Big oil is racing to scale up carbon capture to slash emissions but the challenges are immense

A
paper
mill
in
a
small
Mississippi
town
could
help
demonstrate
whether
capturing
carbon
dioxide
emissions
and
storing
it
deep
underground
is
a
viable
path
to
fight
climate
change.

The
proposed
project
at


International
Paper‘s
mill
in
Vicksburg
was
chosen
by
the
Department
of
Energy
in
February
to
receive
up
to
$88
million
in
taxpayer
funding.
If
successful,
the
system
would
capture
and
permanently
store
120,000
tons
of
carbon
dioxide
annually,
the
equivalent
of
27,000
gas-powered
cars,
according
to
the
companies
behind
the
project.

Amazon,
a
partner
in
the
project,
sources
containerboard
from
the
mill
for
its
boxes
and
packaging.


SLB,
the
oilfield
services
giant
formerly
known
as
Schlumberger,
is
designing
and
engineering
the
carbon
capture
system
in
collaboration
with

RTI
International,
a
nonprofit
that
developed
the
technology.

The
Vicksburg
paper
mill
project
is
just
one
example
of
how

$12
billion
in
funding
from
the
2021
bipartisan
infrastructure
law
is
supporting
the
development
of
carbon
capture
technology
across
the
United
States,
as
part
of
the
Biden
administration’s
efforts
to
achieve
net-zero
emissions
by
2050.

Carbon
capture
and
storage
technology
today
is
expensive,
logistically
complex
and
faces
controversy
over
its
role
in
the
energy
transition
and
safety
concerns
in
communities
where
pipeline
infrastructure
would
be
expanded.

The
Paris-based
International
Energy
Agency
has
described
carbon
capture
and
storage
as
“critical”
to
achieve
global
net-zero
emissions,
while
also
warning
the
oil
and
gas
industry
against
using
the
technology
as
a
way
to
maintain
the
status
quo
on
fossil
fuels.
Some
climate
activists
accuse
the
industry
of
simply
investing
in
carbon
capture
as
way
to
extend
the
use
of
oil
and
gas.

The
technology
typically
uses
chemical
absorption
to
capture
carbon
dioxide
emitted
from
the
chimney
of
an
industrial
plant.
The
emissions
are
condensed
into
a
fluid
for
transport,
normally
through
a
pipeline,
and
are
stored
thousands
of
feet
below
ground
in
depleted
oil
wells
or
geological
formations
such
as
saltwater
reservoirs.

The
challenges
to
implementing
the
technology
are
immense.
The
world
needs
to
capture
more
than
1
billion
metric
tons
of
carbon
dioxide
annually
by
2030,
more
than
20
times
the
45
million
metric
tons
captured
in
2022,
according
to
the
IEA.
By
2050,
the
amount
of
carbon
that’s
captured
needs
to
reach
6
billion
tons
—
more
than
130
times
the
2022
level,
according
to
the
agency.

But
the
track
record
of
carbon
capture
and
storage
so
far
has
been
one
of
“underperformance,”
with
only
5%
of
announced
projects
having
reached
a
final
investment
decision,
according
to
the
IEA.
The
industry
needs
to
demonstrate
that
the
technology
can
operate
economically
at
scale
after
struggling
to
ramp
up
deployment
for
years,
the
agency
says.

The
Vicksburg
papermill
project
is
still
in
an
early
development
stage.
SLB
is
confident
that
it
will
prove
technologically
viable,
said
Fred
Majkut,
senior
vice
president
of
carbon
solutions
at
the
company.
The
goal
is
to
demonstrate
that
carbon
capture
and
storage
is
also
economically
viable,
Majkut
said.

“The
economic
viability
of
carbon
capture
and
sequestration
is
a
challenge
today
because
the
cost
of
building
most
plants
in
order
to
capture
carbon
dioxide
are
very
significant,”
the
executive
said.
It
can
cost
hundreds
of
millions
of
dollars
to
retrofit
an
industrial
plant,
he
said.

For
International
Paper,
the
Vicksburg
project
is
a
potential
way
to
produce
lower
carbon
products
for
consumers
who
are
climate
conscious
and
a
potential
opportunity
to
benefit
financially
through
the
sale
of
carbon
credits.

