Exxon Mobil Corp. proposed a giant, $100 billion hub to capture carbon dioxide emissions along the U.S. Gulf Coast in Texas but warned that government funding would be required to pay for and develop it.
In what would be the world’s biggest carbon carbon and sequestration project, Exxon, along with a multitude of private and public partners, would build a facility to collect emissions from refineries, petrochemical plants and other industrial facilities along the Houston Ship Channel, Joe Blommaert, president of Exxon’s new low-carbon business said in a blog post.
Early projections show such a facility could bury 50 million tons a year beneath the Gulf of Mexico by 2030, more than all CCS projects currently operating globally. Exxon said that figure could double by 2040.
Old oil and gas formations in the Gulf of Mexico have long been seen as having the potential to store large quantities of carbon dioxide but the challenge has been paying for it. Under the current regulatory environment it’s cheaper to simply let the pollutants float away into the atmosphere. Exxon says the project could reduce the country’s carbon footprint significantly so long as government provides companies with the right financial incentives.
“It will need government and private-sector funding, as well as enhanced regulatory and legal frameworks that enable investment and innovation,” Exxon said.
The oil major, under pressure from investors over its environmental record and recent financial returns, didn’t say how much money it would provide to the project and recently cut its capital budget to the lowest in two decades to protect its $15 billion-a-year dividend.
Last year, the company put a smaller but easier to implement carbon capture project in Wyoming on hold due to the economic fallout from Covid-19. It would have cost about $260 million, or less the 1% of what Exxon is proposing for the Gulf Coast.
Still, carbon capture remains Exxon’s favored method of reducing emissions because it complements the oil giant’s existing oil and gas business. President Joe Biden’s administration indicated that it’s willing to boost incentives for the technology in his Made In America Tax Plan released earlier this month.
“We believe CCS should be a key part of the U.S. strategy for meeting its Paris goals,” Exxon said in the post. “New policies are needed, however, to spur the investment required to deploy CCS on a pace and scale to meet Paris Agreement goals.”
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