Direct air capture technology stands poised to address a century and a half of fossil fuel emissions by extracting carbon dioxide directly from the atmosphere. Despite its potential, the high cost—ranging between $600 to $1,000 per metric ton—poses significant challenges. However, oil companies see opportunity where others see obstacles. By coupling this technology with enhanced oil recovery, they aim to boost oil production while reducing climate impact.
The Petra Nova installation exemplifies this approach. Designed to capture a third of one boiler's CO2 emissions, it significantly increased production at a nearby oilfield from 300 barrels per day to 6,000 barrels. Although this increase was only half of the projected forecast, it demonstrated the potential benefits of utilizing captured CO2 in oil extraction. Federal incentives like those included in the Inflation Reduction Act, which offers up to $130 per metric ton for using captured CO2 by 2026, further encourage such endeavors.
Yet, the future of these incentives remains uncertain. The Trump administration's efforts to dismantle climate-related government incentives cast doubt on their longevity over the next four years. Despite this uncertainty, companies like Occidental remain optimistic. They anticipate turning a profit by the end of the decade through direct air capture technology and carbon credit sales, reinforcing their commitment to reducing their climate impact.
NRG Energy pioneered carbon capture in the U.S. with a facility attached to a coal-fired power plant about a decade ago. However, the facility closed in 2020, eventually selling to JX Nippon three years later. This underscores the ongoing challenges facing the industry, particularly the lack of available CO2 that makes enhanced oil recovery using captured CO2 less attractive.
Oil companies such as Occidental and ExxonMobil are strong proponents of tax credits for using captured CO2 in enhanced oil recovery. Originating in the 1970s, the technique involves injecting CO2 into wells to boost oil production—a method initially reliant on CO2 from underground deposits. Occidental's CEO, Vicki Hollub, emphasized the critical nature of this method for enhancing oil output.
"Taking CO2 out of the atmosphere is a technology that needs to work for the United States, and President Trump knows the business case for this." – Vicki Hollub
The interplay between technological advancement, economic incentive, and environmental responsibility creates a complex landscape for carbon capture. The potential profitability and environmental benefits make it an enticing prospect for oil companies aiming to balance production with sustainability.
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