As the world strives to meet a growing demand for energy while also making it less carbon intense, the energy “trifecta” has yet to be met. In other words, a power source that is simultaneously reliable, affordable and low-carbon remains out of reach.
While renewable energy helps to affordably power electrical grids in many states, it offers only intermittent supplies, as battery technology lacks the storage capacity needed to keep the lights on when the sun isn’t shining and the wind isn’t blowing.
Evolving nuclear and geothermal technology is beginning to take hold in isolated pockets across the United States, but both have high front-end costs that ultimately get passed on to the consumer.
Despite the array of emerging energy sources, as it stands, natural gas-fired power plants remain one of the most reliable and affordable sources for electricity in the United States.
Is there a way to make it clean?
In the eyes of the start-up Net Power, the answer is a resounding “yes,” and it has received the financial backing of Occidental Petroleum, Baker Hughes and others in the industry to help them show it.
“The bet we have made for 24/7 clean, firm power is that the lowest cost form will come from a natural gas solution,” said Danny Rice, CEO of the company, in a keynote presentation at the CCUS conference in Houston in March. “It is much more advantageous to start with the lowest-cost feedstock and decarbonize that than it is to start with an unreliable energy source and try to firm it up, or to take an inherently expensive energy source and try to scale it up to bring costs down. Our money is on natural gas.”
The key, Rice said, lies in decarbonizing a gas-fired power plant during the combustion process, using the captured CO₂ to actually power the plant, and sending the remaining CO₂ for enhanced oil recovery or sequestration.
A Solution Right Under Our Noses
The need for power is growing at unprecedented rates in the United States, mostly fueled by burgeoning artificial intelligence data centers.
According to a December 2024 report by Grid Strategies, five-year load-growth forecasts from utilities across the country have jumped almost fivefold from 2022 to late 2024 – a pace that will force the country to increase its capacity to generate and deliver electricity by nearly 16 percent by 2029.
“That’s an unprecedented growth rate in the modern era,” the report stated.
Unlike most countries, the United States has access to reliable and affordable power and therefore has the luxury to explore how to make energy more environmentally responsible as it expands its grid. While it is understandable that solutions are being sought outside of fossil fuels, Rice argued that natural gas has an important seat – perhaps the most important seat – at the table right now.
“People think the way we are going to decarbonize is by moving away from fossil fuels. But by starting with the lowest-cost energy feedstocks and developing innovative technologies to decarbonize them, you can achieve power with a similar carbon intensity as non-carbon fuel sources, but it can be done at a much, much lower cost,” he said. “Decarbonizing natural gas and sequestering CO₂ on the back end will most likely deliver the lowest cost form of energy on a 24-hour basis.”
Today’s combined-cycle, gas- and coal-fired power plants are a hard-to-abate sector. Capturing post-combustion CO₂ requires a substantial amount of energy to separate CO₂ from flue gas, compress it and prepare it for storage or utilization. This reduces the overall efficiency of the power plant, Rice explained.
Furthermore, it is costly to develop the technologies and infrastructure to capture, transport and store the CO₂ byproduct. If power plants are not located near geological formations ideal for long-term storage, decarbonizing could be rendered cost-prohibitive or simply unfeasible.
Believing it is more cost-beneficial to redesign the power generation process of gas-fired plants, Net Power patented technology that uses natural gas and pure oxygen to fuel a supercritical CO₂ cycle, which generates electricity while also capturing CO₂. The power plants that use this technology are expected to operate with high efficiency and produce only electricity, water and pipeline-ready or sequestration-ready CO₂, Rice said.
In this process, the combustion of natural gas and oxygen, commonly referred to as oxy-combustion, produces CO₂ and water vapor. This CO₂ mixture expands and is mixed with recirculated CO₂ to rotate a turboexpander to generate electricity. The CO₂ mixture cools inside a heat exchanger, and water is removed from the CO₂ mixture. The CO₂ is then repressurized and recirculated to be used again in the process. A portion of the CO₂ leaves this semi-closed loop cycle for EOR, sequestration or other purposes.
According to the company, this technology captures 97 percent of CO₂ emissions.
“This is a novel way to generate power using natural gas,” Rice said. “If everyone wants a world where we have 24/7 clean power, getting it from natural gas will be the lowest price point available.”
