Fossil Fuel Companies Made Bold Promises to Capture Carbon. Here’s What Actually Happened.

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Original article by Michael Buchsbaum and Edward Donnelly republished from DeSmog.

A DeSmog review of 12 large-scale projects reveals a litany of cost-overruns and missed targets, with a net increase in emissions.

Most of the 12 largest carbon capture and storage projects around the world are in the United States. Credit: Sabrina Bedford.

Carbon capture and storage (CCS) was high on the agenda at New York Climate Week last week, where critics of the technology raised concerns it would be used to extend the life of the fossil fuel industry.

For years, experts have pointed out that CCS has been primarily used to pump more oil out of the earth, using a process known as enhanced oil recovery (EOR). Burning that oil emits far more carbon dioxide (CO2) than what is captured, and therefore CCS doesn’t represent a viable solution to tackle climate change, critics argue. 

At a news conference after the one-day UN Climate Ambition Summit on September 20, Tzeporah Berman, chair of the Fossil Fuel Nonproliferation Treaty Initiative, said: “The oil companies acknowledged this year that they will not meet their bogus net zero commitments. The data showed us that their carbon capture plans are not working at scale.”

Below is a DeSmog review of the climate impact of 12 large-scale CCS projects around the world; what the fossil fuel industry promised, and what actually happened. Findings include a litany of missed carbon capture targets; cost-overruns, and billions of dollars of costs to taxpayers in the form of subsidies.

The data is drawn from various sources, including the Global CCS Institute; the International Energy Agency; the Institute for Energy Economics and Financial Analysis; the Geoengineering Monitor, and DeSmog research. Data on subsidies was provided by Oil Change International, which plans to launch a database of government support for CCS in 2024. Currency conversions were made in respect to exchange rates when subsidies were first announced or given. 

For more on the climate implications of CCS, see DeSmog’s accompanying news analysis: How Carbon Capture And Storage Projects Are Driving New Oil and Gas Extraction Globally.

What CCS Projects Promise. And What They Deliver.

1. Terrell Natural Gas Processing Plant (“Val Verde”)

Operator: Occidental Petroleum, 1972-present 

Location: Southeast of Ft. Stockton, Texas, USA

Stated maximum capacity: 0.5 million tonnes of CO2/year 

Storage method: Enhanced oil recovery in the Permian Basin

Public subsidies:  None

What they said would happen: More crude oil would be extracted using injected CO2.

What actually happened: It worked. Val Verde’s success served as a replicable model enabling the oil industry to pump more oil while claiming to be helping the climate. 

BackgroundThe world’s first industrial carbon capture facility began siphoning CO2 from a complex of West Texas gas processing plants in 1972. The gas was then piped across the region to boost the productivity of oil wellsNow owned by Occidental Petroleum and re-named the Terrell Natural Gas Processing Plant, the facility has aided in the production of millions of additional barrels of crude. 

Val Verde’s success helped the oil and gas sector develop a business model enabling them to profit long into the future. It simultaneously acted as a potential solution to the worsening greenhouse gas crisis, while still remaining the biggest source of that pollution.

The first dedicated facility to use injected CO2 to produce more oil, Val Verde was instrumental in pioneering enhanced oil recovery (EOR). The technique proved so successful that within a decade drillers had built thousands of miles of dedicated pipelines sending naturally occurring CO2 into oil fields in Texas, elsewhere in the U.S., and eventually other nations. 

Based upon Val Verde, since the 1970s, U.S. oil firms have led in the development of ever more efficient EOR-CCS technologies. Though now practiced globally, Texas’ Permian has the largest concentration of EOR operations. 

As awareness grew that burning fossil fuels was increasingly harmful to the environment, petroleum scientists began looking for industry-friendly solutions. Given that a fraction of the CO2 injected during EOR remains underground, as early as 1977 proponents suggested rebranding EOR into climate-friendlier carbon capture and sequestration (CCS). Envisioning installing capture units on fossil fuel-burning generation plants, particularly coal-fired power stations, backers saw this as an elegant response to growing concerns over carbon emissions. 

Fifty years later, Val Verde still serves as the industry’s model for “beneficial” CO2 usage, and EOR remains the main driver and successful business model for CCS.

2. Shute Creek Treating Facility

Operator: ExxonMobil1986-present 

Location: East of Kemmerer, Wyoming, USA

Stated maximum capacity: 7 million tonnes of CO2/year 

Storage methods: Enhanced oil recovery in Wyoming and neighboring states, limited geologic storage.

Public subsidies: None

What they said would happen: ExxonMobil points to Shute Creek to demonstrate its commitment to capturing ever more carbon.

What actually happened: Almost half the captured CO2 has been used to pump more oil; the rest has simply been vented into the atmosphere, in part because the plant failed to meet about a third of its capture targets.

Background: Owner ExxonMobil claims to have “cumulatively captured more anthropogenic CO2 than any other company” and estimates that its Shute Creek plant is responsible for 20 percent of the world’s yearly sequestered carbon. However, the plant — at Wyoming’s LaBarge gas field — wasn’t designed with climate targets in mind, but rather to produce gas, oil, and a fifth of the world’s helium supply. 

Most of the C02 captured in CCS plants are used to pump more oil. Credit: Buchsbaum Media.

Wyoming’s LaBarge gas field remained unexploited for decades due to its very high levels of CO2, making it a less than ideal source for natural gas production. Nonetheless, in the 1980s Exxon found that capturing carbon during gas processing and selling it for enhanced oil recovery in the surrounding region would make the Shute Creek operation profitable. As global oil prices fluctuated over the following years, carbon capture was paused at the plant during periods when CO2 demand for oil extraction dropped. 

According to a report from the Institute for Energy Economics and Financial Analysis (IEFFA), a nonprofit think tank, 47 percent of all CO2 captured by the plant has been sold for enhanced oil recovery over its lifetime, with only three percent of CO2 sequestered. The remaining 50 percent of CO2 produced by the plant — 120 million tonnes — has simply been vented to the atmosphere, making it a major source of greenhouse gas emissions. While some of this venting was planned, the plant has failed to meet about a third of its total carbon capture targets throughout its history, according to IEEFA. 

