Oil Companies Know Carbon Capture Is Not a Climate Solution
Major oil companies are accused of misleading the public about carbon capture and storage (CCS) effectiveness. Investigations reveal skepticism within the industry, raising concerns about CCS's actual impact on climate change.
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The fossil fuel industry, particularly major oil companies, has been accused of misleading the public about the effectiveness of carbon capture and storage (CCS) as a climate solution. A recent investigation by House and Senate Democrats revealed that these companies have not only misrepresented their role in climate change but also the potential of CCS technology. Internal documents and whistleblower accounts indicate that while companies like ExxonMobil and Shell publicly promote CCS as essential for achieving net-zero emissions, their internal assessments are far more skeptical. For instance, ExxonMobil's projections suggest only 250 to 500 CCS facilities by 2050, significantly lower than Shell's optimistic forecast of 2,500. Critics argue that CCS is not only ineffective but may worsen climate change by increasing emissions when attached to fossil fuel plants. The Environmental Protection Agency's proposed rules for power plants faced pushback from the industry, which expressed doubts about CCS's readiness. Despite this, the Inflation Reduction Act has incentivized CCS through substantial tax credits, leading to concerns about oversight and the actual effectiveness of these projects. Environmental experts argue that the focus on CCS diverts attention from more effective and cheaper renewable energy solutions. The investigation highlights a disconnect between the industry's public messaging and its internal beliefs about the viability of CCS, raising questions about the true motivations behind its promotion.
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3 commentsHere's the damning sentence from the House report [1]: > publicly celebrate carbon capture technologies to help reduce harmful emissions while privately acknowledging that the technology is expensive and claiming that it cannot be scaled without federal government investment
Why is it a bad idea to have federal government investment in this technology? The report does not even bother to quote how much that federal investment would be needed. Imagine that to make something viable you need the federal government to pay for 10% of the capital costs, vs 90%. Neither is viable right now, but the first one has a chance, while the second doesn't.
According to the US Energy Information Administration [2], the capital cost to build a new natural gas power plant is $921/kW. If you add 95% carbon capture, it goes to $2365/kW. So, you would need someone to pay 60% of that to make it equally competitive with a plant without CC.
That does make it sound like CC is hopeless, but there are some things to consider. First: it is reasonable to expect the fossil fuel companies to absorb some of the capital cost difference. Let's say half/half. So the government assistance needs only be 30%. Second: it is likely that as the CC technologies mature, the capital expenditure difference can become lower. Let's say it goes to 20%. Third: the government can actually assist in a financially efficient form, via loan and bond guarantees, so that the financing cost is significantly reduced for the private entity, but at a very low cost for the government. In other words, the government assistance is not a zero-sum game. It actually happens in 90% of the government programs: actual government cash subsidies are rare, most often there are tax deductions, loan guarantees, etc.
[1] https://www.budget.senate.gov/imo/media/doc/fossil_fuel_repo...
[2] https://www.eia.gov/analysis/studies/powerplants/capitalcost...
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