The carbon capture question | FT Climate Capital

[Music] so I'm here at Al rata outside Abu Dhabi where they claim to be leading the world in carbon capture and storage technology the question is can oil and gas companies be involved in the cleanup when they've been part of the problem here in the United Arab Emirates one of the world's top five oil and gas producers they are trying to build on a system that takes carbon dioxide out of the air and stores rather than cutting the production of coal oil and gas fossil fuel Reliant countries say we should try to capture the emissions that are behind global warming while renewable energy such as wind and solar is expected to be the main solution polluting Industries are pushing carbon capture technology as another way of dealing with emissions to try to limit the greenhouse gases in the atmosphere by 2050 the Abu Dhabi National oil company is experimenting with what to do with the carbon dioxide once it is captured for example it is partnered with a Tex startup from Aman called 44.1 named after the weight of the carbon molecule it is trying to inject carbon dioxide which has been dissolved into seawater into the Rocks which in this part of the world are nearer to the surface where it will turn into mineral this is a unique project for the UAE we've never tried to capture CO2 mix it with seawater and inject it into these rocks here in the UAE we're trying something new that we think could be important for the future its early stages adok has deep expertise in subsurface we come together with 4401 441 has interesting technology and we're able to accelerate the process learn and see what is going to happen when two parties come together to try and drive the cost down as adnoc acknowledges these projects are very experimental and could be a long way from being able to capture anywhere near the amounts of carbon dioxide needed by 2030 so everything to do with this facility here is to operate the daak and then to uh condition the CO2 and store it in a liquid uh state right next to it on the left you would see two storage tanks this is where we store our sea water as well as our fresh water so the carbon dioxide that's stored in the tank is in liquid state it's then change into a gasier state it is dissolved in the seawat and then we have a pumping facility that brings that fluid all the way to the left where you see those two red um structures on top of the B holes this is where our wells are we can walk across the peninsula near Abu Dhabi adok is piping the carbon captured from two dirty steel plants and storing it before for pumping it back into the ground to produce even more oil but climate experts say that carbon capture should not be on the agenda for producing more oil and gas at all so the key to solving the climate crisis is to reduce the emissions of carbon and that means phasing out coal and oil straight away carbon capture and storage should not be used to justify new Coal Power stations new gas fired power stations we don't need those we have Renewables Renewables are cheaper cleaner more efficient and also more secure because you're not beholden to the global energy markets for the price of your energy carbon capture and storage is for those incredibly difficult Industries like cement and steel manufacturing which are essential for our economy but we need to capture that carbon it is is not a Panacea to allow people to continue to burn fossil fuels the problem with carbon capture and storage is there are so many different methodologies out there one of them is having huge fans and doing direct air capture you pass air through fans and you capture the very low quantities of CO2 you concentrate it and then you pump it down into rocks deep in into the Earth and it stays there forever but one of the big worries about carbon capture and storage is the storage how do we actually store carbon dioxide safely another big issue is the cost of developing a system at scale that will capture enough emissions we have quite an aggressive path to commercialization for us being commercially viable goes hand in hand with scaling we cannot scale this solution unless it is commercial viable this project and all the other projects we have built give us learnings that we can take on to the next project to improve the technology and to effectively get down to a more cheaper rate of mineralization so for every net ton of CO2 that we convert into rock we generate a carbon credit that carbon credit is a safe and permanent carbon credit which we can then sell to companies governments who want to decarbonize and reach Net Zero like all new things we know that the costs will come down over time but we need to take those first steps in order to learn about the technology and scale it up in the event of success and have more learnings and then the cost comes down over time currently AR riy is capturing around 800,000 ton of CO2 in a yearly basis our aims is to go and increase the carbon capture capacity to achieve 10 million ton perom by 2030 our Target is to achieve The Net Zero ambition by 2045 and we are also uh targeting to reduce the carbon intensity by 25% and achieve the zero methane targets emissions by 2030 the cost to develop these projects is still phenomenal and the amount of carbon captured remains small is it worth it rather than putting the money into other green Energy Technologies the big question right now and no one knows is how cheap can we get these Technologies and how operationally can we make them work with ccus you need to put the carbon capture right in the industrial facility where the Smoke Stack is where the carbon is going into the atmosphere and that can be very challenging operationally for many Industries and for many parts of our global economy if we don't have removals as a meaningful tool in the toolkit it will get even more expensive and take longer to decarbonize to the full extent that we need to so I understand the skepticism and respect the concerns but I've watched us on other Technologies wind solar batteries the forecasts of 20 years ago were so far off how much capacity we've been able to create how much we've been able to bring cost down but this uh technology as we call it has actually been around for more than two three decades and so there just does seem to be an operational difficulty that's related to cost there's so much money in the oil and gas industry that could have been invested in carbon capture and has not been what has been the main barrier over the last two to three decades so the biggest barrier for many aspects of our uh decarbonization challenge globally has been an inability to put a price on carbon we haven't put a price on that and that's created very little incentive to invest in the Technologies in a massive way or to invest to scale those Technologies to gigaton scale the scale that we need now as places like Europe but other places as well are starting to recognize there needs to be one way or the other through through pricing or regulation an an implication for higher emissions and we need to push that through the economy that creates much more incentive to invest in the technology and to put scale into it BCG just published a report on direct air capture which we highlighted that while the costs are $600 plus today we're we actually see a a path to get below $200 a ton and potentially below $150 a ton that rate of decline is not unlike what we've seen in other Technologies but it requires a lot of investment it requires some important collaborations for components of that sector that cut across all the players it requires better financing access that we view this the way we view waste removal where we provide cheap financing or or water treatment plants where we provide cheap financing if we don't invest and we don't work together to try to make it work we take a really important tool out of the toolkit the IAA has calculated the sums that will be involved in developing carbon capture at scale from our point of view it can well play an important role in certain uh application certain sectors such as cement such as uh iron steel and others but to say that the carbon capture and storage technology would allow the oil and gas industry continue with the current oil and gas production uh Trends and at the same time bring the emissions down in line with Paris Target is in our view is a Pure Fantasy in order to capture the emissions from the current oil and gas production Trends in the future and bringing in line with our climate targets through ccs would require a significant amount of annual Investments annual investment uh for CCs in that case would be about 3.5 trillion us do $3.5 trillion us this year the cus Investments were about 4 billion so we are talking about an increase of investment C is a factor of almost 1,000 the fossil fuel Industries around the world have resisted all cause to deal with climate change they should realize that we want energy and we're going to pay for energy and to give you an idea about $3 trillion is spent every year on new energy infrastructure why should it be fossil fuels when Renewables are cheaper cleaner and better and they can do a lot to help themselves if the whole of the oil and gas industry around the world got together and said look okay guys we need to actually clean up our operations if they then mandated globally that they were going to capture all the methane that is leaking from their oil systems their gas systems and also their refineries that would make a huge start on our journey to decarbonizing scientists say we need to cut the amount of energy emissions by half by 2030 from more than 38 billion tons now carbon capture today represents just 0.1% of that it may be needed to help stop the ever Rising emissions in the atmosphere but it will not be the only key to doing that in the short time needed to limit global [Applause] warming

Channel: Financial Times

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Length: 12min 2sec (722 seconds)

Published: Tue Dec 19 2023