3. Sleipner and Snøhvit Projects 

Operator: Equinor (Statoil), 1996-present; Snøhvit since 2008

Location: Offshore (North Sea Sleipner West field), Norway

Stated maximum capacity: Sleipner 1 million tonnes of CO2/year

Stated maximum capacity: Snøhvit 0.7 million tonnes of CO2/year 

Storage methods: Geologic storage in the North Sea

Public subsidies: $175,000 

What they said would happen: Often cited as evidence that the oil industry has already perfected carbon capture and storage techniques.

What actually happened: Studies suggest the projects’ CO2 storage modeling is faulty, underscoring concerns that CO2 behavior remains highly unpredictable. 

BackgroundThe world’s first industrial-scale CCS project constructed for supposed carbon emissions abatement, Sleipner went into operation in 1996 after Norway’s pioneering carbon taxes came into effect.  

Given the relatively high CO2 volume contained within raw gas from the Sleipner West field, to ensure profitability under the new carbon taxes it became necessary to bury the gas. Storing this waste product underground continues to save Equinor hundreds of millions in annual taxes.

In near continuous operation since the mid-90s, and the largest CCS project yet conceived in the North Sea and Europe, Sleipner has a capacity to sequester almost a million tonnes of CO2 annually. 

However, stripping out and pumping all this CO2 back underground doesn’t render the refined gas as carbon neutral. Just the opposite: By some estimates, burning it has created roughly 25 times more CO2 than all that Equinor has sequestered.

Envisioned as a model enabling long-term oil and gas exploration despite emissions, since conception Sleipner has served as an international center of learning and a laboratory for generations of petroleum engineers. The knowledge gained continues to help Equinor and partners such as ExxonMobil expand and implement more CCS and EOR projects worldwide. 

However, though Sleipner was used as a guide for the 2009 EU directive on geological storage of carbon dioxide — now being reviewed to enable expanded CO2 storage and usage, IEEFA studies based on Norwegian reporting reveals evidence that both Sleipner and Snøhvit’s CO2 storage modeling is faulty, showcasing how CO2 behavior remains highly unpredictable, with potentially disastrous consequences. 

4. Kemper Project

Operator: Mississippi Power (Southern Energy Company), 2010-2021 (closed; renamed Plant Ratcliffe) 

Location: North of Meridian, Mississippi, USA

Stated maximum capacity during operations: 3 million tonnes of CO2/year 

Storage method: Enhanced oil recovery in the Gulf of Mexico

Public subsidies: $407 million

What they said would happen: Coal would be burned “cleanly” to produce power.

What actually happened: Costs more than doubled from initial estimates to $7.5 billion; leaks were found during testing and the carbon capture plant was eventually mothballed, then demolished.

Background: As climate policies began to call for a coal power phase-out in the early 2000s, carbon capture became a means to keep the coal industry alive in a “cleaner” form. Building upon a Bush Administration program, in 2008, the Kemper CCS facility was proposed as the flagship project of the U.S. government’s Clean Coal Power Initiative, receiving $407 million in federal subsidies. The plant, operated by Southern Energy company, was designed to gasify lignite (brown coal) and capture the carbon before combustion. 

The Kemper Project was shut down and is being rebuilt as Plant Ratcliff. Credit: Wikimedia CommonsCC BY-SA 3.0

However, the plant never reached its target of capturing 65 percent of its carbon emissions, which would have amounted to 3.0 million tonnes of CO2 per year. First, construction was delayed, and the initially estimated cost of $3 billion ballooned to $7.5 billion. Despite this massive increase in investment, the project’s coal gasification process did not operate reliably during testing as leaks were discovered.

In 2017, carbon capture operations were suspended as ongoing problems made the venture unprofitable. In 2021, the mothballed carbon capture unit was demolished. Today, the remaining Kemper power plant simply burns fossil gas, and “clean coal” remains an expensive and unproven emissions-reduction measure worldwide.  

5. Century Gas Processing Plant

Operator: Occidental Petroleum, 2010-present 

Location: East of Fort Stockton, Texas, USA

Stated maximum capacity: 8.4 million tonnes of CO2/year 

Note: The industry-backed Global CCS Institute says five million tonnes of CO2/ year, which was the plant’s actual operating capacity in 2022.

Storage method: Enhanced oil recovery 

Public subsidies: None

What they said would happen: The project will help usher in a new era of “net-zero oil.”

What’s actually happening: The plant could enable the development of approximately 500 million barrels of oil reserves more cheaply.

Background: With 25,000 miles of CO2 pipelines; 6,000 carbon injection wells spread over 1.4 million acres; and over 50 years of experience, Occidental Petroleum is perhaps the global leader in enhanced oil recovery. 

Boasting a capacity of over eight million tonnes of CO2 per year following a 2012 expansion, the $1.1 billion Century Gas Processing Plant in West Texas has the most storage potential in the U.S., though only about 60 percent of this was used last year, according to the Global CCS Institute. 

Despite its ambitions to expand its oil operations — Occidental Petroleum claims that its CO2-enhanced oil recovery could release the energy equivalent of two billion barrels of oil – the company is billing itself as a climate leader. Citing its “vast legacy” and core competency of CO2-enhanced oil recovery operations, the company says that using new technologies to capture carbon capture could be a “game changer” for the climate. Last year, Occidental started selling its first “Net Zero” oil to a Singapore-based commodities trader, based on direct air capture capacity yet to be installed, and earlier this year it began pre-selling carbon credits based on its eventual “low carbon” jet fuel to Airbus. 

The legacy of EOR-linked facilities, including the Century Gas Processing Plant, has so far been a net increase in global emissions. Various sources show that the oil and gas operations in the Permian Basin, where the plant is located, is the largest “climate bomb” in North America, and one of the world’s leading contributors to climate change. 

