Almost 100 universities that have pledged to shed ties to the fossil fuel industry still bank with financial institutions that have collectively provided $419 billion (£345 billion) to polluting interests between 2016 and 2022.
The new research, conducted by campaign group Make My Money Matter and obtained using Freedom of Information requests, shows that 95 universities still hold a bank account with one of five leading global fossil fuel funders: Barclays, HSBC, Santander, NatWest, and Lloyds.
These banks have supplied billions in financing to Shell and BP, which this year scaled back their climate targets, as well as to other oil and gas firms such as ExxonMobil and TotalEnergies. Barclays was the bank of choice, used by nearly three quarters (73 percent) of the universities.
Barclays was the largest European financier of fossil fuels between the signing of the Paris Agreement in 2016, which set a goal of limiting global warming to 1.5C, and 2022. The British bank propped up the oil and industry with $190.5 billion (£157 billion) in funding during this time, according to the annual Banking on Climate Chaos report from the climate campaign group Rainforest Action Network (RAN).
This story comes after DeSmog revealed earlier this month that UK universities have accepted £40.4 million in funding from fossil fuel companies since 2022. Students across Europe have protested at schools and universities since returning for the new academic year. In the UK, activists from Just Stop Oil have renewed their campaigning on campuses, targeting University College London, Birmingham, Sussex, Falmouth, and Exeter.
Over 100 universities across the UK, representing 65 percent of the higher education sector, have pledged to divest from the fossil fuel industry since 2014. Over 50 are yet to make any public commitments.
Make My Money Matter says that it will be writing to universities and calling on them to ensure that their divestment commitments are not being undone by their banking choices.
“Divesting from fossil fuels while banking with Barclays is hypocritical and performative,” said Jo Campling, welfare and sustainability officer at Sheffield University Students’ Union. “Universities claim they are striving for a better future by educating their students yet they continue to provide legitimacy to the financial institutions ignoring universities’ own scientists and driving us ever closer to irreversible climate breakdown.”
‘More Needs to be Done’
The universities that have held accounts with Barclays include Bristol, one of the “greenest universities in the UK”, University College London (UCL), the UK’s largest higher education institution by student population, and the University of Glasgow, the first UK university to commit to fossil fuel divestment.
Researchers analysed the period between April 2021 and April 2023. The threshold for a ‘banking relationship’ includes a current or deposit account held within the period, but excludes other services such as loans, credit facilities, or currency exchanges.
In 2022, Barclays was a major backer of unconventional oil projects, such as Arctic extraction and extraction from tar sands. The latter emits up to three times more global warming pollution than producing the same quantity of crude oil.
As of late 2022, following pressure from investors, Barclays has agreed to scale down its financing of oil sands operations. However, the new research shows both Barclays and HSBC remained among the top 10 (seven and eight respectively) global financiers of new fossil fuel expansion projects.
Barclays is facing heavy criticism for its ongoing role in facilitating climate breakdown, and its annual general meeting in May was disrupted by climate activists from Extinction Rebellion.
A spokesperson for Barclays told DeSmog: “Aligned to our ambition to be a net zero bank by 2050, we believe we can make the greatest difference by working with our clients as they transition to a low-carbon business model, reducing their carbon-intensive activity whilst scaling low-carbon technologies, infrastructure and capacity.
“We have set 2030 targets to reduce the emissions we finance in five high-emitting sectors, including the energy sector, where we have achieved a 32 percent reduction since 2020. In addition, to scale the needed technologies and infrastructure, we have provided £99 billion of green finance since 2018, and have a target to facilitate $1 trillion in sustainable and transition financing between 2023 and 2030.”
Peter Vermeulen, chief financial officer at the University of Bristol told DeSmog that the university takes its “climate commitments seriously” and engages with major suppliers, including banks, “to see where positive improvements and changes can be made”.
Vermeulen added that, “I, like many others, am disappointed in Barclays’s climate performance, and that they only put a serious climate plan in place in 2020. In my previous role I actively engaged with Barclays on their lack of progress in this area and witnessed improvement. More needs to be done and for that reason, since joining the University of Bristol this summer, I will step that up even further, with university, staff, and student representatives involved in this.”
Rainforest Action Network has calculated that the world’s biggest banks poured $673 billion (£554 million) into fossil fuels in 2022, while DeSmog revealed in May that four in five bank directors at the six largest banks in the U.S. have ties to polluting companies and organisations, including major fossil fuel firms.
