Texas must take the lead in carbon-capture technologies because the state serves as both a major leader in the oil and gas industry and the petrochemicals sector, panelists said Sept. 24 at the National Clean Energy Week and Climate Week NYC.
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Texas leads the nation in oil and gas production in the Permian Basin where more CO2 can be utilized for enhanced oil recovery, while the petrochemicals and industrial hubs along the Texas Gulf Coast produce massive amounts of carbon and hydrogen that can be stored or turned into valuable commodities. And, as new renewable energy infrastructure is built up, carbon capture utilization and storage technologies are needed to help clean up existing industries, said Rich Powell, executive director of ClearPath, a conservative nonprofit focused on clean energy.
"Carbon capture is the one need-to-have technology of the energy transition," Powell said. "Texas is poised to become a leader in carbon capture and storage."
Ken Medlock, an energy and economics fellow at Rice University's Baker Institute for Public Policy in Houston, said more than a quarter of the US industrial sector's carbon emissions come from Texas, concentrated along the Texas Gulf Coast from the Sabine Pass to Corpus Christi, but especially within the Greater Houston region.
That is important because technology and storage hubs and clusters are needed to make carbon capture more economically feasible.
"If it's going to happen anywhere, it's going to happen in Texas," Medlock said.
"Politically, there's a strong motivation to ensure the industry becomes sustainable," Medlock said, because the energy sector is such a big part of the Texas economy. "There's just a massive opportunity in the state, and policy makers are open to the discussions right now. The companies involved in the space are also feeling pressure from the investment community and consumers."
The region also is rich in underground storage options because of the geographic salt domes and saline aquifers that can hold large volumes of CO2.
However, more government intervention is likely needed. A new report in the week started Sept. 20 from the Columbia University's Center on Global Energy estimated that North America's 5,000 miles of CO2 pipeline must be expanded by more than 20,000 miles with more storage hubs and clusters built.
And the ongoing coronavirus pandemic has cut into the demand for CO2 as a valuable commodity. The only commercially operational carbon capture project attached to a coal plant -- NRG Energy's Petra Nova Project near Houston -- suspended operations in May as it failed to turn a profit during the pandemic.
In West Texas, Occidental Petroleum is not only the top oil producer in the Permian, but Oxy also is the industry leader in enhanced oil recovery that uses CO2 to churn out more crude oil from mature wells.
William Swetra, a senior policy analyst for the Oxy Low Carbon Ventures subsidiary, said Oxy formed the new company, 1PointFive, this summer to help finance and deploy direct air capture technology developed by Oxy's partner, Carbon Engineering.
Direct air capture technology essentially sucks carbon emissions out of the air. They plan to build the world's largest direct air capture plant in the Permian Basin to provide Oxy and others with carbon for enhanced oil recovery. The front-end engineering work is slated for 2021 with construction beginning in 2022.
Oxy also is working with NET Power to develop emission-free power plants that convert natural gas and renewable gas into power.
However, Permian oil production fell to below 4 million b/d during the peak of the pandemic from nearly 5 million b/d early in the year, and is now back up to about 4.15 million b/d, according to the US Energy Information Administration. Total US crude production has fallen to less than 11 million b/d from almost 13 million b/d.
But Swetra sees enhanced oil recovery only as the initial market for carbon collected from direct air capture facilities.
"You're going to see a lot of other markets enter the space," he said, from developers of sequestration sites to the petrochemicals sector that will use the carbon for feedstock.
The other good thing is that direct air capture facilities can be deployed anywhere in the world, he said.
"We're really in an exciting time right now, and the future of energy is really being made today," Swetra said.