The debate about the role of carbon capture technologies in reducing emissions and advancing the energy transition is heating up.
While governments are supporting carbon capture technologies and carbon capture, utilization and storage (CCUS) projects with tax incentives, the International Energy Agency and energy transition advocates warn that carbon capture doesn’t mean that the oil and gas industry gets a free ride to continue doing business as usual.
The IEA even went as far as describing carbon capture solutions as an “illusion,” drawing criticism from OPEC about the way it seeks to prescribe how the energy industry should be working and investing.
Solution Or Illusion?
In its now infamous “moment of truth” warning to the oil and gas industry about its (lack of) investments in renewables, the agency criticized the sector as most companies are watching the energy transition from the sidelines, with oil and gas producers accounting for only 1% of total clean energy investment globally.
The IEA report stressed that “excessive expectations and reliance on CCUS” is one of the two major pitfalls in the discussion about the future of oil and gas, the other being a misconception that “transitions can only be led by changes in demand.”
CCUS is an essential technology for achieving net zero emissions in certain sectors and circumstances, but it is not a way to keep the status quo, the IEA said. Related: ECB Rate-Cut Expectations Soar After EU Inflation Cools More Than Expected
“The necessary carbon capture technologies would require 26 000 terawatt hours of electricity generation to operate in 2050, which is more than global electricity demand in 2022. And it would require over USD 3.5 trillion in annual investments all the way from today through to mid-century, which is an amount equal to the entire industry’s annual average revenue in recent years,” according to the IEA.
“With the world suffering the impacts of a worsening climate crisis, continuing with business as usual is neither socially nor environmentally responsible,” IEA Executive Director Fatih Birol said in a statement.
“The industry needs to commit to genuinely helping the world meet its energy needs and climate goals – which means letting go of the illusion that implausibly large amounts of carbon capture are the solution.”
The “moment of truth” for the oil and gas industry and the “illusion” comments on CCUS attracted the attention of OPEC, which took to official communication channels – again – to slam the IEA for its remarks and reports.
OPEC criticized the agency for describing CCUS as an “illusion”, as well as for vilifying the industry and for playing down energy security and affordability.
“Regrettably, the IEA report now also calls technologies such as carbon capture utilization and storage (CCUS) an “illusion”, even though Intergovernmental Panel on Climate Change assessment reports endorse such technologies as part of the solution to tackle climate change,” OPEC said in a statement.
“The truth that needs to be spoken is simple and clear to those who wish to see it. It is that the energy challenges before us are enormous and complex and cannot be limited to one binary question,” OPEC Secretary General Haitham Al Ghais said.
OPEC also noted that “In a world where more dialogue is needed, we repeat that finger pointing is not a constructive approach.”
In another recent report, the Energy Transitions Commission, a global coalition of leaders from across the energy landscape committed to achieving net-zero emissions by mid-century, said that carbon capture could play a vital role in the decarbonization of some industries, but carbon removals cannot be used by oil and gas firms while they continue to pump fossil fuels as usual.
The report “dispels the notion that CCUS and carbon removals justify business as usual for fossil fuel production,” according to the commission, which said that the use of coal, oil, and natural gas must be reduced dramatically by 2050, with reductions starting now.
Experts Divided on CCS, Too
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Experts are also divided on the carbon capture debate and whether these technologies can play a role in the short and long term in the energy transition.
“The U.S. government has created a massive new subsidy for the already heavily subsidized fossil-fuel industry, in the form of the 45Q tax credit for CCS,” Naomi Oreskes, professor of the history of science and affiliated professor of earth and planetary sciences at Harvard University, told The Wall Street Journal in a recent conversation with experts.
CCS could play a role in the future solutions to reduce emissions “But right now it is deflecting attention away from the urgent need to phase down, and ultimately more or less phase out, carbon-polluting fossil fuels,” Oreskes added.
Benjamin Longstreth, global director of carbon capture for environmental group Clean Air Task Force, told the Journal during the same discussion, “To maximize our chances of hitting our decarbonization goals we need a broad portfolio of decarbonization tools and carbon capture is a key part.”
By Tsvetana Paraskova for Oilprice.com
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