Released January 21, 2022 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Natural gas will remain a formidable force in the global economy, especially as concerns grow over carbon emissions from traditional coal-fired energy sources, said Shane Mullins, Industrial Info's vice president of Product Development, during a webinar on the 2022 U.S. & Canada Industrial Market Outlook. In fact, those concerns are creating opportunities for the U.S. and Canada, whose natural gas-derived exports can be a valuable resource for other countries hoping to reduce their carbon footprints.
"Over time, carbon-intensity pricing will be a regional growth driver, especially for the U.S., and that comes with a focus on emissions-reduction planning," Mullins said. "That's going to allow growing exports to be the single most important environmental contribution that the U.S. and Canada can offer the world. After all, we shouldn't accept increased reliance on coal globally, while we only mitigate emissions locally."
The use of new satellite and aerospace technology to detect methane leaks, as well as access to third-party certification of methane intensity, can help production companies across North America stay competitive as they transition to lower-carbon energy sources in a responsible manner.
"This is a profound change," Mullins said. "A producer in a non-competitive basin, based on emissions intensity, is no longer shackled by their peers. Third-party certification is a driver for capital spending directed toward methane emissions."
The U.S. was among more than 100 countries that signed on to the Global Methane Pledge at the U.N. Conference of the Parties (COP26) in November, bolstering the potential for investment in related technology, especially as U.S. developers will want to export it to other countries taking part in the pledge. Mullins said producers who don't improve on emissions will be customer-limited as more countries refuse to import unabated products.
Reactions to the COP26 summit were mixed among climate activists and industry stalwarts alike. For more information, see November 17, 2021, article - COP26 Roundup: Fast, Binding, High-Impact Action on Climate was Elusive.
In addition to the pledges on methane emissions, companies such as Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) are vowing to eventually be "net zero" by entirely eliminating their carbon emissions. Carbon capture and storage (CCS) technology is among the most in-demand means of reducing CO2 emissions from fossil-fuel use. Many countries are encouraging the development of CCS through tax credits.
In the U.S., about 1,500 industrial manufacturing plants qualify for related tax credits--called "45Q" credits, in reference to Section 45Q of the Internal Revenue Code--for CCS additions, including refining, petrochemical, agrochemical and ethanol plants that produce more than 100,000 tons per year of CO2.
Click on the image at right for a graph detailing the top 10 parent companies in the U.S. and Canada for CCS projects, by related investment value.
More than 70 infrastructure projects related to CO2 capture and transport are under development across the U.S., covering more than 3,000 miles of planned pipelines. These include Valero Energy Corporation's (NYSE:VLO) (San Antonio, Texas) Navigator CO2 pipeline and storage system, which is expected to carry and store as much as 5 million metric tons per year of CO2, and span more than 1,200 miles across five Midwestern states. ExxonMobil is developing its LaBarge CCS project in Wyoming to capture up to 1 million metric tons per year, in addition to the 6 million to 7 million metric tons already captured at the LaBarge facility annually.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read detailed project reports on the Valero and ExxonMobil projects.
Mullins said many other midstream players are just starting to look into CCS development, including ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma), Talos Energy Incorporated (NYSE:TALO) (Houston, Texas), Williams Companies Incorporated (NYSE:WMB) (Tulsa), Enterprise Products Partners LP (NYSE:EPD) (Houston) and Kinder Morgan Incorporated (NYSE:KMI) (Houston). These companies are allocating capital and weighing opportunities that could keep U.S. oil production globally competitive on greenhouse gas-intensity basis.
"This is something that could grow to a point where we could see $175 billion of investment on CO2 pipelines spanning the U.S., to mitigate our emissions in the industrial space," Mullins said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
"Over time, carbon-intensity pricing will be a regional growth driver, especially for the U.S., and that comes with a focus on emissions-reduction planning," Mullins said. "That's going to allow growing exports to be the single most important environmental contribution that the U.S. and Canada can offer the world. After all, we shouldn't accept increased reliance on coal globally, while we only mitigate emissions locally."
The use of new satellite and aerospace technology to detect methane leaks, as well as access to third-party certification of methane intensity, can help production companies across North America stay competitive as they transition to lower-carbon energy sources in a responsible manner.
"This is a profound change," Mullins said. "A producer in a non-competitive basin, based on emissions intensity, is no longer shackled by their peers. Third-party certification is a driver for capital spending directed toward methane emissions."
The U.S. was among more than 100 countries that signed on to the Global Methane Pledge at the U.N. Conference of the Parties (COP26) in November, bolstering the potential for investment in related technology, especially as U.S. developers will want to export it to other countries taking part in the pledge. Mullins said producers who don't improve on emissions will be customer-limited as more countries refuse to import unabated products.
Reactions to the COP26 summit were mixed among climate activists and industry stalwarts alike. For more information, see November 17, 2021, article - COP26 Roundup: Fast, Binding, High-Impact Action on Climate was Elusive.
In addition to the pledges on methane emissions, companies such as Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) are vowing to eventually be "net zero" by entirely eliminating their carbon emissions. Carbon capture and storage (CCS) technology is among the most in-demand means of reducing CO2 emissions from fossil-fuel use. Many countries are encouraging the development of CCS through tax credits.
In the U.S., about 1,500 industrial manufacturing plants qualify for related tax credits--called "45Q" credits, in reference to Section 45Q of the Internal Revenue Code--for CCS additions, including refining, petrochemical, agrochemical and ethanol plants that produce more than 100,000 tons per year of CO2.
Click on the image at right for a graph detailing the top 10 parent companies in the U.S. and Canada for CCS projects, by related investment value.More than 70 infrastructure projects related to CO2 capture and transport are under development across the U.S., covering more than 3,000 miles of planned pipelines. These include Valero Energy Corporation's (NYSE:VLO) (San Antonio, Texas) Navigator CO2 pipeline and storage system, which is expected to carry and store as much as 5 million metric tons per year of CO2, and span more than 1,200 miles across five Midwestern states. ExxonMobil is developing its LaBarge CCS project in Wyoming to capture up to 1 million metric tons per year, in addition to the 6 million to 7 million metric tons already captured at the LaBarge facility annually.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read detailed project reports on the Valero and ExxonMobil projects.
Mullins said many other midstream players are just starting to look into CCS development, including ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma), Talos Energy Incorporated (NYSE:TALO) (Houston, Texas), Williams Companies Incorporated (NYSE:WMB) (Tulsa), Enterprise Products Partners LP (NYSE:EPD) (Houston) and Kinder Morgan Incorporated (NYSE:KMI) (Houston). These companies are allocating capital and weighing opportunities that could keep U.S. oil production globally competitive on greenhouse gas-intensity basis.
"This is something that could grow to a point where we could see $175 billion of investment on CO2 pipelines spanning the U.S., to mitigate our emissions in the industrial space," Mullins said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
