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Problems At Chevron’s £3bn CCS Project

July 29, 2021
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By Paul Homewood

 

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Chevron is receiving heavy flak and potential fines for failing to meet emissions reduction targets at its troubled carbon capture and storage (CCS) scheme that forms a crucial element of the Gorgon liquefied natural gas (LNG) export project in Australia. Its partners include Shell and ExxonMobil.

Yesterday, Chevron admitted that its CCS project, described by the US giant as the world’s largest, has failed to meet a five-year target for burying carbon dioxide (CO2) under Barrow Island off Western Australia. The Gorgon joint venture, which also includes Osaka Gas, Tokyo Gas and JERA, shipped its first LNG cargo in 2016.

The $3 billion CCS project, which started operating in 2019 and about three years late, has been beset by technical difficulties. Peter Milne, a Perth-based industry analyst at Boiling Cold, wrote that “Gorgon has been in production for 5.5 years, but there has not been a single day when all elements of Gorgon’s CO2 injection system have worked at the same time.”

Significantly, it is the world’s largest CCS project dedicated to cutting greenhouse gas emissions, not enhancing oil recovery. Worryingly, if Chevron, backed by Shell and ExxonMobil, cannot get CCS right more than a decade after the project was approved, then expectations of a massive global CCS rollout before 2050 look doubtful, warned Milne.

Chevron, which operates the Gorgon LNG development, has not met the official requirement to capture and store at least 80% of the emissions generated over the first five years of the project, or around 4 million tonnes per year. The emissions reduction target formed a key part of the environmental approval process.

The Western Australian environmental minister, Amber-Jade Sanderson, is now seeking an “explanation of how the company intends to address the issue.”

An analysis last year suggested Chevron could face a bill of more than A$100 million ($73 million) if it is required to offset all emissions that breached its approval requirements.

Chevron’s managing director in Australia, Mark Hatfield, said the company is working with the regulator on “making up the shortfall”, which he did not quantify. He added the company would release a public report on the issue later this year.

Analysts believe that the report will likely find that the project only captured 30% of what it was supposed to.

Ian Porter, a former oil and gas industry executive, who is chair of the advocacy group Sustainable Energy Now WA, said the report would be a “major test case for CCS technology” and described the CCS scheme as a “shocking failure of one of the world’s largest engineering projects.”

Still, to be fair to Chevron, they “made the decision to take the necessary time to start the system safely, meaning they were delayed in starting to inject CO2 and haven’t been able to catch-up in time to meet their agreed injection target,” a source close to the project told Energy Voice.

Nevertheless, Chevron remains optimistic. “Like any pioneering endeavour, it takes time to optimise a new system to ensure it performs reliably over 40-plus years of operation,” Hatfield said in a statement yesterday.

Chevron said it has injected five million tonnes of greenhouse gas (carbon dioxide equivalent) since starting the system in August 2019. Much less than the 4 million tonnes per year of greenhouse gas it was supposed to capture.

Nevertheless, the “milestone represents the largest volume of injection achieved within this time frame by any environmental CCS system of comparable specifications,” the company said.

“The Gorgon carbon capture and storage (CCS) system is the biggest CCS system designed to capture carbon emissions and is demonstrating Australia’s world-leading capability in the area,” said Hatfield.

Once fully operational, the system will capture up to 4 million tonnes of CO2 annually and reduce greenhouse gas emissions by more than 100 million tonnes over the life of the injection project, said Chevron.

The system works by taking naturally occurring CO2 from offshore gas reservoirs and injecting it in a giant sandstone formation two kilometres under Barrow Island, where it remains trapped.

“The road hasn’t always been smooth, but the challenges we’ve faced – and overcome – make it easier for those who aspire to reduce their emissions through CCS,” added Hatfield.

“We’re committed to sharing the lessons we’ve learned with state and federal governments, research institutes and other energy producers to assist the deployment of CCS in Australia,” said Hatfield.

Understandably, Chevron is getting flak for failing to deliver the CCS as promised. It’s not a good look when most of the IOCs are talking up the transition to net zero. But the project on Barrow Island is a “pioneering endeavour” and hopefully Chevron will fix it. Crucially, the industry must learn from the mistakes to date.

https://www.energyvoice.com/oilandgas/asia/337852/chevron-fails-to-hit-targets-with-giant-ccs-scheme-at-gorgon-lng/

19 Comments
  1. Jack Broughton permalink
    July 29, 2021 10:20 am

    Removing CO2 from gases is a case of something that is simple in a lab, but extremely difficult at large scale. The oil and gas extraction cases, that are used as “technology demonstrations” are simple compared with the hot, variable flows that occur from a power station.

