Exxon-Led Carbon Capture Project Key to Sustained U.S. Economic Growth

ExxonMobil

XOM
has always been a big business. As I detailed in April when the company announced its plan for a $ 100 billion project focused on the Houston area, its business in the Carbon Capture, Use and Storage (CCUS) space. would be no exception. As an Exxon executive involved in the company’s CCUS business unit told me then, “It’s going to be a big company, but that’s kind of what we do. “

On Thursday, Exxon and 10 other Houston-area companies announced their intention to work cooperatively on this large-scale project, which, when completed, would play an important role in helping each of them achieve their ESG goals in the past. over the next few decades. These companies include some of the biggest names in energy, refining, chemicals and energy: Calpine

RPC
, chevron

CVX
, Dow, ExxonMobil, INEOS, Linde, LyondellBasell

LYB
, Oil Marathon

MPC
m, NRG Energ

NRG
yes, Phillips 66

PSX
and Valero.

“It’s exciting to see so many companies already come together to talk about making Houston the world leader in carbon capture and storage,” Houston Mayor Sylvester Turner said in a statement. “We are reimagining what it means to be the energy capital of the world.

The plan presented by Exxon in April would involve capturing the carbon emissions of the 50 largest industrial emitters in the Houston area and targeting storage in underground caverns, depleted oil tanks and other open-pore spaces in the Gulf of Mexico off the coasts of Texas and Louisiana. Exxon, which since 1970 accounts for around 40% of all carbon captured and stored on earth, set an initial goal for the project to capture and store 50 million tonnes of carbon per year by 2030, gradually increasing this target of 100 million tonnes. per year by 2040.

Exxon estimates that the endowment of potential underground storage space from the Gulf Coast of Corpus Christi to New Orleans could provide a total available capacity of around 500 billion tonnes. At 50 to 100 million tonnes per year, that provides centuries of space available for this project.

In a statement, the group of 11 companies estimate that their facilities alone could allow the project to account for 75 million tonnes of carbon captured and stored by 2040. Anyone who knows the Houston area knows it’s likely the most targeted target in the country. rich environment for this type of industrial CCUS project, and contains many additional sites whose participation in the long term could allow the plan to quickly reach its objective of 100 million tonnes per year.

For large industrial sites like these, CCUS can serve as a lifeline for them to continue to exist and thrive in a climate-driven regulatory environment. Industries like cement, refining, steel, chemicals and other manufacturing operations that exist in abundance along the Houston Shipping Channel and dot the landscape along Interstate-10 to Port Arthur, Beaumont, Orange and Louisiana require 24/7 electricity and are difficult to decarbonize.

CSC hubs like the one envisioned in this Houston-centric project can significantly reduce the carbon footprint of industrial clusters by leveraging existing infrastructure and economies of scale. No region of the United States exhibits these factors in such concentrated abundance as does Houston. To understand the magnitude of the impact this project would create when fully realized, 100 million tonnes of carbon emissions are equivalent to roughly 20 million cars, which is basically the number of cars on the road in Texas today. hui. It’s a big deal.

The politics of all of this will not be easy despite the support expressed by Mayor Turner. The climate alarm community opposes CCUS in general and will specifically oppose this project despite its obvious benefits to the community and the environment, precisely because it would also benefit these 11 industrial emitters and allow them to stay. more easily in business. Environmental groups and sympathetic media will no doubt understand that Exxon and its potential partners are proposing that the federal government increase its tax credit for every tonne of carbon captured and stored from $ 50 to $ 85 per tonne, claiming that this is crucial for a final investment decision to be made.

The companies involved would no doubt argue that this proposal is not out of place at all given all of the increased new grants that Congress is currently targeting on the various renewable energy industries and electric vehicles. The $ 3.5 trillion “budget reconciliation” bill that Democrats are now submitting to Congress is tasked with such provisions, but the expanded carbon capture credit currently contained in this bill would only apply. to CO2 extracted directly from the atmosphere.

This little politically motivated discrimination makes no environmental sense when you think about it. Why wait for carbon to end up in the air we all breathe when it can be captured so easily and efficiently by the factory tailgate that emits it? It’s the kind of irrational thought process that makes achieving those emissions targets so much more difficult than they would otherwise be.

As Joe Blommaert, president of ExxonMobil Low Carbon Solutions, said in April: “It’s not about ‘where’. Society needs all available solutions to achieve the Paris goals. There is no readily available technology on a large scale that can decarbonize these activities, which are fundamental. “

In a net zero carbon world, you either want these particular industries to be able to achieve net zero or you don’t. If you don’t, the inevitable conclusion is that you want them to die instead. But if these industries, which employ tens of millions of people in the United States, enable the production and distribution of food, heat and power our homes and schools, create raw materials for our roads and other infrastructure, and manufacture so many products that we use every day. lives die, then economic growth dies with them.

As the ‘negative economic growth’ narrative characterized by a recent University of Leeds study gains traction among the climate alarmist community, it becomes increasingly clear that the real ‘where’ society will be forced to. face in the not-so-distant future if we can continue to have economic growth and live a 21st century existence, or we cannot.

If we are to land on the latter option, then big and bold CCUS projects like the one Exxon is leading for the Houston area will be a key factor in getting us there.

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