Originally published in the Ark-La-Tex Association of Professional Landmen Register
Carbon capture and storage (“CCS”) is the process of capturing carbon dioxide emissions from large point sources, and then transporting it to a storage location for deposit in underground formations where it will not re-enter the atmosphere. By returning CO2 emissions that resulted from the oxidation of carbon when fossil fuels are burned to the place where the fossil fuels were extracted, CCS can reduce the amount of pollutants released into the atmosphere, thus, potentially limiting climate change. It is estimated that technologies for carbon capture, use, and storage may eventually be able to capture a vast majority of carbon dioxide emissions from power plants, refineries, petrochemical plants and other industrial facilities. Optimistically, at least a portion of the carbon dioxide captured from this technology can be put to productive use in enhanced oil recovery or the manufacture of fuels, building materials, and more. CCS is viewed as the primary practical way to achieve deep decarbonization in the industrial sector and could contribute 14 percent of the global greenhouse gas emissions reductions required under carbon neutral target goals and regulations by 2050.
Focusing on innovation, rather than elimination, this trend of development parallels the evolution of the oil and gas industry into an energy industry — one that invests in low-carbon and CCS technologies.
Notably, CCS technologies are being advanced out of the Natural Energy Technology Laboratory in West Virginia and other institutions. However, latent problems associated with global warming, including severe weather, that would be tackled by CCS aren’t always far from home. While it can be debated whether climate change was a contributing cause, the State of Texas was ambushed by an unprecedented winter storm in February 2021, leaving almost the entire state with no power. This prompted the new Energy Secretary Jennifer Granholm to advise the State of Texas to consider upgrading its connectivity to the national grid so that neighbors can help in times of crisis.
But the future need not be bleak. This April, Exxon called for expansive industry-government collaboration to develop large carbon capture and storage projects around Houston, Texas, namely, due to Houston’s footing as a home for major refining, petrochemical, manufacturing and power facilities. Exxon reported that it has already briefed government officials and industry groups, including Texas Governor Greg Abbott, Houston Mayor Sylvester Turner, U.S. Senator John Cornyn, House members in the Region, and the Greater Houston Partnership. Infrastructure estimates predict that facilities in Houston could capture and store 50 million metric tons of carbon dioxide annually by 2030 and 100 million by year 2040. The benefits of this project don’t end there, as Exxon’s proposal says the innovation in Houston could be deployed to other U.S. areas with heavy industry near storage sites, like the Midwest and the Gulf region.
British Petroleum also recently announced that it will spend $1.3 billion to build a network of pipelines and associated infrastructure to collect and capture natural gas produced as a byproduct from oil wells in the Permian Basin and in New Mexico. Natural gas is a potent greenhouse gas, and this project sought to eliminate the routine flaring of natural gas by 2025. This is viewed as a precedent setting carbon capture and reuse project.
Next door in Louisiana, U.S. Senator Bill Cassidy has joined a bipartisan group of lawmakers in introducing the nation’s first comprehensive carbon dioxide infrastructure package, namely, the Storing CO2 and Lowering Emissions (SCALE) Act, which could make Louisiana a national hub for carbon capture and sequestration. The bill would support the buildout of infrastructure to transport CO2 from the sites of capture to locations where it can be either used in manufacturing or sequestered safely and securely in underground formations. The legislation could also provide critical regional economic opportunities and create thousands of jobs. An analysis released by the Decarb America Project projects the possible effects as creating 13,000 direct and indirect jobs per year through the 5-year authorization. However, the Project acknowledged this estimate is conservative, as it does not include the thousands of jobs likely to be created by retrofitting energy-intensive facilities, such as cement and steel plants, or by building direct air capture plants.
The cost-benefit analysis of CCS technology is also improving daily. As part of a marathon research effort to lower the cost of carbon capture, chemists have demonstrated a way to seize carbon dioxide by using a different solvent (EEMPA) in the capture system that reduces costs by 19 percent compared to current technology. Notably, the U.S. Department of Energy’s Pacific Northwest National Laboratory (“PNNL”) plans to produce 4,000 gallons of EEMPA in 2022 at a 0.5-megawatt scale inside testing facilities at the National Carbon Capture Center in Shelby County, Alabama. This project is led by the Electric Power Research Institute in partnership with Research Triangle Institute International and PNNL. The eventual goal is to reach the U.S. Department of Energy’s goal of deploying commercially available technology that can capture CO2 at a cost of $30 per metric ton or less by 2035.
CCS is a promising phoenix set to arise from the ashes of the world’s aging industrial practices, and America has a unique opportunity to emerge smarter and stronger than before as a leader in CCS technology. No matter the source, no matter the strategy, CCS is on the rise and evolving into an integral part of the energy industry.
This article was written and submitted by Hattie Guidry, Arielle Anderson, Jourdan Curet, and Kristi Obafunwa with Kean Miller LLP. Kean Miller LLP is a full-service law firm located in Texas and Louisiana that counsels clients on a wide variety of substantive legal areas and state and federal laws, including a specialized practice in the energy and environmental industry. Our attorneys are some of the leading practitioners in their field, including many who have helped shape the legal landscape.