Carbon Capture: Should Public Companies Continue To Fund It?

For years, carbon capture companies have argued that their technology is the solution to climate change.1 Capturing and storing carbon certainly aligns with the IPCC’s requirement that greenhouse gas emissions should be curtailed as soon as possible.2 In fact, the IPCC even recommends carbon capture to help limit global warming to 1.5°C.3 But, should public companies continue to fund it?

What is carbon capture?

Carbon capture and storage (CCS) reduces the carbon emissions from heavy industry and fossil fuel power plants.4 There are three ways to capture carbon: pre-combustion, post-combustion and oxy-fuel combustion.5 They all prevent CO2 from entering the atmosphere.6 The captured CO2 is either stored or utilised.7 It is a way of preventing greenhouse gas from contributing to global warming whilst continuing to use fossil fuels for energy or industry.

How many companies currently use carbon capture?

There are currently 19 large-scale industrial and two large-scale CCS power facilities in operation.8 20 additional projects are also under development.9 Collectively, the 21 working facilities can capture about 40 million tonnes of CO2 per annum.10 To ensure the global temperature rise does not exceed 1.5°C, CCS volume must increase by a factor of 35 from its current rate.11 It would require substantial investment from governments and public companies to alleviate the effects of climate change.

However, many investors are reluctant to provide further funding for carbon capture companies. The failure of initiatives, such as the Kemper power plant, has thrown doubt over the utility of CCS. The Kemper power plant was once considered 'clean coal' energy's flagship.12 Its CCS facilities were supposed to capture 65 per cent of the plant’s CO2 emissions.13 Initial construction costs were USD $2.4 billion.14 However, these soon ballooned to USD $7.5 billion.15 Overly complex technology, unknown startup operation and technology risks, and the falling price of natural gas are thought to be responsible for the project’s failure.16 In 2017, the complex was converted to a natural gas power plant, raising serious concerns over promises of ‘clean coal’ through CCS.17

What public companies are interested in carbon capture?

Unsurprisingly, oil and gas fossil fuel companies tend to be most interested in carbon capture technology. For instance, Royal Dutch Shell,18 Chevron Corporation,19 NRG Energy,20 and Equinor21 have all invested billions of dollars into CCS projects.22 But, it has become evident that many of these initiatives are sustained with false promises.

For instance, Canadian energy company SaskPower operates and owns the first commercial-scale coal-fired power station with CCS facilities.23 The initial reception for Boundary Dam was largely positive, due to the plant's perceived environmental benefit.24 In reality, however, the cost and performance of the CCS technology tell a different story. The CCS facilities accounted for the majority of the project’s startup costs: CAD $917 million of CAD $1.47 billion.25 They also require almost 25 per cent of the power plant’s output to operate.26 Most of the captured CO2 is then used for enhanced oil recovery to boost oil production.27 Much of the environmental benefit of the CCS technology is, therefore, negated by repurposing the CO2 to generate more fossil fuels.

Boundary Dam and the failed Kemper power plant are examples of CCS technology's misleading and unreliable nature. Rather than waste more investment from public companies and taxpayers, efforts should focus on boosting the burgeoning clean energy sector. Their minimal emissions and annual growth rate of 13.7 per cent over the past decade are hard evidence that the future lies with renewables.28 

Carbon Capture and storage
3 ways to capture carbon
21 CCS power facilities in operation
Carbon capture IPCC 1.5oC limit global warming
Carbon Capture: Should Public Companies Continue To Fund It?5
Renewable energies

 