According to the Massachusetts Institute of Technology’s research entry on the Century Gas Processing Plant, it allows Occidental Petroleum to “develop approximately 500 million barrels of reserves from currently owned assets at an attractive cost.” 

6. Petra Nova 

Operator: Previously NRG Energy in partnership with JX Nippon Oil, 2017-2020; shut down in 2020 and now wholly only owned by JX Nippon, restarted September 2023

Location: Attached to one unit at the WA Parish Power Plant, Richmond, Texas, USA 

Stated maximum capacity during operations: 1.4 million tonnes of CO2/year 

Storage method: Enhanced oil recovery in the West Ranch oil field

Public subsidies: $190 million 

What they said would happen: Game-changing solution to fossil emissions.

What actually happened: Failed to meet capture targets; barely reduced overall carbon pollution.

Background: Petra Nova restarted just this September, two years after it was shut down in the early days of the COVID-19 pandemic when the price of West Texas crude oil crashed. The only ​​CCS unit attached to a coal-fired power plant in the United States, during its first short operating period it proved adept at EOR. However, independent analyses reveal that it both failed to meet its capture targets and, when taking lifecycle emissions into consideration, it barely reduced any overall carbon pollution. 

Hailed as a game-changing solution to rising greenhouse emissions from the fossil fuel industry, co-owners NRG Energy and Japan’s JX Nippon promised at the time that Petra Nova would revolutionize the sector and rescue the future of fossil fuel electricity generation. 

The $1 billion project (including a $190 million U.S. Department of Energy grant under the Clean Coal Initiative and a $250 million loan from the Japanese government) is attached to one 654 megawatt coal-unit of the monster NRG-owned W.A. Parish power facility near Houston, Texas. 

Ranked in 2019 as the ninth most carbon-emitting power plant in the U.S., Parish’s combined eight coal and fossil gas units annually belch over 15.1 million tonnes of CO2 into the atmosphere.

After capture and compression, CO2 is piped over 80 miles away to the West Ranch oil field for EOR. Before Petra Nova came online, only a measly 300 barrels a day were oozing from the field. But during Petra Nova’s first year of operations, that figure jumped to 4,000 a day. As pressure built, production soared by a factor of 50 to over 15,000 barrels per day.  

But when West Texas oil prices crashed at the end of March 2020, capturing and sequestering CO2 for EOR stopped making economic sense, and its owners mothballed the plant until oil markets improved.  

As to whether Petra Nova itself was actually capturing at 90 percent as project-backers claim, IEEFA’s research shows it rarely captured as much as 75 percent of passing CO2. Officially the U.S. Department of Energy states it captured only approximately 3.9 million short tons of CO2 during its first three years, shy of the 4.6 million tons developers had expected.

The Petra Nova CCS plant just restarted in September. Credit: NDLACC BY-NC-ND 2.0

Sole owner JX Nippon Oil & Gas Exploration Corp., Japan’s largest oil producer, proudly states that the restarted project will simultaneously achieve a dramatic increase in production from aging oil fields as well as cut atmospheric CO2 emissions in Texas. 

Continuing to masquerade as a climate-benefitting project, with oil prices currently inching towards $100 per barrel, the finances of running Petra Nova once again make sense. Going forward, EOR operations will again pay for CCS system operations while extending another chance to demonstrate how the technology can be viable at scale in what many see as a major test of efforts to sequester CO2 and store it permanently underground. 

That Petra Nova did virtually nothing previously to actually reduce overall CO2 emissions — more likely increasing them, is not seen as a bug, but a feature given that its sole purpose is to capture a portion of the plant’s pollution in order to produce more oil — a task it has demonstrably excelled in doing.

7. Gorgon Project

Operator: Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), 2017-present  

Location: Barrow Island, Western Australia, Australia

Stated maximum capacity during operations: 4 million tonnes of CO2/year 

Public subsidies: $60 million Australian ($47 million U.S.)

What they said would happen: A flagship plant to store CO2 produced by drilling for offshore gas.

What actually happened: Project started years after drilling began; plagued by technical problems that meant it captured less than a quarter of what was promised.

Background: Chevron and its partners were allowed to build the $5.5 billion Gorgon LNG plant on the Barrow Island nature reserve for one reason only: to bury millions of tonnes of produced CO2 from offshore gas reservoirs into a formation deep under the island.

Theoretically capable of storing up to 4 million tonnes of CO2 per year and legally bound to capture 80 percent of its emissions, Gorgon has by all accounts failed spectacularly.

Although Gorgon’s gas plant produced its first LNG cargo in March 2016, the first CO2 injection didn’t begin until August 2019 — three and a half years behind schedule. And since then it’s only sequestered, on average, less than 1 million tonnes per year.

With barely a day going by when all elements of Gorgon’s CO2 injection system worked at the same time, a 2022 report by IEEFA found that Gorgon had missed its storage and emissions targets by some 50 percent during its first five years of operation. 

With CO2 leaking out of Gorgon’s assigned CO2 storage reservoir, in December 2020, regulators cut the permitted injection rate to 30 percent of maximum capacity until Chevron could fix its pressure management system without fracturing the rock around the injection wells and permanently damaging the system’s performance.

According to Australian and other publications: Gorgon failed to bury 9.5 million tonnes of carbon dioxide in its first five years of operations. In response to the shortfall, in 2021 Chevron announced it would buy 5.23 million tonnes of carbon offsets (many of which have subsequently proven to be junk). 

By all accounts Chevron continues to fall even further behind on its CO2 capture and storage targets, but the fossil fuel behemoth is being less than open about by how much.

What is certain is that Chevron’s gas refining has produced tremendous volumes of CO2 — little if any of which have been “sequestered”. 

Nevertheless, the Australian government has since approved two new massive offshore greenhouse gas storage areas, saying CCS “has a vital role to play” to help the country meet its net zero targets.

