How New Carbon Capture Technology Can Help Climate Concerns
June 24, 2022
A slightly modified version of this article was first published in RealClearEnergy.
Carbon capture and storage (CCS) is the ‘new’ technology that has been in existence for decades. First proposed in Texas in the 1970s, CCS is hardly a novel idea. But despite its long heritage, there are still only a limited number of operational CCS facilities around the world today.
That number is changing, and changing fast; there are now more than 135 CCS projects in development around the world. Momentum is building, especially in the United States. According to a recent FTI Consulting survey,1 86% of US voters want the government to take some action to implement CCS. Indeed, it’s one reason the recent Infrastructure Investment and Jobs Act (IIJA), signed into law on November 15, 2021, earmarked $10 billion for CCS.
More broadly, the impetus for this tectonic shift is the scale of the challenge of decarbonizing the global economy while meeting a growing appetite for energy. The tragic events in Ukraine have shown too clearly the crippling impact of abruptly reducing supply without simultaneously addressing demand. The stakes are high in ensuring decarbonization is done equitably, as rising energy prices disproportionately impact low-income families.
With a burgeoning global middle class and emerging nations eager to develop their economies, demand for power will only increase. Greater deployment of renewable resources will address some of this growth, but we will also need to rely on hydrocarbons to meet the balance. CCS offers one of the most effective vehicles to do so; capturing CO2 emissions from industrial source points and safely storing them underground.
The second factor behind the exponential uptick lies in CCS’ status as the Heineken of our energy system; it can tackle the parts that other technologies can’t reach. Clean hydrogen made with CCS can play a key role in addressing emissions from some of the hardest-to-decarbonize energy intensive industries. These emissions are not unsubstantial; cement production alone is estimated to be responsible for 8% of global CO2 emissions.
This capability is important. Only a quarter of respondents to FTI Consulting’s survey indicated a clear willingness to reduce use of materials like concrete, steel and plastics to combat climate change. In other words, mitigation technologies like CCS, which deliver emissions reductions while still allowing for critical energy intensive industries, will be an important piece of solving the climate jigsaw.
Criticism of CCS
Of course, as momentum has built behind CCS, so has scrutiny. Concerns over costs to the taxpayer (45%), long-term storage (41%) and the management of full sites (41%) are the top respondent concerns in the FTI Consulting survey. Perhaps more fundamentally, less than half of the voting population (41%) has heard of CCS.
Opponents have also branded CCS a false climate solution, focusing on the technology’s cost and supposed lack of efficacy, arguing that it will prolong the use of fossil fuels and delay a pivot to renewables.
Indeed, the most significant question is over the use of enhanced oil recovery, or EOR, where CO2 is utilized to stimulate further oil or gas production. EOR has been the main way that carbon capture has been deployed historically, and some see it as the best on-ramp to permanent sequestration. But critics frequently claim that the captured carbon is only used to coax more fossil fuels out of the ground.
As a result, opponents are now arguing that the foundational 45Q tax credit, which has been a key driver of the technology in the US, should not be used for EOR and instead prioritize permanent storage underground. Doing so could address one of the main concerns of environmental groups, smoothing the way to more widespread use in future.
Recent activism focused on CO2 pipelines demonstrates the breadth of issues facing developers: it’s not just capturing carbon that opponents are focusing on, but all the related infrastructure necessary for deployment. The entire value chain is now under scrutiny.
So where does this leave us?
Industry is considering ways to address the cost and time taken to deploy CCS. The IIJA included a provision of $3.5 billion for the creation of large-scale pilot projects, and many companies are collaborating to create low-carbon hubs in areas with existing emissions-intensive facilities.
These clusters typically co-locate power generators alongside end users and benefit from shared transportation infrastructure and geological storage. As a result, they will be able to leverage significant economies of scale to drive greater reductions in project costs and CO2 emissions. In fact, FTI Consulting’s survey results show that low-carbon hub partnerships between public, private, labor, and academic groups are seen as the most effective way to advance CCS technology (66%) by the public.
The International Energy Agency estimates that, in order to meet the goals of the Paris Agreement, the world must build 2,000 CCS facilities by 2040. Doing so will take a significant collective effort and require that we address the lack of public familiarity as a priority. The road to widespread adoption of this proven but game-changing technology will be a complex one, but one that we must get right.
1: FTI Consulting conducted an online survey among 1,000 likely 2022 American voters. The survey captured responses between May 17th – 23rd, 2022. A slightly modified version of this article was first published in RealClearEnergy.
© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
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