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Houston carbon capture project grows support

September 16, 2021

WASHINGTON — Eleven of Houston’s largest energy and chemical companies on Thursday will announce plans to create a large-scale carbon storage complex in the Houston area to serve the region’s massive industrial and petrochemical sectors.

The companies, including Exxon Mobil, Chevron, Dow Chemical and the power company Calpine, said they were pursuing the development of a storage site or sites capable of storing up to 50 million metric tons of carbon dioxide per year by 2030 and about 100 million metric tons by 2040 — equal to almost the entire global capacity of existing carbon capture systems.“I cannot emphasize enough how important it is 11 companies are stepping forward to express their support and say the lines of communication are open,” said Joe Blommaert, president of Exxon Mobil Low Carbon Solutions, the business unit developing carbon capture and storage systems for the oil company. “It’s the who’s who of Houston companies.”

On HoustonChronicle.com: Between Biden and climate investors, carbon storage gains ground

Energy and industrial companies have come under increasing pressure from government and investors alike to shift their businesses in line with global plans to address climate change and slash greenhouse gas emissions. The announcement Thursday comes five months after Exxon floated the idea of creating an offshore storage site capable of storing 100 million metric tons of carbon dioxide a year to cost in excess of $100 billion.

While short on firm commitments — the announcement Thursday said only the companies have, “expressed interest” in the concept — it marks a step forward for a large and complex project.

“It’s exciting to see so many companies have already come together to talk about making Houston the world leader in carbon capture and storage,” Houston Mayor Sylvester Turner said in a statement. “We’re reimagining what it means to be the energy capital of the world.”In an interview Wednesday, executives from Exxon, Chevron and Calpine said a final investment decision would depend on government incentives for carbon capture and storage.

Companies can now claim a $50 tax credit for every ton of carbon dioxide they store, as long as they begin construction of storage facilities by 2025. Lobbyists representing companies pursuing carbon capture have argued for expanding the credit to $85 per ton, as well as shifting to direct payments rather than tax credits and extending the window to begin construction to 2035.

Congress has agreed to some of those measures. But in the budget package under debate on Capitol Hill, the expanded credit would only extend to direct capture projects that pull carbon dioxide directly from the atmosphere, as opposed to equipment that captures emissions from industrial smokestacks.

Carbon capture remains an expensive technology that proponents say needs government subsidies to make economic sense.

“The technology isn’t the constraint. The constraint is making the commercial case for it,” said Caleb Stephenson, executive vice president of Calpine Commercial Operations. “The quantity of dollars (from government incentives) is not yet adequate.”

But even as they wait on Congress, the companies said they were not sitting idly by. They have plans to meet by the beginning of October to discuss next steps.

The companies said they are still trying to determine the best sites to store carbon dioxide and examining both onshore and offshore options. They also need to figure out the most economic way to transport carbon captured from the industrial complex centered around the Houston Ship Channel.

The executives emphasized that while no firm decisions had been made, their announcement was not just “aspirational.”

“We always hedge our bets on these press releases, but having 11 logos on this is significant in itself,” said Jeff Gustavson, president of Chevron New Energies, the business unit focusing on low-carbon fuels.

The other companies that say they support the carbon capture project are the chemical companies INEOS, Linde and LyondellBasell, the refiners Marathon Petroleum,Phillips 66 and Valero, and the power company NRG Energy.

james.osborne@chron.com

Twitter.com/@osborneja

 

 

By James Osborne, Houston Chronicle
https://www.houstonchronicle.com/business/energy/article/Houston-carbon-capture-project-grows-support-16462632.php