8. Abu Dhabi Steel CCS (Al Reyadah Project) 

Operators: ADNOC, Masdar, Emirates Steel, (2016 – present) 

Location: Mussafah, United Arab Emirates

Stated maximum capacity during operations: 0.8 million tonnes of CO2/year 

Storage method: Enhanced oil recovery 

Public subsidies: N/A

What they said would happen: A steel plant would be made climate-friendly.

What actually happened: The captured CO2 was used to pump more oil.

Background: The world’s only large-scale facility to capture emissions from steel production, the project promises to store up to 90 percent of all CO2 originating from the Emirates Steel plant near Abu Dhabi. From there, a pipeline carries the compressed gas to onshore oil fields, where it is used for enhanced oil recovery. The plant follows a trend of focusing carbon capture technology on “hard-to-abate” emissions from industrial sectors such as steel, cement and chemical production. 

“The success of this project will definitely be a catalyst for similar projects in the UAE and across the region,” said ADNOC head Sultan Ahmed Al Jaber, during a video interview promoting the project in 2014. Since the construction of the Al Reyadah Project, the UAE has announced new projects which would increase the country’s carbon capture capacity by over five times. ADNOC states that it will invest $15 billion in “low-carbon solutions,” with a heavy focus on CO2-enhanced oil recovery.  

ADNOC’s plans are helping to drive a CO2-enhanced oil recovery boom on the Arabian Peninsula. In 2019, Qatar announced a large-scale project to capture CO2 from liquified natural gas refining and storing it in geologic formations, but which has also been linked to eventual use for oil extraction. Neighboring Saudi Arabia built its first carbon capture plant in 2015 to extract oil from declining oil wells, and declared last year that a new carbon capture facility planned to start operations in 2027 would become the world’s largest, eventually aiming to capture 44 million tonnes of carbon dioxide per year by 2035. 

9. Boundary Dam 

Operator: Saskatchewan Power, 2014-present

Location: Estevan, Saskatchewan, Canada

Stated maximum capacity during operations: 1 million tonnes of CO2/year 

Storage method: Enhanced oil recovery in the Weyburn oil field (90 percent), geologic storage (10 percent)

Public subsidies: $240 million Canadian ($217 million U.S.)

What they said would happen: A world-leading “clean coal” facility.

What actually happened: Consistent failure to hit capture targets; captured CO2 used to pump more oil.

Background: When a carbon capture unit was attached to an aging section of a lignite-burning power station in Canada, expectations were high that the plant would become a world-leading “clean coal facility.” To fund the construction, the Canadian government gave $240 million CAD for the carbon capture venture. The plant would also solve the problem posed by a Canadian law passed in 2012, which mandated that all 50-year and older coal power stations be shut down unless they had a carbon capture retrofit. In the case of the targeted Boundary Dam unit, its operating life would have expired by 2019. 

Boundary Dam Power Station in Estevan, Saskatchewan. Credit: Flickr/Saskatchewan Power.

Rather than meeting its yearly target of one million tonnes of CO2 captured per year, the plant has consistently underperformed. By the company’s own accounting, the plant is on track to capture 750,000 tonnes of CO2 in 2023, matching similar results from 2022. In 2021, the carbon capture facility stored only about 442,000 tonnes, less than half of its intended annual capacity. 

This follows a similar trend of underperformance since Boundary Dam started running in 2016, according to an analysis from IEEFA. The report authors identified the project as “struggling” and found that it had barely reached its targeted 90 percent storage target on “any single day.” Most CO2 that was captured was sent to the nearby Weyburn oil field for enhanced oil recovery. 

10. Quest CCS 

Operator: Shell PLC, 2015 – present 

Location: Edmonton, Alberta, Canada

Stated maximum capacity during operations: 1.3 million tonnes of CO2/year 

Storage method: Enhanced oil recovery 

Public subsidies: $745 million Canadian ($654 million U.S.) 

What they said would happen: Touted as a “thriving example” of oil industry success in reducing emissions.

What actually happened: Less than 50 percent of emissions captured, relative to 90 percent target; overall emissions offset the carbon captured. 

Background: Designed to capture carbon emissions from Canadian Tar Sands operations and store them underground, Shell’s Quest plant is the world’s first to commercially produce so-called “blue hydrogen.” Blue hydrogen is the industry’s term for hydrogen produced by burning fossil gas through steam methane reformation. The process itself produces tremendous volumes of CO2 — hence the need to turn the hydrogen “blue” by burying the produced pollution underground.

With $654 million of the $1 billion cost of Quest coming from Canadian government subsidies, the plant’s operator, Shell, claimed it would help them reach its “net zero” target by 2050 while heralding the “exciting work” there to reduce emissions from industrial sources. 

Though touted as a “thriving example” of how CCS is working to significantly reduce carbon emissions, a 2022 investigation by Global Witness showed that despite 5 million tonnes of CO2 capture from 2015 to 2021, Quest released a further 7.5 million tonnes of GHG over the same period, and that just 48 percent of the plant’s carbon emissions were being captured, far short of the 90 percent carbon capture rate promised. 

Global Witness’ study found that the capture rate drops to only 39 percent when including other greenhouse gas emissions from Shell’s project.

11. Great Plains Synfuels Plant 

Operator: (Basin Electric), 2000 -to present 

Location: Near Beulah, North Dakota, USA

Stated maximum capacity during operations: 3 million tonnes of CO2/year 

Storage method: Enhanced oil recovery in the Weyburn and Midvale oil fields

Public subsidies: $1.5 billion from the U.S. Department of Energy

What they said would happen: World’s biggest project to capture carbon produced by burning coal. 

What actually happened: The captured CO2 is being used to extend the life of oilfields in Canada by 25 years.

Background: Dakota Gasification Company’s Great Plains Synfuels Plant boasts that it captures more CO2 from coal conversion than any facility in the world.

Starting with 18,000 tonnes of regionally mined lignite, the dirtiest of all coals, the Great Plains Synfuels Plant cooks and converts the lignite into methane gas, which it then transforms into ammonia for fertilizer, as well as other chemical products, while stripping out produced CO2 for eventual use in enhanced oil recovery. 

