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Leonard Hyman & William Tilles

Leonard Hyman & William Tilles

Leonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…

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The Best Solution For Climate Change

If our longer-term goal is to reduce the accumulation of carbon dioxide in the atmosphere (which produces climate change) — there are only four ways to do it. 1) Reduce or eliminate the use of fossil fuels. 2) Continue using fossil fuels but remove CO2 during or after the combustion process and store it as we would a toxic substance. 3) Plant vegetation that absorbs the carbon dioxide from the atmosphere. 4) Take it out of the atmosphere and either put it somewhere or make use of it.

(As an aside, we should point out one of the more ingenious uses of locally sourced CO2 of which many Oilprice readers are no doubt aware: to enhance oil recovery from fields long past their prime. "Flooding" the field with CO2 provides easier access for drillers.)

Geoengineering, as our fourth carbon reduction option is called, has, until recently, seemed both unpopular and impractically expensive. But if new numbers are even roughly accurate, Geo-E technology is back in the game.

First, though, consider the alternatives. Governments around the world have already begun programs to replace fossil fuels with renewable energy. Automobile manufacturers could reduce fossil fuel use by accelerating vehicle electrification. This would be a big plus for the environment -- providing the car batteries weren't recharged from electricity from coal fired power plants in Kentucky or West Virginia.

However, billions of people around the world, as they become more prosperous, want precisely those modern comforts most of us in the west presently enjoy: lighting, air conditioning, washing machines and refrigerators etc. And many of these countries possess significant, accessible coal resources used for electricity production. The political power of this demand for access to electricity (and related benefits) is enormous. These fossil fueled power plants could well be around for decades. The issue is how do we address decarbonizing electric generation and transportation on a global basis? No small issue.

Related: This Is Aramco’s Spare Production Capacity

Carbon removal and sequestration has proved expensive and contentious. One petroleum major is fighting with an Australian state over its long-delayed multi-billion-dollar sequestration project. An American utility sank (and lost) billions in another never-completed plant. These are proving to be large, high stakes engineering projects with uncertain financial futures.

Even the insurance and public policy issues are formidable. Who would insure the owner of a carbon "vault" that the stored carbon dioxide did not escape its tomb? This resembles the issues associated with nuclear waste burial, NIMBYism etc. except with a hard to control gas not a solid.

Then there is the ecologically-friendly approach which advocates planting trees or other carbon-absorbing crops. There are many obvious benefits from this relatively low-tech approach. But the actual impact is difficult to gauge without considering what happens around these projects: Is there an actual net reduction in carbon dioxide in the atmosphere? Or is reforestation and land use restrictions merely causing more forest removal in still unprotected areas?

Geoengineering requires extraction from a global resource, the atmosphere. The atmosphere is sort of like a global common, something we all share. But who determines how much comes out? What are the implications for food production? Who would do it? And who would pay for it?

Until recently, Geo-E's economics were so bad that this discussion was strictly academic. But a Swiss firm, Climeworks, opened two facilities last year, one in Switzerland and one in Iceland. Climeworks says it can capture a metric ton of carbon dioxide for $600. Their claim is that their process at scale could reduce carbon capture costs to $100 per ton.

Related: The New OPEC Deal: Paper Barrels Won’t Materialize

Another firm, Carbon Engineering, headed by a Harvard University researcher, has a pilot plant in British Columbia. Carbon Engineering believes that its process will produce carbon removal at a $92-232 per ton range. As a plus, this process can use the scrubbed CO2 to manufacture fuels which could be sold in high-priced markets such as California.

Meanwhile, researchers at the University of Toronto this year developed yet another CO2 removal approach: utilize renewable energy to electrochemically reduce carbon dioxide to useful hydrocarbons (ethylene and ethanol). The Toronto researchers have not yet put a price tag on their process. But this again demonstrates that carbon dioxide can be transformed into something else, not just dumped underground.

Admittedly, at present geoengineering costs for this removal exceeds the $40-$80 per ton the World Bank said should be charged for carbon dioxide emissions. And even these figures are far above the $10 or so paid in carbon trading markets last year. But the drop in cost estimates from $600 to $100 in a year should be seen as wake up call. Geoengineering may yet offer a serious route to decarbonization.

