Carbon Capture Projects Severely Underperform While Mostly Helping Produce More Fossil Fuels
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Story at a glance…
Almost all CO2 stored underground is done parallel with natural gas extraction.
These projects, according to a rigid new analysis, should not be looked upon as a solution to climate change.
Many have failed entirely, underperformed, or pushed market demand to exporters who don’t sequester carbon.
An examination of flagship carbon capture projects has shown that they significantly underperform commercially and technically as a mitigating solution to climate change.
The report also found that the vast majority of CO2 captured from the atmosphere has been sequestered in the ground by oil companies, specifically ExxonMobil (40%), as a means to increase production in declining oil wells. The CO2 is trapped, but doing so enhances the production of fossil fuels.
Conducted by the Institute for Energy Economics and Financial Analysis (IEEFA), they detail that 72% of all carbon captured from the atmosphere, or from going into the atmosphere, for the purpose of sequestering underground, was done so to enhance the production of oil wells, known in the industry as Enhanced Oil Recovery (EOC).
According to estimates, humanity has placed 300 million metric tons of carbon underground for various reasons. Less than 1% of these have been the depositing of atmospheric CO2, i.e. anthropogenic emissions, into underground silicate aquifers for more-or-less eternal storage.
Some of these projects have failed, others simply underperformed. The IEEFA investigated why, and whether this strategy is even economically viable in the first place.
Deep squeeze
Often the carbon that humanity has captured didn’t come from the air, but out of natural gas extraction. Raw natural gas can contain anywhere from 3% to 80% CO2, which needs to be removed to produce a marketable gas for distribution through pipelines, or liquefied in LNG plants for export.
By creating vast carbon-capture facilities like the Shute Creek Treating Facility, which captures 7 million metric tons per annum of CO2, a byproduct CO2 commodity became invaluable during the oil shock of the 1970s. Used in declining American oil wells, the compressed CO2 was deposited underground in order to squeeze more hydrocarbons out for extraction.
“As our report shows, carbon capture for storage has been around for decades, mostly serving the oil industry through EOR,” said report author Bruce Robertson. “Around 80–90% of all captured carbon in the gas sector is used for EOR, which itself leads to more CO2 emissions”.
Shute Creek for example went online in 1987, and since then it has always produced more CO2 than it sequestered, sometimes by a factor of 50% according to company data. Coupled with downstream emissions from the additional oil that was produced by EOR and then burned, there’s no reason to suggest that this roundabout way of preventing emissions is doing anything to prevent climate change.
PICTURED: The Yamal LNG project, Arctic Russia. PC: Total Energy.
Norway or the highway
On the other hand, Sleipner CO2 Storage Project, commissioned in 1996 and located in the Central North Sea between the UK and Norway, was the world’s first commercial carbon capture project with a dedicated geological structure for CO2 sequestration and has arguably been the most successful economically at storing CO2 underground forever.
Comparing Sleipner and Shute Creek isn’t truly apples to apples, as the natural gas extracted at Sleipner is only around 4%-9% CO2, compared to Shute Creek where the gas is 66% CO2. For that reason, captured carbon is 0.85 million metric tons per year compared to 7 million at Shute Creek.
A similar story is found at the Snøhvit natural gas field, where 0.7 million tons are deposited there yearly.
Norway was among the first EU countries to impose a CO2 tax, which was 1.65 kroner on every cubic meter of gas or liter of oil extracted from the continental shelf. Coupled with EU regulations from the Trading and Emissions System in 2008, which establishes a yearly cap on CO2 emissions, oil and gas production in Norway has remained relatively stable, as have emissions—fluctuating over the last 24 years from between 10 and 15 million metric tons of CO2 and equivalents per year.
However, these stringent regulations and those in other countries like it have pushed the price of fuel higher in these countries as they spend big to comply. The Snøhvit field pumps its CO2, found as dry ice under the gas field, 143km to shore into the Hammerfest LNG plant, after which it is removed from the natural gas, and sent back via a separate pipeline to be deposited 2,600 meters—around a mile and a half underground.
In Sleipner, where the depositing happens onsite, the cost is $17 per ton of CO2, a cost past directly to consumers.
An argument arises that because of the stringent compliance under the carbon tax (had the operators vented 1 million tons of CO2 in the first year, the tax bill would have been US$49 million) countries who need to import natural gas can’t afford these cleaner, greener extraction sites and instead look to countries whose industries don’t make any effort to sequester the carbon they have to extract.
For examples one need look no further than Russia—the center of the LNG market in Europe. Their country’s first carbon capture and storage project on the model of Shute Creek, Sleipner, and Snøhvit was only announced last year. Currently, Novatek’s Yamal LNG plant produces 6 tons of CO2 per ton of natural gas. The industry standard is about 0.4 tons of CO2.
Novatek hoped to be able to make a decision in early 2022, but the War in Ukraine will almost certainly have disrupted this, as France’s Total Energy was a key ally in the Yamal project.
PC: IEEFA.
Couldn’t match the hype
Another key example in the IEEFA report was Gorgon, the world’s largest carbon capture storage facility based on an LNG plant. Located on Barrow Island off the Pilbara coast of Western Australia, the capacity is 15.6 million metric tons per year, and had a dedicated geological formation in which to inject 100 million metric tons over the course of its lifetime.
“However it wasn’t until three-and-a-half years later that carbon finally began returning to the ground. Startup checks in late 2017 found leaking, corroded valves, and excess water in the pipeline between the LNG plant and the injection wells, a potential cause of corrosion,” the report reads.
“Technical problems did not end there. In January 2021, it was reported that the WA Department of Mines, Industry Regulation and Safety had ordered Gorgon to reduce the volume of carbon captured by the project, due to structural issues. Essentially, sand was blocking the well that reinjects water underground, compromising the crucial pressure management system”.
Less than 50% of all the CO2 removed from the LNG at Gorgon has been injected back into the Earth, offering a glimpse into the engineering challenge posed by what has now become an industry-standardized activity.
A perfect example of just how hard it is comes from Algeria, the fifth largest exporter of LNG on Earth, and the site of another overhyped carbon capture project engineered by the only company that has managed to run one successfully—the Norwegian firms Statoil and Equinor who built Sleipner and Snøhvit.
Between 2004 and 2011, the In Salah natural gas plant stored 3.8 million metric tons of CO2, but was suspended in 2010 over fears that the formation into which the gas was being injected was unstable, and could leak.
70% of all carbon capture today is managed by natural gas producers, and 73% of that captured carbon is used for EOR—the extraction of additional oil from existing wells.
The sunk costs into these projects is well into the tens of billions, but with merely a slightly-slower pace of warming that’s still too fast to avoid the worst of scientists’ bold predictions being all that there is to show for it, there’s an argument that carbon capture strategies should be looked for elsewhere. WaL
PICTURED ABOVE: The Sleipner field in the North Sea. PC: Øyvind Gravås and Bo B. Randulff / Equinor ASA.
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