Since 2000, Great Plains Synfuels Plant remains the only CCS project to sell its CO2 cross border, compressing CO2 into a liquid and transporting it via a 320-kilometer pipeline to the Weyburn and Midale oil fields in Alberta. Each ton of injected CO2 increases oil production in Weyburn by almost three barrels.

CO2 enhanced oil recovery operation will enable an additional 130 million barrels of oil to be produced, extending the field’s commercial life by around 25 years.

Inside the Great Plains Synfuel Plant in 2009. Credit: Buchsbaum

One of the most Republican-leaning states in the U.S., where many consider climate change a hoax, North Dakota’s state government has been more than happy to take advantage of the Biden administration’s Inflation Reduction Act, given its tax credits for capturing and storing CO2 emissions.

Seeking to take advantage of those credits to increase revenue, North Dakota’s Industrial Commission recently unanimously approved a 32-square-mile expansion of the subterranean storage area for carbon from the synfuels plant.

Even though Great Plains sends 2 million tonnes of CO2 a year into the Weyburn Field for EOR, “there’s another 1.5 million potential of CO2 that’s produced at that plant today that’s not being captured, so they have the opportunity to capture that extra 1.5 million right there and get paid,” North Dakota Governor and State Industrial Commission Chair Doug Burgam has argued

State Department of Mineral Resources Director Lynn Helms also said that more CO2 will be needed to sustain regional oil production for the long term. Calling for more CCS or CO2 pipelines, Helms lamented that current CO2 production only meets about 10 percent of what is needed for enhanced oil recovery.

“We’ve got to find a way for carbon capture and utilization to become a part of North Dakota’s economy or we will leave billions of barrels of oil in the ground,” Helms said in August. 

12. Santos Basin Pre-Salt Oil Field CCS

Operator: Petrobras, 2012-present 

Location: Atlantic Ocean (300 km west of Rio de Janeiro state), Brazil 

Stated maximum capacity during operations: 10.6 million tonnes of CO2/year 

Storage method: Enhanced oil recovery in the offshore Santos Basin

Public subsidies: N/A

What they said would happen: World’s biggest offshore CCS project would slash industry’s carbon footprint. 

What actually happened: Successful use of captured CO2 to dramatically expand offshore oil production is triggering a new oil boom.

Background: Operating at over a hundred wells in Brazil’s vast ultra-deep water oil fields, Petrobras boasted the highest amount of CO2 stored in 2022, about a quarter of total human-built carbon sequestration capacity The first project of its kind globally, the company claims that offshore carbon capture has reduced the lifecycle carbon footprint of a barrel of oil by 39 percent. The CO2 used to extract oil in the Santos Basin comes from the natural gas also produced by the field, which is separated on  specialized floating platforms, and repurposed for additional profit. 

Petrobras’ experiment has paid off handsomely. CO2 injection has boosted productivity in the Santos Basin, even though it once was deemed a difficult area to extract oil due to hard-to-drill salt formations on the ocean floor. In 2022, Petrobras reinjected a world-leading 10.6 Mt of CO2 directing the gas to extract more oil, which will be refined, transported, and burned to emit more CO2 into the atmosphere. Recently, the company announced its new target of approximately 80 million metric tonnes of CO2 reinjection by 2025 in CCS projects.

Other major oil companies operating in the deep sea region might be taking notes, leading to an offshore oil boom in Brazil. These international firms include Norway’s Equinor, which aims to boost its Brazil-based oil production by more than fivefold over the next 10 years. 

Additional reporting by Dana Drugmand in New York.

Original article by Michael Buchsbaum and Edward Donnelly republished from DeSmog.

Synopsis by dizzy: Enhanced Oil Recovery rebranded as Carbon Capture and Storage as a public relations exercise.

As awareness grew that burning fossil fuels was increasingly harmful to the environment, petroleum scientists began looking for industry-friendly solutions. Given that a fraction of the CO2 injected during EOR remains underground, as early as 1977 proponents suggested rebranding EOR into climate-friendlier carbon capture and sequestration (CCS). Envisioning installing capture units on fossil fuel-burning generation plants, particularly coal-fired power stations, backers saw this as an elegant response to growing concerns over carbon emissions. 

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Continue ReadingFossil Fuel Companies Made Bold Promises to Capture Carbon. Here’s What Actually Happened.

Revealed: The Oil and Gas Lobbying Campaign to Water Down Windfall Tax

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Original article by Adam Barnett republished from DeSmog.

Industry figures held more than 200 meetings with key politicians in the year following Russia’s 2022 invasion of Ukraine, new research finds.

Prime Minister Rishi Sunak tours a Shell gas plant in Aberdeen in July 2023. Credit: Number 10 (CC BY-NC-ND 2.0)
Prime Minister Rishi Sunak tours a Shell gas plant in Aberdeen in July 2023. Credit: Number 10 (CC BY-NC-ND 2.0)

The UK government’s weakening of its windfall tax on energy profits matched the demands of a high-level lobbying campaign by the oil and gas industry, new research reveals. 

Trade body Offshore Energies UK (OEUK), formerly Oil and Gas UK, and its operator members including BP, Shell, ExxonMobil, TotalEnergies, and Equinor, met with ministers at least 210 times in the 12 months following Russia’s 2022 invasion of Ukraine.

The meetings – which include in-person talks with the then Business and Energy Secretary Kwasi Kwarteng and his minister Greg Hands (now the Conservative Party chairman) – are revealed in research by Fossil Free Parliament (FFP), a group campaigning against fossil fuel influence on UK politics. 

They form part of a lobbying blitz by fossil fuel firms against the windfall tax, conducted through meetings, drinks receptions, letters, parliamentary groups, and a “fiscal forum” with the Treasury attended by the then chancellor (and now prime minister) Rishi Sunak. 