“There
are
examples
in
the
marketplace
where
customers
have
the
opportunity
to
express
their
preferences
economically,
whether
that’s
clicking
a
button
to
say
they
want
to
abate
the
carbon
emissions
for
a
trip
in
an
Uber
or
an
airplane,”
said
Adam
Miklos,
director
of
low
carbon
innovation
at
International
Paper.

“Ultimately,
it
has
the
potential
to
reduce
our
emissions
and,
if
successful,
present
an
opportunity
to
sell
carbon
and
renewable
credits,”
Miklos
said.

The
Mississippi
mill
is
a
snapshot
of
how
the
oil
and
gas
industry
is
trying
to
demonstrate
that
carbon
capture
and
storage
is
a
viable
tool
in
the
race
to
slash
emissions,
after
using
similar
technology
for
decades
to
extract
oil.

The
industry
has
used
carbon
storage
techniques
since
the
1970s
in
a
process
called
enhanced
oil
recovery,
in
which
carbon
dioxide
is
injected
underground
to
create
pressure
that
pushes
more
crude
toward
production
wells.

Chevron,


Exxon,


Baker
Hughes
and


SLB,
among
others,
are
now
repurposing
that
expertise,
betting
that
carbon
capture
and
storage
will
serve
a
large
market
of
heavy
industries
such
as
cement
and
steel
that
have
few
good
options
right
now
to
slash
their
emissions.

Total
spending
on
carbon
capture
and
storage
projects
is
expected
to
reach
$241
billion
worldwide
by
2030
if
all
announced
projects
materialize,
according
Rystad
Energy.
The
United
States
and
the
United
Kingdom
are
the
leaders,
with
investments
expected
to
reach
$85
billion
and
$45
billion,
respectively,
by
the
end
of
the
decade,
according
to
Rystad.

In
the
U.S.,
investment
in
carbon
management
technologies
more
than
doubled
to
$1.2
billion
in
2023,
the
first
full
year
after
the
passage
of
the
Inflation
Reduction
Act,
according
to
the

Clean
Investment
Monitor.
The
law
supports
the
industry
with
tax
credits
of
up
to
$85
per
ton
of
emissions
captured
and
stored.

Cement
plants,
for
example,
produce
emissions
not
only
by
burning
fossil
fuels,
but
also
due
to
the
materials
used
in
the
manufacturing
process.
About
two-thirds
of
the
industry’s
carbon
dioxide
emissions
come
from
chemical
reactions
that
occur
when
breaking
down
limestone.

Cement
is
one
of
the
most
widely-used
products
globally,
second
only
to
drinking
water,
and
is
responsible
for
about
7%
of
the
world’s
carbon
dioxide
emissions
alone,

according
to
the
United
Nations.
Cement
and
steel
together
represent
about
14%
of
global
emissions,

according
to
the
U.N.

“Right
now,
these
types
of
industries
have
no
way
to
effectively
decarbonize
to
net
zero
without
carbon
capture,”
Majkut
said.
“If
they
want
to
produce
cement,
there
will
be
CO2
emissions
simply
because
of
the
materials
that
are
being
used.”

With
carbon
storage
already
a
mature
commercial
business,
SLB
is
trying
to
tackle
the
capture
side,
which
presents
one
of
the
major
hurdles
to
scaling
up
the
technology
due
to
its
high
cost,
according
to
Majkut.
The
solvent
that
would
be
used
to
catch
carbon
dioxide
molecules
at
the
Mississippi
mill
promises
to
lower
the
energy
requirements
of
the
capture
process
and
make
it
more
cost
effective,
he
said.

“We’re
quite
comfortable
that
in
the
next
12
to
24
months,
we
will
be
coming
to
market
with
actually
that
chemistry
as
part
of
our
core
offering
and
develop
what
we
call
process
design
packages,”
Majkut
said.

SLB
CEO
Olivier
Le
Peuch
has
said
carbon
capture
and
storage
will
play
a
leading
role
in
the
company’s
annual
revenue
targets
of
$3
billion
by
2030
and
$10
billion
by
2040
for
its
new
energy
portfolio.

SLB
this
month
announced
a
nearly
$400
million
investment
in
Aker
Carbon
Capture,
a
pure-play
carbon
capture
company
based
in
Norway,
in
an
effort
to
accelerate
deployment
of
the
technology
at
commercial
scale.

