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Love Is A Long Road - Carbon-Capture Projects Reach Major Milestones, But Not All The News is Good

Progress in the carbon-capture industry can be slow, given the extended permitting process for sequestration wells, uncertain long-term outlook and skepticism about the real-world effectiveness in reducing carbon dioxide (CO2) emissions. The past several weeks have been a better-than-usual period for advocates of carbon capture and sequestration (CCS), with significant milestones reached for a trio of important projects under development, but not all the news was positive. In today’s RBN blog, we’ll look at what’s happening with a handful of key CCS projects. 

Let’s start with a quick refresher on carbon capture. When CO2 is captured and then permanently stored, that’s CCS, which requires a Class VI injection well (see Figure 1 below) for long-term storage in deep geologic formations. If the CO2 is used for some other process before it’s stored, it is called carbon capture, use and sequestration (CCUS) — the most common example being enhanced oil recovery (EOR), which requires a Class II injection well. Permitting for Class VI wells is typically handled by the Environmental Protection Agency (EPA), although three states (Louisiana, North Dakota and Wyoming) have control over that process, something referred to as primacy. (For more, see Take Control.)

Class VI Injection Well

Figure 1. Class VI Injection Well. Source: EPA

In our first blog on the bottleneck around carbon-capture projects, The Waiting, we noted that relatively few applications for Class VI wells have been approved by the EPA, even though the regulations around them were established back in 2010. There are plenty of CCS projects in the works, however, driven by improvements made to the 45Q tax credit for permanent CO2 sequestration as part of the Inflation Reduction Act (IRA). A fresh look at the EPA’s online dashboard for Class VI well permitting shows that activity has picked up since June. There are 150 total wells under review, up from 139 in June, with 38% of those applications filed within the last 12 months, up from 35% in June. (Those figures do not include projects seeking approval in the three states with Class VI well primacy.) Of the 150 wells under review as of September 27 (orange bars in Figure 2 below), the latest data available, there are four wells in the first phase of the approval process (completeness review), 139 in the second phase (technical review), zero in the third phase (draft permit), three in the fourth phase (public comment; more on those below) and four in the final phase (permit decision). Let’s look next at two projects that have reached significant milestones. 

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