Study Explains Why Commercial Carbon Capture and Sequestration Ends in Failure

According to scientists from the University of California, San Diego, there are 12 crucial traits that describe why commercial carbon capture and sequestration (CCS) projects fail or succeed in the United States.

The study was recently published in the Environmental Research Letters journal.

CCS has turned out to be increasingly significant when it comes to tackling climate change. As a matter of fact, the Intergovernmental Panel on Climate Change (IPCC) largely depends on this technology to achieve zero carbon levels at a low cost.

CCS is one of the few low-carbon technologies in the proposed $400 billion clean energy plan of President Joseph R. Biden which has gained bipartisan support.

In the last 20 years, the government and the private sector have invested tons of money to capture carbon dioxide (CO₂) from many power and industrial plant sources.

But in spite of the elaborate support, such projects had failed to a large extent. As a matter of fact, 80% of studies seeking to commercialize the CCS technology have encountered failure.

Instead of relying on case studies, we decided that we needed to develop new methods to systematically explain the variation in project outcome of why do so many projects fail.

Ahmed Y. Abdulla, Study Lead Author and Research Fellow, Deep Decarbonization Initiative, University of California, San Diego

Abdulla is also an assistant professor of mechanical and aerospace engineering at Carleton University.

He added, “Knowing which features of CCS projects have been most responsible for past successes and failures allows developers to not only avoid past mistakes, but also identify clusters of existing, near-term CCS projects that are more likely to succeed.”

By considering the largest sample of U.S. CCS projects ever studied, and with extensive support from people who managed these projects in the past, we essentially created a checklist of attributes that matter and gauged the extent to which each does.

Ahmed Y. Abdulla, Study Lead Author and Research Fellow, Deep Decarbonization Initiative, University of California, San Diego

The Credibility of Incentives and Revenues is Key

The team noted that the credibility of incentives and revenues—that is, functions of politics and policy—is one of the most significant attributes, together with capital expenditure and technological readiness, which have been widely analyzed before.

“Policy design is essential to help commercialize the industry because CCS projects require a huge amount of capital up front,” noted the study authors, which included an international research team.

The researchers also pointed to present-day credible policies that serve as incentives, like the expansion of the 45Q tax credit in 2018. It offers an assured revenue stream to companies if they sequester the CO₂ gas in deep geologic repositories.

But so far, the only significant incentive for companies to recover their investments in carbon capture is by selling the CO₂ gas to oil and gas firms, which subsequently inject the gas into oil fields to improve the speed of extraction—a process known as enhanced oil recovery.

Besides this, the expansion of the 45Q tax credit in 2018 incentivizes the improved oil recovery but at a lower cost for each CO₂ unit, when compared to the dedicated storage of geologic CO₂.

Apart from selling to oil and gas firms, CO₂ gas is not exactly a useful commodity and, therefore, there are only a few feasible business cases to support the CCS sector on the scale that is needed or projected to stabilize the climate.

If designed explicitly to address credibility, public policy could have a huge impact on the success of projects.

David Victor, Professor of Industrial Innovation, School of Global Policy and Strategy, University of California, San Diego

Victor is also the co-lead of the Deep Decarbonization Initiative.

Results with Expert Advice from Project Managers with Real-World Experience

Although technological readiness has been widely investigated and is crucial for decreasing the risk and cost of CCS, the team looked further than the engineering and engineering economics to find out why the CCS technology continues to remain a risky investment.

During the course of two years, the investigators examined publicly accessible records of 39 projects of the United States and sought the know-how of CCS project managers, who have in-depth, real-world experience.

The researchers identified 12 potential determinants of project results, which include financial credibility, the credibility of incentives, technological readiness, the burden of CO₂ removal, regulatory challenges, cost, public opposition, industrial stakeholder opposition, plant location, employment impact, population proximity and the host state’s appetite for the development of fossil infrastructure.

To assess the relative effect of the 12 attributes in describing the project results, the team first created a couple of statistical models and then complemented their empirical study with a model obtained through an expert assessment.

These experts only emphasized the significance of the credibility of incentives and revenues—that is, the huge majority of effective projects set up in advance to market their captured CO₂ gas for improved oil recovery.

These experts obtained unconditional incentives upfront, improving perceptions that they were depending on safe financial footing.

The study authors concluded that models used in this analysis—particularly when amplified with the structured description of expert judgment—can probably enhance the representations of CCS deployment throughout the energy systems.

“Assessments like ours empower both developers and policymakers. With data to identify near-term CCS projects that are more likely to succeed, these projects will become the seeds from which a new CCS industry sprouts,” wrote the study authors.

Other co-authors of the study include Ryan Hanna, an assistant research scientist from the University of California, San Diego; Kristen R Schell, an assistant professor from Carleton University; and Oytun Babacan, a research fellow from Imperial College London.

Journal Reference:

Abdulla, A., et al. (2021) Explaining successful and failed investments in U.S. carbon capture and storage using empirical and expert assessments. Environmental Research Letters. doi.org/10.1088/1748-9326/abd19e.