Is oil our ticket to a greener future?

By Chris M.

In 2009, the Royal Society warned “global efforts to reduce emissions have not yet been sufficiently successful to provide confidence that the reductions needed to avoid dangerous climate change will be achieved.” This reality – that we are both emitting too much carbon and capturing too little of it – was cited by David Keith as the driving motivation behind launching Carbon Engineering (CE) in 2009.

It is hard to argue against Keith’s ultimate goal of achieving negative emissions. One must wonder, however, whether CE’s proposed pathway – “the production of low carbon intensity transportation fuels” – really is the road to climate salvation. Is it really wise to encourage the production of more fossil fuels, even when those fuels would otherwise be stranded? And, can we rely on low carbon intensity transportation fuels to be a bridge to direct air capture (DAC)?

In short, I say no. Enhanced oil recovery utilizing captured carbon dioxide (CO2-EOR) has been shown to actually cause net increases carbon emission. Even more, we may be overstating the ability of the CO2-EOR market to provide the revenues necessary to grow CE and commercialize the technology.

To commercialize and scale DAC, Keith and other carbon capture advocates have set their eyes on an odd customer: oil companies. Oil companies have for decades used carbon dioxide (CO2) to increase the productivity of aging oil wells in a process known as EOR. During EOR, carbon dioxide is injected into an oil field, where it increases pressure and displacement of oil that would have otherwise been stranded. The majority of injected carbon remains trapped underground, and the small amount that makes its way to the oil well is re-injected to continue production.

The problem, however, is with the carbon cost of burning the fossil fuels recovered by the process. Indeed, a number of studies and tests bring into question Keith’s claim that DAC would “enable carbon-neutral hydrocarbon fuels.” One 2009 study estimated that “between 3.7 and 4.7 metric tons of CO2 are emitted for every metric ton of CO2 injected.”

Another problem is potential leakage of stored CO2 into the atmosphere. CO2 injections frequently cause earthquakes that fracture overlying rock, and if the rock is too thin stored CO2 could escape back into the air. This nearly happened in Algeria, where CO2 inducedearthquakes caused a 200-meter crack in the overlying rock that was meant to hold back four million metric tons of injected CO2.

A short-term increase of carbon emissions may be justifiable if it really were to ensure the development of cost-effective DAC technology in the long-term. But a 2010 study by the Pacific Northwest National Laboratory, disputes this possibility, arguing that CO2-EOR cannot be expected to spur commercial deployment of DAC “as a means to reducing greenhouse gas emissions.”

The study cites a number of reasons for this, focusing primarily faulty CO2 price forecasts. Until now, CO2-EOR prices have reflected relative resource scarcity – there have been relatively few providers of carbon and those providers have often been hundreds of miles away from oil fields targeted for EOR. Declining oil production in the U.S. also set a price premium on CO2 as oil companies sought to squeeze every barrel out of aging oil fields. In a future with increased supplies of CO2 from carbon capture and new sources of unconventional resources, CO2 prices would deflate and suppliers of CO2-EOR would no longer be able to extract a rent from oil companies.

Far from being a carbon-neutral pathway to the commercialization of carbon capture technology, I fear that CO2-EOR will only serve to accelerate fossil fuel consumption, to increase carbon emissions, and to distract us from implementing policies that could bring a us to a negative emission future sooner and more efficiently.

So, I pose Columbia University physicist Peter Eisenberger’s question to all of you: “Why spend so much time and energy and ingenuity coming up with solutions that are not really solutions?” Why not, for example, focus on implementing a carbon tax that would make CE’s DAC technology cost-competitive tomorrow, and not 20 years from now?

Sources:

http://e360.yale.edu/feature/can_carbon_capture_technology_be_part_of_the_climate_solution/2800/

http://e360.yale.edu/feature/geoengineering_carbon_dioxide_removal_technology_from_pollutant_to_asset/2498/

https://mitei.mit.edu/system/files/dooley.pdf

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About macomberjohnd

HBS Finance faculty interested in sustainability in the built environment including devices, structures, townships, and cities.

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