Carbon capture and storage: the lowdown and the upside

Chances are you might have heard about carbon capture and storage, a method to reduce carbon dioxide emissions using existing technology that can be deployed at scale.  As ANGEA Senior Advisor Neil Theobald writes in the April edition of The Energy Diary, with the right policy and regulatory environment it will be an important part of the energy transition – in Asia and further afield.  

Carbon capture and storage (CCS) covers the capturing of carbon dioxide (CO2) from industrial processes, its transportation to a storage site and then injection into porous underground formations for long-term storage.

The technology for these three stages is relatively mature.  Separation of CO2 from natural gas or its recovery from combustion flue gas has been going on for years, as has transmission by pipeline.  The injection of CO2 into underground rock formations is also a well-established technique for enhanced oil recovery.

This means that CCS has an advantage that some other energy transition options do not – no heroic technological developments are required to implement CCS at scale.

The challenge of the energy transition is such that all technologies that can contribute need to be considered.  The International Energy Agency (IEA) and UN Intergovernmental Panel on Climate Change (IPCC) both see CCS as a vital component of the overall transformation of the energy system to reduce emissions.

It is becoming clear that relying almost exclusively on renewables for power generation will not lead to cost or reliability outcomes that are acceptable, meaning natural gas will be in the power mix for the foreseeable future.  Meanwhile, some industrial processes that produce CO2 are very difficult to decarbonise.  Examples are steel and cement where the basic chemistry means that CO2 is an integral part of the process, not just a byproduct of energy production.  While possible alternatives are available for steel, cement manufacturing is very difficult to change.

CCS is often objected to on the basis that it will prolong the use of fossil fuels, however this misstates the issue.  The reality is that the use of fossil fuels will be prolonged because they are vital to the functioning of the global energy system and broader economy.  CCS is a way to reduce the impact of fossil fuels that are going to be consumed anyway.

Other objections include that the technology does not work, that there is a risk of CO2 leakage and that it is too costly.  As with nuclear, these objections often seem to be driven by an ideological point of view rather than any analysis.

One of the largest CCS installations in the world is at the Gorgon LNG project in Australia, where a concentrated CO2 stream is separated before the natural gas is liquefied.  Historically the CO2 would have been vented to the atmosphere, however at Gorgon it is compressed and reinjected into a rock formation over 2 km below the surface.

Gorgon is sometimes cited as an example of CCS not working because injection rates have been less than planned in the early stages.  This is not due to any fundamental failure of the CCS technology and it is expected that after some remedial work, injection will reach targets.  These sorts of teething issues with significant scale ups are common and do not mean that the approach lacks validity.

In the Asia-Pacific there are challenges for CCS deployment beyond those in more interconnected regions such as North America and Europe.  As usual, geography is important and much of the CO2 captured will be where geology for CCS is not helpful, while many of the potential sequestration locations are in less developed countries.  The creates an opportunity to develop an international trade and create new economic opportunities by transporting CO2 across international borders, whether by pipeline or ship.

To support this, much needs to be done around policy and regulation and while this work will be extensive, it is achievable.  An example is the Asia Natural Gas & Energy Association’s (ANGEA) initiative announced in late 2023 to develop a roadmap for the regulation of cross-border carbon accreditation in the Asia Pacific.  This will bring together government, industry and other stakeholders to map out a way to consistent standards and accreditation for the transportation of CO2 across international borders.  This project will report out later in 2024 and while this sort of foundational work is not glamorous it is critical to the development of the industry.

The scale of the increase in CCS required to have a meaningful impact on the energy transition is daunting.  The key to success will be in driving down unit costs to make it competitive with alternatives, long term policy certainty and a supportive regulatory environment.

Neil Theobald has more than 40 years’ experience in the oil and gas industry, including 17 years at Chevron, where he was Vice President, Global LNG, Gas Supply & Trading. He has been a Senior Advisor to ANGEA since 2021.

ANGEA is an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Based in Singapore, it works in partnership with governments and societies across the region to deliver reliable and secure energy solutions that achieve national economic, energy security, social and environmental objectives and meet global climate goals.