Big Opportunity in Texas for CO2 Capture

Date:

News Opinions

The Texas legislature is considering HB1284 and SB450, a set of bills that will empower the state to begin approving permits for the use of Class VI wells for carbon capture and storage. Class VI wells are those designed to inject CO2 deep into the earth for long-term storage. Currently, these approvals are handled by the U.S. Environmental Protection Agency (EPA). By transferring approval authority to the Railroad Commission of Texas (RRC), the state can more efficiently embrace opportunities to partner with industry leaders in capturing CO2 emissions and improve environmental health. 

While the emergence of carbon capture and sequestration into the public policy discussion is relatively new, the truth is that Texas has been incorporating this technology into its operations for decades. The first commercial-scale carbon capture effort was launched in West Texas in 1972 and was used for enhanced oil recovery. This same technology is used in oil and gas fields across the country to make exploration more efficient, extend the life of existing plays, and limit CO2 emissions. 

As the technology matures, other uses for captured CO2 are coming online. For instance, in 2018, NET Power completed a 50 MW power plant test facility in La Porte, Texas that uses a revolutionary process of burning natural gas with a mixture of CO2 and oxygen. The result is power generated by turbines spun by high pressure CO2, not steam. This means the plant runs with zero air emissions including traditional pollutants and CO2. In fact, excess CO2 generated in the process is shipped by pipeline for use in other projects, like oil and gas recovery, and helps make the cost of power competitive in the marketplace. This proven technology will now be shipped around the world, including a recently announced 280 MW plant in Illinois. 

ExxonMobil is another major Texas player looking at an ambitious carbon capture project. “For the past three years, ExxonMobil has been assessing the concept of multi-user CCS ‘hubs’ in industrial areas located near geologic storage sites, such as depleted oil and gas reservoirs,” says Joe Blommaert of ExxonMobil. “We believe the time is right for a large-scale collaboration in the United States between government at every level, private industry, academia and local communities to create an ‘Innovation Zone’ approach to dramatically accelerate CCS progress.”

The company is exploring the possibility of a $100 billion dollar project along the Houston Ship Channel and the surrounding areas that would allow for the capture of all CO2 emissions from the local petrochemical, manufacturing, and power generation facilities. The CO2 could then be stored thousands of feet below the Gulf of Mexico to be used in various ways and to help meet emissions goals. 

“Given Texas’ long experience with all aspects of oil and gas development, it would make sense for the state to have the primary authority of making sure that production and storage occur in a safe and environmentally responsible way,” says Josiah Neeley, the Texas Director of the conservative-leaning R Street Institute. “While Texas, along with most other states, has been granted primacy over various well types, Class VI wells have remained under federal oversight.”

Wresting control back from the federal government will allow the state to be more responsive as the carbon capture industry continues to develop. According to a study by the Rhodium Group,  prepared for the Regional Carbon Capture Deployment Initiative, Texas is uniquely situated to benefit from the expansion of a carbon capture and storage industry. “Texas has the opportunity to create an annual average of up to 18,350 project jobs over a 15-year period and 9,230 ongoing operations jobs through the deployment of carbon capture at 95 industrial and power facilities,” the study states. “The retrofit of equipment at these facilities has the potential to capture nearly 161 million metric tons of carbon dioxide (CO2) per year. Along with the development of CO2 transport infrastructure, this would generate up to $59.9 billion in private investment.”

The effort of HB1284 and SB450 to apply for, and obtain primacy, from the federal government is nothing new; the state already has jurisdiction over all other types of wells across Texas. Furthermore, polling done by Conservative Texans for Energy Innovation has found that 64% of Texans favor carbon capture technology. By passing these bills, Texas positions itself to not only reduce CO2 emissions but to also capitalize on an ever-emerging economic opportunity. 

This piece was written with input from Conservative Texans for Energy Innovation.