Carbon capture and storage works, but its high cost has slowed its uptake, APPEA conference hears

Experts say the technology being extolled as a must for net zero is not a failure, just very challenging and very expensive.

Getting CO2 to storage sites is a complicating factor.

Carbon capture and storage is “complicated and costly’’ to do on a large scale, and its lack of affordability in part explains why the mature technology is not widely used, the Australian Petroleum Production and Exploration Association conference has heard.

The key role CCS will play in reaching net-zero carbon goals has been a key theme of the conference, being held in Adelaide this week, along with calls for more government support for the technology which aims to permanently store carbon emissions underground in depleted oil and gas reservoirs.

And while Resources Minister Madeleine King told the conference this week that CCS was “perhaps the single biggest opportunity for emissions reduction in the energy resources sector’’, her colleague, Industry and Science Minister Ed Husic yesterday said he wasn’t yet convinced.

“If the technology stacks up, great,’’ Mr Husic said in a radio interview. “I haven’t taken the view that it’s all bad and I haven’t taken the view that it’s all great. I haven’t seen it yet to be honest … it really hasn’t shown that it’s able to work at scale.’’

Mr Husic said “it would be great if we can do it’’, but that remained to be shown.

While Ms King’s comments to the conference were strongly supportive of the role CCS could play in reaching net zero, there were no commitments made in terms of supporting the technology through incentives or subsidies.

Her comments follow the government stripping $250m in previously committed funding from CCS projects in last October’s federal budget.

APPEA says a carbon capture and storage strategy is essential at a national level and is pushing for the creation of “net zero industrial zones” where heavy carbon-emitting industries can be co-located, and their emissions captured and stored.

The conference also heard from many speakers that Australia risks falling behind the US and Europe, which are pouring billions into net zero programs including support for CCS projects, with the US allowing them to use a key tax credit.

To date there is only one commercially-operated CCS project active in Australia, at Chevron’s Gorgon project offshore Western Australia, while Santos’s Moomba CCS project is 60 per cent complete, with first injection expected next year.

The Chevron project is underperforming, with Chevron Australia general manager energy transition David Fallon telling the conference on Wednesday that pressure management issues were still hindering the $2.5bn project.

Mr Fallon said the $2.5bn Gorgon CCS project was working and was “the world’s largest stand-alone storage facility’’, but admitted it was only operating at about one third capacity.

It had to date stored about eight million tonnes of CO2, Mr Fallon said.

The Gorgon CCS operation is designed to store CO2 stripped from the natural gas stream in depleted in reservoirs more than 2km beneath Barrow Island, offshore Western Australia.

The company aims to inject about 100m tonnes of CO2 back underground over the life of the LNG project with the system to eventually capture four million tonnes of greenhouse gases annually.

Mr Fallon said there had been some “misleading reporting’’ saying the project did not work, but the high level message was that “the CO2 storage, it is working’’.

“It’s safely storing CO2. Even with the challenges we’ve had it remains, as I understand it, the world’s largest stand-alone CO2 storage facility solely focused on storage, so we’re working through the challenges and we’ve got lots of engineers and plans to remediate the system,’’ he said.

“There’s often some misleading reporting saying ‘it’s a failure, it doesn’t work. I can say it does work.’’

When challenged on why the technology, which has been in use at a modest scale for decades overseas, has not been more widely adopted, Mr Fallon said “it’s not cheap”, while reiterating that it needed to be part of the net zero toolkit.

“The times are changing, it’s not cheap, but as the world’s evolved and lower carbon is a higher priority there’s certainly more interest in CCS and it becomes a more attractive investment from a cost point of view.

“As, increasingly, people around the world put prices on carbon … things like CCS must be in the solution set to help large emitters get to their net zero requirements.’’

BloombergNEF senior associate for hydrogen Kathy Xitong Gao told the conference that CCS was “complicated and costly to do … at a large scale’’.

Ms Gao said there were several hurdles the industry had to surmount to make it more viable, which differed by jurisdiction. In the US for example, the permitting time frame for a CCS project currently sat at about six years, while countries such as South Korea and Japan lacked the geological structures to store CO2 underground.

Ms Gao said the growing focus on building CCS hubs provided some “promising hope’’ for the technology.

She said while the cost of capturing CO2 was “actually quit high”, carbon prices were also high and would make projects viable.

“I think the bigger problem with CCS is … the scale and the scale comes more around … the transportation and storage side of it,’’ she said.

Ms Gao said transporting CO2 for storage could double the cost of the endeavour, meaning hubs were a better option.

APPEA chief executive Samantha McCulloch said this week that Australia risked falling behind the US and Europe if a concerted CCS strategy was not implemented.

“The world needs technologies like CCS to get to net zero and it is industries like ours that can enable that, using our skills and infrastructure to progress these projects,” she said.

“The global race is on and the US and Europe are announcing major programs worth billions to incentivise projects. Australia needs to seize the economic and emissions reduction benefits.

“Developing Net Zero Zones can help facilitate this journey, enabling new investment into industrial hubs with shared energy and emissions reduction infrastructure.”