There is little question that carbon capture, storage and utilization (CCSU) is destined to become one of America’s big growth industries in the years to come. Tesla TSLA +0.5% TSLA +0.5% TSLA +0.5% and SpaceX founder and CEO Elon Musk – whose real-time net worth according to Forbes would rank him just behind Jeff Bezos as the world’s 2nd-wealthiest man – is so enthused about this looming technological bonanza that he recently committed to putting up $100 million of his personal fortune as an award to the person or company who comes up with the most promising new approach to making CCSU a scalable and workable approach to reducing atmospheric carbon dioxide.
“Am donating $100M towards a prize for best carbon capture technology,” Musk tweeted to his 42.7 million followers on January 21, following with a second tweet promising to provide details “next week.” The following week came and went without said details being released, but Musk’s history would indicate he wasn’t just blowing smoke and that details will be coming soon enough.
The Potential for CCSU in Texas
A week later, Rice University’s Baker Institute for Public Policy, in a project supported by the Cynthia and George Mitchell Foundation, released a new report on January 28 detailing the potential for the state of Texas to play a leading role in the development of this economic sector. Authored by Kenneth Medlock, senior director of the Center for Energy Studies at the Baker Institute, and Keily Miller, research manager at the Center for Energy Studies, the report outlines the development of a CCUS value chain, and discusses various coordination problems, and legal, regulatory, and commercial encumbrances that can hinder its future development in the state.
“As consumers and investors increasingly reveal preferences for lower CO2 emissions, market agents are shifting their investment and marketing strategies,” the authors wrote. “This provides an opportunity for regulators and policymakers to reduce uncertainties that can impede investment, and explore fiscal measures that provide value to legacy industries and create pathways for growth in new industries.”
Medlock and Miller also note that a robust research and development portfolio, supported by government initiatives, will be a key to rapid progress in this arena: “Given the importance of hydrocarbons to the Texas economy, a robust R&D portfolio that focuses on efficiency improvements in existing CCUS technologies, new combustion processes, expanded uses of hydrogen produced from hydrocarbon feedstocks, new carbon-based materials and new uses for CO2 in industrial processes and power generation can contribute greatly to the health of Texas’ economic and environmental future.”
With its wealth of depleted oil and gas fields around the state, especially in West Texas and the Gulf Coast, Texas stands to benefit from this new growth industry in the decades to come. As Medlock and Miller point out, those benefits can be maximized by smart public policy measures.
Big Oil Has a Big Role to Play
Given the huge potential for those depleted conventional oil and gas reservoirs to provide enormous volumes of core space for carbon capture and storage (CCS) operations, energy companies doing business in Texas have been engaged in experimentation and operations related to this area for decades now. Two big companies headquartered in the state – ExxonMobil XOM +1.4% and Oxy – have recently begun expanding their already considerable efforts in this arena.
In coordination with its quarterly results on February 1, Exxon XOM +1.4% XOM +1.4%Mobil announced a significant new business plan that will expand its global low-carbon technology portfolio. Exxon is a company has been involved in CCS for more than 30 years, to such an extent that it is able to boast of being responsible for capturing and storing 40 percent of all CO2 that’s ever been captured and stored.
Exxon CEO Darren Woods said that “Given the importance of hydrocarbons to the Texas economy, a robust R&D portfolio that focuses on efficiency improvements in existing CCUS technologies, new combustion processes, expanded uses of hydrogen produced from hydrocarbon feedstocks, new carbon-based materials and new uses for CO2 in industrial processes and power generation can contribute greatly to the health of Texas’ economic and environmental future.”
In addition to exploring potential projects along the Gulf Coasts of Texas and other states, involving geologic formations both onshore and offshore, Exxon said it also plans to evaluate opportunities in Wyoming, the Netherlands, Belgium, Scotland, Singapore and Qatar. Thus, the company plans to address a global issue with a truly global business enterprise.
Oxy has also been involved in CCS for decades, and has long operated very large projects in the Permian Basin of West Texas. “We believe we have a moral imperative (and) Occidental is committed …” Vicki Hollub, Oxy CEO, told a conference in January, discussing her company’s plan to achieve net-zero carbon profile by 2050, through efficiencies and an expanded CCSU program. “We cannot achieve the Paris accords without this.”
A Startup in Houston Designs Innovative Solutions
Part of Oxy’s expanded program is a project it runs in conjunction with a Houston-based startup named Cemvita Factory. Founded by CEO Moji Karimi, a former drilling engineer in the petroleum business, and his sister and Chief Science Officer Tara Karimi, Cemvita employs an innovative process based on photosynthesis principles that enables it to manufacture a wide variety of chemicals and products using CO2 either produced by or sourced by a company as a feedstock.
In a recent interview, Moji Karimi told me that “One thing we want to bring to the oil and gas industry is to connect the dots between ‘CCS’ and ‘CCUS’, in thinking about more of an integrated approach that brings the ‘utilization’ into the mix.”
Cemvita Factory’s approach attempts to meld biotechnological solutions with heavy industries to solve problems. “We have this problem with too much CO2 here on earth, so why are we not focusing on using the CO2 as a feedstock, like we do with everything else,” Karimi said. “CO2 is a very stable molecule and it doesn’t like to react with anything. Also, it doesn’t have hydrogen in it, so there are limited things you can make with it. But photosynthesis is the starting point to go from CO2 to sugar, as plants do, so that’s where we started.”
One of the early applications discovered using this system was for deep space exploration, using the CO2 that astronauts breathe out and converting it into sugar, which is then converted to food. Karimi pointed out that the same principles will be applied on a grander scale in future Mars missions.
“On Mars, where 96% of the air is CO2, that becomes an excellent carbon source for making fuels and other things,” Karimi said. “Both NASA and SpaceX already have plans to produce methane using the CO2 in the Mars atmosphere to produce the fuel their ships will need to make their way back to earth. It would not make sense to take fuel to Mars, since you’d have to burn more than 200 lbs of fuel to deliver one pound of return fuel.
“We realized that the space industry has been thinking about CO2 as a valuable commodity and feedstock for a long time. So, we decided that for us to grow as a company and solve real problems on earth, we would have to expand to help emitters like oil and gas companies, and petrochemical companies by using the CO2 from their flue gas and carbon capture operations as a feedstock for manufacturing chemicals.
“Our first main project was with Oxy for conversion of CO2 into carbon-negative bio-ethylene. Since then, we have now identified about 30 different molecules that we can make from the CO2.”
Karimi said that, in Cemvita Factory’s business model, he and his sister don’t pick which molecules to work on: “We go to the companies and say, ‘ok, you have the emissions source for CO2 – is there a product that you are producing now, or that you are buying a lot of that we could make from your CO2?’ This way, we can help them close that loop in their own operations.”
It’s the kind of innovative approach that must be developed if CCSU is to achieve the scope and scale needed to help truly address the world’s carbon issue. And – who knows? – it might also be the kind of approach that could catch the eye of Elon Musk and his $100 million prize.