Commenting on the findings of the Make My Money Matter report, Nat Gorodnitski from Students Organising for Sustainability said: “If we want to stop the worst effects of climate change, we need to end fossil fuel funding. Banks are the biggest funders by a long way and rely heavily on the higher education sector for recruitment, reputation, and business, while their fossil fuel financing contradicts academic research, university policies, and students’ needs.
“This gives students and universities the unique power to pressure banks to end their fossil fuel financing in a meaningful way, and call for a shift to funding sustainable energy.”
A spokesperson for HSBC said: “Supporting the transition to net zero and engaging with clients to help them diversify and decarbonise is critically important to us. We are committed to aligning our financed emissions to net zero by 2050.”
A University of Glasgow spokesperson that the university “is committed to doing our part to tackle the climate emergency. In 2014, we pledged to divest our holdings in companies involved in the oil and gas sectors over a 10 year period, and have already achieved this. We have also set an ambitious target to achieve net zero greenhouse gas emissions by 2030. Our socially responsible investment policy is regularly reviewed.”
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 PipelineNOW!
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.
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.”
Major fossil fuel firms have committed tens of millions in finance to UK universities since 2022, DeSmog can reveal.
Many of these commitments have been accepted by institutions that have actively pledged to divest from oil and gas companies.
According to freedom of information requests submitted by DeSmog, more than £40.4 million has been pledged to 44 UK universities by 32 oil, coal and gas companies since 2022 in the form of research agreements, tuition fees, scholarships, grants, and consulting fees.
Most of the funding spans the current academic year, with a handful of projects running for a number years, up to as far as 2027.
The largest contributors were Shell, Malaysian state-owned oil company Petronas, and British Petroleum (BP). These three companies account for over 76 percent of the total figure awarded, having committed £20.98 million, £5.19 million, and £4.89 million respectively.
A further 10 companies made up nearly 20 percent of the remaining contributions during this period: Sinopec, Equinor, BHP Group, Total Energies, Eni SPA, Saudi Aramco, ExxonMobil, Kellas Midstream, Ithaca Energy, and Chevron.
Previous reporting from openDemocracy and the Guardian found that, between 2017 and December 2021, £89 million had been given to UK universities from some of the world’s biggest fossil fuel companies.
These partnerships have shown no sign of abating. DeSmog’s research shows an additional £40 million committed by fossil fuel firms since 2022, despite pledges from 102 higher education institutions to divest from the industry.
The universities in receipt of the most money were: Exeter, Imperial College London, Heriot-Watt, Manchester, Cambridge, Oxford, Royal Holloway, Queen Mary London, and Teesside.
“Young people care so deeply about protecting the planet because their futures are on the line,” said Green Party MP Caroline Lucas. “Yet fossil fuel giants are putting that future at risk with their planet-wrecking pollution, and then attempting to youthwash their reputation by handing over dirty money to universities”.
“If we’re going to tackle the climate emergency and secure a liveable future for the next generation, educational institutions should cut all ties with fossil fuel companies immediately.”
These figures do not include a total for Durham University, which declared that it had research agreements involving fossil fuel firms totalling £1.7 million but did not declare the sums that the oil and gas firms had contributed to these agreements.
These figures also do not include the amount held in fossil fuel investments by these universities. Our research indicates that at least 18 higher education institutions held direct investments in 25 fossil fuel companies over the relevant time period, collectively worth a further £8.1 million.
Many top universities also hold stakes in high-value pooled investment funds that are pouring hundreds of millions into fossil fuel giants. Research conducted by the student campaign group People & Planet estimates that, as of July 2022, as much as £319 million was still held in these funds by universities across the UK, including some institutions that have made promises to divest.
More than 65 percent of the country’s higher education institutions have refused to make further fossil fuel investments. This would potentially remove £17.7 billion from the reach of the industry, while 51 universities have yet to divest from oil and gas
Laura Clayson, climate campaigns manager at People & Planet, told DeSmog: “we say to those 51 universities left to divest: the student movement will remain unwavering in its demands for justice until our victory list includes every single one of you.”
The Leaderboard
The University of Exeter has received the most from fossil fuel firms since 2022, having signed a £14.7 million, five-year deal with Shell in November, as revealed by Byline Times. The project is to work on “carbon storage and sequestration”, and continues a 15-year relationship between the university and the oil giant.
