Could Expensive Oil Rescue Carbon Capture?

What a difference a few years makes. Not long ago, power plants with carbon capture and sequestration (CCS) seemed to be the key to a low carbon future.

Today, with no large-scale pilot plants operating, no appetite for big government subsidies, and no price on carbon in the offing, CCS barely registers in most low-carbon energy conversations.

I’ve recently been wondering, though, whether high oil prices might change that. The United States produces about a quarter-million barrels of oil each day by injecting carbon dioxide underground to enhance oil recovery. The scale of this endeavor, known as CO2-EOR, is limited primarily by CO2 availability, most of which comes from natural sources. That’s why estimates of the potential impact of various cap-and-trade bills often projected big gains in U.S. oil production: by penalizing greenhouse gas emissions, they would have incentivized CCS, and in doing that, helped boost oil.

But here’s the thing: at some oil price, it should be worth capturing CO2 from power operations purely so that it can be used to extract oil.

I’ve been meaning for a while to try and put some numbers to this hunch. I hadn’t followed through, but this past Monday, I visited an interesting company whose business strategy is based substantially on this bet. That’s enough motivation for me to drill down a bit more.


One response to “Could Expensive Oil Rescue Carbon Capture?

  1. since we don’t make electricity with oil the price of oil has no effect on the price of electricity … the price of oil and carbon capture are not linked in any way …

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s