May 12, 2024

Opportunities and Challenges with CCUS Deployment – Q&A With Charles McConnell

Recently, we spoke with Charles McConnell, Executive Director of the Center for Carbon Management in Energy (CCME) at the University of Houston and a former US assistant secretary of energy.

In this post, we share his insight regarding the broader picture of CCUS deployment, discussing its main opportunities and challenges on a large scale.

Question: What is the broader picture regarding the CCUS deployment, and where do you see the industry heading?

Answer: The marketplace is currently witnessing a surge in enthusiasm for CCUS, signaling a global realization that CCUS is no longer an optional measure but a necessity. We've surpassed the notion that CCUS is prohibitively expensive or unproven. Now, there's recognition of its significance, particularly in the context of the rapidly increasing electricity demand.

Moving forward, renewable energy sources like wind and solar, coupled with battery storage, will play pivotal roles in the energy transition. However, the substantial growth in electricity requirements, such as those for huge AI data centers, necessitates a focus on baseload power which currently relies heavily on fossil fuels. This need cannot be met by renewables alone.

Transformative technologies are imperative for fossil fuel-based baseload power to meet these needs in an environmentally responsible fashion. But let’s not forget - less than 40% of all energy consumed is for electricity – net zero goals cannot be met by simply addressing KWh! Achieving net-zero goals first and foremost requires addressing the challenges in hard-to-decarbonize sectors globally.

Question: How can we scale CCUS deployment to meet global climate goals?

Answer: Scaling CCUS efforts requires a realistic understanding of the global energy landscape. Eliminating fossil fuels while achieving significant growth is simply not feasible. If today nearly 80% of global energy is from fossil fuels, you can’t simply eliminate fossil fuels and grow by 50% across the value chain – the math does not work.  You simply cannot grow by subtraction.

Unfortunately, decisions around energy seem to be often driven by intangible factors. The buzzword is to ‘follow the science’, but if we want to ‘follow the science’, we cannot ignore it at the same time! Our global society is facing a paradox - we need to wrap our heads around it. We are either following the science or not, decisions around energy can’t be based on personal feelings.

While achieving net-zero goals by 2050 may seem aspirational, it requires a concerted effort to overcome challenges such as infrastructure development and permitting processes. These challenges must be addressed realistically. For example, the geology of different regions may necessitate varied approaches to CCUS deployment. CCUS is not easy to implement everywhere for everybody by any stretch.

Question: How does CCUS deployment differ in the US and Europe from the rest of the world?

Answer: Many places around the world are not clouded with European and American aura and regions outside the traditional CCUS hubs in Europe and the US can deploy CCUS more broadly or even leapfrog the West. Leveraging lower carbon-intensity oil production presents a big opportunity globally. Utilizing anthropogenic CO2 for oil production can result in lower carbon-intensity oil, and marketing of crude oil based on its carbon intensity will become increasingly important 20-30 years from now.

We face a conundrum: while some may resist the idea of producing more oil, the reality is that CCUS facilitates the production of cleaner oil, meeting market demand for low-carbon intensity products. For example, hydrogen for industrial use, rather than for transportation, will be the main source of impact for hydrogen production.

Question: What are the biggest hurdles to CCUS implementation?

Answer: Public acceptance and stakeholder activation are critical. The issues surrounding the environmental justice movement and regulatory uncertainties pose significant obstacles to CCUS deployment. The concept of environmental justice remains largely undefined, and it is often subject to individual interpretations. This complicates the assessment of its adequacy in community engagement. In turn, the lack of clarity in defining environmental justice and community engagement creates uncertainty for investors and project developers.

These uncertainties, or the "known unknowns," present major challenges that hinder investment. Despite acknowledging the imperative of environmental responsibility, shareholders remain cautious.

Regulatory processes must evolve to provide clarity and streamline permitting, fostering investor confidence. Additionally, the absence of carbon taxes or mandatory requirements further complicates the investment landscape. All this hinders the scalability of CCUS efforts.

Question: What are some technological challenges with CCUS implementation?

Answer: On an international scale, the narrative of CCUS implementation is expected to unfold offshore, whether in deep waters or shallow seas, rather than in residential areas onshore. Offshore applications may offer viable solutions in regions with distinct geological characteristics, highlighting the importance of adapting CCUS strategies to local contexts. However, to ensure successful deployment, robust methods for measurement, monitoring, and verification are necessary.

Enhanced oil recovery (EOR) is critical for CCUS, but it necessitates a commitment to long-term measurement and verification of CO2. For example, there is significant interest in EOR in the US. However, some operators are inclined towards solely assuming class 2 well responsibility for EOR injectivity, avoiding long-term commitments to CO2 measurement and monitoring for safety. Operators must prioritize long-term CO2 measurement and verification to ensure safety. It's a trade-off - those opting for CO2 utilization must adhere to stringent measurement and verification standards.

These measures are essential for addressing concerns related to leakage, safe storage, and long-term liability. Striking a balance between reaping benefits and assuming responsibility is essential for successfully implementing CCUS technologies and for societal acceptance and trust in these technologies. Robust monitoring and verification will be critical for implementing this technology without looming concerns that something will bubble up in your backyard or offshore.

In our upcoming post, we'll delve further into the technological opportunities linked with the worldwide deployment of CCUS, drawing from the same insightful conversation.