Oil and Gas Industries Can be Part of the Solution to Climate Change

Last week in Riyadh at the 6th CSLF Ministerial Meeting, US Energy Secretary Ernest Moniz and Saudi Arabian Oil Minister Ali Al-Naimi issued a joint statement identifying the critical need for carbon capture, utilization and storage technologies (CCS) as a solution to reduce rising levels of greenhouse gasses. Both the USA and Saudi Arabia are leaders in CCS and recognize the need to continue developing the policy and technology to support the growing industry.

There is an emerging counter narrative in the debate over climate change; the world’s oil and gas companies can be part of the solution to reducing greenhouse gas emissions by developing new technologies, maximizing efficiency and capturing carbon. US oil companies like ExxonMobil and the Republican Party may not be part of the messaging, but leading international oil majors like Saudi Aramco, Shell and BP (all members of the Oil & Gas Climate Initiative) embrace the reality of climate change and are investing billions in new technologies to help solve the problems.

While the Green’s solution to climate change is to “leave it all in the ground”, and put the oil, gas, and coal industries out of business, fossil fuel interests obviously do not share this agenda. And US conservatives, if they can admit to climate change at all, offer only empty rhetoric about innovation. Internationally though, a new consensus is forming among oil powers to put innovation into action and not leave behind any “stranded assets”.

With the Paris Climate Change Conference just weeks away, Saudi Arabia released their INDC which is their strategic plan for reducing carbon emissions. The Kingdom has done an about-face from their typically obstructionist role in past rounds of talks. The Kingdom has pledged to reduce CO2 emissions by 130 million tons annually over the next 15 years, but maintaining a robust oil exporting economy. Their plan is to leverage technology to clean up fossil fuels and diversify their economy, and in doing so generate employment and improve their local environment.

Saudi Arabian industries and research centers have an impressive array of CCS initiatives underway, each of which has a solid business rationale. CO2 captured at refineries and chemical plants is being put to use for enhanced oil recovery as well as production of urea, methanol, cement and plastics. Research is being done into oxy-combustion of heavy fuels, advanced carbon capture membranes, highly efficient vehicles, and even mobile carbon capture on cars. The Saudis have reduced methane gas flaring by 99% since the 1970’s and used those molecules to create a diversified chemicals industry. They are applying the same approach to carbon capture and plan to create new exports of products that use CO2 as a raw material as well as recycling CO2 back into the energy systems.

Internationally, Shell just unveiled the new Quest CCS project in Alberta, Canada, this flagship effort will capture and store over one million tons annually (Mtpa) of CO2 from an oil sands bitumen upgrader. Quest follows on the launch of the Boundary Dam CCS last year, the first commercial coal power plant retrofit in neighboring Saskatchewan which stores 1 Mtpa of CO2. The Uthmaniyah CO2-EOR project in Saudi Arabia is now actively storing .8 Mtpa in oil fields. In Illinois, Archer Daniel Midlands is storing 1 million tons per year from a corn ethanol facility, the first Bio-CCS project. Projects soon to be operational include the first effort to apply CCS in steel production at the Emirates Steel Plant in Abu Dhabi storing .8 Mtpa. In the USA, the Kemper County Energy Facility in Mississippi is expected to come online in 2016 and store 3 Mtpa from a new lignite coal power plant and the Petra Nova coal power plant retrofit near Houston will store 1.4 Mtpa. The Chinese and UK governments are committed to efforts as well.

This diverse portfolio of successful CCS projects around the world in a variety of industries is proof that these technologies do work to reduce GHG emissions and while expensive today, costs will come down. Leading agencies such as the IEA are unequivocal that the two degree climate scenario cannot be met without the use of CCS and influential voices such as Al-Naimi and Moniz are endorsing the message. CCS should be given policy parity with renewables and other forms of clean energy, fossil fuels will be with us long into the future and we must invest in cleaning them up.