According to the contract award notice, the project is part of a “wider Shell-led research programme focused on sequestration which aligns with Shell’s target to be a net-zero emissions energy business by 2050”.
Last year, Shell produced only 0.02 percent of its energy from renewable sources, analysis by Greenpeace has revealed. The company also recently abandoned plans to cut oil production by 1-2 percent each year until 2030, and will be investing £33 billion in oil and gas production between 2023 and 2035, compared to just £8-12 billion in “low-carbon” products.
Shell claims that it has reduced oil production more quickly than expected, though the company’s planned emissions between 2018 and 2030 are estimated to account for nearly 1.6 percent of the global carbon budget.
A spokesperson for the firm said: “We remain committed to becoming a net zero emissions energy business by 2050… It remains our view that global energy demand will continue to grow and be met by different types of energy – including oil and gas.”
New research from the University of Queensland shows that more than half of the world’s top fossil fuel producers will fail to meet climate targets unless they expand plans to decarbonise, while a major report from the UN has warned that the world will miss its climate targets unless it commits to “phasing out all unabated fossil fuels”.
A University of Exeter spokesperson said that its work with Shell will “contribute to the global race to net zero.”
Imperial College London has received the second most from fossil fuel firms since 2022. This follows a long association with oil and gas giants, which gave £54 million to the university between 2017 and 2021.
A spokesperson for Imperial told DeSmog that it pledged in 2020 it will only engage in research partnerships “with fossil fuel companies where the research forms part of their plans for decarbonisation, and only if the company demonstrates a credible strategic commitment to achieving net-zero by 2050”.
The university has maintained a working relationship with 13 fossil fuel companies since 2022.
The largest beneficiaries of fossil fuel financial commitments since 2022
Exeter
£14,700,000
Imperial College London
£6,725,769
Heriot-Watt
£6,005,844
Manchester
£3,077,268
Cambridge
£2,821,437
Oxford
£1,209,221
Royal Holloway
£740,657
Queen Mary London
£587,956
Teesside
£500,000
The University of Manchester houses the BP Centre for Advanced Materials (ICAM) research unit, a collaboration between BP and leading universities in the UK and US, including Manchester, Cambridge, and Imperial. The ICAM website states that the centre supports “BP’s ambitions to become a net zero company by 2050”.
BP generated just 0.17 percent of its energy from renewable sources in 2022 and, in the first half of last year, the company spent more than 10 times more on new oil and gas projects than it did on “low carbon” energy. In 2022, 92.7 percent of all activity for both BP and Shell went into fossil fuel investment.
As with Shell, BP posted record profits in 2022 worth some £23 billion. At the same time, it scaled back plans to cut emissions by 2050 on the grounds that it needs to keep investing in new oil and gas to meet consumer demand. BP did not respond to our request for comment.
The University of Manchester’s funding agreements with BP stretch back to 2008, when it was selected by the fossil fuel giant to run its Projects and Engineering College.
Hundreds of people have subsequently completed BP’s courses at the university, with Manchester describing the partnership as a “strategic alliance that has a major impact on both organisations”. The university has also received money from Shell and TotalEnergies.
A spokesperson for Manchester told DeSmog: “Since 2019 all new research funded in the BP ICAM has been focused on topics in materials sciences that support the energy transition, providing research to support BP’s goal to become a net zero company by 2050.”
Since 2022, Durham University’s research projects have included contributions and commitments from BP, ExxonMobil, and the China Petroleum and Chemical Corporation (Sinopec).
The university also previously partnered with the universities of Edinburgh and Leeds to form the Engineering and Physical Sciences Research Council’s Centre for Doctoral Training in Soft Matter and Functional Interfaces (SOFI CDT), which has been sponsored by industrial partners including Infineum, a joint venture between ExxonMobil and Shell.
Durham University is also a sponsor of the GeoNetZero CDT, a PhD research and training programme focused on geoscience and the energy transition, which has 11 other university partners; Heriot-Watt, Aberdeen, Birmingham, Dundee, Exeter’s ‘Camborne School of Mines’, Keele, Newcastle, Nottingham, Plymouth, Royal Holloway and Strathclyde.
From 2020 to 2022, CDT recruited 16 PhD students per year, funded in part by the oil and gas firm NEO Energy, which pledged £2.5 million alongside academic partners.
