Chevron’s Gorgon facility on Barrow Island off Western Australia is next to a huge gas field. Photographer: Lisa Maree William/Bloomberg
To achieve its net zero goals, the world is relying on a controversial technology developed by the fossil fuel industry. It will cost $4.5 trillion this decade.
September 13, 2023, 7:00 a.m. UTC
Get within a few dozen meters of one of the world’s largest carbon capture projects on Australia’s remote Barrow Island and normal conversation quickly becomes impossible.
From the dense labyrinth of pipes and towers the size of a city block comes the roar of carbon dioxide escaping into the atmosphere – exactly what Chevron Corp.’s ambitious $2.1 billion system calls for. should stop.
The Gorgon project is located 60 kilometers (37 miles) off the northwest coast of Australia next to a huge gas field. Chevron won approval to develop the site into a large liquefied natural gas export facility because the company could capture and store 80% of the CO2 mixed with the fuel rather than releasing it.
Since LNG production began in 2016, this has largely not been the case. The damage control measures began late, took place in fits and starts and were plagued with technical problems. Although the plant is currently successfully capturing CO2, it is only storing 1.6 million tonnes per year, less than half of its 4 million tonnes capacity, after difficulties reliably injecting the gas into the ground.
Chevron’s $2.1 billion Gorgon carbon capture and storage project on Barrow Island, Australia. Photographer: Lisa Maree Williams/Bloomberg
Carbon capture and storage is one of the most controversial solutions in reducing greenhouse gas emissions. Governments and companies have poured over $83 billion into projects over the past three decades, according to BloombergNEF data. Last year the technology captured just 0.1% of global emissions.
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But the enthusiasm at Chevron, the second largest oil and gas producer in the USA, remains unbroken. The plan is to keep going and spend even more money on the divisive technology, both at Gorgon and elsewhere.
“We need to get started and really get going,” said Chris Powers, vice president of carbon capture, utilization and storage at Chevron’s New Energies unit and the company veteran tasked with getting Gorgon back on track. “These are multi-year projects that will require many, many, many millions of dollars to progress.”
One of the biggest problems is that unlike technologies like solar, which have reached mass scale and are now close to drop-in solutions, CCS is still a bespoke set of processes. It is expensive, site-specific, and requires custom construction virtually everywhere it has been tried.
Many environmentalists say the technology should be abandoned, arguing it is simply a way for the fossil fuel industry to justify its continued existence and avoid having to write down the value of its assets.
But CCS is also one of the world’s last great hopes for limiting dangerous warming.
The world is full of emissions-intensive and costly infrastructure such as power plants and factories that cannot easily be phased out in favor of environmentally friendly alternatives. In some cases it is because the plants were recently built in countries that are cash-strapped and cannot afford to shut them down. In other cases, because there is not yet a commercially viable path to decarbonization for industries such as cement and steel smelting. If CCS technology can be upgraded, the world will gain valuable time.
That’s why climate scientists from organizations like the Intergovernmental Panel on Climate Change — hardly apologists for oil companies — say CSS is an unavoidable necessity.
According to Bloomberg News calculations based on the International Energy Agency’s scenario planning, about another 300 plants similar in size to Gorgon will need to be in operation by 2030 to keep the world on track to achieve net-zero emissions by the middle of this century to reach.
The Carbon Capture Wall
Achieving net zero emissions requires a huge expansion of global capacity
But after decades of slow progress, time is quickly running out. Since projects typically take five to seven years from announcement to commissioning, the industry only has two years to build confidence in CCS and significantly increase investment. According to BloombergNEF, around $4.5 trillion will be needed by 2030.
Perched incongruously in a nature reserve of red soil, brittle vegetation and rare marsupials, Gorgon is one of those projects that simply needs to achieve its goals to convince skeptics of the technology’s viability.
The remote Barrow Island was declared a Class A nature reserve in 1910 due to its rare vegetation and wildlife. Oil wells drilled in previous decades dot the landscape, producing a small amount of crude oil alongside the bulbous termite mounds. Photographer: Lisa Maree Williams/Bloomberg
In the early 1970s, Chevron made history by injecting leftover CO2 captured from an oil field to produce more fuel on a large scale. Normally the gas would have been drained, but instead engineers used it like soap to squeeze out extra oil.
