Why Big Oil Companies are Investing in Carbon Capture & Storage

By: TomAugust 30, 2024

Look Who's Spending Money on Low-Carbon Technology

Many of the largest petroleum companies are going all in on carbon capture and storage research. While this seems like an admirable and responsible business approach, it's also a very strategic survival tactic. Petroleum refineries account for approximately 13% of industrial carbon monoxide emissions in the US. CO2 is the leading cause of climate change and global warming. A greater worldwide sense of urgency to reverse this trend has prompted government initiatives to move away from fossil fuels like oil, coal and natural gas. The US goal of net zero emissions by 2050 will require a major commitment to decarbonization. The movement away from fossil fuels and towards renewable, sustainable forms of energy must happen for this to occur. There is no doubt investing in carbon capture and storage technology is good for the environment. Yet, many of these large corporate green initiatives may also advance a more self serving corporate agenda. It's a good business practice that may at least temporarily stave off the decline of the petroleum industry.   
oil refinery icon with dollar sign
  • ExxonMobil has allocated 3 Billion dollars over the course of the next several years on lower-emission technology like carbon capture and storage.
  • Chevron U.S.A. Inc., became the lead investor in a 45 million dollar venture with ION Clean Energy company. Funding will go towards post-combustion point-source carbon capture technology
  • Shell Oil Company has plans to spend $10-$15 billion on carbon capture and storage in the coming years.
  • BP Oil Company has lost millions of dollars and cut thousands of jobs due to reduced demand for oil and gas in the UK. In response, BP is cutting its oil and gas production by 40%. The company is making a bold move to pivot towards investing in low-carbon technology. By 2030, BP plans to pump $5 billion annually into carbon capture bioenergy and hydrogen.  

How Carbon Capture & Storage Benefits the Environment

Carbon Monoxide is present in the atmosphere as a result of both natural and industrial activity. All living animals, including people exhale CO2 as a waste. Through the photosynthesis process, much of the naturally produced carbon monoxide is absorbed by plants and trees. The remaining CO2 is absorbed into the atmosphere. Moderate amounts help insulate the earth and keep temperatures within a habitable range. The problem occurs when that delicate balance of nature is upset. When carbon monoxide emissions caused by fossil fuel production are released into the air, additional heat is trapped in the atmosphere. The results are one of the leading causes of climate change and global warming. By capturing CO2 at the emission source or directly from  the atmosphere, carbon capture and storage could play a major role in slowing or reversing global warming.

How Carbon Capture and Storage Benefits Oil Companies

Reducing the amount of CO2 from the atmosphere has great environmental advantages. But, actively pursuing this technology is also extremely advantageous for the petroleum industry. 

Enhanced Oil Recovery (EOR)

When captured CO2 is injected into existing oil wells, additional trapped oil deposits are released. This process drives production and profits of large petroleum companies.  

Economic Incentives

Government initiatives designed to promote the development of carbon capture and storage are a huge source of additional revenue for the petroleum industry. The new 45Q tax credit awards companies up to $60 per ton of CO2 captured. This program offers a significant amount of additional revenue to an already profitable industry. 

Industry Perception and Policy Influence

Petroleum companies are promoting their usage of low-carbon technology in an attempt to reduce growing environmental concerns over industry practices. By utilizing carbon capture and storage, big oil companies hope to influence public perception and policy. 

Basics of Carbon Capture & Storage

carbon capture near industrial area
  • Carbon Monoxide Capture: During this process, CO2 is captured, separated from other gasses and compressed into a liquid form. 
  • Carbon Monoxide Transport: Once compressed, CO2 is transported through pipelines, by road or shipped to final destination.
  • Carbon Monoxide Storage: To assure stability, CO2 must be buried into rock formations deep underground
carbon capture and storage graphic
Depleted oil reservoirs are an ideal location for storing captured carbon monoxide. CO2 can be transported by ship or through direct pipeline from the refinery. Pumping CO2 into these depleted reservoirs not only provides safe storage, it is also known to loosen more fossil fuel from the ground. This process is called enhanced oil recovery

Carbon Capture and Storage Methods

Various carbon capture processes remove carbon monoxide at both industrial sites or directly from the atmosphere. Lowering the amount of greenhouse gasses is one way to alter the course of global warming.  When paired with bio-energy or direct air capture technology, a negative carbon emissions level is attainable. Proper implementation revolves around  three basic steps;  carbon capture, transfer and safe storage of contained CO2 gasses. 

Carbon Capture and Storage (CCS)

The carbon capture and storage or (CCS) process removes carbon monoxide directly from the emission sources. Point source CO2 capture occurs within the confines of an industrial plant before carbon monoxide has a chance to enter the atmosphere. This allows for containment, transfer and safe storage of carbon monoxide.

Direct Air Capture and Storage (DACCS)

DACCS uses large, powerful fans to draw air in from the atmosphere. Then, a chemical process is used to separate CO2 from other gasses. DACCS utilizes chemicals to separate carbon monoxide from other gasses. From there, captured CO2 is either transported to safe underground storage or used to manufacture industrial products or carbonated beverages.

Bioenergy with Carbon Capture and Storage (BECCS)

Bioenergy with carbon capture and storage is the only form of CO2 capture that also produces energy. It's also one of only a few methods that addresses removal of CO2 already in the atmosphere. These preexisting gasses are sometimes referred to as historic carbon emissions. BECCS uses sustainably harvested biomass and waste bi-products obtained from forest and agricultural industries to produce renewable energy. This method typically requires land set aside to raise specific types of plants and trees. During the photosynthesis process, these crops pull CO2 out of the atmosphere; providing a natural form of carbon capture. Next, those same crops are harvested and burned to produce renewable energy to heat or to power homes or industries. 

Could Carbon Capture & Storage Prolong Fossil Fuel Dependency?

A study released by NASA reports average levels of the toxic air pollutant have dropped by about 15 percent since 2000. Still, this did not stop 2011 through 2020 from being the warmest decade on record [source: World Meteorological Organization. A greater emphasis on renewable energy sources in the US and Europe has helped but much more needs to be done. Carbon capture technology offers one way to help stem the tide of global warming. Yet, one might argue that this technology could prolong dependency on fossil fuels by offering a pass to oil, coal and natural gas companies who invest in carbon capture. One possible negative effect is that CCS may curb the sense of urgency to expand clean renewable energy sources. Big oil, coal and gas companies are making large donations to universities to promote future development of carbon capture. This could detract greatly from ongoing research of solar, wind and hydro energy. While it's easy to get caught up in the amazing capabilities of this technology, carbon capture comes at price. Not only in the form of missed clean energy opportunities, but also an inevitable rise in the cost to power our homes, businesses and vehicles. 
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