The centre is based out of the Shell Building at Heriot-Watt University’s School of Energy, Geoscience, Infrastructure and Society, and has nine core industry partners: BP, Cairn Energy, Chrysaor, China National Offshore Oil Corporation (CNOOC), Equinor, ExxonMobil, NEO Energy, Shell, and Total Energy.
A spokesperson for Heriot-Watt told DeSmog: “Heriot-Watt University and our Centres for Doctoral Training (CDTs) are committed to a rapid and just energy transition, led by our world-class research and teaching… The GeoNetZero CDT is a new programme of PhD research and training set up to address key areas in geoscience and their role in the low carbon energy transition and challenge of net zero.
“We work in collaboration with the energy sector to develop education and research opportunities related to net zero, responsible consumption of oil and gas, and the transition to renewable energy sources.”
Studentships
Fossil fuel companies pledged to fund scholarships and tuition fees across at least 17 universities in 2022.
The Italian multinational Eni funded a scholarship programme at the University of Oxford’s Saïd Business School in 2022 called the Africa Scholarship, as well as a scholarship programme with St Anthony’s College, Oxford.
Oxford has previously said that it “receives funding from and donations from companies and organisations from the fossil fuel sector” typically at an average of £3 million a year in research funding and £2 million in philanthropic donations. It says that the research funding is equivalent to less than 1 percent of the university’s research turnover.
Kellas Midstream also funds a set of scholarships at Teesside University, while Cardiff receives over £870,000 from TotalEnergies for its OneTech Futures graduate programme, which began in 2018 and runs through to 2025.
Shell has given the University of Aberdeen £150,000 for new “Transition Scholarships” for the coming academic year, funding research into “key challenges around net zero and reducing emissions”.
The university, based in Europe’s “oil capital” on the coastline of the UK’s North Sea oil and gas fields, pledged to divest from fossil fuels in 2021 – saying that it planned on excluding fossil fuel extraction companies from its £52.7 million investment portfolio by 2025.
A report commissioned by the University of Cambridge and led by Nigel Topping, a former UN climate action champion, last year recommended that the institution halt all funding from fossil fuel companies, including for research or philanthropic purposes. Cambridge itself took £2.8 million from Shell, BP, and BHP Billiton in 2022, and has reportedly received around £3.3 million per year from the industry since 2017.
A spokesperson told DeSmog: “The University of Cambridge only accepts funding from energy companies where it is sure that the resulting collaboration will help the UK and global society move to renewable or decarbonised energy. An enhanced set of criteria created in 2021 includes a written assessment from non-conflicted experts on whether the purpose of the proposed collaboration contributes meaningfully to the energy transition.”
A spokesperson for the University of Strathclyde said: “The University of Strathclyde is committed to supporting the energy transition to a sustainable, renewable energy system and the delivery of net zero targets by 2050. Much of the University’s work in the achievement of a sustainable and zero carbon economy is carried out in collaboration with industrial partners in the energy sector.”
A spokesperson for Royal Holloway, University of London, said: “At Royal Holloway, University of London, we are committed to developing and implementing activities that support environmental sustainability and a solution-based approach to net zero.”
The University of Bradford refused to reveal how much it received in partnerships with both Sinopec and the Saudi chemicals company SABIC, citing the commercial interests of the companies.
A deal struck between the University of Surrey and BP, running from 2019-2022, was also withheld because of a non-disclosure agreement in place.
A number of other universities refused our freedom of information requests or failed to respond to repeated requests for comment. This included the universities of East Anglia, Nottingham, Birmingham, Plymouth, Loughborough, Bishop Grosseteste, and Oxford Brookes.
Additional reporting by Joey Grostern and Sam Bright
UPDATE: 5 October 2023 – This article previously erroneously listed Scottish Power as a fossil fuel company. The firm has now been removed from the article and Strathclyde University removed from the largest recipients of fossil fuel funding.
Greenpeace activists display a billboard during a protest outside Shell headquarters on July 27, 2023 in London. (Photo: Handout/Chris J. Ratcliffe for Greenpeace via Getty Images)
In February this year, the UK’s Climate Change Committee (CCC) wrote a letter to government in which it claimed that more domestic oil and gas extraction would have “at most, a marginal effect on prices”, recommending instead that the best way of reducing exposure to volatile energy markets is “cut[ting] fossil fuel consumption, improving energy efficiency, [and] shifting to a renewables-based power system”.