Competitor
Baker
Hughes
is
developing
direct
air
capture
technology
after
acquiring
a
company
called
Mosaic
Materials
in
2022.
Baker
Hughes
has
not
disclosed
the
value
of
the
deal.

The
technology
aims
to
catch
low
concentration
carbon
dioxide
emissions,
which
are
harder
to
capture,
directly
from
the
atmosphere
as
well
as
from
industrial
plants.
Baker
Hughes
anticipates
the
technology
will
most
likely
come
to
market
by
the
end
of
2026.

Baker
Hughes
is
targeting
up
to
$7
billion
in
orders
by
2030
for
its
new
energy
portfolio,
which
includes
carbon
capture
and
storage
technology.
The
company
is
forecasting
a
total
market
for
its
new
energy
business
of
between
$60
billion
and
$70
billion
by
the
end
of
the
decade.

“By
2030,
I
do
believe
we’re
going
to
start
to
see
these
technologies
start
to
become
reasonably
competitive,”
said
Alessandro
Bresciani,
senior
vice
president
of
climate
technologies
at
Baker
Hughes.

The
Gulf
Coast
of
the
United
States,
home
to
enormous
oil
and
gas
and
other
industrial
plants,
is
emerging
as
a
center
of
carbon
capture
and
storage
investments
in
the
U.S.

Jeff
Gustavson,
vice
president
of
lower
carbon
energies
at
Chevron,
said
the
region
has
the
potential
to
quickly
increase
use
of
the
technology
because
of
favorable
geology
for
storage
located
close
to
high
concentration
emissions
that
are
easier
to
capture
at
a
lower
cost.
Some
100
million
tons
of
carbon
dioxide
are
emitted
annually
from
Houston
through
to
Port
Arthur,
Texas,
Gustavson
said.

Chevron
and


Exxon
are
targeting
$10
billion
and
more
than
$20
billion,
respectively,
of
spending
on
emissions-reducing
technologies
that
include
carbon
capture
and
storage
in
major
projects
under
development
along
the
Gulf
Coast.

Exxon
over
the
past
two
years
has
entered
agreements
to
capture
carbon
emissions
from
ammonia
and
fertilizer
producer


CF
Industries
and
steelmaker


Nucor,
both
in
Louisiana,
and
industrial
gas
producer


Linde
in
Beaumont,
Texas.
The
country’s
largest
oil
company
is
targeting
a
start-up
date
for
a
carbon
capture
and
storage
system
at
CF
Industries
in
the
first
half
of
2025.

Dan
Ammann,
president
of
low
carbon
solutions
at
Exxon,
said
those
three
contracts
combined
promise
to
remove
5
million
tons
of
emissions
annually
—
the
equivalent
of
converting
2
million
gas-powered
cars
to
electric
vehicles.

Exxon
completed
its
acquisition
of
the
carbon-dioxide
pipeline
operator
Denbury
for
$5
billion
in
late
2023.
The
deal
gave
Exxon
more
than
900
miles
of
pipeline
stretching
through
Mississippi,
Louisiana
and
Texas
that
are
located
near
at
least
10
storage
sites
in
the
region.

“It
gives
us
sort
of
instantaneous
scale,
instantaneous
reach,
across
this
huge
source
of
emissions
along
the
Gulf
Coast,”
Ammann
said
of
the
Denbury
acquisition.
“It
gives
us
the
ability
to
develop
storage
all
along
that
pipeline
as
well.”

Exxon
says
it
now
owns
the
largest
carbon
dioxide
pipeline
network
in
the
U.S.
As
the
infrastructure
comes
together,
Exxon
is
seeing
“a
very
high
level
of
interest
from
a
lot
of
different
emitters
along
the
Gulf
Coast,”
Ammann
said.

Chevron
is
the
operator
and
lead
investor
in
a
flagship
project
called
Bayou
Bend,
which
has
a
140,000
acre
position
of
permanent
carbon
dioxide
storage
space
near
Port
Arthur
and
Beaumont,
Texas.
The
project
is
a
joint
venture
with
minority
shareholders


Talos
Energy
and
Carbonvert.

Negotiations
are
currently
underway
with
potential
customers,
Gustavson
said,
declining
to
disclose
names.
The
area
is
home
to
large
petrochemical,
refinery,
liquid
natural
gas
and
industrial
gas
operations
with
significant
carbon
dioxide
footprints,
he
said.

