By November 8, 2017 0 Comments Read More →

CCS technology a possible profit maker for oil majors

CCS

SaskPower installed a CCS system at its Boundary Dam Power Station. SaskPower photo.

Carbon capture and storage (CCS) development has been held back due to high costs

Carbon capture and storage, or CCS, technology could help industries known for having large carbon footprints reduce their CO2 emissions even though demand for their products is on the rise.

The International Energy Agency forecasts the demand for steel, chemicals and plastics to increase, likely leading to a 35 per cent jump in emissions for each sector up until 2050.

The outcome is a surge in energy demand, especially in developing countries, and will mean coal and oil will amount to 77 per cent of the world’s energy use through 2040.

As a result, development of CCS technology has come to the forefront in the effort to bring together climate goals and economic development.

In early October three oil majors, Statoil, Shell and Total, joined forces in a CO2 partnership to develop equipment and facilities for storing the CO2 emitted by industrial plants in Norway.

According to OilPrice.com, the project will have an annual storage capacity of about 1.5 million tons and will help stimulate CCS technology research worldwide.

As well in October an investment fund led by the CEOs of 10 oil and gas producers known as the Oil and Gas Climate Initiative (OCDI), put millions of dollars towards “technologies and business models” which potentially reduce GHG emissions significantly.

Until now CCS development has been slow due to high costs.  But, with big oil funding development of the technology, the race is on to commercialize CCS.

CCS development will reduce GHGs, but oil majors know that captured carbon will also help them access oil that had been unreachable by pumping CO2 into the reservoir to re-pressurize it.

While detractors quickly argue that any climate-saving effects are offset by increased oil production, the CO2 that is pumped underground could be harnessed from coal plants.  CCS would make the GHG spewing facilities cleaner.

This process will turn capturing CO2 into a profitable business as well as provide an incentive for companies to cut their emissions.

According to the IEA, using CO2 in enhanced oil recovery (EOR) can result in net emissions reductions, especially if more CO2 is used per barrel than is usually the case.

And if oil prices rise, profits from CCS projects will lead to more use of the technology.

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