Meanwhile, research from campaign group Uplift reveals that gas from undeveloped UK oil and gas fields in the North Sea, including Rosebank, will deliver at most three weeks of energy to the UK per year, while oil would provide up to five years of oil demand, even if none of it were exported. In reality, most production from North Sea fields, along with Rosebank, which is joint-owned by Norwegian state oil major Equinor (40%), Canadian Suncor Energy (20%) and Israeli-owned Ithaca Energy (20%), is likely to be exported abroad, as is currently the case with 60% and 80% of North Sea gas and oil, respectively.
Further analysis of data from GlobalData reveals just how far burning oil and gas from Rosebank would threaten the UK’s climate targets. According to GlobalData, Rosebank contains the largest untapped oil and gas reserves of all proposed North Sea fields, with 370 million barrels of oil equivalent.
Using US Environmental Protection Agency (EPA) conversion figures – according to which one barrel of oil emits 0.43 tonnes (t) of CO₂ when burnt and 1,000 cubic feet of gas emit 0.0551t of CO₂ when burnt – Rosebank is likely to release 155 million tonnes of carbon dioxide (mtCO₂) into the atmosphere over its lifetime.
However, in a “balanced” net-zero pathway, as per the CCC’s sixth carbon budget, emissions from fossil fuels fall 75% by 2035 from 2018 levels. In total, emissions from “fuel supply” – predominantly made up of fossil fuels – amount to 298mtCO₂-equivalent (mtCO₂e) between 2023 and 2050, meaning lifetime emissions from Rosebank are equivalent to more than half of the UK’s remaining carbon budget for total fuel supply.
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Just Stop Oil protesting in London 6 December 2022.
The oil industry’s push to portray carbon capture as a climate solution at COP28 obscures how the technology is really being used.
Shell and its joint venture partners have a Quest carbon capture and storage (CCS) project at its Scotford Complex near Fort Saskatchewan, Canada. Credit: Government of Alberta, CC BY-NC-ND 2.0
When Sultan Ahmed Al Jaber opens the 28th annual UN climate conference in Dubai in November, he will be juggling two roles – convincing the world of the United Arab Emirates’ leadership in reducing greenhouse gas emissions, while preserving the very industry that’s causing them.
In addition to his job as summit president, Al Jaber heads the Abu Dhabi National Oil Company (ADNOC), which plans to increase its oil and gas output by 11 percent by 2027. The company says that more oil will mean less emissions, however — provided the industry builds enough facilities to capture carbon dioxide (CO2), the main gas causing the climate crisis.
“We must be laser-focused on phasing out fossil fuel emissions, while phasing up viable, affordable zero carbon alternatives,” Al-Jaber said at a pre-COP 28 event in Bonn in June. The statement was widely interpreted as a pitch for carbon capture.
On September 6, ADNOC finalized a deal to build a carbon capture and storage (CCS) project in the UAE’s Habshan oil and gas field, extending the company’s existing CCS operations at a steel plant. Now projected to become one of the largest carbon capture plants in the Middle East, ADNOC says the facility will have the equivalent climate impact of removing 500,000 cars from the road.
In fact, the project will be used to squeeze even more oil from the ground. Most of the CO2 ADNOC already captures is pumped into existing oil wells, forcing residual crude to the surface in a process known as “enhanced oil recovery” or “EOR”.
It is a trend reflected across the sector: Of the 32 commercial CCS facilities operating worldwide, 22 use most, or all, of their captured CO2 to push more oil out of already tapped reservoirs. This fleet accounts for approximately 31 million tonnes of the world’s roughly 42 million tonnes of operational carbon capture capacity, according to figures published by the industry-backed Global CCS Institute, U.S. Energy Information Administration and other sources.
But the fact that existing carbon capture projects are mostly used to bring more oil to the surface has not stopped oil and gas companies championing the technology as a climate solution in the run-up to COP28.
In January, ExxonMobil Tweeted a video interview with a safety and environment supervisor at its LaBarge CCS project in Wyoming.
“Welcome to La Barge — the industrial facility that has captured the most CO2 emissions on earth to date,” says a caption at the start of the clip.