By Leonard S. Hyman and William Tilles for Oilprice.com

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  • Aghast on June 25 2018 said:
    But what about cow farts and volcanic eruptions? The sun cycle determines the temperature along with magnetic field. The earth is cooling. Climate science is propganda. Plants absorb CO2 and release oxygen. More more huge green trees. No one should ever go hungry and yet we restrict agricultural development. How brainwashed are how many people?
  • NickSJ on June 25 2018 said:
    The CO2 theory of global warming has been progressively discredited over the past 20 years as temperature data diverges from alarmist predictions. Spending trillions to reduce emissions of an essential gas do nothing but harm the poor and impoverish the middle class with much higher energy costs. The environmental lobby is desperately trying to hang on to its massive government funding by demonizing those who point out its errors and the scientific corruption which is endemic in this field. This will go down as the biggest scientific fraud in history, and it has already harmed hundreds of millions of people.
  • Ronald C Wagner on June 25 2018 said:
    C02 is a small trace element in the atmosphere and is beneficial to all plant life which will use it to grow more vigorously. The hysteria is uncalled for and the costs of all other options are definitely not cost effective. The best new fuel source is natural gas. The role of other "renewables" is, aside from hydro, very small. May true reason and logic prevail. Coal is the worst polluter by far and it has nothing to do with CO2. However natural gas will cut CO2 in half and that is the reason that America has amongthe lowest CO2 rate and cleanest air of any major nation.
  • Kevin on June 25 2018 said:
    I applaud the above two comments. Bravo, well said. Theres more people around that know the truth. This is gonna get gooooood....
  • Louis Spring on June 25 2018 said:
    Since we produce 21.4 billion metric tons of CO2 by automotive and industrial means, should we spend $100 per ton ridding ourselves just of this CO2 is over $2.14 Trillion Dollars. Right now, that is a pipe dream.
  • Randy Verret on June 26 2018 said:
    For openers, the ongoing vilification effort against ALL THINGS fossil fuels needs to be put out to pasture. Regardless of the actual effects of CO2 in the atmosphere, demonizing energy producers that provide EVERY modern society the many benefits they currently enjoy is not constructive. Energy sector companies need to start stepping it up with outreach and public education so folks understand what the REAL alternatives are as we transition over the coming decades away from fossil fuels. Energy companies have the technical expertise and scientific KNOWLEDGE to lead that "charge." CONSERVATION, intelligent (not political) scientific debate, well thought out R & D and a rational debate about a coherent national energy policy are all parts of moving forward and the Sierra Club, WildEarth Guardians, et al are NOT remotely qualified to lead in this arena. Time for folks in the ENERGY SECTOR to be the progressives in this critical arena. Drama & "theater" needs to give way (finally) to science & technology. Otherwise, we'll just continue to "push peas around our plate"...
  • David Jones on June 27 2018 said:
    The comments here represent quite a collection of cookie cutter ignorance, I'm sorry if reality has rubbed these commenters the wrong way but fossil fuels will have to go sometime this century. The best option the oil industry has is to evolve into a more fluid energy industry by investing in and building up alternatives now as well as keeping an open mind to new energy technology entries in the future and a watchful eye on existing technologies for any potential negative effects they may exhibit. If such effects are detected, efforts must be made to counteract them or to move to alternatives asap. Something that the current industry has failed to do appropriately, in many ways they have done the opposite which has landed us in our current predicament.

    As for geo engineering, the article here is mostly discussing CCU and Power to X, that form of engineering is the safest as far as I can tell. Others like CCS are more dangerous since we end up once again with dangerous waste dangerous waste issues. Then there are the extreme options that we should stay away from such as injecting aerosols into the atmosphere or building sun shades. Those are a recipe for disaster.
  • P G Bailey on June 27 2018 said:
    I am surprised that you fell into the same trap as the technically ignorant popular media in showing, as your illustration, some harmless steam emitting from a couple of chimneys. Usually the know nothing media show a cooling tower or two, also emitting nothing but water vapour. Editor please note, if you cannnot find a relative illustration do not use one at all.
    Interesting that the author accepts the premise that C02 is the cause of all our problems, when in fact nothing of the kind has yet been proven.

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