You've probably heard the term carbon capture. It's the idea that, through a very complicated, expensive process, carbon dioxide that spit out during the production of fossil fuels can be captured and stored deep underground, instead of letting it escape into
the atmosphere where it contributes to global warming. Despite billions and billions of dollars spent, it's never quite worked the way its boosters have hoped, and yet oil companies and governments continue to invest in carbon capture and storage as they look for ways to meet ambitious net zero goals.
We're investing in innovation and hastening the scale up of new technologies like carbon capture and advanced nuclear and clean hydrogen.
It's really important for everyone to recognize that even in twenty to fifty, when we are at that zero, it is full cost that around a culture of our energy needs will still come from oil and gas. That's why technologies like carbon capture and storage are important.
Canadian companies are leaders in developing technologies such as carbon capture and storage, next generation biofuels, advanced batteries for electric cars, and cleaner oil sands extraction processes. This creates good jobs and it also helps the planet.
But Bloomberg, Stevens Stepchinsky, and David Stringer report that time is running out to prove that this technology can live up to its promise.
The International Energy Agency says that to stay on track for net zero missions by twenty fifty, there needs to be one point two giga tons of CO two captured in store per year. To put that into context, there are only forty five million tons of CO two captured earlier this decade.
Here's the big worry.
We're talking about trillions of dollars that will be put into technologies that keep fossil fuels going instead of being put into technologies to replace fossil fuels.
I'm Weskasova today on the big take why it's so hard to put carbon dioxide back in the ground. Stephen, carbon capture is one of these things that we hear about all the time, and yet I think a lot of people like me don't quite understand what it is. Can you just tell us what is carbon capture and storage?
So carbon capture and storage, funny enough, isn't really exactly one thing.
It's like a system of things.
That are all working together in this complicated chorus so first there's the element of actually capturing it. It uses quite a bit of science, and the capturing aspect has been around for decades since the nineteen seventies, the oil industry has known how to capture it. And then there's a transportation aspect of it. How do you transport usually pipes, And then you have to store it, and storage is the part that can be quite challenging, but also there
are many different ways to store it. For much of the last four or five decades, carbon capture and storage was you would pump it back into the ground to get more oil out.
That's enhanced oil recovery.
But what now we're doing is you have to store it in basically poorest parts of the earth. That's liquid aquifers or essentially empty oil or gas cavities underneath the earth. So all of those things working together is carbon capture and storage. It's not just like this thing that you can go and buy from a store in place and say bump, you're hooked up and you're working. It is a bespoke technology for each refinery, power plant, liquefied natural gas,
export facility, whatever it is. You have to develop Basically all these systems and get them to work together. Carbon capturing storage is vital for hitting ambitious green goals and reducing our pollution.
It's the dream of.
Being able to continue using cement factories, refineries, power plants while also reducing our carbon footprint. Carbon capture essentially will grab or halt the emissions at the source and then store it within the earth without letting it go into the atmosphere. CO two, when released into the atmosphere exacerbates climate change.
So by capturing that.
CO two before it goes into the atmosphere, you're essentially stopping that pollution from ever happening. When described like that makes a ton of sense. The world needs to reduce this carbon footprint, and by using technology and by reducing pollution at the source, you can do that while continuing essentially the life that we enjoy. You can continue using that power plant, that refinery.
David so Stephen describes this very complicated process of trying to capture carbon. Why aren't we able to do it? It seems like we've been trying to get our arms around this problem, but it keeps eluding us.
Every specific project needs fine tuning. How is it generating greenhouse gases? Is that in oil production, is it in gas production. Is it because it's a power plant that's spewing out emissions. This is just incredibly complex. So you're right, we've had fifty years of arguably relative failure governments. Some of the biggest companies in the energy sector, they've spent about eighty billion dollars over the last fifty years trying
to perfect these techniques. The end result is that all that effort has captured less than one percent of the world's pollution. In fact, by some estimates, we've seen about forty five million tons of carbon a year captured by carbon capture systems. That's about zero point one percent of global emissions. So there's been a lot of effort, a lot of cap it'll poured in, but so far we've just not seen that reward because of the complexity.
And why is that, Simon, Why is it so hard with all that money spent, all those years, big companies, smart scientists, why can't they.
Get this right.
It's a lot of different reasons, but I think the main thing to focus on is that all these facilities, each one is so different. Just because you've figured out how to solve these problems in Canada in this one project, for example Shell's Quest, you can't apply that to Chevron's Gorgan in Australia. The lessons learned can't easily be applied to other projects because each challenge is something different. The issues really is from the very ground up, from how
carbon capture and storage works. And while there has been money pouring into carbon capture and storage, when you talk to a specialists at the IA International Energy Agency, they still say that we're behind the amount of projects that we're building. They think that the world should be building even more.