Nowhere does the video mention that most of the CO2 captured from the LaBarge gas processing plant is being injected underground to extract more oil. Research by the Institute for Energy Economics and Financial Analysis, a nonprofit energy think tank, shows that 97 percent of CO2 captured by the La Barge facility has been sold for EOR since the plant began operations in 1986. In times when EOR was not profitable, CO2 was simply vented into the atmosphere.
While CCS is proving a boon for the fossil fuel industry, a DeSmog review of 12 of the world’s biggest projects has found a litany of missed carbon capture targets; cost overruns; and multi-billion-dollar bills to taxpayers in the form of subsidies.
DeSmog’s research also raises questions over an oft-cited claim that industry captures 41 million tonnes of CO2 annually — or 0.1 percent of the world’s approximately 37 billion tonnes of energy-related CO2 emissions.
Beyond the consistent underperformance of many CCS projects, DeSmog found that most either strip out CO2 in the process of refining fossil fuels, or use their captured CO2 to push more oil out of the ground — or both. The result: existing CCS projects are enabling the release of a much greater amount of overall CO2 emissions into the atmosphere than they are storing underground.
For examples, see a summary of the 12 projects DeSmog analysed here.
From Oilman’s Dream to “Climate Solution”
The process of using carbon dioxide to produce more oil, now known industry-wide as enhanced oil recovery, or “CO2-EOR”, was born in the oil fields of Texas in the early 1970s.
Petroleum engineers from leading oil producers such as Shell, Exxon, and Chevron had discovered that injecting CO2 at high pressure into “mature” or “previously developed” oil reservoirs helped increase the flow of otherwise stubborn hydrocarbons — in essence squeezing more volume out of aging wells.
Though initial tests found that each ton of injected CO2 could push out an additional two or more barrels of oil, the lack of readily available CO2 made the technique expensive. That changed when companies began siphoning off CO2 emitted from several Texas gas processing plants, and piping it to an oil field to boost productivity. To ensure a steady supply, industry agents scoured the region and purchased the rights to mine naturally occurring CO2 deposits in Colorado, New Mexico, and Arizona — eventually building hundreds of miles of dedicated pipelines to transport the gas to oil-field injection points.
By the late 1970s, amid growing concerns over what was then known as the “greenhouse effect,” industry executives began to propose that capturing CO2 and burying it underground could allow the world to continue generating power from fossil fuels far into the future. In 1992, the Paris-based International Energy Agency (IEA) and other energy organizations established a research program to support developers seeking to prove CCS at scale.
By the time of the first U.N. climate conferences in the mid-1990s, the oil industry had begun marketing carbon capture as a technological “silver bullet” capable of making coal “clean,” and rendering oil and gas as “low carbon” — a strategy employed by oil majors to this day.
However, capturing CO2 is not the same as avoiding its climate impacts. If that CO2 is then used to directly produce more oil, or if CCS “abatement” is used to suggest that additional oil and gas production is climate-friendly — or in some cases both — then those CCS projects are invariably acting as a net harm to the climate, by actually increasing overall CO2 pollution.
Carbon dioxide runs through pipes at a North Dakota CCS plant. Credit: Buchsbaum Media.
For example, the fossil fuel industry often points to Norway’s pioneering Sleipner CCS facility — which has captured and buried approximately one million tons of CO2 per year under the North Sea since 1996 — as proof that carbon capture works. But that figure does not account for all the additional CO2 that’s emitted when fossil gas produced by the plant is burned by end-users.
Energy expert Michael Barnard, estimates that even though Sleipner has stored about 23 million tons of CO2 from 1996-2019, burning the gas refined by the plant over that time has released some 581 million tons of CO2 into the atmosphere — or more than 25 times the amount that was sequestered. (For more details on Sleipner, see DeSmog’s review of 12 CCS facilities).
Profit Driver
Now an established technique worldwide, producers generally use CO2-EOR to recover oil from older “depleted” fields, where less sophisticated recovery methods have left up to two-thirds of the original oil behind. If the geology and economics are favorable, using EOR techniques can extend the productive life of developed oil fields for several more decades.
To put the significance of this approach to the oil industry into perspective, according to the U.S. National Energy Technology Laboratory, of the 600 billion barrels of oil that have been discovered in the U.S., approximately 400 billion are unrecoverable by conventional means. But half of that unrecoverable oil — or 200 billion barrels — could be squeezed to the surface through CO2-EOR.
