The lease granted by the Texas General Land Office will cover 271,000 acres and allow Exxon to bury emissions in geologic rock formations under the seabed, the Spring, Texas-based company said in a statement. Exxon has agreed to remove 6.7 million tons of CO2 a year from industrial emitters along the Gulf Coast, including a new deal with a gas-gathering project in Louisiana announced this week.
The company may also capture as much as 7.5 million tons a year from its Baytown refinery if its proposed hydrogen project receives enough tax credits to go ahead.
“We’re at a point now where, with the volume of CO2 we have coming onto the system, it’s the natural time to expand beyond the onshore storage developments into the offshore storage space,” said Dan Ammann, president of Exxon’s division for low carbon solutions.
Carbon capture has a checkered history, with many projects around the world failing to live up to their promise of harnessing the benefits of fossil fuels while removing the emissions. But Exxon believes better technology, financial incentives from the Inflation Reduction Act and cooperation from emitters mean now is the right time to scale up, especially along the Gulf Coast, which accounts for about 20% of U.S. emissions.
Exxon has a head start on rivals in the region as it owns the country’s largest network of CO2 pipelines after purchasing Denbury Inc. last year. It expects its first project — removing as much as 2 million tons of CO2 emissions from CF Industries Holdings Inc.’s ammonia plant in Donaldsonville, Louisiana — to come online in the first half of 2025, pending regulatory approvals, Ammann said.