The Ongoing CCUS ‘Gold Rush’
Carbon capture utilization and storage was labeled “a gold rush” by Bloomberg Businessweek in January. Much of it is driven by the 45Q carbon capture and storage tax credit that has significantly changed the economic outlook for CCUS. In August 2022, Congress made major revisions to 45Q, including the amount of tax credit from $45 a tonne to $85 a tonne. Projects must begin construction by 2033 to be eligible. Injection of CO2 into the subsurface has been used for tertiary oil recovery efforts in the Permian Basin of New Mexico and West Texas since the 1970s. However, the permanent storage of CO2, especially in saline reservoirs, is a relatively new enterprise.
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Carbon capture utilization and storage was labeled “a gold rush” by Bloomberg Businessweek in January. Much of it is driven by the 45Q carbon capture and storage tax credit that has significantly changed the economic outlook for CCUS. In August 2022, Congress made major revisions to 45Q, including the amount of tax credit from $45 a tonne to $85 a tonne. Projects must begin construction by 2033 to be eligible. Injection of CO2 into the subsurface has been used for tertiary oil recovery efforts in the Permian Basin of New Mexico and West Texas since the 1970s. However, the permanent storage of CO2, especially in saline reservoirs, is a relatively new enterprise.
DOE Support for CCUS
In the last 20 years, the U.S. Department of Energy has been instrumental in facilitating research in CCUS. The DOE established a r egional carbon sequestration partnership program in 2003 to determine the best geologic and terrestrial storage approaches in specific regions and to demonstrate technologies to permanently store CO2. The DOE has continued the program by establishing four regional initiatives to supply technical assistance to stakeholders interested in developing CCUS projects. The DOE-sponsored projects began with paper studies and progressed to small-scale injection programs within the different regions. In addition, there is DOE funding for direct air capture programs that can also use geological storage. The original field projects had injection rates of less than half a million tonnes a year. Recent projects are for more than a million a year and in some proposed cases, up to 8 million tonnes a year. There is also growing interest in hydrogen transport and storage, which have similar issues to CCUS. If hydrogen is to be used as a fuel in transportation, manufacturing and power generation, storage of hydrogen, at scale, is required to lower the cost of delivery to meet commerciality targets. Hydrogen is a smaller molecule with different properties compared to CO2. There must be additional research on this topic.
Risk and Public Perception
We need to reevaluate the risk and uncertainty of CCUS in both subsurface energy storage and in transportation through pipelines. The public safety risk was demonstrated by a 2020 CO2 pipeline rupture in Satartia, Miss., which led to a local evacuation and 45 people hospitalized. In Illinois, this accident led to local opposition to both pipeline development and CO2 storage. We need to be preemptive in our understanding of public perception in this emerging field. Although burdensome, the U.S. Environmental Protection Agency underground injection control class VI permits ma y help alleviate some of the public’s concerns. AAPG offers a workshop on CCUS for employment in the emerging field of energy professionals. The workshop will happen on April 25-27, 2023. The work presented at this event will demonstrate the ongoing need for skilled petroleum geologists, geophysicists and engineers for safe carbon management.