For the next 30 years, this was the primary use of carbon capture: not to curb greenhouse gas emissions, but to produce even more fossil fuels. Then, as concerns about global warming grew, the industry began experimenting with using CCS to operate refineries and gas fields with a lower carbon footprint.
It was a frustrating journey. According to a 2021 study, around 78% of large-scale demonstration and pilot projects initiated between 1995 and 2018 were canceled or put on hold. A central issue was the high costs.
According to the IEA, 40 projects worldwide currently sequester carbon at a commercial level. This is in stark contrast to the exponential increase in wind and solar installations.
One project that the industry often touts as a success is Quest in Scotford, Canada, operated by Shell Plc. It processes emissions from a plant that produces hydrogen to process bitumen from oil sands fields so that the thick fuel can be refined into products such as gasoline.
Shell’s Quest carbon capture and storage project in Scotford, Canada. Photographer: Jason Franson/Bloomberg
It was built on time and on budget and has reached nearly its full capacity of 1 million tons per year in its first seven years of operation – although the actual amount of emissions avoided is lower because the site produces other pollutants that are not captured.
Learning from Quest’s design, Shell hopes to leverage modularized designs and existing technologies in future ventures to reduce the need for sophisticated systems tailored to individual projects. This approach could also help reduce costs.
“We don’t talk about CCS, we do CCS,” said Zoe Yujnovich, head of Shell’s integrated gas and upstream business, which is responsible for exploration and production. CCS is “absolutely critical to my business.”
Quest is also one of the projects where Chevron’s Powers, 43, a cheerful chemical engineer by training, wants to take lessons. Weeks before he took office, Chevron announced it would catch and offset 25 million tons annually by 2030, the equivalent of about six gorgons.
Powers – like much of the oil and gas industry – says the viability of CCS is non-negotiable if the world wants to maintain its current lifestyle.
“I just fundamentally don’t think society is ready to go back to the Wild West or the Stone Age,” Powers said. “We are making an important contribution to meeting the world’s growing energy needs.”
Powers is a third-generation oilman. His grandfather did construction work on refineries and chemical plants. His father was a chemical engineer and was involved in the processing of hydrocarbons. “And now we’re capturing CO2, which is critical to the quality of life we all have, and putting it back into the ground – that’s the personal story I tell people, it’s a complete cycle so to speak.”
Most CCS projects share some core elements. They use chemical solvents to remove CO2 in towers; Pipes for cooling, heating and transporting the gas; and then pressurized systems to store it, often in hollow natural caves that were once home to fossil fuels.
Engineering in remote locations always requires a certain level of ingenuity. On Barrow Island, for example, the equipment that flares gas – an approach used in emergencies to relieve dangerous pressure buildups – had to be placed further inland and surrounded by massive black walls so turtles wouldn’t think it was the moon and use it to navigate the island.
But when it comes to CCS, the level of customization required is extreme.
At Gorgon in 2017, traces of water in the pipes carrying CO2 triggered an acidic reaction that quickly destroyed the equipment. Chevron had to stop all CO2 transport until engineers finally decided to fix the problem by installing machines to dehydrate the CO2. That delayed the start.
“This is not an off-the-shelf technology,” said Christina Ng, an analyst at the Institute for Energy Economics and Financial Analysis, a nonprofit that advocates for a transition away from fossil fuels. “It’s so specific, it’s so sensitive to where it’s placed, it can’t easily be reproduced anywhere.”
Now the plant is plagued by problems with water and pressure management during CO2 injection. Solutions being tested include withdrawing and transferring water to another reservoir nearby, allowing for higher CO2 injection. The price is still being determined.
Meanwhile, to make up the deficit, Chevron will have to buy millions of tons of carbon offsets, including from a market that has been criticized for failing to reduce greenhouse gas emissions.
Despite the industry’s difficulties, governments around the world are redoubling their efforts. President Joe Biden’s U.S. Inflation Reduction Act would provide tax credits that could cover the costs of building and operating carbon capture facilities. The UK is committing up to £20 billion to subsidize CCS over the next two decades, while the European Union is targeting inputs of 50 million tonnes per year by 2030 – a 66% increase on what is currently planned.
