The carbon capture question | FT Climate Capital

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So I'm here at Al Riyadh, outside Abu Dhabi, where they claim to be leading the world in carbon capture and storage technology. The question is, can oil and gas companies be involved in the clean-up when they've been part of the problem?

Here in the United Arab Emirates, one of the world's top five oil and gas producers, they are trying to build on a system that takes carbon dioxide out of the air and stores it. Rather than cutting the production of coal, oil, and gas, fossil fuel reliant countries say we should try to capture the emissions that are behind global warming.

While renewable energy, such as wind and solar, is expected to be the main solution, polluting industries are pushing carbon capture technology as another way of dealing with emissions to try to limit the greenhouse gases in the atmosphere by 2050.

The Abu Dhabi National Oil Company is experimenting with what to do with the carbon dioxide once it is captured. For example, it has partnered with a tech star-tup from Oman called 44.01, named after the weight of the carbon molecule. It is trying to inject carbon dioxide, which has been dissolved into seawater, into the rocks, which in this part of the world are nearer to the surface, where it will turn into mineral.

This is a unique project for the UAE. We've never tried to capture CO2, mix it with seawater, and inject it into these rocks here in the UAE. We're trying something new that we think could be important for the future.

It's early stages. ADNOC has deep expertise in subsurface. We've come together with 44.01. 44.01 has interesting technology. And we're able to accelerate the process, learn, and see what is going to happen when two parties come together to try and drive the cost down.

As ADNOC acknowledges, these projects are very experimental. And could be a long way from being able to capture anywhere near the amounts of carbon dioxide needed by 2030.

So everything to do with this facility here is to operate the DAC, and then to condition the CO2, and store it in a liquid state. Right next to it, on the left, you would see two storage tanks. This is where we store our seawater, as well as our freshwater.

So the carbon dioxide that's stored in the tank is in liquid state. It's then changed into a gaseous state. It is dissolved in the seawater. And then, we have our pumping facility that brings that fluid all the way to the left, where you see those two red structures on top of the boreholes. This is where our wells are. We can walk...

Across the peninsula, near Abu Dhabi, ADNOC is piping the carbon captured from two dirty steel plants and storing it before pumping it back into the ground to produce even more oil. But climate experts say that carbon capture should not be on the agenda for producing more oil and gas at all.

So the key to solving the climate crisis is to reduce the emissions of carbon. And that means phasing out coal and oil straight away. Carbon capture and storage should not be used to justify new coal power stations, new gas-fired power stations. We don't need those. We have renewables. Renewables are cheaper, cleaner, more efficient, and also, more secure because you're not beholden to the global energy markets for the price of your energy.

Carbon capture and storage is for those incredibly difficult industries, like cement and steel manufacturing, which are essential for our economy, but we need to capture that carbon. It is not a panacea to allow people to continue to burn fossil fuels.

The problem with carbon capture and storage is there are so many different methodologies out there. One of them is having huge fans and doing direct air capture. You pass air through fans, and you capture the very low quantities of CO2. You concentrate it, and then, you pump it down into rocks deep into the Earth. And it stays there forever.

But one of the big worries about carbon capture and storage is the storage. How do we actually store carbon dioxide safely?

Another big issue is the cost of developing a system at scale that will capture enough emissions.

We have quite an aggressive path to commercialisation. For us, being commercially viable goes hand in hand with scaling. We cannot scale this solution unless it is commercially viable. This project and all the other projects we have built give us learnings that we can take on to the next project to improve the technology and to effectively get down to a more cheaper rate of mineralisation.

So for every net tonne of CO2 that we convert into rock, we generate a carbon credit. That carbon credit is a safe and permanent carbon credit, which we can then sell to companies, governments who want to decarbonise and reach net zero.

Like all new things, we know that the cost will come down over time. But we need to take those first steps in order to learn about the technology and scale it up in the event of success and have more learnings, and then the cost comes down over time.

