For an industry that has for decades been criticized by environmental groups as the root of all evil it is ironic that oil and gas producers are aligned in championing carbon capture with such enthusiasm.
The fossil fuel industry is at the forefront of lobbying for radical changes in public policy into research to cut the costs of extracting CO2 from hydrocarbon energy. Industry leaders like Bob Dudley from BP are quoted in the Telegraph as saying, “we can’t just keep our heads in the sand”.
The reality is the hydrocarbon industry has seen the writing on the wall. Public attitudes are hardening, aided by worries about particulate emissions from diesel cars and air pollution in major cities from Beijing to Delhi and even in western capitals like London. The industry is under huge pressure from sovereign wealth funds, pension funds and activist shareholders to find long-term solutions to the carbon question and thwart claims that hydrocarbons are our sunset energy source.
Gradually hardening tax regimes, which give politicians the opportunity to raise revenue with carbon taxes, are also applying pressure to the hydrocarbon Industry to come up with viable ways to reduce a carbon footprint. Hence their enthusiasm for carbon capture and storage (CCS).
Carbon Capture
The article explains Exxon Mobil (NYSE:XOM) is involved in a quarter of all CCS projects worldwide from simple CO2 storage to developing new chemicals that can lower emissions, and controversially backs a carbon tax. The company is in a joint-venture with fuel-cell energy to develop carbonate fuel cells that can capture 90% of CO2 gases cheaply. It’s this kind of technology that will make the difference. So far, traditional CO2 capture and sequestration projects, frequently run over budget and fail to deliver carbon capture at anything like an economic rate.
The article describes an interesting project on the Texas Gulf Coast, built by a firm called NetPower and supported by Toshiba (T:6502) and Exelon (NYSE:EXC). The technology is said to produce electricity from natural gas that is cost competitive with current technologies and generates zero atmospheric emissions — eliminating the smokestack altogether.
Source: NetPower
According to NetPower, the technology employs a process called oxy-combustion, where fuel is burned with pure oxygen instead of ambient air. Oxygen is preferable to air because air is nearly 80% nitrogen. When combusted, nitrogen creates NOx, a harmful pollutant.
Less NOx
Oxy-combustion enables the plant to virtually eliminate all NOx production. In addition, it uses a mostly pure, high-pressure stream of CO2 rather than in a traditional power station that uses steam to drive the turbine as its primary means of producing power, it has turned a major problem for other power systems — the energy and processes needed to capture, clean-up, and compress carbon dioxide emissions — into a solution.
If it can be proved commercially sound, such technology could transform both the economics and environmental case for using natural gas for power production. Not surprisingly NetPower is getting a lot of interest from around the world in its project.
Clearly, the hydrocarbon industry was never going to roll over and die in the face of environmental pressures, but rather than fight a rear-guard action, it is pouring funds into research and trialing new technologies that may not just ensure the economic future of their in-ground resources, but dramatically improve the environmental landscape at the same time. Environmental pariah to environmental savior, now there’s a slick move.