BOSTON, March 16, 2022 /PRNewswire/ -- The recent Intergovernmental Panel on Climate Change (IPCC) report warned us over the threat global warming is posing, with consequences already being felt and accelerating rapidly. At the same time, the price of oil is at its highest since 2008 and is likely to continue to soar. Although prices at these levels are largely war-driven, both oil and gas prices were already climbing as economies reopened last year. These events have just shown how energy vulnerable and dependent on fossil fuels the global economy still is.
Despite exceptional performance in 2021, the oil and gas (O&G) sector continues to be slowly investment-starved as pressure to decarbonize grows stronger from institutional investors, stakeholders, creditors, and governments with rising climate commitments. If the O&G industry is to remain relevant in the short- to medium-term and drastically reduce its climate impact, how can the sector adapt to meet seemly conflicting goals?
While some major oil companies are divesting oil assets and replacing them with green power generation, others are keeping hydrocarbon businesses and focusing on limiting or offsetting their emissions. Offsetting targets have driven investments in carbon capture utilization and storage (CCUS), which has seen more than 100 new facilities announced in 2021 alone, and it is on track to quadruple in capture capacity based on pledged projects. To find out more about CCUS, see the IDTechEx report "Carbon Capture, Utilization, and Storage (CCUS) 2021-2040".
CO2-enhanced oil recovery (CO2-EOR) in particular - where CO2 is injected into the subsurface to boost oil production - currently represents the most developed and economically attractive end-use of captured CO2 and there is enthusiasm in the industry. The CEO of Occidental Petroleum, Vicki Hollub, stated in an interview with the Financial Times that "[the world's last] barrel of oil has to be from CO2-enhanced oil recovery because that's the lowest emission barrel possible". The company is the leading CO2-EOR operator in the United States, and it is betting on the world's largest direct air capture (DAC) facility to pull 1 million metric tons of CO2 per year from the air for EOR in the Permian Basin.
Indeed, under specific conditions, CO2-EOR can be a useful tool to reduce emissions from fossil-fuel consumption until the world completes the transition to a clean energy mix. If a closed-loop is achieved, nearly all the CO2 used in EOR remains sequestered deep in the subsurface. Injecting CO2 underground to produce more hydrocarbons releases new CO2 into the atmosphere when the oil is burned, but net emissions can be neutral or even negative if the CO2 is injected in sufficient quantities (i.e., enough to offset the oil usage emissions), its permanent geological storage is guaranteed, and, better still, the CO2 is sourced from the air or from biomass. It is estimated that CO2-EOR can produce carbon neutral oil as long as no more than 2 barrels of oil (bbl) are recovered per metric ton of CO2 injected (tCO2). Current practices yield an average recovery ratio of around 3.3 bbl/tCO2.
Thus far, CO2-EOR represents only 0.5% of the world's total oil production and its main bottleneck is the availability of captured, industrial CO2, which requires an extensive CO2 network linking capture sites to carbon sinks. But even with uncertainties around costs and technical complexities - mostly related to capturing and transporting the CO2 from capture points - CO2-EOR is actionable today and can mitigate emissions as other decarbonization options develop and become economically feasible.
Given CO2-EOR is one of the few uses of CO2 that can be profitable without carbon prices or other government interventions, IDTechEx sees the technique continuing to dominate the CCUS realm in the first half of this decade. Today CO2-EOR uses nearly 70% of the anthropogenic CO2 captured globally. But ass energy production shifts towards renewables and carbon pricing and tax incentives are put into force, dedicated geological storage (CCS) as a waste management service will eventually outpace CO2-EOR as the main endpoint for captured CO2. This is contingent to infrastructure development, which needs to happen accordingly to lessen the cost burden of geological storage. IDTechEx forecasts the share of CO2-EOR decreasing to around 38% of the world's CO2 capture capacity by 2030, but the sector would still grow at a CAGR of 14% (2021-2030). For more details, see IDTechEx's market report "Carbon Capture, Utilization, and Storage (CCUS) 2021-2040".
Critics will justifiably say that more ambitious action is needed to address climate risks and CCUS is still a drop in the ocean relative to the sheer scale of global emissions. But recognition of the value of CCUS as a climate mitigation technology is clear in growing investments and policies, and the industry is certainly leveraging them.
IDTechEx has been tracking technology innovations for over 20 years, with in-depth, independent analysis across a broad range of topics including Green Technology, Electric Vehicles, Energy Storage, Energy Harvesting & Off Grid, Food & AgTech, and Smart Cities. Our full portfolio of research can be found at www.IDTechEx.com.
About IDTechEx
IDTechEx guides your strategic business decisions through its Research, Subscription and Consultancy products, helping you profit from emerging technologies. For more information, contact [email protected] or visit www.IDTechEx.com.
Media Contact:
Natalie Moreton
Digital Marketing Manager
[email protected]
+44(0)1223 812300
Social Media Links:
Twitter: https://www.twitter.com/IDTechEx
LinkedIn: https://www.linkedin.com/company/idtechex/
Facebook: https://www.facebook.com/IDTechExResearch
SOURCE IDTechEx
Share this article