Why are oil companies and even the US government so determined to try to make this technology work when it just hasn't born out.
There are two sides of that coin. The cynical side is you look at the people who are investing in it. You have these major oil and gas companies that it is in their best interest to get this to work because then folks can continue using the fossil fuels.
That they produce.
The other side is that the reason why governments are pouring so much money into a specialists and even environmentalists say that this is necessary to some degree, is because there are some sectors or industries that even by twenty fifty, we will not be able to decarbonize. For example, cement production. You can't electrify that. That's a chemical process that is going to release pollution that you need to capture, and cement is used in everything. The same can be said
with some petrochemicals, even fertilizer production. All of these things together indicate that the world will need see to some degree, not today or tomorrow, but by twenty fifty when we're really trying to hit ambitious green goals.
David Stephen mentioned this kind of controversy over whether this is a real viable technology or if it's just forestalling the inevitable, which is to move past the use of fossil fuels. What is the controversy around this, Like where do people come down in the various sects.
I guess right to the heart of debate about carbon capture. It really is the technology that many climate advocates just love to hate. It's been used for years in a process to generate more fossil fuels. Its first purpose was for things like enhanced oil recovery, and now we see big oil kind of repurpose this and cast it as a really vital solution. To help the most catastrophic climate change. So it is controversial, it is contentious, but what this debate forces us to do is to wrestle with the
future of fossil fuels. How long are things like cold and oil and gas going to have a role when the global power mix. And that's a really difficult conversation for many people to have, but it is an urgent one. The fact is, whether it's the IPCC or the International Energy Agency, what we're told is that all solutions are necessary. The world's going to have to lean on every single mechanism we have to avert the worst kind of planetary warming.
That isn't a.
Message that some people want to hear. It isn't a popular idea that we're going to be putting in many billions of dollars into a technology that essentially sustains fossil fuels. And yet what many people argue is that it's vital we do have to lean on this along with other technologies.
When we come back what a huge carbon capture operation actually looks like. Steven, So, we've been talking about just how complicated it is to try to capture and store carbon, and you actually went out to see two of these projects. Where are they like?
I went to one on Barrow Island in Australia.
It's Chevron's Gorgon Carbon Capture and Storage facility.
It is the world's biggest just.
Pure CCS capturing and storing plant in the world by capacity.
No one lives in Barrow Island.
It is about forty kilometers off of northwestern Australia and it was just red dirt as far as the eye can see, very iron rich red dirt. And the only thing that you see there is this enormous plant which is connected to look fied natural gas export facility. What people often don't realize is just how big, how enormous these facilities are. It's a dense maze of metal that for the case of the one in Australia, on this island, it is the size of a city block and it
is roaring. It is so loud when you are next to it you cannot talk to another person. The facility isn't working at full capacity. It's supposed to capture and store four million tons of CO two a year, but it's only capturing about one point six But the loud sound is the release of that leftover CO two. You're seeing about four stories of all these pipes amazing around you.
There are all these sorts of different levers and platforms and silos and spicketts at the end that it's difficult to see where it starts and where it ends, but it does just indicate the scale. And what you need to appreciate is that when you're building carbon capture and storage, and when people talk about it, it's not simply stamping something out. You have to build all of these complicated pipes and make them weave around this plant in this dirt on this island.
And where's the CO two coming from that they're capturing.
The CO two that they're capturing is coming from the production of natural gas. When Chevron was first developing the project a few decades ago, they were looking to tap a natural gas field off of northwestern Australia that had a lot of CO two concentration. I think a lot of people don't realize that natural gas together naturally, just has some CO two. When you produce the natural gas, you need to remove the CO two as part of
the process. Usually, when you produce natural gas, you separate the CO two and then you just release it into the atmosphere which pollutes and can be a nasty problem. The government in Australia wanted them to capture about eighty percent of that CO two. That was part of their plan and their promise, and so they developed a carbon capture and storage plant and it is again the biggest on Earth that is doing what it's doing now from inception,
it has been having quite a few problems. The LNG facility started in twenty sixteen and it was supposed to have the CCS plant with it, but the CCS aspect, the capture and storage didn't start until twenty nineteen because of technical problems.
David.
So this plant, despite all of this effort, in all of this machinery, isn't really living up to its capacity.
That's right.
For example, in the last fiscal year, the Gorgon project managed to store about one point six million tons of CO two. That might sound a lot, it isn't. The project is designed to sequester a far more than that volume, and in fact that total was almost a third less than the previous year. While Chevron say that the project will get up and running up full capacity in time, it just is an illustration of the fact that even this kind of flagship project for the industry just isn't
meeting expectations. Why that's such a big problem is because of the scale the industry needs to hit.
