direct air capture

Wednesday, 08/03/2022

It’s one thing if you’re 25 or 30 years old and your 401(k) is just getting started — you’ve got time to build it up, so don’t sweat it — but it’s quite another if you’re 60 or 65 and you’ve still got to sock away a lot of money before calling it quits. It could be argued that the environmental community is facing a quandary very similar to that of an aging boomer short on retirement savings. The fact is that the International Energy Agency’s (IEA’s) target of achieving net-zero man-made carbon emissions globally by 2050 in order to blunt the human impact on climate change will require massive new investment and a complete and well-coordinated transformation of the world’s energy complex. In the near-term, progress along that path must include an extraordinarily rapid ramp-up in the use of carbon capture and sequestration (CCS). And like an aging worker whose late discipline may be thwarted by an unforeseen health challenge, as we’ve seen with the recent energy crisis, there’s a lot that could derail progress toward those goals. Is the IEA's goal achievable? Maybe. But, as we discuss in today’s RBN blog, it won’t be easy.

Thursday, 03/17/2022

When U.S. lawmakers introduced the 45Q tax credit in 2008, they were planting a seed they hoped would one day sprout into a flourishing carbon-capture industry. As the years wore on and the number of successful projects remained small, they added a little fertilizer in 2018, not only enhancing the value of the credits but easing some of the limitations in the earlier legislation. It’s now 2022 and, with climate concerns and the energy transition at top of mind, Washington is again looking at ways to make the tax credit more effective and spur new growth in carbon-capture projects. In today’s RBN blog, we look at how economic and technological challenges have so far limited the success of carbon-capture initiatives.

Wednesday, 02/09/2022

Not so long ago, most folks in the energy industry hardly gave carbon dioxide (CO2) a thought. Sure, some CO2 was used for enhanced oil recovery (EOR) and in some production areas the natural gas coming out of the ground had to be treated to remove high levels of CO2. But otherwise, CO2 wasn’t on the industry’s radar. Now though, CO2 is a front-and-center concern not just for the energy industry but for society at large as the global economy tries to decarbonize. And while renewable energy like wind and solar will be part of that decades-long effort, so will the push to capture CO2 and permanently store it deep underground. Put simply, it’s time for producers, midstreamers, and refiners alike to gain a deeper understanding of carbon capture and sequestration, how it will affect them, and — ideally — how they can profit from it. In today’s RBN blog, we discuss highlights from our new Drill Down Report.

Tuesday, 02/01/2022

The Internal Revenue Code’s tax credit for carbon oxide sequestration, better known as 45Q, is fortunate to enjoy something very rare in Washington, DC, these days — generally bipartisan support. A host of changes aimed at bolstering the tax credit were included in the House-approved version of the Democrats’ central piece of legislation, the Build Back Better (BBB) Act, but it appears to have no way forward in the Senate — it was declared “dead” Tuesday by West Virginia Senator Joe Manchin, a must-have vote — which means it will likely be split into separate pieces, further complicating its path to passage. Several proposed changes to the 45Q tax credit have already been included in separate legislation, so they could still become a reality. In today’s RBN blog, we’ll look at some potential changes to the tax credit as well as measures that might restrict its use.

Monday, 01/17/2022

The idea of capturing the carbon dioxide emitted from power plants and industrial facilities and permanently storing it deep underground is widely viewed as one of the more promising ways to reduce greenhouse gas emissions. The catch is, how do you convince private-sector CO2 emitters to invest tens or hundreds of millions of dollars in carbon capture and sequestration projects? Enter federal government incentives — in this case the Internal Revenue Code’s carbon oxide sequestration tax credits, better known as 45Q, which at first glance would appear to offer certain industries significant financial incentives if they make these investments. However, while the credits — available for a variety of projects and uses — have been around since 2008 and were significantly expanded in 2018, they have not yet made much of an impact. In today’s RBN blog, we look at how the credits can add up for individual projects and how widely variable costs make carbon capture uneconomic for several industries.

Wednesday, 01/05/2022

Capturing carbon dioxide and permanently storing it below ground is expected to be a critically important tool in the global effort to reduce greenhouse gas (GHG) emissions. The oil and gas industry has been a leader in showing how CO2 –– albeit mostly CO2 that is produced from underground reservoirs, not captured from industrial facilities or power plants — can be used and sequestered via enhanced oil recovery (EOR). The catch is that capturing CO2 and using it for EOR or injecting it into deep wells for eternal storage doesn’t come cheap and so government incentives are required to justify investment in carbon-capture projects. Enter the 45Q tax credit. First made available for U.S. carbon-capture projects in 2008, it has been expanded considerably since then and could soon be expanded further, although its results to date are a mixed bag at best. In today’s RBN blog, we discuss key aspects of the tax credit, how it has changed over time, and what may be coming down the pipeline.