Carbon capture struggles for a foothold — and profit
With Democrats and oil companies joining forces, now seen as best chance to scale up
WASHINGTON — Carbon dioxide was first captured and pumped underground at commercial scale at a natural gas processing facility in Texas in 1972.
Almost a half century later, despite increasing demand for the technology as global leaders seek to fight climate change, carbon capture is still struggling to gain a foothold. The number of projects in development globally remains below where it was 10 years ago after companies that invested in carbon capture systems struggled to make a profit — despite billions of dollars in government subsidies.
Now, with Congress and President Joe Biden moving to funnel billions more dollars into expanding carbon capture in the United States, and the oil and gas industry increasingly on board, carbon capture might have its last and best chance yet to scale up.
“The next 10 years are absolutely critical,” said Jessie Stolark, public policy manager at the Carbon Capture Coalition, a trade group.
With scientists warning that the world needs to begin decarbonizing immediately to get the planet to net-zero emissions by 2050 and avoid the worst consequences of climate change, the carbon capture industry faces a steep learning curve.
By some estimates 50,000 carbon capture plants are needed globally by 2050 to both capture emissons and pull existing carbon from the atmosphere, at a cost of $10 trillion. As it stands now, only 26 carbon capture plants are operating worldwide.
And within the environmental community, there are plenty of skeptics that such a scale is achievable within three decades.
“The timeline for getting widespread carbon capture up and running economically is not the
time scale we need,” said Matthew Davis, vice president of civic engagement at the League of Conservation Voters. “We have off the shelf solutions right now to produce electricity cleanly.”
More expensive than wind turbines or solar panels, the promise of carbon capture has always been its ability to decarbonize sectors of the economy that are harder to electrify due to their high energy demand, including heavy industry or commercial airplanes. At the same time, it could help save an oil industry that employs tens of thousands of Americans and is the economic lynchpin in states like Texas.
Many government officials believe they have little choice but to move ahead. The United Nations’ Intergovernmental Panel on Climate Change says under most scenarios the world will need carbon capture to help slash greenhouse gas emissions to levels that would avoid catastrophic climate change . The International Energy Agency, which advises governments on energy supplies, estimates that 15 percent of emissions reductions will need to come through carbon capture.
“Carbon capture has been part of the policy pillars for more than a decade, going back to George W. Bush. The reasons why it’s fascinating is because it’s a lifeline for oil and coal and maybe natural gas in a lowcarbon future,” said Michael Webber, a professor of energy resources at the University of Texas-Austin. “It’s going to be expensive and clunky, but government has an obligation to invest in it because we’re going to need it.”
In Europe and the United States, governments are beginning to invest more seriously in the technology.
Congress boosted tax credits for carbon capture projects in 2018, and is now considering a further expansion to speed development. That has begun to attract the interests of oil and gas, as well as power companies, which maintain the only thing holding the technology back is the relative lack of government incentive.
With most governments refraining from assessing fees or penalties for emitting greenhouse gases, companies are largely free to do so with minimal consequence, said Joe Blommaert, president of Exxon Mobil Low Carbon Solutions.
“The value of carbon is not transparent at this moment,” he said. “We need to create that transparency so you can let the market do its work as efficiently as possible.”
With no carbon fee on the horizon in the United States, companies are left to use a patchwork system of tax credits and federal grants to get carbon capture projects going.
Still, the 2018 increase in the tax credit to $50 per ton of carbon captured and stored, along with increasing pressure from investors to clean up emissions, has led to a new wave of carbon capture proposals . An estimated 40 projects are in development, said Stolark, of the Carbon Capture Coalition. Among them are plans for a sprawling carbon storage hub near Houston, with 11 companies including Exxon Mobil, Chevron, Dow Chemical and the Houston power company Calpine expressing interest in developing the project.
But as of yet, none of those projects have a green light to begin construction.
“These are complex projects to put together, and it’s just going to take time for the marketplace to have more understanding,” Stolark said.