So think about it.
The International Energy Agency forecast that the world needs another three hundred facilities the size of Gorgan and that they need to be up and running by twenty thirty if we're going to keep on track to hit net zero emissions by twenty fifty. The challenge is just colossal. We kind of understand some of the technical challenges, but think
about the investment. According to Bloomberg and EF, four and a half trillion dollars is going to be needed to be invested in carbon capture and storage over the next eight years.
So they need to build many more of these plants. How many carbon capture and storage plants are there right now around the world.
So right now there's about forty large scale facilities that actually have carbon capture and storage attached to them. It's a small number. That's after nearly fifty years of developing this technology, and together they capture about forty five million tons of carbon a year. It is a small number when you compare it against the many hundreds that are needed. But what the industry says is, look, there's forty that are at least to some extent working and operating. It's
now a question of scale. It's a question of w not a question of if. What the industry says is it's got to succeed, and of course what we've seen on the ground is just how challenging that is.
And when you don't succeed, there are real consequences. The International Energy Agency says that to stay on track for net zero emissions by twenty fifty, there needs to be one point two giga tons of CO two captured in store per year. To put that into context, there are only forty five million tons of CO two captured earlier this decade. The Gorgon Project was the largest polluter in Australia during the year through June twenty twenty two, according to data from Australia.
So this thing is supposed to be reducing pollution, it's causing more pollution because.
They're not capturing the CO two.
All of that pollution is being released into the atmosphere and it is essentially a huge problem for Chevron and they have to buy carbon credits to offset those emissions.
And what did Chevron say about that.
So when you talk to Chevron, they understand that this is a problem, that this is a challenge, and they're going to be investing more money to make sure that Gorgan gets to capacity and it's doing what it's designed to do. But when I talk to the engineers there, I talk to specialists, they're still proud of what they've accomplished. They say, hey, look, we're one of the few people in the industry actually capturing and storing. We're storing millions
of tons of CO two over the last few years. Now, of course they're not doing it at the level that they said they would, but they said that this is not a pure technological challenge.
We've overcome a lot of the challenges. It's just scaling it up.
And Chevron, for what it's worth, they're putting their money where their mouth is because they are investing and pushing forward with other CCS projects in the US, they're looking at projects in Europe, and they've set up essentially a whole new unit to look at developing CCS projects back
in twenty twenty one. Now, one of the other problems for Chevron's Gorgan project is that it's built on Barrow Island, which is a nature reserve, which means that they have to do a few special things there to make sure
that they don't affect the local habitat. For example, the equipment that flares gas, a normal part of LNG or liquefied natural gas production systems, had to be separated further inland and surrounded by massive black walls so that turtles wouldn't think that it's the moon and use it to navigate at night. And the plant's birth, which is like a jetty. It's where the ships come and dock and offload and unload up. The LNG runs abnormally long at Gorgon so that they don't affect the turtles and the
other wildlife. But because it runs so long, it does sometimes attract whales, and sometimes those whales can disrupt loading at the facility.
After the break. If they can make this technology work, just how much will it do to combat climate change? David? Some of those numbers you were thrown out are pretty mind bending. Three hundred new facilities the size of Gorgon need to be built. It's going to cost four point five trillion dollars. Is this it are realistic?
It's a big ask, but what already saying from governments is there is political will and money is being provisioned and put into action to try and make this reality. If we just think about President Biden's big centerpiece, the Inflation Reduction Act, that contains huge provisions to offer tax credits, which is going to dramatically lower the cost of this technology. They'll certainly cover the cost of operating carbon capture facilities.
In the UK, they're.
Committing twenty billion pounds to subsidize carbon capture projects in the next couple of years. And we're also seeing areas like the European Union they've got big targets that they're aiming to increase more than two thirds the capacity that they currently have on the continent to inject carbon. Under the grounds political wills there some of the money starting to be mobilized, it be realistic. That's going to be down to the industry. It's going to be down to
companies like Chevron and others. And if they can get these things working.
Seven, if the US and say the EU all gets together and puts I don't know, a few hundred billion dollars into this against four point five trillion it's the industry going to come up with the rest.
The industry needs to come up with the rest, and it's not going to be easy.
It's going to be challenging.
But when you look at the big folks like Chevron and Shell and some of these other companies that are really putting money into it, it does look like there is at least some backing within the industry. It does look like there is more momentum now than before because the technology needs their investment. At the same time, they need this technology to work because the future of their industry and where they're going will depend on it. I mean whether or not we'll be using more fossil fuels.
