The Evolution of Carbon Capture in the Oil and Gas Industry
Carbon capture, transport, and storage have been utilized since the early 1970s primarily within the oil industry, demonstrating early recognition of the need to mitigate emissions.
The oil and gas industry has long been intertwined with discussions on carbon capture, a process aimed at reducing greenhouse gas emissions by capturing CO2 from industrial sources before it enters the atmosphere. Over the decades, the industry has witnessed various approaches and technologies to implement carbon capture, with mixed results.
Here’s a retrospective look at the historical performance of carbon capture in the oil and gas sector:
Early Adoption: Carbon capture, transport, and storage have been utilized since the early 1970s primarily within the oil industry, demonstrating early recognition of the need to mitigate emissions.
Amid growing concerns about environmental pollution and the impacts of fossil fuel combustion on climate, the oil and gas industry embarked on pioneering efforts to address carbon emissions through carbon capture technologies.
Carbon capture and storage is an old technology, first commercialized in the 1970s. Back then it was called enhanced oil recovery, because the carbon dioxide recovered from oil and gas production was injected into depleted oil and gas reservoirs to re-pressurize them and extract more hydrocarbons.
As the climate change movement gained momentum, the oil and gas industry wisely rebranded enhanced oil recovery as a “climate-friendly” process with a new name: carbon capture utilization and storage. Today, over 70 percent of carbon capture projects are, in fact, enhanced oil recovery projects used to produce more oil and/or gas, resulting in yet more greenhouse gas emissions.
The Institute for Energy Economics and Financial Analysis has estimated that most of the total captured carbon throughout history found its use in enhanced oil recovery—approximately 80–90 percent. Only a small proportion of carbon capture projects (approximately 10–20 percent) have stored carbon in dedicated geological structures without using it for oil and gas production.
Technological Advances: While carbon capture technologies were proposed as early as the 1980s, they have seen significant advancements over the years, aiming to extract CO2 from industrial processes. However, carbon capture is still an emerging and unknown technology.
A IEEFA study reviewed the capacity and performance of 13 flagship projects and found that 10 of the 13 failed or underperformed against their designed capacities, mostly by large margins.
The natural gas processing sector dominates the application of carbon capture technology. The gas production process requires the removal of carbon dioxide. While many gas companies now claim to produce “carbon-neutral” gas or liquefied natural gas, this is little more than marketing hubris.
The “carbon-neutral” tag has been obtained by using carbon capture to capture the 10–15 percent of Scope 1 and Scope 2 emissions (the emissions generated from producing natural gas) during the gas production process or by purchasing carbon offsets. Yet up to 90 percent of emissions from oil and gas do not occur at production. Instead, these emissions, called Scope 3 emissions, occur when the product is actually used, that is, burnt. As shown in our study, capturing Scope 3 emissions, the biggest chunk of emissions created from using the product, is not being accounted for in these “carbon-neutral” claims.
Apart from the poor performance of carbon capture projects, carbon capture in power plants has shown a track record of technical failures since 2000. Close to 90 percent of the proposed global carbon capture capacity in the power sector has failed at the implementation stage or was suspended early.
Integration with Operations: Oil companies capture millions of metric tons of CO2 annually from natural gas processing plants, with some utilizing the captured CO2 for enhanced oil recovery, a process that boosts oil production.
In recent years, the oil and gas industry has increasingly embraced carbon capture technologies as part of its operational strategy to mitigate greenhouse gas emissions. This integration of carbon capture with oil and gas operations marks a significant step towards environmental sustainability while addressing the industry's role in climate change mitigation.
Oil and gas facilities, including refineries and natural gas processing plants, have implemented carbon capture systems to capture CO2 emissions produced during industrial processes.
One innovative approach involves utilizing captured CO2 for enhanced oil recovery operations. CO2 injection into depleted oil reservoirs helps mobilize additional oil, increasing recovery rates while permanently storing captured carbon underground.
Existing oil and gas pipelines are repurposed to transport captured CO2 from industrial sites to storage sites or EOR projects, maximizing efficiency and reducing infrastructure costs.
Carbon capture integration offers potential economic benefits through increased oil recovery rates and revenue generation from carbon capture and storage (CCS) projects. Despite the promising potential, challenges such as high upfront costs, technological complexity, and regulatory uncertainties remain significant hurdles for widespread adoption.
Future Outlook: The industry continues to explore carbon capture technologies, driven by the need to reduce emissions and adapt to evolving regulatory frameworks.
As the oil and gas industry continues to prioritize sustainability and adapt to evolving environmental regulations, the integration of carbon capture technologies with operations is expected to play a crucial role in the industry's transition towards a lower-carbon future.
Collaborative efforts between industry stakeholders, government agencies, and research institutions will be essential to overcome technical and economic barriers and realize the full potential of carbon capture integration.
In conclusion, the historical performance of carbon capture in the oil and gas industry showcases both progress and setbacks. As the industry navigates towards a more sustainable future, continued innovation and collaboration will be key in realizing the full potential of carbon capture technologies.
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