• Tariq Siddiqui,

Permian CCS Hub: A Lasting Solutions For Emissions

Updated: Nov 11

By Tariq Siddiqui

UEPA-Upstream EP Advisors LLC


Permian oil & gas operators are the leaders and innovators in providing energy solutions, and there is absolutely no doubt, that they will continue to find solutions to Permian emissions. In this article we propose, a Permian ‘CCS Hub’ that will provide a lasting solution to the emissions, among many other pathways.


Global Flaring Challenge

Global gas flares burn approximately 140 billion cubic meters of natural gas every year that emits more than 400 million tons of CO2 equivalent emissions every year.


Permian Flaring/Venting Challenge

Permian Basin is a national security asset, the oil & gas production benefits Texas, New Mexico and the national economy; this can be done responsibly and sustainably.


An aerial survey of nearly 900 different oil and gas sites (ref1) in the Permian Basin reveals that massive methane emissions at many sites occurred. The only way to know what’s going on and to ensure things are operating properly is to regularly check sites for problems. Methane is a powerful greenhouse gas, roughly 80 times more potent than CO2 in trapping heat in its first few years.


What is Flaring & Venting?

The flaring and venting practice, which is commonly used by oil and gas companies to relieve the pressure that builds up on gas lines during oil production or emptying gas-lines for maintenance purposes, is responsible for releasing CO2 and methane into the atmosphere.

  • Venting is when operator release methane into the air. Venting of CH4 is the most damaging, as methane is 28 time more dangerous than CO2, which results when methane is combusted and or flared.

  • Flaring is when operators burns excess natural gas. It results in emission, though not as high as venting. 84 % of routine flaring can be avoided by no extra cost.

Why Flare?

Flaring often remains a cheaper alternative to pushing the gas to market, and flaring often comes down to the fundamentals of supply and demand.

  • Natural gas market has been marked by oversupply and low prices for years, and for many companies, the economic analysis does not favor a major change in current operations.

  • Lack of market for gas but also lack of facilities.

  • Whether the operators want to make the investment in facilities?

  • Flaring is free, stopping flaring requires investment

  • Flaring is currently legal, meaning regulatory policies that encourage using gas for other purposes are required.

Alternatives To Flaring

The prime focus should always be on ‘Avoiding’ and “Reducing’ emissions. emissions that cannot be avoided and reduced (Example: difficult industries-cement) must be ‘Removed’ from either Nature Based Solutions or technology based solutions like Direct Air Capture (DAC) and/or Carbon Capture Sequestration (CCS).


The process of halting routine flaring can be done by methods such as

  • Associated gas to sales (preferred solution)

  • Rewiring gas for electricity

  • Internal uses for methane, such as heating.

Public Perception & Impact

Reduction Efforts

The Texas oil and natural gas industry continues to make strides toward a cleaner, stronger and better energy future, as evidenced by the Texas Methane & Flaring Coalition’s goal to end routine flaring by 2030," said Todd Staples, president of the Texas Oil and Gas Association.


In a recent interview, BlackRock CEO Larry Fink said, “I would much rather have us, business, do it ourselves . . . before the government does it for us.”


Seventy-seven endorsers encompassing government and oil companies have signed World Banks, Zero Routine Flaring by 2030 initiative. Occidental was fist US company to sign, subsequently Chevron, Exxon and Shell have also signed. Some leading examples are:

  • Oxy’s Direct Air Capture (DAC) in Permian

  • Exxon & Shell have have milestone emission reduction target reaching net zero by 2050

Other major players like Chevron, COP, EOG, Pioneer, Concho, Devon and Diamondback can also play important role in the hub.


SOLUTION: A Permian CCS Hub

Benefits

A permian CCS Hub, comprising of multiple sources (emitters), CO2 pipeline network and multiple sinks can provide a lasting solution to the permian emission. Sinks could be fields storing CO2, benefitting from CO2-EOR or geological storage of CO2 in deep saline aquifer. There is abundance of both in permian. The benefits would be:

  • ESG and sustainability will enhance the ability of permian operators to create value over the long-term

  • Increase ESG investment and exploit full potential of Permian

  • Upscaling to hub will reduce the costs substantially for all operators

  • Hub will reduce the project risk to emitters, transporters & storage operators

  • Minimize the need for every operator embark on piloting a CCS

  • Abundant EOR opportunities for operators with oil field

  • Proximity and pervasive access to saline aquifer, lower cost of pipeline

  • Federal 45Q incentives to reduce cost and emission ($50 /Tonne for Saline Aquifer; $35/Tonne for CO2-EOR)

  • Opportunity to earn Voluntary Carbon Credits

  • Better profitability from enhanced oil production

Growth & Scope

  • There are currently 56 commercial CCS project already in operation globally removing 41 mtpa across various industries, according to Rystad.

  • Nearly 140 CCS plants could be operational capturing at least 150 mtpa of CO2. If all projects move ahead

  • Onshore storage is currently dominant mode of storage due to less complexity and lower cost. Can Permian be the hub?

  • Offshore storage will become increasingly important. Houston Shipping channel emitter are also looking for a CCS solution offshore. Its gain traction in Europe by regulatory policies, incentives and prices of EU-ETS credits.

Reference:

  1. Environmental Defense Fund


64 views0 comments