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Over the last century, the state of Texas has reaped billions of dollars by allowing companies to burrow into the floor of the Gulf of Mexico to extract oil and gas. Now, the General Land Office — the state agency tasked with protecting the vulnerable Texas shoreline and other natural resources — is eyeing carbon sequestration as the next industry to develop in the Gulf.
Angling for a share of $12 billion in federal funding for such projects under the 2021 Infrastructure Investment and Jobs Act, companies are competing to build carbon capture plants next to onshore oil wells, gas wells and other polluting facilities along the coast. At the same time, they are applying for offshore leases that will allow them to store that heat-trapping carbon dioxide deep beneath the seafloor.
Crucial to the effort are a stream of U.S. government grants, followed by generous tax credits for every ton of carbon stored.
In September 2021, the General Land Office, or GLO, awarded its first lease for carbon sequestration on 40,000 acres of state-owned land near Port Arthur to Talos Energy, a Houston-based oil and gas company. The oil giant Chevron has a 50% stake in the project, known as Bayou Bend, which if completed could be the nation’s first offshore carbon storage site.
Last month the GLO announced that it had awarded six more leases for offshore carbon storage that would generate $130 million in bonus payments for the state’s school fund. And in February, the Port of Corpus Christi, the nation’s top port for oil exports and an economic engine for Texas, said it had received $16.4 million in federal funding to conduct a feasibility study for both onshore and offshore carbon storage projects. The research will be conducted with Texas A&M University, the University of Texas, Talos and Howard Energy Partners, a San Antonio gas company.
The GLO declined to provide details about the six offshore leases granted last month, from the location or size of the storage sites to the identities of the companies involved. Despite its August announcement that the projects had been greenlighted, the agency said the leases had not yet been formally “executed.”
The oil and gas industry maintains that carbon capture and storage technology, or CCS, can significantly reduce greenhouse gas emissions and hasten the nation’s progress toward net-zero status — the point at which the volume of heat-trapping gases released by power plants, oil refineries, factories and other major emitters would be equal to what is removed.
But environmentalists and scientists argue that CCS does not live up to those claims. So far, the technology has yet to be widely deployed and the results have been mixed, meaning that emissions continue to increase even as billion-dollar plants for carbon capture and sequestration are built out.
Relying on the oil and gas industry’s data, the nonprofit Institute for Energy Economics and Financial Analysis reported last September that 10 of 13 major CCS projects around the globe had failed or underperformed by wide margins. “It doesn’t work for as long as people claim it does, and there are significant uncertainties about how long it can be stored underground,” said Dennis Wamsted, an energy analyst at the institute.
Carbon capture technology essentially acts as a giant filter. When natural gas is burned at a power plant, most of the emissions typically flow directly into the atmosphere. But when a capture facility is attached to the power plant’s smokestacks, gases fed through the facility separate the carbon molecules from other pollutants through a series of chemical reactions.
The isolated carbon molecules can then be pressurized and compressed into a liquid that in theory is transported through a pipeline to a sequestration well, more or less modeled after an oil and gas drilling well. At this stage, the CO2 is sent back underground and trapped under layers of rock and sediment.
The threat of leaks and explosions
Leakage is a major concern. In another study casting doubt on the viability of CCS, Italian researchers estimated that if storage wells leaked at a rate of 0.1 percent — a likely scenario, based on what scientists have observed so far — an additional 25 gigatons of carbon would be added to the atmosphere by 2100.
Scientists, environmentalists and frontline communities also worry that the pipelines that transport pressurized carbon dioxide…
Read More: Texas bets on undersea carbon capture and storage, but doubts persist