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Carbon capture and storage (CCS) has become big business in the United States. As of mid-March, Industrial Info Resources was tracking more than $99 billion worth of potential U.S. CCS investments as federal legislation pours billions into decarbonization.
According to a recent report by the National Renewable Energy Laboratory (NREL), the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act of 2021, commonly referred to as the Bipartisan Infrastructure Law, together “represent the largest commitment of the U.S. federal government to invest in the modernization and decarbonization of the U.S. energy system.” (http://bit.ly/3ZqO249)
The report, “Evaluating Impacts of the Inflation Reduction Act and Bipartisan Infrastructure Law on the U.S. Power System,” notes that the Congressional Budget Office estimates that climate/clean energy programs, tax credits and other incentives will exceed $430 billion from 2022 through 2031.
“While the climate and clean energy provisions are numerous and have the potential to impact all aspects of the U.S. energy system from fuel and electricity production to final consumption in industry, transportation, and buildings, the provisions relevant to the electricity sector — in particular, the suite of tax credits for clean generation, storage, and carbon dioxide capture and storage — are expected to be some of the most consequential in terms of emissions reduction and clean energy deployment,” explains the NREL report .
Annual power sector carbon dioxide emissions could decline 72 percent to 91 percent below the 2005 level across the range of policy scenarios by 2030, as outlined by the report.
Texas Leads CCS Investments with Nearly $41 Billion
According to Industrial Info’s project database, Texas leads the way with nearly $41 billion worth of potential CCS investments, followed by Louisiana.
Chevron Corp. recently announced the Bayou Bend CCS project on the Texas Gulf Coast had greatly expanded its CO2 storage footprint through the acquisition of nearly 100,000 acres onshore in Chambers and Jefferson Counties, Texas. The increased acreage “positions Bayou Bend to be one of the largest carbon-storage projects in the United States,” Chevron says in a press release.
Combined with the previously announced approximately 40,000 acres offshore Beaumont and Port Arthur, Texas, the expanded Bayou Bend project now encompasses nearly 140,000 acres of pore space for permanent CO2 sequestration, the company notes.
The press release continues: “The total acreage holds a gross storage capacity of more than 1 billion metric tons, positioning Bayou Bend to be a leading carbon transportation and storage solution for industrial emitters located in the Houston Ship Channel and Beaumont/Port Arthur region, one of the largest industrial corridors in the country.”
Bayou Bend is a joint venture between Chevron, Talos Energy and Carbonvert.
One of the largest potential investments in CCS comes from Exxon Mobil Corp., which plans to construct a 1 billion-cubic-foot-per-day “blue hydrogen” unit in Baytown, Texas, with a carbon capture system designed to store up to 10 million metric tons of CO2 per year. Blue hydrogen is derived from natural gas, with the resulting CO2 being sequestered. The project would kick off construction in the spring of 2025, with completion in the spring of 2027.
“This project allows us to offer significant volumes of low-carbon hydrogen and ammonia to third-party customers in support of decarbonization efforts,” says Dan Ammann, president of ExxonMobil Low Carbon Solutions, in a press release. A final investment decision for the project is expected by 2024.
Louisiana CSS Investments Nearly $26 Billion
Louisiana follows Texas in potential CCS investments, totaling nearly $25.6 billion.
CapturePoint’s recently announced final investment decision to build a CCS operation in Louisiana highlights a continuing trend: The state has become one of the leaders in this field. CapturePoint says its Central Louisiana Regional Storage Hub (CENLA Hub) has the “potential to be among the largest onshore, deep-underground carbon-sequestration centers in the United States, with the capacity to permanently secure tens of millions of tons of CO2 annually, up to two miles underground.”
It adds: “The first phase of the CENLA Hub project will involve the capture of dedicated CO2 emissions from natural gas-processing facilities owned by affiliates of Energy Transfer in northern and central Louisiana, as well as from other industrial sources in the area, for transport by pipeline to deep-underground sequestration in the CENLA Hub.”
This joins a growing list of other carbon-capture projects in Louisiana. One example: Talos Energy and EnLink Midstream signed a Memorandum of Understanding in February 2022 to develop a CCS facility for the Mississippi River industrial corridor between Baton Rouge and New Orleans. In 2017, the state was listed as No. 4 in U.S. CO2 emissions, and much of that is centered in the industrial corridor.
Talos recently acquired the River Bend CCS site in east Louisiana, which will be part of this facility. Its area includes about 26,000 acres of space and has a sequestration capacity of more than 500 million metric tonnes.
Shell also is concerned about carbon emissions in the Mississippi River industrial corridor. In 2022, it announced plans for the Liberty Carbon Capture, Utilization and Storage (CCUS) hub, which would capture emissions from the company’s petrochemical plants in the area. However, the company says it would be open to taking CO2 from other area emitters in the future.
There are several reasons for Louisiana’s popularity, some natural and some human-related. On the human side, southern Louisiana’s many refineries and petrochemical plants emit a lot of carbon dioxide, making the gas available for sequestration. And the presence of oil and gas fields nearby creates opportunities for reusing depleted wells for CCS.
Recognizing the opportunity as far back as 2009, Louisiana’s legislature began smoothing the path for CCUS investment and infrastructure. It passed the Louisiana Geologic Sequestration of Carbon Dioxide Act that year. It established a state regulatory framework,
setting state liability for injected CO2 after 10 years of storage; created a trust fund to manage and monitor such storage; and granted the state power to invoke eminent domain for certain CCS
projects. The state has made other moves since then.
Last fall, LSU’s Craft & Hawkins Department of Petroleum Engineering announced it would be the first university in the United States to offer a formal concentration in CCUS. The school said it took this step because of the state’s high concentration of CCUS projects.
On the natural side, there are a lot of places to store CO2. Louisiana is smack in the middle of what the U.S. Geological Survey identifies as the nation’s best CCS area: the Coastal Plains. This area stretches across the Gulf states from Texas to Georgia.
With all the advantages the area boasts, funding is still needed to make it happen — and the U.S. Department of Energy (DOE) announced that the cash for carbon-capture projects is about to flow. Funding involves two types of projects: carbon-capture large-scale pilots and carbon-capture demonstrations.
The former will provide a total of $937 million from the DOE’s Office of Clean Energy Demonstrations for testing projects that are in the development stage but remain untested and are large enough to “demonstrate the interaction between major components.”
For the latter, there will be “$2.5 billion to develop six carbon-capture facilities to significantly improve the efficiency, effectiveness, costs, emissions reductions and environmental performance of coal and natural gas use,” the DOE notes. It suggests two projects to capture CO2 from gas-fired power plants: two from coal-fired power plants and from two nonpower-generating facilities.