The evidence, published in a briefing today (October 24) and shared exclusively with DeSmog, indicates that certain changes requested by the oil and gas industry were accommodated by the government when developing the scope of the levy.

It comes as Sunak faces criticism for delaying some net zero targets and granting 100 new North Sea oil and gas licences, including Equinor’s Rosebank project. As DeSmog reported in March, the Conservative Party received £3.5 million from fossil fuel and polluting interests in 2022. 

A spokesperson for OEUK defended its contact with the government: “We will always champion our industry to all parliamentarians on a cross-party basis and do so in an open and transparent manner.”

Caroline Lucas, Green Party MP for Brighton Pavilion, described the research as “shocking”.

“Fossil fuel giants have been committing countless climate crimes, polluting our planet and reaping obscene profits – while everyone else faces sky-high energy bills and a cost of living scandal,” she told DeSmog. 

“This research reveals the extent to which the dirty fossil fuel lobby has been aided and abetted by this Tory government – taking their donations, offering privileged access, and handing over staggering tax breaks and subsidies to carry out yet more climate-wrecking damage.”

Windfall Tax ‘Loophole’

The Energy Profits Levy, known as the windfall tax, was announced by the government in May 2022 to tax energy companies’ billions in excess profits due to the global price spike fueled by Russia’s February 2022 invasion of Ukraine. 

Then chancellor Sunak said the windfall tax would raise around £5 billion over the next year to help with cost of living. However, when the levy was passed in July 2022, it included a loophole where companies received 91p tax relief for every pound they invest in UK extraction, in what the independent Institute of Fiscal Studies called a “huge tax subsidy” for energy companies. 

As of September 2023 the windfall tax had raised £2.6 billion, just over half of what was promised, and following a year of record profits by five oil majors. Between them, Chevron, ExxonMobil, Shell, BP and TotalEnergies made a total of £195 billion in profits last year. 

The new research indicates this ‘loophole’ came about following a surge in meetings and lobbying between OEUK and its member companies with the government, 

In June 2022, the month the windfall tax was being consulted on and drafted, meetings between the government and OEUK and its members nearly doubled from 15 to 29, according to the new research. 

In the same month, OEUK also wrote letters to Sunak warning the proposed windfall tax would have a negative impact on oil and gas investments in the UK. The letters also called for an emergency summit, including a meeting of the “fiscal forum”, a talking shop between the industry and the Treasury. OEUK describes the fiscal forum as a tool for “facilitating coherent engagement with government authorities to drive the policy agenda”. 

On 20 June, the day before the consultation’s launch, the British Offshore Oil and Gas Industry All-Party Parliamentary Group (APPG), which is co-run by OEUK, held a summer reception at the Houses of Parliament. The reception saw speeches from Conservative MP Peter Aldous, the APPG’s chair, and Greg Hands, then a minister in the Department for Business, Energy and Industrial Strategy. 

At the reception, OEUK’s then chief executive Deirdre Michie gave a speech claiming the windfall tax could “undermine and disrupt” energy investment at a time when the UK needs to focus on “energy security and working for net zero”. 

Three days later, Sunak, Hands and exchequer secretary Helen Whately attended an “Oil and Gas Roundtable”. The meeting, also known as a fiscal forum, was held in Aberdeen, Scotland, with OEUK and members including BP, Shell, Equinor, and TotalEnergies. According to a 28 June letter from Michie, the meeting discussed the “negative impact” of the windfall tax “on investor confidence”, while companies warned of its “damage to the UK’s competitiveness”. 

Michie wrote: “While we remain disappointed at the decision to create the EPL [Energy Profits Levy], OEUK and our members want to work constructively with you to help rebuild investor confidence and ensure that the EPL is designed and implemented thoughtfully and is fit for purpose.”

OEUK’s concerns appear to have been taken into account by the government. 

For example, in Michie’s 28 June letter she insisted that the windfall must tax end in 2025: “Industry needs certainty that the EPL will be terminated by the end of 2025 at the latest and we would hope that ministerial statements will continue to reinforce the timebound nature of the EPL.” A deadline of 31 December 2025 was later included in the EPL bill. 

Michie’s letter also requested that the windfall tax should not apply to the Petroleum Revenue Tax (PRT), a tax break that oil and gas companies receive for decommissioning oil rigs, adding: “[we] have written to your officials with detailed proposals on the changes to the draft legislation and hope you will give this significant consideration”. The final windfall tax bill did not apply to PRT, as Michie had requested.  

“This research makes it abundantly clear that our government has an open-door policy when it comes to the fossil fuel industry”, said Carys Boughton, a campaigner with Fossil Free Parliament. 

“They ask for special treatment; they get special treatment, and the rest of us pay for it – with obscenely high energy bills, and a worsening climate crisis.”

She added: “Our political leaders should be channelling every effort into a just transition from fossil fuels, but this won’t happen until the industry with a vested interest in keeping us all hooked on oil, gas and coal is kicked out of our politics.”

Jeremy Hunt and the ‘Price Floor’

A tranche of additional documents, obtained by Fossil Free Politics and seen by DeSmog, shed further light on the extent of industry lobbying, which continued beyond the introduction of the windfall tax. 

After Liz Truss’s disastrous September mini-budget, newly-installed chancellor Jeremy Hunt used his Autumn statement in November 2022 to extend the windfall tax to 2028 and increase it from 25 percent to 35 percent. 

OEUK raised its opposition to these changes with Victoria Atkins MP, Financial Secretary to the Treasury, in a meeting on 17 November 2022. 

Minutes of the meeting, obtained via a Freedom of Information request, show the body’s chief executive Deirdre Michie telling Atkins that the windfall tax extension “plays into investors being undermined”, and that the 10 percent increase “will impact companies borrowing and projects”. 

Michie also complained of a “lack of engagement” with ministers, and brought up “the previous HMT [Treasury] fiscal forum”. 

A few weeks later, on 9 December, Hunt hosted a fiscal forum in Edinburgh with OEUK and its members BP, Shell, Equinor, TotalEnergies and others. There he promised “more regular fiscal forum meetings in future”, according to a Treasury press release. 

