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Big oil and gas firms deepen investment in carbon capture

Deals underscore the energy industry’s narrow path to sustainability

by Craig Bettenhausen
April 10, 2024


Carbon capture companies find themselves in an odd position. They exist because of the threat of climate change, a problem created largely by fossil fuels. At the same time, the firms that extract and burn fossil fuels are often their main customers—and their primary investors.

Some pipes meeting a wall.
Credit: Ion Clean Energy
Ion Clean Energy is pilot testing its CO2-capture solvent at a gas-fired power plant in Pittsburg, California.

That tension is on full display in recent acquisitions and funding rounds. Earlier this month, the carbon capture solvent start-up Ion Clean Energy raised $45 million in a series A funding round led by Chevron. Ion says its ICE-31 liquid amine solvent stays intact longer and captures more carbon dioxide from common emission streams than conventional options can.

Chevron says that it plans to integrate ICE-31 into its growing carbon capture and storage (CCS) business. In 2023, the company bought a 50% stake in Bayou Bend, a CCS project near Houston, and invested in the carbon capture technology firms Carbon Clean Solutions and Svante.

In late March, the oil field services company SLB bought an 80% share of the CCS technology provider Aker Carbon Capture for $400 million. And earlier in March, the French oil company TotalEnergies bought Talos Low Carbon Solutions for $148 million. The main asset in the deal is a 25% stake in Bayou Bend. The oil and gas firm Equinor owns the other 25% of the project.

TotalEnergies says the purchase will help it reduce emissions from its petrochemical operations in the Houston area.

Oil and gas investment in carbon capture companies may be accelerating, but it isn’t entirely new. For example, BP has been an investor in the CO2 mineralization start-up CarbonFree for 10 years. CarbonFree just signed a deal with US Steel to install a carbon capture plant at Indiana’s Gary Works steel mill. The firms say the plant will capture 50,000 metric tons of CO2 annually.

Alex Zapantis, general manager for external affairs at the nonprofit Global CCS Institute, says petroleum firms are pushing into carbon capture for several reasons.

In the immediate term, subsidies—especially in the US—mean many proposed projects now make business sense. Oil companies are also eager to establish a presence in an expanding field as their primary products become increasingly fraught. Zapantis says the global pipeline of CCS projects has grown 30–50% annually for the past 6 years.

Carbon capture and, especially, storage also offer petroleum producers a way to get new value from their existing assets. The same imaging equipment that tells planners where to drill for oil and gas can determine a site’s suitability for CO2 sequestration. In some cases, the site was once a petroleum reservoir.

Each firm also has a trove of geological data to leverage—and the human expertise to make those data useful. Long term, Zapantis says, more and more young engineers “want to switch from oil and gas exploration or development to CO2 storage resource identification or appraisal.”

Not everyone is excited about CCS’s potential to give oil and gas firms a foothold in the future. Kathy Mulvey, accountability campaign director at the Union of Concerned Scientists, an environmental advocacy group, says CCS is a distraction from meaningful efforts to reduce fossil fuel use. At best, the oil firms’ investments are “about preserving their fossil fuel–centric business models,” she says.

And for the companies expanding oil and gas exploration, “CCS is a centerpiece of greenwashing campaigns,” Mulvey says. “Chevron’s $45 million investment in a carbon capture company should be compared to the roughly $19 billion that it plans to spend on new oil and gas projects next year.”


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