Saudi national oil company tries to reduce its carbon footprint
‘Good business practice’ tied to lower emissions
Saudi Aramco wants to develop new technologies that would remove carbon dioxide from the tailpipes of heavy-duty trucks, potentially extending the life of the internal combustion engine and the need for Saudi Arabia’s main product as global climate change rules threaten to limit the use of fossil fuels.
Mobile carbon capture technology is one of the latest projects aimed at curbing greenhouse gases undertaken by the world’s biggest oil producer. Aramco, the national oil company of Saudi Arabia, now spends almost a third of its research budget on energy efficiency, lowemission fuel products and carbon capture, underscoring how important its leaders think those projects will be to keep the oil business afloat in a carbon-constrained world.
“Being a lower-emissions producer also means you’re a low-cost energy producer,” Aramco chief technology officer Ahmad Al Khowaiter said in a recent meeting with reporters in Houston. “That’s good business practice, not just good environmental practice.”
Investing in carbon capture technology has emerged as one of the more viable ways for Saudi Aramco to reduce its carbon footprint as it pumps one in eight barrels of the world’s oil. Carbon dioxide, a byproduct of burning fossil fuels such as oil, coal and natural gas, traps heat in the Earth’s atmosphere, which in turn raises global temperatures.
Technology that traps the greenhouse gas before it seeps into the atmosphere has captured the attention of policymakers, energy executives and analysts, as it becomes increasingly clear that renewable energy sources can’t be adopted fast enough to stop the worst impacts of climate change while keeping the global economy running. In all likelihood, wind and solar power will grow rapidly, but they will remain a smaller part of the global energy mix than fossil fuels in coming decades.
As a result, the world will need billions of dollars in carbon capture investments to prevent temperatures
from rising more than 2 degrees Celsius, a goal that 195 countries set in the 2015 Paris Climate Accords.
“It’s just reality that we can’t come close to meeting our climate goals without technology that’s going to store CO2,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “Clean energy isn’t going to happen fast enough.”
Over the past few years, Saudi Arabia has invested in technology that uses carbon dioxide in the mix of chemicals for making plastics and resins and built a gas treatment plant that collects as much carbon as 70,000 cars produce in a year. It has continued to explore advances to reduce carbon capture costs.
As for the kingdom’s pioneering in mobile carbon capture, officials hope the technologies will trap around half of the carbon dioxide pouring out of 16-ton trucks, which will use more efficient compression ignition gasoline engines, instead of higher-emission diesel engines.
The trucks will store the carbon dioxide at refueling stations. The carbon dioxide will later be pumped into the ground in oil fields to help recover more crude.
But the Saudis have a ways to go to reach the goal of stripping out half the carbon dioxide. The company’s most recent mobile carbon capture prototype, which uses a Camry, collects a quarter of its own emissions.
Saudi Aramco isn’t the only oil company investing in carbon capture, but it has been on the forefront of the venture. In Norway, Statoil, Total and Royal Dutch Shell plan to build carbon storage equipment and facilities that would capture carbon dioxide emanating from industrial sites.
There are 17 large-scale carbon capture and storage facilities operating around the world, including nine in the United States, according to the industry trade group Global CCS Institute. Saudi Arabia has one, completed in 2015, linked to a natural gas processing plant.
Saudi Arabia’s investments, as well as its recent pact with the U.S. Energy Department to develop emissions-cutting technologies, come as forecasters predict that U.S. energy companies will invest a lot more in carbon capture in coming years. So far, however, U.S. companies that have pumped cash into carbon capture technology have faced big setbacks, largely because of the high costs of building the facilities and limited ways to make money on carbon.
The oil and gas industry, which uses carbon dioxide to extract oil from aging fields, represents one of the few markets for captured carbon. Last summer, Southern Co., a utility, said it would stop working on carbon capture technology at a natural gas-fired power plant in Mississippi, after project costs ballooned to $7.5 billion from $2.4 billion.
In 2016, NRG Energy completed the Petra Nova carbon capture project at its coal-fired plant in Fort Bend County at a cost of about $1 billion. The company vowed that it wouldn’t launch new carbon capture projects.
The U.S. government, however, hasn’t given up on the technology. Congress recently approved a budget that would support carbon capture technology by doubling the tax credits from $22 per ton of carbon dioxide this year to $50 in 2026.
In a report this month, the International Energy Agency, a Paris-based group that advises energy importers, said it believed the funding boost could “trigger the largest surge in carbon capture investment of any policy instrument to date.” The IEA estimates the enhanced tax credits could could draw $1 billion in investments to build 11 million to 33 million tons of carbon capture capacity over the next six years.
That would represent a twothirds increase in the world’s carbon capture capacity, and it could lift domestic crude output 50,000 to 100,000 barrels a day. Oil companies buy 72 million tons of carbon dioxide every year to boost oil recovery from declining fields, according to the IEA. Energy companies also use carbon in making chemicals.
In the interview on the sidelinesof a recent energy conference in Houston, Khowaiter acknowledged there isn’t much of a market for carbon dioxide outside of the oil and gas industry. But if regulations set limits for carbon emissions and assess costs — say through a carbon tax — that could push companies into the carboncutting business.
“If you really have a serious target to reduce the carbon footprint, carbon capture is competitive against the alternatives,” Khowaiter said. “You will see carbon capture take off, because it’s going to be one of the cheapest ways to do it.”