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Equinor, Shell and US Steel to launch ‘clean energy’ hub

© ShutterstockCCUS - carbon capture usage and storage.

United States Steel Corporation, Equinor US Holdings, and Shell US Gas & Power are to jointly develop a clean energy hub in the Ohio, West Virginia, and Pennsylvania region.

Industry and fossil fuels announce plans for a US clean energy hub.

Is energy ‘clean’ if you capture and store emissions, or an excuse for kicking action down the road?

Could growing focus on CCUS distract oil majors from action on existing emissions?

When carbon capture is used to describe clean energy

While described as a ‘clean energy hub’, the focus appears to be on decarbonisation through carbon capture use and storage (CCUS), as well as the development of hydrogen facilities.

CCUS is a major focus for carbon-intensive sectors such as fossil fuels and gas, and hydrogen is seen as a relatively easy win for the fossil fuel industry due to its experience in stream methane reforming from natural gas (so called blue hydrogen where natural gas is split into hydrogen and CO2, and the CO2 is put to work or stored).

The development of CCUS has been hampered by high cost and energy burden at sites, as well as concern that a focus on the technology will allow business as usual to continue in the hopes that the technology will become commercial ‘soon’.

In a statement, the companies said that the development of the hub, and its associated infrastructure, would generate new, sustainable jobs, stimulate economic growth, and help achieve significant reductions in carbon emissions.

To support its development, Equinor and Shell will jointly apply for US Department of Energy funding designated for the creation of regional clean energy hubs. US Steel (NYSE:X) is evaluating the role it may play in the hub, including as a potential funding participant, customer, supplier, or partner

The regional CCUS and hydrogen hub aligns with both the United States’ and project partners’ ambitions to realize net-zero carbon emissions by 2050.

Carbon capture and storage has a critical role in net zero

CCS is expected to play an important role in the achievement of net zero goals. Most climate scenarios accept that the world will need CCS technology if the net zero 2050 goals are to be achieved.

In fact carbon capture, utilisation, and storage (CCUS) technologies are set to play an important role in energy transition in many nations, especially those moving towards higher use of natural gas, such as the countries of Southeast Asia.

Governments around the world are committing significant funding to its development and a growing number of oil majors are announcing CCS plans. In the US, the importance of shale gas in America’s energy security plans makes its development critical – the recent IFA includes tax credits for facilities using CCS. The UK has implemented a roadmap to make CCS more economic and has set up a £1 billion Carbon Capture & Storage Infrastructure Fund.

CCUS market set to grow but cross-sectoral collaboration is key

Analysis from Grand View Research projects that the global carbon capture and storage market will be valued at $5.35 billion by 2030 and grow at a CAGR of nearly 6% from 2022 through to that date.

Learning from experience and collaboration between companies in different sectors is going to be critical in developing standardised techniques and approaches that will lower the cost of operations.

CCS projects have a reputation for poor management and technology failures but there have been successes. For example in Canada Shell operates Quest, a CCS facility that captures, transports and stores more than a million tonnes of CO2 every year from the Scotford Upgrader, that turns bitumen into synthetic crude oil using hydrogen. It started up on time and under budget in 2015. Since then, Quest has captured and safely stored over 7 million tonnes of CO2.

Are cabon-intensive sectors really taking action?

According to the International Energy Agency in its report About CCUS, around 40 million tonnes of CO2 were captured from power and industrial facilities in 2021. There are currently around 100 projects in the pipeline but the IEA said: “Although recent progress is encouraging, the planned pipeline of projects would fall well short of delivering the 1.7 billion tonnes of CO2 capture capacity deployed by 2030 in the Net Zero by 2050 scenario. but even if the 100 or more projects currently in development come online, it will still be insufficient in meeting targets.”

While there may be a need for CCUS, and if there is any chance of achieving net zero goals there will be, but is it an excuse for carbon-intensive sectors to look as if they’re taking action.

We have seen that emissions from oil exploration are far higher than projected and yet the oil majors seem to be concentrating on new exploration and innovations that are not yet commercial. This distracts from one simple fact – with the technology we have today we cannot keep emitting GHGs and stay within the carbon budget. That means that relying on hope that a technology will one day remove the problem looks like little more than wishful thinking and a refusal to face reality.

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