Philippe Roos, Strasbourg - Jan 21, 2022

Some in the oil sector suggest carbon capture and storage (CCS) could save fossil fuels in a net-zero world. Carbon dioxide emissions are the problem — not fossil fuels — and can be suppressed with CCS, they argue. CCS could indeed become a sizable business where oil companies have cards to play, particularly in the storage part. But the CO2 volumes involved are way too large to all be handled with CCS, and fossil fuel use will have to shrink a lot to reach net-zero targets.

Fossil fuels are currently responsible for 32 billion tons of CO2 emissions, including 17 billion tons for oil and gas alone. It is hard to fathom that a still-emerging industry would ever be able to handle such a gigantic amount of matter.

By comparison, the oil and gas sector currently manages — by weight — around 4.5 billion tons of oil and 2.5 billion tons of gas per year, and the global agriculture sector is harvesting 10 billion tons of crops annually. Shrinking fossil fuel usage therefore looks unavoidable, but by how much?

Net-Zero Scenarios

Net-zero scenarios, such as those produced by the International Energy Agency (IEA), BP and the UN Intergovernmental Panel on Climate Change (IPCC) assume some 4 billion-5 billion tons per year of CO2 are captured from fossil fuels in 2050. While smaller than current oil- and gas-related emissions, the amount of CO2 captured would be about the size of today's oil production in tonnage terms, and can reasonably be considered the upper limit of what a future CCS industry can handle.

The IEA's base-case scenario meanwhile assumes just 200 million tons/yr of CCS in 2050.

Net-zero scenarios imply that fossil fuel supply and/or demand would need to shrink by 55%-75% over 2010-50. But while coal almost disappears in every one of them, they show substantial disparities in how oil and gas evolve.

Oil, for example, falls by around 75% in BP and the IEA scenarios, versus only 40% in the average of the IPCC's 1.5°C scenarios. Most of the difference comes from how much negative emissions are factored in, primarily from bioenergy with CCS (BECCS), which is highly controversial because of the volume of energy crops it involves and the sustainability issues it raises.

The IPCC assumes over 7 billion tons/yr in 2050 of negative emissions technologies, which remove CO2 from the atmosphere, versus around 2 billion tons for BP and the IEA.

This is not realistic and more of a modeling trick than an actual technology forecast, says the Science Based Targets initiative's Alberto Carrillo Pineda. "Somewhere in the economy, some emissions are not being reduced, so climate modelers need to have negative emissions and the way to model negative emissions is by adding BECCS."

Plain CCS

Plain industrial CCS is much less controversial. Industrial gases giant Linde's Tilman Weide recently told Energy Intelligence he considers it a relatively cheap and easy transitional technology between current carbon-intensive processes and the hypothetical fully electrified industry of the future. The technology is known, it takes two-three years to build a CCS plant and the gap between capture costs and European CO2 prices is "not so big," says Weide.

Carrillo Pineda concurs. "For sectors like cement or steel it's not that straightforward whether they should electrify, use hydrogen or use CCS, and it depends a lot on local conditions." In terms of volume, Weide expects the global need for CCS will steadily decline over time as processes decarbonize and fossil fuel consumption diminishes.

The IEA's net-zero scenario sees CCS amounting to 5 billion tons of CO2 per year by 2050, including 2.5 billion tons from industry, 1.5 billion tons from blue hydrogen production and 1 billion tons from power generation.

Direct Air Capture

Direct air capture (DAC), another negative emissions technology, is a different story. While it does not involve the same kind of environmental and social issues as BECCS, it remains an unproven and therefore risky technology to rely on for large-scale removal of CO2 from the atmosphere, according to Carrillo Pineda. "We cannot assume that a company can continue to release carbon and then plan to remove it at some point in the future," he warns.

This could change in just a few years, though, as Canada's Carbon Engineering is working with Occidental Petroleum on the first large-scale DAC plant in the US' Permian Basin. It is expected to be commissioned in 2024 and capture 500,000 tons of CO2/yr at $300 per ton.

This is expensive but Carbon Engineering CEO Steve Oldham told Energy Intelligence he expects to reach the $100 threshold later this decade if enough projects are being launched to generate cost savings.

Philippe Roos is a senior reporter at Energy Intelligence based in Strasbourg, France. This article appeared initially in EI New Energy.


OPINION: Accelerating Net-Zero Goals
Europe sees high energy prices as an opportunity to move more quickly to end fossil fuel use, which producers should take note of.  >>>  
OPINION: History Lessons for the Energy Transition
The energy price crisis has focused attention on low-carbon transition costs. But applying the brakes would be a mistake, with history offering important lessons. >>>  
OPINION: COP26  turns heat on oil industry up, not down 
Hopes that high oil and gas prices would highlight risks of underinvestment were dashed: COP26 showed the persistence of climate action. >>>