Carbon capture and storage questioned after Chevron result

Australia's only commercial scale carbon capture and storage (CCS) project has failed to meet targets to sequester carbon emissions from an LNG facility, raising questions as the role that CCS technology can play in reaching decarbonisation targets within the oil and gas industry.

On Monday, Chevron, the operator of the CCS facility at the Gorgon LNG plant in Western Australia, announced that it had reached the milestone of injecting five million tonnes of greenhouse gas (carbon dioxide equivalent, CO2e) since safely starting the system in August 2019.

The milestone represents the largest volume of injection achieved within this time frame by any environmental carbon capture and storage (CCS) system of comparable specifications.

However, Chevron had committed to storing at least 80% of the carbon dioxide produced by the Gorgon LNG facility, or around 4 million tonnes a year. The storage was one of the key conditions for state government approval.

"The Gorgon carbon capture and storage (CCS) system is the biggest CCS system designed to capture carbon emissions and is demonstrating Australia's world-leading capability in the area," said Chevron Australia managing director Mark Hatfield. "Once fully operational, the system will capture up to 4 million tonnes of CO2 annually and reduce greenhouse gas emissions by more than 100 million tonnes over the life of the injection project."

Chevron's system works by taking CO2 from offshore gas reservoirs and injecting it in a giant sandstone formation two kilometres under Barrow Island, where it remains trapped.

CCS is seen as a key piece in the "technology not taxes" approach the federal government has taken to managing climate change. In the May budget, Treasurer Josh Frydenberg affirmed a series of allocations under Australia's Technology Investment Roadmap, including $275.5 million to accelerate the development of four additional hydrogen hubs in regional Australia, $263.7 million to carbon capture and storage (CCS) and carbon capture, utilisation and storage (CCUS) projects, and $279.9 million for purchasing emissions reductions that are below compliance safeguard baselines.

The Global CCS Institute, an international think tank whose mission is to accelerate the deployment of carbon capture and storage (CCS), said that the result of the Gorgon projects is not the norm of international CCS projects.

"Every industry has projects that experience operational difficulties due to particular circumstances," said Matt Steyn, senior advocacy and communications adviser at the Global CCS Institute. "CCS is no different. CO2 has been injected into the subsurface at multi-million tonne per annum scale for almost 50 years. The difficulties experienced at Gorgon are not the general CCS experience globally, where success is the dominant feature."

Steyn noted there are 26 operational CCS facilities around the world and numerous others in the development pipeline.

"With an increasing amount of countries and private companies committing to a net-zero future, there is greater momentum behind CCS than at any other time," he said. "Highlighting the shortfall of a single project neglects the bigger picture in which CCS is increasingly vital to achieving our global climate goals."

The oil and gas industry has emphasised CCS and CCUS as technological solutions to allow further use of fossil fuels while meeting the aims of the Paris Agreement to contain global warming to less than 2 degrees C. In a session at the Australian Petroleum Production and Exploration Association (APPEA) conference in June, Shell Australia executive vice president Tony Nunan name checked the Chevron Gorgon project in saying that CCS and hydrogen are important parts of the solution.

However, John Curtin Distinguished Professor Peter Newman from the Curtin University Sustainability Policy Institute, called the results of the Gorgon CCS project "a turning point in history, in the demise of fossil fuels."

"This was going to be the golden child of the industry being a responsible industry that could create an energy source whilst removing its CO2 problem," Newman said. "Despite their publicity, which continues to say this is the world standard and is setting up the future of natural gas projects, they will now have to sequester carbon in the land instead of marine sediment directly, they will be responsible for a very large increase in cost that will make it very difficult for them to overcome."

Newman also noted that the cost of CCS is not competitive with the potential to create hydrogen and ammonia as fuel sources using renewable energy sources like solar and wind.

"It's definitely time to redirect capital to the next economy, not the old economy," Newman said. "The next economy has opportunities that will continue to get cheaper and more effective, and they will provide a good investment. If you try desperately to make gas last longer, all it is doing is ensuring that there will be stranded assets and lost investment."

Steyn of the Global CCS Institute said that more investment is needed in CCS.

"To reach net-zero by mid-century there needs to be a one-hundred fold increase in CCS facilities to over 2,000 worldwide," Steyn said. "For governments, creating an enabling environment for investment will necessitate defining the role of CCS in meeting emissions reduction targets, placing a value on the storage of CO2 and developing specific CCS laws and regulations.

"More direct support from government can be provided through the identification and assessment of storage resources, investment in CO2 transport and storage infrastructure to facilitate CCS hub development, and through the provision of capital grants and low-cost finance for projects."

Read more: Global CCS InstituteGorgon LNGAustralian Petroleum Production and Exploration AssociationChevron AustraliaCurtin University Sustainability Policy InstituteGorgon CCSMark HatfieldMatt SteynPeter NewmanShell AustraliaTechnology Investment RoadmapTony NunanTreasurer Josh Frydenberg