Sources

  1. Roberts, D. (2019). Climate change: pulling CO2 out of the air could be a trillion-dollar business. [online] Vox. Available at: https://www.vox.com/energy-and-environment/2019/9/4/20829431/climate-change-carbon-capture-utilization-sequestration-ccu-ccs.
  2. IPCC (2018). Summary for Policymakers — Global Warming of 1.5 oC. [online] Ipcc.ch. Available at: https://www.ipcc.ch/sr15/chapter/spm/.
  3. IPCC (2018). Summary for Policymakers — Global Warming of 1.5 oC. [online] Ipcc.ch. Available at: https://www.ipcc.ch/sr15/chapter/spm/.
  4. Energy.gov. (n.d.). Pre-Combustion Carbon Capture Research. [online] Available at: https://www.energy.gov/fe/science-innovation/carbon-capture-and-storage-research/carbon-capture-rd/pre-combustion-carbon#:~:text=Pre%2Dcombustion%20capture%20refers%20to.
  5. Resources for the Future. (n.d.). Carbon Capture and Storage 101. [online] Available at: https://www.rff.org/publications/explainers/carbon-capture-and-storage-101/.
  6. Resources for the Future. (n.d.). Carbon Capture and Storage 101. [online] Available at: https://www.rff.org/publications/explainers/carbon-capture-and-storage-101/.
  7. www.nationalgrid.com. (n.d.). What is Carbon Capture and Storage? | National Grid Group. [online] Available at: https://www.nationalgrid.com/stories/energy-explained/what-is-ccs-how-does-it-work.
  8. www.energypolicy.columbia.edu. (n.d.). Columbia | SIPA Center on Global Energy Policy | Net-Zero and Geospheric Return: Actions Today for 2030 and Beyond. [online] Available at: https://www.energypolicy.columbia.edu/research/report/net-zero-and-geospheric-return-actions-today-2030-and-beyond.
  9. www.energypolicy.columbia.edu. (n.d.). Columbia | SIPA Center on Global Energy Policy | Net-Zero and Geospheric Return: Actions Today for 2030 and Beyond. [online] Available at: https://www.energypolicy.columbia.edu/research/report/net-zero-and-geospheric-return-actions-today-2030-and-beyond.
  10. www.energypolicy.columbia.edu. (n.d.). Columbia | SIPA Center on Global Energy Policy | Net-Zero and Geospheric Return: Actions Today for 2030 and Beyond. [online] Available at: https://www.energypolicy.columbia.edu/research/report/net-zero-and-geospheric-return-actions-today-2030-and-beyond.
  11. www.energypolicy.columbia.edu. (n.d.). Columbia | SIPA Center on Global Energy Policy | Net-Zero and Geospheric Return: Actions Today for 2030 and Beyond. [online] Available at: https://www.energypolicy.columbia.edu/research/report/net-zero-and-geospheric-return-actions-today-2030-and-beyond.
  12. Kelly, S. (2018). How America’s clean coal dream unravelled. [online] the Guardian. Available at: https://www.theguardian.com/environment/2018/mar/02/clean-coal-america-kemper-power-plant.
  13. Wilson, S. (2019). Two years since Kemper clean coal project ended. [online] Mississippi Center for Public Policy. Available at: https://mspolicy.org/two-years-since-kemper-clean-coal-project-ended/ [Accessed 11 Feb. 2021].
  14. Wilson, S. (2019). Two years since Kemper clean coal project ended. [online] Mississippi Center for Public Policy. Available at: https://mspolicy.org/two-years-since-kemper-clean-coal-project-ended/ [Accessed 11 Feb. 2021].
  15. Wilson, S. (2019). Two years since Kemper clean coal project ended. [online] Mississippi Center for Public Policy. Available at: https://mspolicy.org/two-years-since-kemper-clean-coal-project-ended/ [Accessed 11 Feb. 2021].
  16. IEEE Spectrum: Technology, Engineering, and Science News. (n.d.). Full Page Reload. [online] Available at: https://spectrum.ieee.org/energywise/energy/fossil-fuels/the-three-factors-that-doomed-kemper-county-igcc [Accessed 11 Feb. 2021].
  17. Conca, J. (n.d.). The Largest Clean Coal Power Plant In America Turns To Natural Gas. [online] Forbes. Available at: https://www.forbes.com/sites/jamesconca/2017/07/11/the-largest-clean-coal-power-plant-in-america-turns-to-natural-gas/?sh=50cac997d260 [Accessed 11 Feb. 2021].
  18. Shell.com. (2012). Carbon capture and storage projects. [online] Available at: https://www.shell.com/sustainability/environment/climate-change/carbon-capture-and-storage-projects.html.
  19. Affairs, C.P., Government and Public (n.d.). Chevron Greenhouse Gas Management. [online] chevron.com. Available at: https://www.chevron.com/sustainability/environment/greenhouse-gas-management [Accessed 11 Feb. 2021].
  20. NRG Energy, Inc (2019). Petra Nova. [online] NRG Energy. Available at: https://www.nrg.com/case-studies/petra-nova.html.
  21. www.equinor.com. (n.d.). Carbon capture and storage in Equinor - equinor.com. [online] Available at: https://www.equinor.com/en/what-we-do/carbon-capture-and-storage.html.
  22. Market Realist. (n.d.). Should You Add Carbon Capture Companies to Your Investment Portfolio? [online] Available at: https://marketrealist.com/p/publicly-traded-carbon-capture-companies/ [Accessed 11 Feb. 2021].
  23. www.zeroco2.no. (n.d.). Boundary Dam integrated CCS project — zeroco2. [online] Available at: http://www.zeroco2.no/projects/saskpowers-boundary-dam-power-station-pilot-plant [Accessed 11 Feb. 2021].
  24. POWER (2015). SaskPower’s Boundary Dam Carbon Capture Project Wins POWER’s Highest Award. [online] POWER Magazine. Available at: https://www.powermag.com/saskpowers-boundary-dam-carbon-capture-project-wins-powers-highest-award/ [Accessed 11 Feb. 2021].
  25. Grist. (2015). Turns out the world’s first “clean coal” plant is a backdoor subsidy to oil producers. [online] Available at: https://grist.org/climate-energy/turns-out-the-worlds-first-clean-coal-plant-is-a-backdoor-subsidy-to-oil-producers/ [Accessed 11 Feb. 2021].
  26. Grist. (2015). Turns out the world’s first “clean coal” plant is a backdoor subsidy to oil producers. [online] Available at: https://grist.org/climate-energy/turns-out-the-worlds-first-clean-coal-plant-is-a-backdoor-subsidy-to-oil-producers/ [Accessed 11 Feb. 2021].
  27. Grist. (2015). Turns out the world’s first “clean coal” plant is a backdoor subsidy to oil producers. [online] Available at: https://grist.org/climate-energy/turns-out-the-worlds-first-clean-coal-plant-is-a-backdoor-subsidy-to-oil-producers/ [Accessed 11 Feb. 2021].
  28. Rapier, R. (n.d.). Renewable Energy Growth Continues At A Blistering Pace. [online] Forbes. Available at: https://www.forbes.com/sites/rrapier/2020/08/02/renewable-energy-growth-continues-at-a-blistering-pace/?sh=1ec0a77776b6.