    • MikeHig permalink
      July 29, 2021 10:52 am

      I read it that they are re-injecting the CO2 that is co-produced with the natural gas:
      “The system works by taking naturally occurring CO2 from offshore gas reservoirs and injecting it in a giant sandstone formation two kilometres under Barrow Island, where it remains trapped.”
      Maybe they are trying to capture the power station exhaust as well.
      It would be very interesting to read a proper technical description of the processes and the problems, if anyone has a link?…..

      • MikeHig permalink
        July 29, 2021 10:57 am

        Apologies Jack. I think I misread your comment.
        You were making the general point that what they are doing should be easier than CCS on power stations.

  2. Robert Christopher permalink
    July 29, 2021 10:55 am

    “… naturally occurring CO2 from offshore gas reservoirs …”

    Does anyone know more about this naturally occurring CO2?

    Are there pockets of buried CO2, just as there are pockets of buried Methane?

    If so, what are the reasons for extracting this CO2, apart from attempting CCS?

    • John Fuller permalink
      July 29, 2021 12:26 pm

      CO2 and other gases, H2S, for example, are almost always produced to varying degrees with natural gas (methane) production. There are various methods for separation. Gorgon is a large gas and condensate field. Economically this CCS project works (I guess) because of the LNG revenues generated. The CO2 injection enhances recovery. Imagine a simple CCS injection project into an old depleted gas field. Financially attractive?

  3. subseaeng permalink
    July 29, 2021 12:03 pm

    There has been much talk about CCS for many years now and I think it is very telling that as yet (if I am correct) nobody has made this work on any significant scale and several projects proposed over the years from oil companies both in the UK and Norway have tried and failed. It it was that easy it would have been done by now. Remind me again of the definition of insanity?

    • Broadlands permalink
      July 29, 2021 12:48 pm

      CCS can’t possibly work when it cannot capture and store one part-per-million of oxidized carbon even after 30 years of new scaled up facilities. The latest estimate from the IEA calls for the storage of 7,600 million metric tons by 2050. With one ppm of CO2 equal to 7,800 million tons, the use of this technology is hopelessly trivial to the climate. Others besides Chevron will soon find this out. The word boondoggle comes to mind.

      • Broadlands permalink
        July 29, 2021 4:19 pm

        I should have added that CO2 storage under pressure can be used in secondary oil recovery. However, that it not the intention of most carbon capture schemes, especially those trying to convert to carbonates which makes the amounts needed even larger.

    • MikeHig permalink
      July 29, 2021 12:50 pm

      It has been made to work. Here’s an example from wiki:
      “During its life, the Weyburn and Midale fields combined are expected to produce at least 220 million additional barrels of incremental oil, through miscible or near-miscible displacement with CO2, from fields that have already produced over 500 million barrels (79,000,000 m3) since discovery in 1954.”
      Those extra barrels are worth about $11 bn at current prices – well worth the effort. The CO2 injection has been running for 20 years, using gas piped over 300 km from a synfuel plant where it is a by-product.
      There is also the Boulder Dam project where CCS on a coal power plant supplies CO2 for enhanced oil recovery (EOR).

      What is interesting now is that CCS is becoming economically attractive to the oil companies. Both Texas and Louisiana are offering to pay for sequestration with a reduced tariff if it is combined with EOR. In the latter case it adds about $20 – 25 to the value of each barrel of oil produced.

      Capturing industrial CO2 for EOR is calculated to sequester more CO2 than is produced in the production, refining and eventual consumption of the oil. Such “carbon-negative” oil has been tagged as “Blue Oil” by a company – Denbury – that is a leading exponent.

      It’s going to be fun to see how this develops.

      • Joe Public permalink
        July 29, 2021 12:58 pm

        “There is also the Boulder Dam project where CCS on a coal power plant supplies CO2 for enhanced oil recovery (EOR).”

