduce their emissions by using carbon capture and storage (CCS) technology. This is, realistically, one of the few ways that oil and gas companies can reduce their emissions while keeping their fossil fuel production high. However, energy experts and environmentalists now worry that big oil companies are becoming too reliant on CCS technology instead of striving to make meaningful changes toward a green transition.
CCS technology has been around for years but has so far failed to capture carbon dioxide at the rate required to decarbonize large-scale, hard-to-reduce operations. Companies and governments around the world have poured huge amounts of funding into CCS in recent years in an effort to develop the technology needed to efficiently capture and store huge amounts of CO2 from industrial, oil and gas operations. However, scientists still don’t know whether current technology can capture the massive amount of carbon emissions that many oil majors promise.
The International Energy Agency (IEA) has deemed CCS technology “essential” to achieving net zero emissions globally. It is considered one of the few possible ways to decarbonize hard-to-abate industries, which we continue to rely on until alternative production methods and materials are developed. The IEA also warned that it is not viable for oil and gas companies to mitigate major new fossil fuel projects simply by integrating CCS technology into their operations. Many oil majors have invested heavily in CCS technology to justify their ongoing exploration activities and huge oil and gas production, which is expected to continue for decades. But the IEA has repeatedly said this is at odds with a net zero emissions scenario by 2050.
CCS typically works by using chemical absorption to capture CO2 emitted from a facility’s stack. The emissions are then condensed into a liquid that will be transported through a pipeline and stored thousands of feet underground in depleted oil wells or geological formations. This process is anything but simple and deploying CCS technology on a commercial scale is both complicated and expensive. According to the IEA, more than a billion tonnes of CO2 will have to be captured each year by 2030, or more than 20 times more than in 2022. This figure rises to six billion tonnes in 2050, or approximately 130 times more than in 2022.
Despite big promises, many companies are failing to meet their carbon capture targets. To date, only five percent of announced CCS projects have reached a final investment decision, according to the IEA. There is still little evidence to suggest that CCS technology can be economically deployed on a commercial scale.
Oil and gas companies have earmarked significant funds for CCS technology over the coming years, in hopes of being able to continue pumping oil and gas for decades. Chevron plans to spend $10 billion on emissions-reducing technologies, while Exxon has committed to investing $20 billion. Total projected spending on CCS projects is approximately $241 billion globally by 2030. The United States and the United Kingdom are currently leading these efforts with investment pipelines of $85 billion. and $45 billion, respectively, by 2030.
Many energy experts and environmentalists fear that the rush to fund CCS technology is a dangerous distraction. Oil and gas companies have been forced to accelerate their ESG efforts due to pressure from governments and international organizations, as well as high consumer expectations. However, most of these companies expect oil and gas production to continue to be their primary business for decades to come, meaning they need a rapid way to decarbonize their operations without reduce their production. Without proven track record, this approach could be dangerous when it comes to decarbonization, because if CCS technology does not meet expectations, it could have disastrous repercussions.
CCS technology remains extremely expensive and fails to perform as efficiently as expected. A 2022 study of CCS projects found more failures than successes, including Chevron’s Gorgon liquefied natural gas facility in Australia. It is the world’s largest CCS project to date, costing $3 billion, and was found to be operating at only a third of its planned capacity. At this rate, it will be impossible for companies that rely on CCS technology to meet their climate goals in the years to come. Nevertheless, oil and gas companies around the world continue to make bold claims about the potential of CCS technology, without sufficient evidence to support them. The failure of CCS technologies in oil and gas operations could be catastrophic, leading to far higher carbon emissions than expected and helping to delay the global green transition.
By Felicity Bradstock for Oilprice.com
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