Ahead of the meeting, OEUK said it would urge the government to “scrap the windfall tax on homegrown energy when oil and gas prices fall back to normal levels”. This would mean that if prices drop below a certain point, the windfall tax could be removed before 2028. 

Ahead of the Spring Budget in March 2023, OEUK repeated this demand, reportedly writing to Hunt to call for a “trigger price” which “switches off” the windfall tax. 

Lobbying continued through the spring. In a meeting on 15 March with Treasury’s Exchequer Secretary James Cartlidge, OEUK’s new chief executive David Whitehouse told Cartlidge that the industry was “extremely disappointed that oil and gas did not get a mention in the budget” and called for more engagement and “a public signal” to “shore up confidence”. 

On 9 June, OEUK got its wish. Hunt introduced a “price floor” to the windfall tax, which meant the tax would end before 2028 if wholesale energy prices fall back to normal levels – as OEUK and member companies had been requesting.

‘Cosy Relationship’

When contacted by DeSmog, OEUK did not address the evidence of lobbying specifically on the windfall tax.  A spokesperson said the industry body was “proud” to provide a secretariat function to the all-party parliamentary group for offshore oil and gas.

“The offshore sector is a crucial part of the UK economy, supporting over 200,000 jobs in communities across the country and in nearly every parliamentary constituency,” they said.  

“Our industry is playing a vital role in the UK’s low-carbon energy future and paid £11 billion in production taxes in 2022/23. It has paid a total of £400 billion in taxes over the lifetime of the basin.”

Shell referred DeSmog to OEUK for comment. All other companies named in this story were also approached but had not responded by publication.

The Conservative Party, Cabinet Office, and the Department for Energy Security and Net Zero were also contacted for comment.

Tessa Khan, executive director of Uplift, a North Sea campaign and research group, said the findings revealed the latest in the industry’s “long enjoyed unwarranted influence over our politics”.

“This is an industry that has made obscene amounts of money while millions of ordinary people – older and disabled people, families with young children – have struggled to heat their homes,” she said. “That they then lobbied in private against a windfall tax designed to claw back some of these profits, is disgusting if unsurprising.”

“The cosy relationship between government and profiteering oil and gas companies needs to end, not just for the sake of everyone facing unaffordable energy bills, but for a liveable climate too.”

Original article by Adam Barnett republished from DeSmog.

Image of InBedWithBigOil by Not Here To Be Liked + Hex Prints from Just Stop Oil's You May Find Yourself... art auction. Featuring Rishi Sunak, Fossil Fuels and Rupert Murdoch.
Image of InBedWithBigOil by Not Here To Be Liked + Hex Prints from Just Stop Oil’s You May Find Yourself… art auction. Featuring Rishi Sunak, Fossil Fuels and Rupert Murdoch.
Continue ReadingRevealed: The Oil and Gas Lobbying Campaign to Water Down Windfall Tax

Influential Conservative Think Tank’s Funders Include BP, Shell and Equinor

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Extinction Rebellion NL image reads STOP FOSSIELE SUBSIDIES
Extinction Rebellion NL image reads STOP FOSSIELE SUBSIDIES

Original article by Peter Geoghegan republished from DeSmog.

Major fossil fuel companies are among Onward’s “corporate partners”.

Onward has had a meteoric rise. Since its inception in 2018, five of its founding advisory board members have taken roles in Conservative cabinets and its reports regularly feature in print and broadcast media.

Onward, which describes itself as “a modernising think tank” with “bold and practical ideas for the centre right”, was ubiquitous at Tory conference in Manchester this week. It hosted two dozen fringe sessions, and it will be out in force at Labour conference in Liverpool this weekend.

While Tufton Street’s free market think tanks refuse to declare their donors, Onward is something of a novelty on Britain’s right-wing think tank scene – twice a year it publishes names of anyone who contributes £5,000 or more (although the value of donations is not declared, nor what the funding is for). 

Fossil fuel giants Shell and BP are members of Onward’s “business network”, where for £12,000 (plus VAT) members get invites to networking opportunities, briefings and previews of reports. 

Onward has been vocal on energy issues. It has called for the Tory government to apply windfall taxes on renewables rather than oil and gas giants and has proposed diversifying “energy supplies through greater use of oil and coal in the short term”.

Last week, another Onward donor, Equnior, received government approval to develop the Rosebank oil field in the North Sea.

Green Party co-leader Carla Denyer said that it’s “a huge concern to see that a think tank with so much influence right at the heart of the government and the opposition is funded by fossil fuel companies”, adding that “we need to get fossil fuel funding out of politics”.

Onward said it does not accept corporate sponsorship of research reports, noting that it published a report last week making the case for government to go further and faster on decarbonisation. 

In all, Onward lists more than 20 “corporate partners”, including Al Altep Holdings Inc, a New York-registered holding company controlled by Len Blavatnik, according to 2021 US filings. Blavatnik made his fortune trading commodities in post-Soviet Russia and topped the Sunday Times Rich List in 2021.

Al Altep Holdings has donated millions of dollars to both Republicans and Democrats in the US, including GOP Senate leader Mitch McConnell. Another company owned by Blavatnik previously donated $1 million to Donald Trump’s inauguration committee. 

Blavatnik, a dual US-British citizen, is best known in the UK for his sponsorship of the Tate and the Blavatnik School of Government at the University of Oxford. He has not made political donations in the UK, but he has funded the influential conservative think tank Policy Exchange.

Blavatnik did not respond to a request for comment.

‘Unparalleled Branding Opportunities’

Onward’s disclosures give a rare insight into how a think tank’s funding pool grows. Five years ago, Onward had only a handful of backers, including some charitable foundations and the Tory-linked public affairs firm WPI Strategy.

By 2021, the think tank had more than a dozen corporate partners, including Amazon, energy giant SSE, the National Union of Farmers, and the Solicitors Regulation Authority.