Currently, Al Riyadh is capturing around 800,000 tonnes of CO2 on a yearly basis. Our aim is to go and increase the carbon capture capacity to achieve 10mn tonnes per annum by 2030. Our target is to achieve the net zero ambition by 2045. And we are also targeting to reduce the carbon intensity by 25 per cent and achieve the zero methane target emissions by 2030.

The cost to develop these projects is still phenomenal. And the amount of carbon captured remains small. Is it worth it, rather than putting the money into other green energy technologies?

The big question right now, and no one knows, is, how cheap can we get these technologies? And how operationally can we make them work? With CCUS you need to put the carbon capture right in the industrial facility where the smokestack is, where the carbon is going into the atmosphere. And that can be very challenging operationally.

For many industries and for many parts of our global economy, if we don't have removals as a meaningful tool in the toolkit, it will get even more expensive and take longer to decarbonise to the full extent that we need to. So I understand the scepticism and respect the concerns, but I've watched us on other technologies - wind, solar, batteries - the forecasts of 20 years ago were so far off, how much capacity we've been able to create, how much we've been able to bring costs down.

But this 'technology,' as we call it, has actually been around for more than two, three decades. And so, there just does seem to be an operational difficulty that's related to cost. There's so much money in the oil and gas industry that could have been invested in carbon capture and has not been. What has been the main barrier over the last two to three decades?

So the biggest barrier for many aspects of our decarbonisation challenge globally has been an inability to put a price on carbon. We haven't put a price on that. And that's created very little incentive to invest in the technologies in a massive way or to invest to scale those technologies to gigaton scale, the scale that we need.

Now, as places like Europe, but other places as well, are starting to recognise there needs to be one way or the other through pricing or regulation, an implication for higher emissions and we need to push that through the economy, that creates much more incentive to invest in the technology. And to put scale into it.

BCG just published a report on direct air capture in which we highlighted that while the costs are $600-plus today, we actually see a path to get below $200 a tonne and potentially, below $150 a tonne. That rate of decline is not unlike what we've seen in other technologies, but it requires a lot of investment.

It requires some important collaborations for components of that sector that cut across all the players. It requires better financing access. That we view this the way we view waste removal, where we provide cheap financing or water treatment plants, where we provide cheap financing. If we don't invest and we don't work together to try to make it work, we take a really important tool out of the toolkit.

The IEA has calculated the sums that will be involved in developing carbon capture at scale.

From our point of view, it can well play an important role in certain applications, certain sectors, such as cement. Such as iron, steel, and others. But to say that the carbon capture and storage technology would allow the oil and gas industry to continue with the current oil and gas production trends and at the same time bring the emissions down in line with the Paris target is, in our view, is a pure fantasy.

In order to capture the emissions from the current oil and gas production trends in the future and bring it in line with our climate targets through CCUS would require a significant amount of annual investments.

Annual investment for CCUS, in that case, would be about US£3.5tn. 3.6 trillion US.$. This year, the CCUS investments were about $4bn. So we are talking about an increase of investment, CCUS, a factor of almost 1,000.

The fossil fuel industries around the world have resisted all calls to deal with climate change. They should realise that we want energy. And we're going to pay for energy.

And to give you an idea, about $3tn is spent every year on new energy infrastructure. Why should it be fossil fuels when renewables are cheaper, cleaner, and better? And they can do a lot to help themselves. If the whole of the oil and gas industry around the world got together and said, look, OK guys, we need to actually clean up our operations. If they then mandated globally that they were going to capture all the methane that is leaking from their oil systems, their gas systems, and also, their refineries, that would make a huge start on our journey to decarbonising.

Scientists say we need to cut the amount of energy emissions by half by 2030 from more than 38bn tonnes now. Carbon capture today represents just 00.1 per cent of that. It may be needed to help stop the ever-rising emissions in the atmosphere, but it will not be the only key to doing that in the short time needed to limit global warming.