24 Sept. 2020-Carbon capture and storage projects must play a greater role in fossil fuel emissions reductions from offshore oil platforms to onshore natural gas processing plants in order to meet net-zero climate goals as the calendar for so-called peak oil demand is moved up, according to industry reports released Sept. 22.
Governments around the world, including in North America, must incentivize and invest more in carbon dioxide pipelines and storage hubs to enable the large-scale carbon emission reductions that are necessary to prevent worsening global warming, according to a new report from the Columbia University Center on Global Energy Policy presented Sept. 22 during Climate Week NYC.
Global carbon emissions must dramatically drop by 50% in just 10 years and further reduce those emissions by another 50% by 2040 in order to achieve net-zero emissions by mid-century to help meet the goals of the Paris climate accord.
“The core arithmetic of ‘net zero’ is harsh and unforgiving. We are failing,” said Julio Friedmann, the report’s lead author and a Columbia senior research scholar. “Time is the fundamental issue here.”
That means, in addition to building new power generation only through renewable energy sources, also constructing carbon capture projects to service existing industry, including oil and gas infrastructure, power plants, petrochemical plants, cement and steel plants and more. Carbon capture also would be utilized for carbon dioxide removal systems, including direct air capture plants, and for hydrogen production facilities. The concept for bioenergy production with carbon capture and storage is termed “BECCS.”
The report estimates that North America’s 5,000 miles of carbon dioxide pipeline must be expanded by more than 20,000 miles with more storage hubs and clusters built.Friedmann called carbon capture the “Swiss army knife of deep carbonization.”
Increasingly, European energy powers BP, Total, Eni, Equinor and others are investing in new renewable energy projects, including in North America. BP, for instance, is pledging to achieve “net-zero” status by 2050 and is projecting that global oil demand will peak by 2030.
US ride-service giants such as Uber and Lyft have pledged to be net-zero by 2040 and 2030, respectively, with more investor pressure on ESG (environmental, social and corporate governance) issues.
S&P Global Platts Analytics projects that peak oil demand in its base case could come as soon as 2035, and by 2025 in a stress case with more government intervention. US crude supplies will not return to 2019 levels until late 2023 or early 2024.
“We recognize that renewables remain a modest percentage of overall budgets, but all of the major oil companies have slashed capital expenditure plans and announced severe cost-cutting measures,” according to a new Platts Analytics report, adding that “the massive size and financial strength of the oil majors may position them best as future consolidators and leaders of a broader energy industry — not just as hydrocarbon players.”
However, major carbon-capture projects in the US have fallen well short thus far. The only commercially operational carbon capture project attached to a coal plant — NRG Energy’s Petra Nova Project near Houston — suspended its operations in May as it failed to turn a profit during the coronavirus pandemic. Likewise, plans for the Southern Company’s multibillion-dollar, carbon capture project at the Kemper coal plant in Mississippi collapsed back in 2017.
In order to avoid keeping carbon capture an excuse for keeping fossil fuels flowing, Air Products CEO Seifi Ghasemi said clear plans are needed for new, carbon-free energy sources. It must be made clear that carbon capture is the stopgap for making existing industry cleaner, he said.“People are beginning to realize that global warming is not a hoax,” Ghasemi said. “This is really a fundamental issue that the human race needs to address.”