The think tank has also received funding from leading Conservative funders, including mega-donors such as current party treasurer Graham Edwards, former Tory CEO Sir Mick Davis, and IPGL Limited, which is owned by Conservative Foundation board member Lord Michael Spencer.

Onward is well plugged into Tory circles. Conservative MP Neil O’Brien was a co-founder – along with former Theresa May staffer Will Tanner – and the think tank’s current director, former journalist Sebastian Payne, has put himself forward as a Conservative general election candidate.

At Conservative conference, Onward advertised drinks reception sponsorship deals for £30,000 that would give “unparalleled branding opportunities” at an event “for around 200 MPs, special advisers, journalists and industry leaders. It includes a speech from a senior Cabinet minister and remarks from our partner.”

But Onward has been building bridges with Labour, too. Onward’s pre-conference promotional material includes Labour MP Lucy Powell MP saying: “I think Onward are a fantastic think tank”.

At Labour conference, Onward is offering “partnering opportunities” that include funding a private roundtable “led by a senior MP or shadow minister”, priced at £17,500. 

Responding to questions about its funding, an Onward spokesperson said that the think tank “is committed to openness about our funding. 

“We are a not-for-profit organisation and rely entirely on the generosity of our network to support our research programme”.

This article was originally published on Peter Geoghegan’s Substack, Democracy for Sale. [a subscription site]

Original article by Peter Geoghegan republished from DeSmog.

Continue ReadingInfluential Conservative Think Tank’s Funders Include BP, Shell and Equinor

Protesters occupy City Of London insurers’ offices demanding they reject climate-wrecking projects in UK and Africa

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Extinction Rebellion occupy Lloyds of London insurance companies 18 October 2023.
Extinction Rebellion occupy Lloyds of London insurance companies 18 October 2023.

Ten City of London insurance companies are targeted by activists calling on them to stop insuring West Cumbia coalmine and East Africa Crude Oil Pipeline NOW!

Hundreds of protesters occupied City of London offices of ten Lloyd’s of London insurers demanding they rule out insuring the proposed West Cumbria coal mine and the East Africa Crude Oil Pipeline (EACOP).

The occupations started as a huge crowd gathered outside Standard Bank. The protests are in collaboration with Fossil Free London’s “Oily Money Out” mass action – at which Greta Thunberg was arrested yesterday – and in solidarity with Extinction Rebellion Gauteng in South Africa.  In Johannesburg activists were recently met with brutality by security personnel hired by Standard Bank as they peacefully called for dialogue to end the financing of new coal projects.

The protesters marched waving banners saying “Don’t Insure EACOP” and “Don’t Insure West Cumbria Mine” to three high profile buildings including the “Walkie Talkie” where in a coordinated swoop, activists occupied the office foyers of Ascot, Talbot, Chaucer, Markel, Allied World, CNA Hardy, Tokio Marine Kiln, Sirius International and Lancashire Syndicates. The activists are staging a sit-in and refusing to leave.

Insurers from Lloyd’s of London have come under increasing pressure to rule out offering insurance to both the West Cumbria coal mine and EACOP, including protests at offices across the UK with hundreds of students entering the job market refusing to work for them.

Claude Fourcroy, a spokesperson for Money Rebellion said: “We are calling on all the banks and insurers behind the West Cumbria mine and East Africa Crude Oil Pipelines to cut their ties now. Both of these projects will fuel climate breakdown. Lloyd’s of London and the insurers in its market sit at the centre of a web of climate wreckers in the City of London, alongside Barclays and HSBC.”

Community members from Cumbria and Uganda joined the protests, sharing the united call to insurers and banks to stop underwriting fossil fuel projects.  The UK Climate Change Committee warned that the West Cumbria Mine would increase UK’s domestic emissions and make the government’s legally-binding domestic emissions budgets difficult to meet.

The massive 1443 km East Africa Crude Oil Pipeline will wreak havoc on communities, jeopardise ecosystems and water supplies. and eliminate the possibility of Earth remaining habitable. There can be no new fossil fuels anywhere if global heating is to remain under 1.5C.

Scientists say we are dangerously close to crossing the globally agreed threshold of 1.5C this year. Neither project will proceed without financial and insurance backing.

Andrew Taylor, Coal Action Network said: “West Cumbria Mining Ltd wants to dig coal here right up until 2049 – when we’re supposed to have reached net zero by 2050! They’re not looking at the impact of how burning it would damage the climate and nature.  The UK government talks about us having energy security but the truth is, if the mine goes ahead, 85% of the coal would be exported.”

Patience, a youth activist from Fridays for Future Uganda said: “We have gathered here today to demand that insurers cut ties with EACOP. By supporting this deadly fossil fuel project they undermine any climate commitments they have made. People in Uganda are facing human rights violations in the name of this project. This has to end.”

Fossil Free London is simultaneously disrupting the Canary Wharf offices of Total Energies, a majority shareholder in EACOP.

The protests come on the second day of the Fossil Free London “Oily Money Out” protests targeting the Energy Intelligence Forum at the InterContinental Park Lane Hotel in London, where fossil fuel corporations, including Shell, Total and Equinor, are talking to government ministers. The Forum is taking place in the run up to the COP28 Climate Conference, which has already been captured by the fossil fuel industry, with the appointment of Al Jaber, chief executive of the Abu Dhabi National Oil Company (ADNOC) as the COP28 President.

Banner reads Oily Money Out. Protests London 18 October 2023.
Banner reads Oily Money Out. Protests London 18 October 2023.

Joanna Warrington, campaigner with Fossil Free London said: “We can’t allow London to welcome the climate-wrecking elite when droughts, floods, and wildfires rage across the world. London’s banks and finance sector have been ignoring all the warning signs while pouring billions into fossil fuel expansion. Their profit is our loss. Financing new fossil fuel developments is incompatible with a safe future.”

Continue ReadingProtesters occupy City Of London insurers’ offices demanding they reject climate-wrecking projects in UK and Africa