Today, the oil industry pumps some 80 million tonnes of CO2 underground each year to extract more oil, much of it in the U.S. — the world’s leading oil and gas producer, and biggest user of CCS-EOR, which drives six percent of the country’s daily output. In some cases, the technique can squeeze up to four or five additional barrels from otherwise declining fields for every ton of injected CO2. Though geology plays a role, one of the main factors inhibiting even greater EOR volume is the lack of cheaply available CO2.
Despite many EOR projects simply being intended to extend oil production, companies often label them as climate-friendly “carbon capture” facilities since about half the CO2 injected underground remains there, depending on local geological conditions.
However, climate claims made on the basis of CCS projects also often ignore the fact that much of the CO2 the industry “captures” for EOR purposes is mined from naturally occurring underground deposits, and reburying this gas in an oil field does nothing to reduce the amount of emissions humans are releasing into the atmosphere by burning fossil fuels.
Government Backing
While costs for proven zero-carbon emitting renewable energy technologies are plummeting, CCS projects have remained dependent on subsidies and tax breaks that often incentivise some of the world’s richest and most polluting companies to capture CO2 to produce more oil.
Governments worldwide have awarded at least $19 billion in subsidies to CCS projects over the last 20 years, according to data compiled by Oil Change International, a research and advocacy organization. This number includes more than $4 billion in failed projects, including the troubled Kemper Facility, a now-abandoned “clean coal” and EOR scheme. (For details, please see DeSmog’s review of 12 CCS projects).
Carbon capture technology used at a coal mine in 2014. Credit: Peabody Energy, Wikimedia Commons (CC BY-2.0)”>Wikimedia Commons Wikimedia Commons (CC BY-2.0)”>CC BY-2.0
By far and away, the United States has extended the most government support for CCS, estimated at $15 billion since 2010. Canada, Australia, and the European Union have also poured billions into the technology. Norway’s state-owned Statoil, now Equinor, was also an early CCS adopter, and the government continues to pour billions into new, more sophisticated projects. Likewise, state-owned companies in China, as well as Brazil’s Petrobras, Saudi Arabia’s Aramco, and the United Arab Emirates’ ADNOC are receiving support to develop and expand their existing CCS operations.
U.S. Doubles Down
Despite the fact that almost three-quarters of existing CCS projects are used to pump more oil, new climate policies on both sides of the Atlantic are driving more government support.
In August last year, U.S. President Joe Biden’s Inflation Reduction Act (IRA) – which contained sweeping climate provisions — significantly expanded tax credits for investments in CCS beyond an existing $12 billion in government support. Under the revised “45Q” credits section, companies can now claim $60 per ton of CO2 captured for EOR — up from $35 before the Act was passed — and $85 per ton of CO2 captured for geological storage, up from $50.
Additionally, the IRA reduces the requirements for eligible CCS projects while locking in a seven-year extension to qualify for the tax credit, meaning that developers have until January 2033 to begin construction.
The industry-backed Global CCS Institute reckons these tax breaks and other enhancements could increase CCS deployment in the U.S. 13-fold to more than 110 million tonnes per year by 2030.
Since there has been no cap set as to how much the U.S. government can pay through new carbon capture credits, Bloomberg New Energy Finance and Credit Suisse caution these subsidies could balloon to a vast $50 to $100 billion in CCS giveaways over the next decade.
Flurry of Deals
More than 50 new CCS projects were announced within months of the passage of the IRA — spurred on by even more support from the Biden administration.
In July, ExxonMobil, which boasts more CCS experience than any other company, spent over $5 billion to acquire independent oil and gas producer Denbury Resources and its 1,300 miles of CO2 pipeline infrastructure. In projects almost entirely devoted to EOR, Denbury has been injecting over four million tonnes a year of carbon captured from industrial and natural sources into various oil fields in 10 onshore sequestration sites across the Gulf region of the U.S.
Buying Denbury allows ExxonMobil to not only advance its various carbon capture deals, but also gives it a great potential revenue source as polluting companies increasingly resort to buying carbon credits to meet climate targets. With an expanding CO2 pipeline network already in place, ExxonMobil can now offer itself up as an emissions disposal company and cash in on the associated tax credits.
Looking ahead, ExxonMobil says that CCS and other “carbon management” schemes could develop into a $4 trillion global market by 2050.