        2017: “SaskPower spending more to capture carbon than expected”

        https://www.cbc.ca/news/canada/saskatchewan/saskpower-carbon-capture-1.3896487

        2018: “SaskPower abandons carbon capture at Boundary Dam 4 and 5”

        https://www.cbc.ca/news/canada/saskatoon/saskpower-abandons-carbon-capture-at-boundary-dam-4-and-5-1.4739107

      • MikeHig permalink
        July 30, 2021 10:10 am

        Joe Public: that project has indeed had problems, late completion, cost overruns and lower efficiency.
        The Norwegians abandoned the Mongstad project in the face of similar challenges (and that was the second attempt, iirc) and the same happened with a big project in the NE of England.
        However there are many other sources of CO2 which may be easier to handle. The EOR project I mentioned has been running for over 20 years using CO2 from a synfuels plant in N. Dakota.

        I fully agree with other commentators that CCS is madness on stilts. However, if it provides an opportunity for the oil industry to benefit from the madness, I am in favour of them going for it.
        There’s a delicious irony in that the industry which is usually cast as the devil incarnate being the one with the best means to fulfill the crazy dreams of the climateers.
        The cream on that cake is “carbon-negative” oil. If it can be realised at scale – a very big “If” – it will tick so many boxes:
        > Greater recovery from existing fields.
        > Economic benefits on top of the value of the oil.
        > Retention of our existing ICE transport and fuelling infrastructure.

        The “dream team” would be to hook up an Allam-cycle power plant to an EOR project……

    • chriskshaw permalink
      July 29, 2021 3:58 pm

      Removal of a few percent of CO2 from the produced gas is indeed easier involving little additional conditioning of the gas prior to the membrane separation stages. Very unlike the CO2 from coal power exhaust. In the gas case the CO2 contributes very little to incremental production, if the gas were diverted to the nearest oilfield then the economics could potentially work. The removal and injection discussed here will only be political. Getting the gas concentration to where the density can allow a radial stage pump to be used instead of the compressor would be a net gain as the hydraulic efficiency improves and renders the project a bit less mental.

      • MikeHig permalink
        July 30, 2021 10:13 am

        Good points.
        Wrt to the gas concentration, Allam-cycle power plants will produce industry-grade CO2.
        The pilot plants have been a success. Four industry-scale projects are now underway.

  4. Colin R Brooks AKA Dung permalink
    July 29, 2021 1:02 pm

    The real problem here is not that CCS attempts are failing, it is that they are even being attempted at all. Why do people/scientists think we now have such low levels of atmospheric CO2 when geologists think our atmosphere was once 80% CO2(800,000 parts per million ^.^)?
    Why would anyone in their right mind try to remove life giving CO2 any faster than nature has already been managing it? In reality we should be trying to increase atmospheric CO2.

    • Broadlands permalink
      July 29, 2021 4:29 pm

      You may recall that was exactly the solution offered back in the 60s and 70s when global cooling and a new ice age was the imminent threat. It doesn’t seem to matter which way the climate seems to go, it’s a threat to humanity.

      And around 1960 ESSO had an ad in Life Magazine explaining why their products were helping to warm a cooling planet. Maybe, EXXON should resurrect that in court?

      • Colin R Brooks AKA Dung permalink
        July 29, 2021 4:37 pm

        Well it would not make any difference, CO2 does not caused warming ^.^

  5. Cool-engineer permalink
    July 29, 2021 6:41 pm

    “ The system works by taking naturally occurring CO2 from offshore gas reservoirs and injecting it in a giant sandstone formation two kilometres under Barrow Island, where it remains trapped.”
    Sure…
    Why do they think it will remain trapped down there?? Sandstone is porous (think “sponge”), and there is no crown of gas-impermeable (i.e., ignious) rock above it. The island is mostly limestone which is also porous. What’s to stop the gas from dispersing out through the island rock above it and/or into the water around the island? Are they monitoring the whole area for leakage?
    Inject liquid into a sponge and some of it stays inside for a while but thanks to gravity, most of it eventually drains out.
    Inject gas into a sponge and….well, ask any 10 year old how long it will stay there.
    Broadlands’ previous comment is spot on. This is a boondoggle with negligible impact.

  6. July 29, 2021 7:32 pm

    ‘ £3bn’ – there’s your problem…madness!

  7. REM permalink
    July 30, 2021 6:09 am

    They don’t actually say how much CO2 they have “stored”.

    “Chevron said it has injected five million tonnes of greenhouse gas (carbon dioxide equivalent) since starting the system in August 2019.

    What do they mean by carbon dioxide equivalent? Is it perhaps water vapour?

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