XxonMobil also admitted that it is now time for carbon capture technology to be transformed into a profitable business.
It needs to be clarified that ExxonMobil has always had pessimistic expectations about spending a lot of money in this technology, saying that without government subsidies, “carbon capture is of little economic significance.”
At the annual analyst meeting on Wednesday, ExxonMobil changed its previous caliber and stated that carbon capture and storage has become the company’s main method to achieve its emission reduction targets. A new business unit has recently been created to implement the technology. commercialize. The company stated that policy changes and other developments have made carbon capture technology more commercially viable.
ExxonMobil CEO Darren Woods said that we have made enough progress to make this technology landed, superimposed on the gradual implementation of global government policies and the growing interest in investment in this field. These factors have all contributed to the company’s decision.
Although the Biden government has always held a supportive stance on the carbon capture business, this technology that captures carbon emissions and stores it underground still faces a political threshold that requires huge subsidies. At present, the main commercial use of carbon capture technology is to deploy it in oil and gas production.
(Application of carbon capture in the oil and gas industry, source: U.S. Department of Energy)
As data that the company often displays, ExxonMobil has captured a total of 120 million tons of carbon emissions in the past 30 years, which is said to account for 40% of the global carbon capture since 1970. However, this production basically comes from the Shute Creek natural gas processing facility in Wyoming that went online in the 1980s. In fact, ExxonMobil does not store the carbon dioxide itself, but sells it directly to nearby producers for injection into old oil and gas wells to increase production. Criticism of this application is that the captured carbon emissions are used to produce more fossil fuels, which is tantamount to reducing the meaning of carbon capture itself.
ExxonMobil predicted on Wednesday that carbon capture will be a $2 trillion market by 2040, and it is also the most economical way to reduce emissions. The current tax credit for carbon capture in the United States is up to US$50 per ton, which is still lower than the incentive to promote electric vehicles.
In early February, Exxon Mobil announced that it would invest more than US$3 billion in the low-carbon business unit by 2025, and said that it currently has more than 20 projects in stock. According to multiple current and former employees, some of these project companies have been considering projects for several years. They had not been launched before because of insufficient economic viability. For example, the company’s management has raised economic concerns about the project where carbon dioxide produced by the Gulf of Mexico chemical plant is captured and injected into the underwater rock formations.