‘Preserve our Industry’
The deal-making continued in August, when the White House and the Emirati government endorsed a new partnership between ADNOC and Texas-based Occidental Petroleum to “supercharge and accelerate decarbonization solutions” in the UAE, the United States, and around the world. Both partners are currently running large-scale carbon capture projects specifically aimed at producing “low carbon” oil.
One of the technologies the partnership will explore is “direct air capture,” which involves sucking air through giant fans and filtering out CO2 with a chemical-lined filter. The CO2 can then be stored underground or piped to petroleum wells to help extract oil. Bonus funds in Biden’s IRA are now available to prove this experimental technology is viable.
Currently the world’s first large-scale direct air capture plant in Iceland stores about 4,000 tonnes of CO2 a year, about 0.001 percent, of global carbon capture capacity, according to data from the Global CCS Institute. That’s less than four second’s worth of global emissions. However, these modest beginnings have not tempered oil industry enthusiasm for the technique.
“We believe that our direct capture technology is going to be the technology that helps to preserve our industry over time,” Occidental Petroleum Chief Executive Vicki Hollub told a major fossil fuel conference in Houston in March. The company is already the U.S. leader in carbon capture operations, and Hollub says new advances could serve as a lifeline for the oil industry, extending operations “60, 70, or 80 years in the future,” she noted.
Direct air capture plants could soon be used to trap CO2 for enhanced oil recovery operations in the US, the UAE and beyond. In 2021, ADNOC announced plans to produce “low carbon” petroleum, and last year Occidental signed its first contract for “net-zero oil”.
European Commission President Ursula von der Leyen requested a Dutch foreign official to examine CCS as a climate solution. Credit: WikiMedia Commons, CC BY-NC-ND 2.0“>WikiMedia Commons
Europeans Follow Suit
Aggressive support for CCS from the Biden administration has found echoes across the Atlantic. In March, the European Commission proposed that the EU should target 50 million tonnes per year of CO2 capture capacity by 2030, from almost zero today. The target forms part of the draft Net-Zero Industry Act, a key piece of climate legislation aiming to drive the clean energy transition.
European Commission president Ursula von der Leyen has since instructed Wopke Hoekstra, a former Dutch foreign minister who has worked for Shell, to examine CCS as a climate solution before he takes over as climate commissioner in October.
Against this backdrop of positive policy signals, the oil industry has announced a spate of ambitious carbon capture plans in Europe, a continent with little existing CCS infrastructure outside of Norway – almost all of which plan to store CO2 under the North Sea.
In the UK, the North Sea Transition Authority, which regulates the country’s oil and gas industry, this month awarded 21 licenses to 14 companies to store captured CO2 into blocks for formerly productive oil and gas fields under the seabed. The combined CCS plan aims to store 30 million tonnes of CO2 annually by 2030.
Around the world, hundreds of new carbon “abatement” projects reliant on CCS to clean up fossil-fueled electrical generation, steel and cement output, as well as hydrogen production, are now scheduled to come online by the end of the decade.
This, in turn, has triggered a scramble by companies seeking to enter the rapidly emerging CO2 logistics, handling, shipping and disposal markets.
Despite all this activity, announced global schemes to capture and bury CO2 constitute only a tiny fraction of what would be needed to slow climate change, critics say. Based on the current project pipeline, the International Energy Agency predicts that by 2030, the world’s annual carbon capture capacity from both new construction and retrofits could amount to a total of 205 million tonnes of CO2, only about 0.5 percent of current global energy-related emissions.
Moreover, the core of the IEA’s Net Zero scenario, as well as similar roadmaps for avoiding the worst impacts of climate change, rests on rapidly accelerating the shift to renewables from fossil fuels, regardless of whether a portion of CO2 emissions are “abated” through capture and storage.
Aware of the risks of the oil industry presenting CCS as a catch-all climate solution at COP28, some governments are pushing back. In July, ministers from Germany, France, Denmark, the Netherlands and more than a dozen other nations published a joint letter warning that CCS and “abatement technologies must not be used to green-light continued fossil fuel expansion.” Instead, such technologies “must be considered in the context of steps to phase out fossil fuel use, and should be recognised as having a minimal role to play in decarbonization.”
With the Emirati hosts seemingly determined to champion carbon capture, and the oil industry planning to market ever more barrels of “net-zero” oil, the battle over the future of a 50-year-old technology may have only just begun.
Click here for case studies from a DeSmog review of 12 of the world’s leading CCS projects, and their impact on the climate.
