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Carbon capture and storage is a fantasy — and taxpayers are footing the bill

Summary:
A relatively long piece on Carbon Capture by Vox. It does touch on every topic concerning capture and storage. Oil companies sold the public on a fake climate solution — and swindled taxpayers out of billions by Amy Westervelt Vox This spring, Democrats wrapped up a nearly three-year investigation into the fossil fuel industry’s role in climate disinformation and asked the Department of Justice to pick up where they left off. In House and Senate Democrats’ final report and hearing, investigators concluded that major oil companies had not only misled the public on climate change for decades, but also were continuing to misinform them about the industry’s preferred climate “solutions”— particularly biofuels and carbon capture. Sen.

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Oil companies sold the public on a fake climate solution — and swindled taxpayers out of billions

by Amy Westervelt

Carbon capture and storage is a fantasy — and taxpayers are footing the bill

Companies touted the potential of CCS publicly, as they downplayed the technology internally

Carbon capture and storage is a fantasy — and taxpayers are footing the bill

Exxon’s low internal projections for CCS back in 2018 map to the company’s own experience with the technology, too. To date, the only “successful” carbon capture project Exxon points to in its materials is its LaBarge Shute Creek gas facility in Wyoming. The Shute Creek facility is often referenced by the industry in general as a successful large and longstanding CCS project. On paper, LaBarge is responsible for around 40 percent of the total carbon emissions ever captured in the world. But the details tell a different story.

According to Exxon’s own disclosures and an analysis conducted by IEEFA in 2022, only around 3 percent of the carbon captured there (roughly 6 million tonnes) has been permanently sequestered underground. Of the rest of the 240 million tonnes of carbon emitted over the facility’s first 35 years in operation, half has been sold to various oilfield operators for enhanced oil recovery, or EOR — a process by which oil companies inject carbon underground to get more oil out — and approximately 120 million tonnes has been vented into the atmosphere.

When asked to comment for this story about its 2018 scenario plan and overall record on CCS, ExxonMobil sent the following statement by email: “False narratives that downplay our CCS efforts deliberately fail to recognize the strides we’re making in our Low Carbon Solutions business. Referencing one possible scenario from over six years ago does not represent our business outlook. We continuously evaluate our business plan based on market conditions.”

The credit nominally requires companies to verify their claims. Aside from some specific requirements to ensure condensed CO2 doesn’t wind up in groundwater, the EPA is not verifying how much carbon is actually sequestered by these projects.

When asked about verification of carbon stored under the 45Q tax credit, the EPA told Drilled and Vox that it “does not implement the Section 45Q tax credit program and is not privy to taxpayer data,” and that questions about how tax claims are verified should be directed to the IRS. The IRS confirmed that it ensures companies claiming the credit have filed paperwork outlining their claims, including a lifecycle analysis, but that it does not have the scientific or technical expertise to verify that the amount of carbon claimed is actually being permanently sequestered.

The company even worked on a series of kids’ videos touting CCS. In one subpoenaed email, Exxon executives asked the creative team working on the kids’ series to steer away from the idea that carbon is bad or that carbon capture is difficult. “De-emphasize concept that catching carbon is difficult or hard,” the feedback reads.

Yet that is precisely the company’s experience with CCS, according to several current and former Exxon staffers who agreed to speak with Drilled and Vox on condition of anonymity for fear of retaliation. Some of them were involved in the early days of researching CCS as a potential climate solution at Exxon, which they said only began in earnest in 2018, the same year that the 45Q tax credit first increased (from $10 for every metric ton of sequestered carbon to about $50 per metric ton).

Exxon is not the only one that embraced EOR for years before repositioning it as a climate solution. The industry has known for decades that compressed carbon works really well to vacuum up any remaining oil from porous rock, but it’s expensive to store and transport carbon. The industry’s embrace of natural gas helped drive down costs a bit, because while the finished product might be “low carbon,” gas often comes out of the ground bringing quite a bit of CO2 with it. That CO2 needs to be stripped out to make natural gas, a process called “gas sweetening,” leaving companies with excess CO2.

Still, the process of storing and transporting it remained expensive, so it didn’t always make financial sense to do EOR. Now, with investor-owned oil companies like Exxon, Chevron, BP, and Shell hurtling toward an inevitable decline in production rates — an inflection point referred to as “peak oil” — they need EOR more than ever. By rebranding it as a climate solution and tying it to a tax credit, they’ve not just made the process cheaper, they’ve created a new revenue stream — called Low Carbon Solutions at Exxon and Shell, Gas & Low Carbon Energy at BP, and Lower Carbon at Chevron.

The 45Q tax credit revenue will also make it feasible for these new business units to supply carbon capture where it might genuinely be needed, on facilities with hard-to-abate emissions, like concrete, steel, and ammonia plants. But the vast majority of carbon that US taxpayers are paying oil companies to capture will either be going toward generating more oil, or would have greater emissions reductions benefits had the companies opted not to drill for gas in the first place.

Clouded in carbon complexity

Climate scientists say CCS connected to fossil fuel use or production delivers little benefit when it comes to tackling climate change, period.

Yet, so far, major oil companies have struggled to deploy CCS technology in any other capacity. “When we talk about the failure of CCS, we generally talk about capturing, not storage, but when you look at capacity and how much has actually been sequestered, it’s very little,” Ho said.

Carbon capture and storage is a fantasy — and taxpayers are footing the bill

“These are not your grandmother’s pipelines,” Raffensperger said. “They could be lethal. We talk about the kill zone or a fatality zone around a CO2 pipeline. We don’t talk about that with oil and gas pipelines. These are uniquely dangerous and underregulated.”

Carbon capture and storage is a fantasy — and taxpayers are footing the bill

“They thought the USGS was overly optimistic [about the potential of CCS] and they wanted us to basically bring industry technical expertise in to tell them their projections were overblown,” one Exxon staffer said. The team brought together to study CCS was then tasked with running an experiment to see if it was even possible to permanently store captured carbon. When the study showed that it was indeed possible, current and former Exxon staffers told Vox and Drilled the company’s executives were “surprised.”

“CCS is a proven and safe technology that experts agree is pivotal to achieving net zero,” an ExxonMobil spokesperson said in response to a request for comment for this story. “We’re making progress in our Low Carbon Solutions business, with current plans to capture and permanently store more CO2 than any other company.”

But the US government is all in on that fantasy now.

“[The carbon capture tax credit] 45Q is not based on net climate benefit or net CO2 reductions, it’s based on gross CO2 capture,” Blackburn, the environmental lawyer, said. “Why would you think making carbon a commodity would reduce CO2 emissions? It’s like the opposite of carbon tax, we’re actually paying them to produce more of it.”

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