BP is looking to move heavily into carbon capture, utilisation and storage projects around the world predicated on its Net Zero Teesside scheme in the UK, with the US seen as ripe for development of opportunities that could rival Equinor’s pioneering Northern Lights project.
The UK supermajor is operator of a consortium engaged in developing the scheme to decarbonise several carbon-intensive industries in Teesside, north-east England, using CCUS to capture up to 10 million tonnes of carbon dioxide emissions, with the aim of making it the UK’s first net-zero industrial cluster by 2030.
The project is touted as a world first that will create a clean energy industrial cluster incorporating hydrogen and low-carbon electricity with offshore storage of CO2.
“We hope that this project can serve as a model that we can bring to the US and other areas around the world,” BP Americas senior vice president Cindy Yeilding told an Accelerate online energy transition webinar arranged by sister publications Upstream and Recharge on Wednesday.
The US is seen as replete with opportunity for CCUS because the nation has a lot of carbon-intensive industries; policy support and partnership at the federal and state levels; existing infrastructure; and “fantastic geology” for storage, according to Yeilding.
US lead in carbon capture
A study carried out on behalf of the US National Petroleum Council last year showed the US led the world in terms of carbon capture schemes, with 10 projects that were responsible for capturing about 80% of the CO2 emissions captured globally.
“In this study we confirmed that the US is uniquely positioned to continue to lead in this area,” Yeilding said.
She pointed out the US already has facilities with similar CO2 storage capacity to that of Northern Lights, which is being developed in Norway, but that these are generally associated with enhanced oil recovery, although virtually all captured CO2 remains stored in underground formations.
“There is huge interest given all this potential, and this – combined with supportive policies – has created a lot of buzz around developing CCUS businesses in the US,” she added.
Yeilding said that BP “plans to develop CCUS opportunities” as these are seen as having “great potential” to decarbonise natural gas, which is seen as a relatively low-carbon fuel that can be paired with the use of renewables to meet future energy demand.
“Gas remains a resilient source of operating cash that will help fuel our transition,” she said.
In particular, the company is looking to produce blue hydrogen with gas through the use of carbon capture.
BP recently unveiled a goal to capture 10% of clean hydrogen supply in core markets such as the US, UK, Europe, China and Australia by 2030, focusing on the industrial power and heavy transport sectors.
Policy support needed
The webinar heard from a panel of industry experts that strong government policies and a regulatory framework, including a well-defined carbon pricing structure, were necessary to incentivise low-carbon investments by the industry.
The European Union will soon announce its strategy on methane that will be “an important piece of the climate puzzle”, according to Poppy Kalesi, director of global energy at the Environmental Defense Fund.
She said the pronouncement is expected to provide clarity for the next decade with “the articulation of performance standards for methane and CO2 for the gas industry that will start a discussion on how the EU transition will evolve over the next 10 years”.
She pointed out there is currently no unified position on gas among EU countries, with those in southern and eastern Europe that are presently reliant on coal for energy generation seeing gas as a bridging fuel.
“Parts of Europe and Germany will be looking to gas well into the 2030s, but there is a big question mark after that date,” Kalesi said.
Similarly, the UK government is shortly set to produce a white paper on the energy transition that “hopefully will give the policy signals needed to make big bets” on low-carbon projects, according to Michael Tholen, director of sustainability at Oil & Gas UK.
Access Corporate Finance chief executive David Kotler said BP and Total stood out as having relatively high targets for installed renewable energy capacity, with offshore wind in particular seen as key to developing scale in terms of power generation.
Worley’s president for energy transition and digital, Geeta Thakorlal, said the contractor has seen a “shift in the project mix” of clients towards the use of CCUS and electrification to decarbonise oil and gas production, as well as blue hydrogen, and added: “Offshore wind is a real game-changer.”