Carbon Capture Emerges as Top Priority for Exxon, Others
Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) does not expect the carbon capture and storage (CCS) market to slow down anytime soon, and the oil and gas giant is investing accordingly. ExxonMobil joins other U.S.-based energy leaders, such as Air Products and Chemicals Incorporated (NYSE:APD) (Lehigh Valley, Pennsylvania), Peabody Energy (NYSE:BTU) (St. Louis, Missouri) and CONSOL Energy Incorporated (NYSE:CEIX) (Canonsburg, Pennsylvania), in adopting the emissions-reduction technology, which captures CO2 from fossil-fuel energy generation and stores it underground, often to be reused in creating hydrogen and other products. Industrial Info is tracking more than $34 billion worth of active CCS projects across the U.S., nearly half of which is attributed to projects in Texas and Louisiana.
ExxonMobil estimates there will be a $4 trillion global market for CCS technology by 2050, which the company says will account for about 60% of the oil and gas market's value at that point in time. These remarks come on the heels of similar predictions by other industry players, including oil producer Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas), which in October estimated the global CCS market eventually could reach $5 trillion in value.
"This is a very dynamic space," said Darren Woods, the chief executive officer of ExxonMobil, in a recent quarterly earnings-related conference call. "If you think back a couple of years ago, hydrogen and carbon capture--and frankly, even biofuels--were struggling to kind of be in the mix, in terms of potential solutions. Whereas today, I think people recognize the importance they're going to play going forward."
ExxonMobil's Low Carbon Solutions subsidiary expects to begin construction in the coming months on a carbon-capture project at its Shute Creek Gas Plant near Kemmerer, Wyoming, which has two trains that process 740 standard cubic feet per day of natural gas. The first phase involves a series of equipment additions for the plant itself, such as a new flash vessel and electric motor compressor, as well as equipment additions for the sales facility and pump station; a new disposal well to handle excess CO2; and a nine-mile CO2 pipeline. These components would capture, transport and store up to 50 million standard cubic feet per day of CO2.
ExxonMobil made its final investment decision on the first phase toward the end of February. Jacobs Engineering Group Incorporated (NYSE:J) (Dallas, Texas) is contracted to perform engineering services on all major components. ExxonMobil also is evaluating the potential for a second phase that would essentially double the facility's carbon-capture capacity. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read detailed project reports on Phase I's plant additions, pump-station additions, disposal well and CO2 pipeline, as well as Phase II's plant additions, pump-station additions, disposal well and CO2 pipeline.
"We're accelerating our work to reduce emissions and drive innovations focused on the hard-to-decarbonize sectors, such as heavy industry and commercial transportation," Woods said in the conference call. "An important part of this activity is our ambition to achieve 'net-zero' emissions from our operations by 2050. Also important is the good progress we've made building our Low Carbon Solutions business, which is rapidly expanding, utilizing existing policy."
Air Products has some of the most ambitious goals for its CCS technology. The company wants to position itself as the world's leading producer of "blue hydrogen," which is made from natural gas via a steam reformation process, with the associated CO2 sequestered with CCS technology. At present, the most common form of hydrogen production is "grey," which uses a similar process but does not capture the carbon byproduct.
Air Products' proposed blue hydrogen and carbon sequestration project in Louisiana would produce about 750 million standard cubic feet per day of blue hydrogen for the Gulf Coast hydrogen pipeline network, with the remainder used in the production of ammonia. The project, which has an estimated price tag of between $4 billion and $4.5 billion, is currently set to begin construction toward the end of 2023, although numerous factors could delay or alter the projected investment. Subscribers can learn more from Industrial Info's project report.
ExxonMobil also is considering a blue hydrogen production facility for its petrochemicals plant in Baytown, Texas, with the capacity to produce as much as 1 billion cubic feet per day. ExxonMobil says the proposed addition is designed to sequester as much as 10 million metric tons per year of CO2, more than doubling Baytown's current capacity. For more information, see Industrial Info's March 3, 2022, article - ExxonMobil Mulls Blue Hydrogen for Baytown.
Nonetheless, companies pursuing new hydrogen-production technologies remain cautious. Executives at Air Products were among those hesitant to embrace "green" hydrogen, an emerging--and relatively expensive--process that draws on renewable energy to power an electrolyzer that can split water into its elemental components, with almost no emissions.
"At this point in time, we are doing carbon capture in order to produce blue hydrogen specifically," said Seifi Ghasemi, the chief executive officer of Air Products, in a recent quarterly earnings-related conference call. "So, I don't see us branching into [green hydrogen]. But if that becomes a very attractive sector and we have the technology, we'll take a look at it."
Subscribers to Industrial Info's GMI Project Database can click here for a full list of project reports for active CCS projects across the U.S.