G-20 leaders gathered in New Delhi agreed to support the expansion of emissions-cutting technologies, reflecting a broader retreat from ambitions to quickly phase out fossil fuels. This year’s United Nations COP28 climate summit in the United Arab Emirates will also feature heavily in favor of the technology. “In any realistic scenario that takes us to net zero, carbon capture technology will play a role,” said COP28 President Sultan Al Jaber in a speech in May. “Without them the calculation simply doesn’t add up.”
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And in Japan, CCS is the centerpiece of its transition plan. Instead of quickly switching to cheaper wind and solar energy to decarbonize the power sector like most G7 countries, authorities are relying on the technology to extend the life of their giant coal and gas power plants and cut emissions.
Up to 60 Gorgons are expected to be in use by 2050. It’s a high-risk strategy because any mishap threatens to derail efforts to curb pollution in the second half of the century.
Key to his hopes for a breakthrough are innovation centers like Omuta on the southern island of Kyushu. One of the oldest coal mines in Japan was once located here. A team of engineers from Toshiba Corp. has been here for over a decade. accommodated. Attempts are currently being made to couple CCS with the neighboring Mikawa biomass plant.
Bioenergy with carbon capture storage in Omuta, Japan. Source: Toshiba Energy Systems & Solutions Corp.
Because Mikawa’s fuel is renewable – it burns palm kernel shells – tracking emissions would make it carbon negative, at least in theory. The system runs for short test periods during the cold winter and scorching summer, providing important data points for Toshiba and Japan’s emerging CCS industry.
The project is so experimental that there are small metal signs hanging on every inch of the facility so engineers know exactly what each part does. They ring every time the wind blows.
Toshiba and its partners plan to liquefy the CO2. Japan may want to send CO2 to places like Australia where there is more space for storage.
To skeptics, CCS is nothing more than a fantasy get-out-of-jail card for polluters and hoover up cash that could be better used elsewhere.
“It’s great propaganda in the sense that it gives the user the idea that we can continue to burn fossil fuels and not have as many emissions,” said Charles Harvey, a professor of civil and environmental engineering at the Massachusetts Institute of Technology. “Put the subsidies into the technologies that are good, that work, that are efficient.”
And those who benefit most are often the strongest advocates. Toshiba, for example, is also a major supplier of turbines for fossil fuel power plants. Additionally, CCS is one of the few ways to balance environmental goals with the decision by some major oil and gas producers to cut production more slowly than originally planned following Russia’s invasion of Ukraine.
Chevron won approval to develop the site into a large liquefied natural gas export facility because the company could capture and store 80% of the CO2 mixed with the fuel rather than releasing it. Photographer: Lisa Maree Williams/Bloomberg
Barrow Island is dotted with oil wells that have been drilled over the past few decades. Many still oscillate up and down today, producing a tiny bit of crude oil alongside the termite mounds and native African kangaroos.
The natural gas the island is currently focusing on is in high demand as a so-called transition fuel as Asian nations look to move away from dirtier coal. Still, Australia is bearing the carbon costs: the Gorgon project was the country’s biggest polluter in the year to June 2022, according to the regulator’s latest available data.
Despite all the setbacks, there are successes that make the company optimistic. Beneath the dusty red earth, pipes actually carry some CO2, which is captured and condensed to a supercritical state, about two kilometers underground.
There is neither deafening noise from the equipment nor a faint hum at the three injection sites. You can only tell that the fountains are working as designed by the constantly changing numbers on small digital monitors.
A CO2 injection site on Barrow Island. Photographer: Lisa Maree William/Bloomberg
“We will spend significantly more money to get capacity to our desired optimal price,” Chevron’s Powers said. “Although we are not quite where we want to be, we can actually point to it and say that we are running a project that captures the CO2.”
This sentiment sums up the carbon capture industry. There has been evidence in the industry for decades that the technology works. But despite these successes, the impact is currently not large enough to make a significant contribution to slowing climate change.