“Bayou
Bend
could
be
one
of
the
largest
CO2
storage
projects
in
the
world.
You’re
talking
several
million
tons
a
year
of
storage,”
Gustavson
said.
The
project
has
the
potential
for
even
more
storage
capacity
depending
on
how
much
technical
progress
is
made,
the
executive
said.

While
the
IEA
has
described
carbon
capture
and
storage
as
“essential”
to
slash
emissions
in
sectors
like
heavy
industry,
agency
director
Fatih
Birol
issued
a
sharply
worded
statement
in
November
calling
on
the
oil
and
gas
industry
to
let
go
of
the
“illusion
that
implausibly
large
amounts
of
carbon
capture
are
the
solution”
to
climate
change.

Birol’s
comments
came
on
the
back
of
an

IEA
report
that
called
on
the
industry
to
invest
more
in
clean
energy
and
accept
the
“uncomfortable
truth”
that
a
successful
energy
transition
will
result
in
the
scaling
back
of
fossil
fuel
production.
That
sparked
a
backlash
from
OPEC,
which
accused
the
IEA
of

vilifying
the
oil
and
gas
industry.

“We’re
not
saying
carbon
capture
can
be
implemented
everywhere,”
SLB’s
Majkut
said.
“As
a
matter
of
fact,
the
primary
way
to
decarbonize
should
be
energy
efficiency,
scale
up
of
renewables,
and
effectively
carbon
capture
shall
be
used
on
applications
that
you
can’t
easily
electrify,
that
you
can’t
easily
decarbonize
otherwise.”

Increasing
carbon
capture
and
storage
to
meet
net-zero
emissions
goals
in
the
U.S.
will
require
a
massive
expansion
of
pipeline
infrastructure.
The
Department
of
Energy

estimates
that
the
network
of
carbon
dioxide
pipelines
needs
to
grow
from
about
5,200
miles
currently
to
between
30,000
and
90,000
miles.

“The
key
is
the
right
geology
close
by
to
concentrated
emissions,”
Gustavson
said.
“That’s
where
we
see
this
scaling
fastest
first,
but
over
time,
we
will
need
to
build
more
CO2
infrastructure
to
be
able
to
transport
CO2
much
longer
distances
to
access
the
same
storage.”

But
the
permitting
process
is
challenging
because
pipelines
often
cross
state
lines,
requiring
lengthy
approval
from
multiple
jurisdictions
and
creating
bottlenecks,
Majkut
said.

Pipeline
expansion
has
faced
opposition
in
communities
where
residents
are

worried
about
the
safety
of
transporting
carbon
dioxide.
In
2020,
a
pipeline
owned
by
Denbury

ruptured
just
outside
the
village
of
Satartia,
Mississippi,
leading
to
the

release
of
more
than
31,000
barrels
of
carbon
dioxide.
More
than
40
people
were
hospitalized
and
200
individuals
were
evacuated
from
the
area.
Denbury
was
fined
nearly
$2.9
million
by
the
U.S.
Transportation
Department.

Denbury
said
in
a

2022
report
that
it
had
upgraded
equipment
and
procedures
in
the
wake
of
the
pipeline
leak
to
“substantially
reduce
the
risk
of
similar
events
in
the
future,
as
well
as
mitigate
and
diminish
the
consequences
in
the
event
they
do
occur.”

The
Energy
Department
says
carbon
dioxide
pipelines
have
a
better
safety
record
than
natural
gas
pipelines
and
other
large
infrastructure
such
as
electric
transmission.
There
have
been
no
deaths
from
carbon
dioxide
pipelines
over
the
past
two
decades
and
one
injury
in
addition
to
the
hospitalizations
from
the
Satartia
incident,
according
to
the
Transportation
Department.

There
are
still
a
lot
of
uncertainties
surrounding
carbon
capture
and
storage,
said
Miklos,
the
executive
at
International
Paper.
But
the
Vicksburg
project
is
an
opportunity
to
carefully
examine
the
technical
and
economic
viability
and
the
impact
on
climate
over
a
multiyear
period,
he
said.

“The
primary
questions
are
around
the
ability
to
do
this
in
a
way
that
is
cost
effective,”
he
said.