Power Up: Chevron’s experience is hardly a great endorsement for CCS

Carbon capture and storage (CCS) continues to be touted by the fossil fuel sector as the answer to abating its emissions by the simple expedient of capturing its carbon emissions and storing them in depleted reservoirs deep underground.

The technology is not restricted to the oil and gas sector and could conceivably be deployed to lower or eliminate emissions from coal-fired power plants as well.

And there’s also the argument that the technology could be the enabler for the hydrogen sector, allowing for its production from natural gas – the methodology known as blue hydrogen – before renewable energy is able to cost-effectively produce blue hydrogen.

Australian Resources Minister Madeline King also told the Australian Petroleum Production and Exploration Association’s annual conference that CCS represented the “single biggest opportunity for emissions reduction” in the sector and that the Government would support the industry through “clear legal and regulatory frameworks and robust policy guidance”.

However, she steered clear of committing funds to back the technology, which might be a wise choice given Chevron’s somewhat painful experience implementing the technology at its Gorgon LNG project in Western Australia.

The Albanese Government had in October last year removed the $250m in funding for CCS projects that was put in place by the previous Government.

CCS stumbling block

Chevron’s large-scale CCS system at Gorgon was supposed to be part of the giant LNG development to address the relatively high CO2 content of its primary gas reservoir.

It all sounds good on paper but while the system was meant to bury an average of 80% of the project’s emissions from 2016, it only started to actually store emissions in 2019.

The amount of CO2 stored has risen since then but as the ABC reported, the facility is still only operating at a third of the capacity.

However, Chevron insists that the technology does work and that the poor performance is due to the need to extract water from the reservoir in which the carbon was held.

In its favour, even this capacity makes the Gorgon CCS facility the largest of its kind in the world and an argument can be made that any kind of CO2 abatement is better than none.

But it does raise the question of just how viable CCS actually is with Bloomberg New Energy Finance senior associate Kathy Gao saying that it depended on carbon pricing to send a strong enough signal to producers though she warned that the costs associated with CCS could more than double the capital required.

Still a role to play

While relying on CCS as the primary way of reducing or even eliminating CO2 emissions from the fossil fuel sector is folly to say the least.

The chorus of support from oil and gas companies seems to be – at least in part – wishful thinking that the technology would allow them to carry on with business as usual.

But that’s not to say that all is lost for the technology.

CCS can and will likely play a role in a whole range of solutions to reduce emissions.

There is reason to believe the technology could be the final element in an integrated emissions reduction strategy, granting the ability to address the hardest to abate emissions.

However, even a higher level of successful adoption can only delay the transition away from fossil fuels and we are likely to see the face of energy change towards a decidedly more renewable look.