The numbers are stark.
There is now 40% more carbon dioxide in the atmosphere than in 1800.
According to the United Nations, oil and gas production needs to fall by 20% in the next ten years in order to stop the Earth’s temperature rising by more than 1.5 degrees Celsius.
It’s seems unlikely that we could achieve this.
Especially when you consider that oil companies are investing billions in new oil production projects as we speak.
What options do we have?
In last week’s Monkey Darts, I looked at one of the most extreme solutions to dealing with climate change: Geoengineering.
This is the business of reducing the temperature of the planet by interfering directly in process of climate change.
One method is to pump aerosols in the upper atmosphere to mimic the effects of a volcanic eruption.
With a canopy of particles reflecting light and creating cloud cover, we might be able to manage how temperatures change.
Then there are those other ideas…
Lowell Wood, an astrophysicist, suggests we build a single 600,000 square mile wire-mesh structure to shade the sun.
The mirrors would barely be visible from Earth and would block just 1% to 2% of the sun’s light but that would be enough to cool the planet, according to Wood.
It sounds crazy.
But I wouldn’t rule it out.
In the meantime, there is another side of geoengineering that I’d like to focus on today: carbon capture.
This is the process of trapping carbon dioxide and storing it before its released into the atmosphere.
There are a few ways to do this.
We could plant millions of trees. We could pay farmers to grow fast growing grasses to soak up C02 and burn it off.
Or we could try and collect carbon and store it before it’s released into the atmosphere.
One of the biggest carbon capture projects so far is in Norway.
It was started by oil giant Equinor after the government introduced a tax of roughly $65 per tonne of CO2 in 1996.
That got Equinor thinking.
They realised that their Sleipner gas field was maturing and also had huge reserves of carbon dioxide (probably about 9% of the remaining reserves).
So they started pumping CO2 into a massive sandstones reservoir under the sea, and storing it there in rock formations.
To date, Equinor has stored more than 16 million tonnes of CO2 into the Utsira Formation, at a cost of approximately $19 per tonne.
And it has plans to build a CO2 processing and injection plant so that it can receive tankers of compressed CO2, which can be processed and injected through a pipeline into the continental shelf off Norway’s west coast.
More recently, a number of carbon capture startups have come up with technologies that radically reduce the cost of carbon capture.
One method is called Direct Air Capture.
Carbon Engineering started nine years ago and counts Bill Gates and a number of oil giants among its backers.
They claim that one of their plants does the work of 40 million years.
How does it work?
The technology remove co2 from the air using huge air fans that suck in atmospheric carbon.
The air gets sent through a honeycomb structure with chemicals that reduce it into a solution that can be processed into calcium carbonate pellets.
These can then be sold and used in industrial applications and/or permanently sequestered deep underground.
This process would cost between $94 and $242 per tonne, down previous estimates of $600 per tonne for this technology.
Swiss firm Climeworks uses another method: collecting adsorbents in small, modular reactors by using large fans.
During adsorption, atmospheric carbon is chemically bound to the adsorbent’s surface and, once saturated, the carbon is driven off by heating it to 100 C and delivering high-purity gaseous carbon dioxide.
Because around 90 percent of the energy demand can be supplied by low-temperature heat, the process is relatively cheap — and only a small amount of electricity is needed for pumping and control purposes.
At present it costs about $600 per tonne of CO2 extracted.
But the company said it would lower that cost to $200 within three or four years.
New Industrial Markets are Opening Up
And if carbon dioxide could be put to industrial use, the resulting revenues for these companies could be huge.
A few industrial applications for captured carbon dioxide are already in play. One involves using the gas to make chemicals and plastics, such as polyurethane foams for seat cushions.
Covestro, formerly Bayer MaterialScience, recently opened a plant that makes these foams from carbon dioxide.
Carbon dioxide that might eventually go into everything from chemicals, plastics, and carbon fiber.
Then there are plans for storing carbon for use on site.
According to McKinsey…“The manufacture of cement, which serves as the binding agent in concrete, accounts for roughly 8 percent of global carbon dioxide emissions, a significant share of the total. Using captured carbon dioxide during the making of concrete would sequester the gas in buildings, walls, bridges, sidewalks, and other concrete structures, allowing the material to serve as a major carbon sink.”
Still, for now, it’s very early days for this technology.
The UK government has pledged £26m towards constructing nine CCS projects at industrial sites across the UK, with another £315m earmarked for the wider decarbonising industry.
That’s a tiny commitment.
And then there is the moral objections that come with backing a technology that is heavily favoured by the energy industry.
They see it as a way to squeeze one final income stream out of aging oil fields.
The key challenge remains cost.
The process can require huge amounts of energy — scrubbing just 1% of man-made CO2 from the atmosphere would use the equivalent of 7% of all US energy produced in 2050, according to WRI calculations.
And then there is the cost of storage.
According to British Geological Survey (BGS), CO2 storage regulations will require that operations are rigorously monitored to see keep track of leakages and to provide early warning if the gas is not behaving as it should do.
It might cost between $94 to $232 per tonne using DAC technology, but that is still pricey when you compare to the $10 you get for
Machines that suck CO2 directly from the air could cut the cost of meeting global climate goals, a recent study published in Nature Communications, but they would need as much as a quarter of global energy supplies in 2100.
The research was the first to explore the use of direct air capture and it concluded that a “massive” and energy-intensive rollout of the technology could cut the cost of limiting warming to 1.5 or 2C above pre-industrial levels.
How to Profit
Still it’s a technology that is increasingly attractive.
It is backed by energy giants. It is on its way to becoming cost effective. And there could be big markets for stored carbon.
Carbon Engineering closed a $68m fundraising round, with investors including BHP, Chevron and First Round Capital, according to the FT.
Climeworks has raised a total of $50.1m and has 14 plants operating around the world.
“We will really end up needing 20 or 30 companies all the size of Royal Dutch Shell if we have to pull 5bn-10bn tonnes out of the year [annually]. We need an industry the size of the oil and gas industry, that works in reverse,” said Julio Friedmann, a researcher at Columbia University’s Center for Global Energy Policy.
Equinor is obviously the biggest CCS play, though it’s likely to be a small portion of their revenues.
Gas flow and storage companies might be useful place to look. For CCS projects to work, all of the equipment that is required for flow of natural gas will also be required for CO2 movement and storage.
Companies selling pumps, such as Flowserve might do well.
I’ll keep you updated on any companies in forthcoming issues of Monkey Darts.