If they get in on the ground floor, carbon capturing and storage could be this huge industry for them, and they could be pioneers and this could be a huge new way for them to boost their profits and use their engineering prowess in the way that they trade carbon and send fuel around the world. Instead of oil tankers, maybe it will be co two tankers. They can transform the way that they operate to get here and help lower emissions and hit ambitious green goals.
Will it be easy? Will everyone be willing? No, it's just not profitable.
And so until there are systems, a price on carbon or really strong tax incentives, it is going to be challenging for the industry to invest in it. And so there are a lot of uncertainties. But at least when I talk to the people at Chevron, when I talk to people at Shell, there does appear to be a shift in their commitment to getting this to work, and they're not backing down.
There are companies in the industry they don't say this is a burden that they also see this as a huge business opportunity. It is the fact that big heavy polluting industries, steelmaking, cement making, of major emitting industries, they're going to have to deal with that. As prices on carbon become more commonplace, there is a potential industry opening
up for the management of carbon emissions. We also see lots of examples of companies looking at direct air captures, a sector where they can make money as well literally sucking carbon emissions out of the air. Yes, this is quite challenging, but lots of people see this is a huge opportunity as well.
But if ultimately we're looking at net zero and trying to move past fossil fuels. Would that four point five trillion dollars be better spent pursuing new, cleaner technologies instead of trying to ride oil down.
That's the big question, and I think that's the argument that you could go either way. I think there are some industries or some sectors like power production.
If you're gonna connect a CCS.
Plant to a qualifire power plant, I think environmentalists or other folks could say, why don't you just invest that in renewables?
Why do that you have other solutions?
Why build these giant, massive monstrosities just for the sake of continuing using a coal fire power plant? The argument there, I think to a lot of folks it's valid. But there are other industries, like steel making or like cement making, where you can't easily just use the technology that we have that exists now. There are other potentially solutions. There are foundries that maybe are electric powered, or maybe you can use green hydrogen. But those are all not perfect yet.
They're still being developed and they're still going to need massive investment. And so I think, having written a story and talk to a lot of experts, there is a idea where the IEA and other experts say that we need to increase the amount of carbon capturing and stories that we have quite significantly thousands of percent from where we are today, but perhaps because of the technological challenges and the cost that's going to take, maybe we should
change that calculus. Instead of saying that we're going to need that th percent more, we say, let's just focus CCS on the industries that truly truly need it and try to just focus our investment on that, and that could potentially be a more viable solution for CCS, according to the people that I had talked to further story.
After looking into this so deeply, seeing it for yourself, reporting on it, where do both of you come down on this question? I'm going to put you on the spot.
I think it's a difficult one to wrestle with, but ultimately we do need all these solutions. Yes, we need vast amounts more renewables. Yes we need to be more energy efficient as well. But the net and net zero, you know, it doesn't mean no fossil fuels. It means that where we do have to continue to use those polluting sources of energy that we're dealing with and accounting for those emissions. So is ccs going to need to be part of the solution. Yeah, I mean, ultimately it does,
to what extent, to what scale. I think that's still a question that we are wrestling with, but it absolutely has a role to play as part of a broad solution.
When you hear about Chevron or Shell, these big energy companies, big companies that produce fossil fuels at pollute, it's easy to just say these companies are doing it just because they want to make a quick buck or continue using their fossil fuels. But there are people in these companies that are really committed to helping the environment. There are people who really committed to solving these problems, and they are working. They are racing against the clock. They understand
the controversy around ccs. They understand that there's a big price tag, and they understand that it doesn't have the best reputation, and they're working to change that because they realize that right now, at this moment, is essentially the
do or die time for CCS. If they can't prove now and today that it works, other companies, rivals, countries, governments aren't going to put the money into it because they're going to go to something else because they've already spent decades developing it working and while they're proud of what they accomplished, they all recognize they need to do more. And having seen this big facility, yes, it is monstrous, it is huge.
It's challenging to see that we.
Could build three hundred of these by twenty thirty. The fact that it exists and they did it well, not working out capacity, the fact that they did it does indicate that it could work. If they could just figure out the liquid okifer, figure out the transport, figure out a way to reduce the costs, then maybe it can be applied on a larger scale.
Steven David, thanks so much for coming on the show, Thanks for having us, Thanks for listening to us here at The Big Take. It's a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen, and we'd love to hear from you. Email us questions or comments to Big Take at Bloomberg dot net. The supervising producer of The Big Take is Vicki Bergolina. Our senior producer is Katherine Fink.
Rebecca Schasson is our producer. Our associate producer is Sam Gebauer. Khil de Garcia is our engineer. Our original music was composed by Leo Sidrin. I'm West Kasova. We'll be back tomorrow with another big take.