Oil Majors Race to Cash in on Carbon Storage in East Texas
March 10, 2024
Oil rigs are drilling a new type of well in East Texas, where carbon dioxide pipelines, top-tier geology and a slew of industrial emissions are kicking off a race to cash in on climate-change-fueled incentives, writes reporter Amanda Drane.
Chevron started drilling test wells last month for its 142,000-acre carbon storage project in Jefferson County and offshore Port Arthur, including what is believed to be the first offshore test well in the U.S. drilled as part of the emerging carbon capture and storage industry. It joins Exxon Mobil, Occidental Petroleum, BP and others that have recently drilled wells east of Houston to collect subsurface data needed to obtain federal permits for projects that would inject carbon dioxide deep underground.
Test wells and land deals mark the first leg of the race to develop these new projects. The opening gun was fired with the Biden administration’s Inflation Reduction Act, which promised $85 per ton to companies that captured climate-warming CO2 from a smokestack rather than emitting it, a significant increase from earlier levels.
Texas oil companies such as Exxon believe the emerging industry’s worth could grow to trillions of dollars a year as demand for climate solutions grows. The International Energy Agency describes carbon mitigation as “an important technology for achieving global net-zero emissions.”