Prototype In-Progress
Nearly a decade ago, Net Power used its own funds – from cash and in-kind contributions from 8 Rivers, McDermott International and Exelon Generation – to build a roughly $150 million power plant to test its technology at a small scale. The 50-megawatt thermal test facility in La Porte, Texas logged 1,500 hours of successful runtime and synchronized to the Texas grid in the fall of 2021.
Its success launched a bold plan to build a nearly $2 billion full utility-scale, approximately 300-megawatt power plant in the Permian Basin. Despite challenges – including rising material costs and time delays – it aims to become the first utility-scale natural gas-fired power plant with near-zero emissions. Initial power generation is expected as early as 2029.
“Even though the Permian is probably the largest energy producer per square mile in the world, they have major power issues,” Rice said. Field compressors and other heavy equipment maintain a constant draw on the grid, Rice noted.
Located north of Midland-Odessa on land provided by Oxy, the plant is being funded in part by Net Power and by Oxy, Constellation, Baker Hughes and SK Group – strategic owners of 70 percent of the company. It is expected to capture nearly 1 million tons of CO₂ per year to be used in Oxy’s EOR operations.
Furthermore, the plant will serve as a prototype for subsequent projects – not just in terms of technology, but in terms of cost optimization through strategic site selection. In the Permian Basin, access to low-cost natural gas coupled with the geology and infrastructure needed for sequestration are ideal, Rice said.
In addition to the Permian plant, Net Power is currently working with partners in California, Wyoming, Appalachia, the Upper Midwest, Arkansas, Louisiana and Alberta, Canada to put its technology in motion.
“A lot of tech companies are starting to pay attention to this. They have environmental goals they want to hit,” Rice said. “To be able to achieve them by 2050, they need three things to happen: they need to achieve some kind of breakthrough on battery storage technology, they need nuclear to get developed in a more cost-effective way than it ever has in history, and they need scalable CCUS to leverage the existing natural gas infrastructure that is feeding all of the gas power plants we have across the United States.”
Aside from location, another important financial advantage is the 45Q tax credits offered by the federal government since 2008 to encourage decarbonization. The government pays $85 for every metric ton of CO₂ that is stored and $60 for each metric ton that is used in EOR for the first 12 years of a plant’s operation. “The 45Q is a huge portion of our economic value,” Rice said. “So, the key piece is being able to sequester the carbon.”
According to Rice, nearly 80 percent of existing thermal power generation sits atop sedimentary basins – ideal formations for CO₂ storage.
Petroleum Geologists Needed
The U.S. Energy Information Administration estimated that in 2019, the United States emitted 5.1 billion metric tons of energy-related CO₂. The U.S. Geological Survey has estimated that the nation has a mean subsurface storage potential of 3,000 billion metric tons of CO₂, according to a 2013 comprehensive assessment.
This immense capacity is a “geological prize” for the CCUS industry, Rice said, emphasizing the need for the skillsets of petroleum geoscientists and engineers to help the industry grow. As more people become aware that CCUS can help decarbonize the electrical grid, fossil fuels – natural gas in particular – might be able to overcome their current stigma.
“We can change the paradigm of what clean energy looks like because, for most people, clean energy doesn’t have fossil fuels in it,” Rice said. “But the reality is over the next five years you are going to start to see people evolve their thinking by moving away from labels, and toward metrics like carbon intensity,” Rice said.
In a bold move, Net Power went public in 2021 pre-revenue. The company chose that avenue to show that the growing need for power in the United States can be met with a reliable, affordable and clean solution.
“We needed to have a better platform to broadcast this to the world. With that public disclosure comes credibility and trust,” Rice said. “It also adds another level of complexity having to balance innovation with maintaining our public obligations as a public company, but people need to see these new technologies.”
While many continue to develop ways to transition out of natural gas, Rice said the nation should be using it whenever possible, as it can accelerate the path to Net Zero in a responsible way.
“If we can decarbonize something like natural gas and transform it into the lowest cost form of 24/7 clean power, all of a sudden gas doesn’t become a bridge fuel to a renewable future or a nuclear future,” he said. “It becomes a final destination.”