Some 1500 depleted oil and gas fields around the world could be crucial for the massive scale-up of carbon capture, utilisation and storage (CCUS) needed to meet aggressive greenhouse gas emissions reduction targets and limit a projected rise in global temperatures, according to a new report.

However, the success of widescale CCUS deployment will depend on an unprecedented level of co-operation between diverse business interests and a rethinking of business models, according to the report from analysts at Wood Mackenzie.

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The whitepaper, “Location, location, location: the key to carbon disposal”, advocates a “basin-wide” approach to CCUS that considers potential storage sites, industrial clusters and infrastructure within an oil and gas basin in making an economic case for a large-scale sequestration project.

Making a viable business case

While not all the 1500 disused or soon-to-be depleted reservoirs suitable for carbon storage will meet the criteria for a basin-wide carbon storage project, the research provides information needed to make a viable business case for a project, said Neeraj Nandurdikar, global head of power and renewables consulting for WoodMac and a co-author of the report.

“Ultimately, this is going to be a business venture,” he says — a point that often gets lost in “hypothetical” discussions about CCUS.

“Somebody is going to have to make shareholder return from all this.”

Nandurdikar added: “Rather than have companies come together and speak in hypotheticals, what we are doing is providing the hard data and saying, 'okay, you all want to do this, here are 500 sites in country X...let’s sit down and talk about the specifics'” — including ruling out sites that will not work so that more appropriate alternatives may be explored.

Mammoth task

The scale of the challenge is sobering. To have a chance of hitting the Paris Agreement target of limiting warming to 1.5 degrees Celsius above pre-industrial levels will require reducing emissions by 1.8 billion tonnes of carbon dioxide equivalent per year over the next three decades, according to the report.

Fossil fuels will still make up 37% of the energy mix in 2050, WoodMac said. Renewables alone will not be enough to meet demand, making a sharp scale-up of CCUS urgent.

With the notable exceptions of the Northern Lights, Net Zero Teesside and Port of Rotterdam Porthos initiatives, few current CCS projects could be considered large-scale and basin-wide.

Many more are needed, Nandurdikar told Upstream, and needed quickly — a big project may take two or three years to plan and another three to four to build.

“So, if we want to start making a dent in CO2 by 2030, we’re already creeping into that window,” he said. “That’s why thinking in terms of a business venture is critical.”

Role of oil and gas players

That contrasts with the tendency to consider carbon capture and storage in narrow regulatory or technological terms. Both are important, but a project must also be approached as a complex business venture involving multiple stakeholders, with questions about how costs, value, risk and governance will be shared.

Oil and gas companies under pressure to bring down their own emissions — and to justify their continued operations — will be instrumental in any large-scale ramp-up of CCUS, he said.

“What we have identified here are 1500 depleted or about to be depleted oil and gas reservoirs. Who better to understand the injection of CO2 back into the reservoir, and the properties of the subsurface, than oil and gas companies, who have decades of experience?” Nandurdikar said.

They also have deep experience in complex ventures and managing expensive projects, he said.

“And the process technology and the equipment involved is nothing unlike what they have already done. The deep expertise, skills, jobs and competencies are all there, so I think it’s a natural fit.”