Australian gas majors have committed to reducing their emissions with both Woodside Petroleum (ASX:WPL) and Origin Energy (ASX:ORG) aiming to hit net zero emissions by 2050 while Santos (ASX:STO) has set a more ambitious target to do so by 2040.

Their methods differ too with Origin, always a more diversified energy supplier than its counterparts, progressing opportunities in green hydrogen and ammonia while reducing emissions from existing operations.

It has also flagged a near term target to generate more than 25 per cent of its own and contracted electricity generation capacity from renewables and storage.

Meanwhile, Woodside says it plans to achieve its goal by limiting its greenhouse gas emissions through efficient operations and design along with carbon offsets.

Aggressive mover Santos is hedging its bets on carbon capture and storage being the answer towards meeting this goal.

It forecasts that its use of CCS technology will grow by more than 30 times by 2030 and by 60 times by 2040.

The gas major is also flagging the production of hydrogen from natural gas as another pathway to reducing emissions, claiming that CCS would capture carbon emissions while the process will use just half the water and cost half as much as electrolysis.

Carbon capture and storage

Here’s where it gets a little dicey.

CCS is a known, even proven technology, that involves the capture of carbon emissions, transporting it to a storage site – typically an underground geological formation, and depositing it where it will not enter the atmosphere.

There have been successful CCS projects such as Occidental Petroleum’s Century CCS facility in West Texas and ExxonMobil’s Shute Creek plant, both of which use the captured carbon dioxide for enhanced oil recovery purposes.

Santos itself has successfully trialled the technology at its Moomba CCS project and is now moving to finalise a commercial project capable of locking away 1.7Mtpa of emissions.

However, CCS technology is not without its share of problems.

The large scale CCS system at Chevron’s Gorgon LNG facility has been plagued with issues despite being a required part of the project.

While Chevron was meant to bury an average of 80 per cent of its (rather substantial) emissions over a five year period from 2016, the system only started emissions storage in 2019.

Even after it came online, the system has been plagued with issues – the latest being an inability to inject carbon dioxide at full capacity to ensure that reservoir pressure does not impact the geological system, though the supermajor told the Sydney Morning Herald that the pressure management system will be operational in the first half of 2021.

That is concerning given that the Gorgon CCS is one of very few commercial scale projects of its type in the world. The International Energy Agency has claimed that the Paris Agreement’s goal of keeping the increase in global average temperature to less than 2 degrees Celsius can only be achieved with CCS technology.

It is not all negative though, the problems that Chevron has faced will no doubt provide a number of valuable lessons for future CCS applications.

There are challenges ahead but Santos’ plan to combine blue hydrogen – creating hydrogen from natural gas – and sequestering the resulting carbon could well be a way for gas players to stay relevant in the new carbon free economy, though there are certainly some challenges along the way.