Carbon management and storage: The future of oil and gas

The oil and gas industry achieved global supremacy in the supply of convenient and portable energy from the early 1900s. By the 1970s, the impact of carbon emissions from these products became clear. The industry now accepts that environmental mitigation is both essential and urgent.

Last November, the UK government hosted an international summit on carbon capture, usage and storage (CCUS) in Edinburgh, where it unveiled its CCUS Action Plan for the UK. Unlike previous attempts at carbon management, this time the benefits of carbon capture and storage (CCS) are being recognised right across the energy system, from electricity to heat and transport, and across the whole economy, from manufacturing to waste disposal.

An industry in waiting It is already possible to see a pathway into this new future. Mature basins, such as the North Sea, have a catalogue of depleted fields and an abundance of legacy pipework infrastructure that can be deployed for safe and permanent carbon storage. The UK also has the people skills and business methods to tackle a new offshore industry.

The UK government’s advisers, the Committee on Climate Change, state that the first projects should exist in the mid-2020s, with 100m tonnes of CO2 per year stored in 2050.

Repurposing existing equipment brings projected savings of some 50–70% compared to new-build alternatives. The Acorn project based at St Fergus in north-east Scotland could be storing CO2 from 2023, at a cost of just £300m for the initial transport and storage network. Increasing and augmenting this activity includes making use of the deep-water port at Peterhead to provide CO2 offloading facilities for shipping, so that the coastal industrial regions of Tees, Humber and South Wales can access secure CO2 storage.

North-east Scotland can act as a global centre of expertise for design, project management, component construction and sustainable finance packages for CO2 storage systems worldwide.

Acorn’s pathway is similar to Norway’s Northern Lights project, with an ambition to be operating by the early 2020s. Both see a role for clusters of CO2 capture from multiple industries, mid-range transport by shipping and pipelines to a well-evaluated single CO2 storage site offshore. Both have full storage permits awarded by regulators.

Many CCUS projects across Europe are ready to follow, several involving Scotland and the expertise of the Scottish Carbon Capture & Storage partnership, with projects such as ALIGN-CCUS progressing industrial involvement.

The case for CCS

For oil companies seeking existing operational practices to balance CO2 budgets, the use of CO2-enhanced oil recovery may rise up a list of options. That enables additional oil production, with the CO2 injected through infrastructure built at no cost to the taxpayer. North Sea calculations suggest 20 suitable fields exist, offering a potential 1–6bn barrels of additional oil, and storing 100m tonnes of CO2.

This transition to CO2 storage is gaining speed as the impact of climate change becomes more publicly visible. Some oil and gas companies, such as BP, Shell and Total, are now discussing storing CO2 resulting from their operations, and the desire to create ‘greener gas’ for heat by 2025 may rapidly drive hydrogen production from methane, requiring a CO2 removal and storage service.

Shell’s latest annual report states that ‘regulations designed to limit the increase of global temperature... could have a material adverse effect on Shell... through higher costs... and reduced demand’. The message is clear – change is coming.

Most progress has been achieved in the UK by decarbonising electricity. The future will be different, focused on heating and industry. This leaves 20% of greenhouse gas emissions which are hard to capture. That gap will be filled by direct air capture, which is now attracting venture investment by oil companies such as BHP, Chevron and Occidental. The resulting CO2 will inevitably require storage.

A North Sea carbon storage industry can be ready and waiting within a generation. By Professor Stuart Haszeldine, Professor of CCS, University of Edinburgh and Director, Scottish Carbon Capture & Storage

By Professor Stuart Haszeldine, Professor of CCS, University of Edinburgh and Director, Scottish Carbon Capture & Storage