1 00:00:00,120 --> 00:00:02,680 Speaker 1: This is Dana Perkins and your listening to Switched on 2 00:00:03,000 --> 00:00:06,240 Speaker 1: the B and EF podcast. So back in twenty twenty 3 00:00:06,559 --> 00:00:09,200 Speaker 1: was the last time that we dedicated an episode here 4 00:00:09,240 --> 00:00:12,120 Speaker 1: on this show to carbon capture and storage, and at 5 00:00:12,119 --> 00:00:14,960 Speaker 1: the time we discussed it in terms of an emerging 6 00:00:15,000 --> 00:00:20,120 Speaker 1: technology which could become important in the future for reducing emissions. Well, 7 00:00:20,120 --> 00:00:24,080 Speaker 1: perhaps now the future has come. Within the intervening period. 8 00:00:24,360 --> 00:00:27,560 Speaker 1: CCS looks like it has been growing fast, with the 9 00:00:27,600 --> 00:00:30,840 Speaker 1: investment in CCS having more than doubled year on year 10 00:00:31,000 --> 00:00:34,120 Speaker 1: as of Q one twenty twenty three. The total capacity 11 00:00:34,120 --> 00:00:36,960 Speaker 1: of projects under development as of late twenty twenty two 12 00:00:37,120 --> 00:00:40,479 Speaker 1: stood at two hundred and forty four million tons per annum. 13 00:00:40,720 --> 00:00:43,640 Speaker 1: That's up forty four percent from the year before. So 14 00:00:43,800 --> 00:00:46,760 Speaker 1: which industries and sectors are driving this growth, why are 15 00:00:46,760 --> 00:00:49,239 Speaker 1: they looking at CCS in particular, and how does it 16 00:00:49,280 --> 00:00:53,479 Speaker 1: compare with other carbon abatement strategies. Today's show draws from 17 00:00:53,680 --> 00:00:57,680 Speaker 1: the recent BNF Carbon Capture and Storage market outlook, and 18 00:00:57,720 --> 00:01:00,279 Speaker 1: who better to speak with us about this topic than 19 00:01:00,360 --> 00:01:03,280 Speaker 1: two members of our Sustainable Materials team. The head of 20 00:01:03,280 --> 00:01:08,240 Speaker 1: the team, alent Tom Abraham, alongside Anastasia Tomasidu. Together, we 21 00:01:08,360 --> 00:01:11,600 Speaker 1: discuss the different industries that are utilizing carbon capture and 22 00:01:11,640 --> 00:01:16,600 Speaker 1: storage technology, including oil, gas, cement, and hydrogen and the 23 00:01:16,640 --> 00:01:20,600 Speaker 1: costs involved for each along with other hard to abate areas. 24 00:01:21,000 --> 00:01:23,920 Speaker 1: In the show, we also get into how carbon capture 25 00:01:24,120 --> 00:01:26,920 Speaker 1: is transported and stored In addition to some of the 26 00:01:26,920 --> 00:01:29,959 Speaker 1: surprising things that it can be used for, we also 27 00:01:30,000 --> 00:01:33,440 Speaker 1: address the potential bottlenecks for storing CO two and whether 28 00:01:33,520 --> 00:01:36,480 Speaker 1: it could pose a threat for the expansion of CCS. 29 00:01:36,800 --> 00:01:39,319 Speaker 1: And lastly, we get into the role that policy plays 30 00:01:39,360 --> 00:01:42,640 Speaker 1: in the adoption of CCS technology, in which countries are 31 00:01:42,680 --> 00:01:47,600 Speaker 1: actively encouraging rollout with reforms and how effective they've actually been. 32 00:01:48,200 --> 00:01:51,320 Speaker 1: As always, if you like this podcast, if you subscribe, 33 00:01:51,360 --> 00:01:54,360 Speaker 1: you're going to receive an update when we publish future episodes, 34 00:01:54,440 --> 00:01:56,640 Speaker 1: and if you give us a review on Apple Podcasts 35 00:01:56,720 --> 00:01:59,280 Speaker 1: or Spotify or any other players, it will make us 36 00:01:59,320 --> 00:02:02,720 Speaker 1: more discoverable by others. But right now, let's jump into 37 00:02:02,800 --> 00:02:07,200 Speaker 1: my conversation with Alan and Anastasia about where the CCS 38 00:02:07,200 --> 00:02:21,000 Speaker 1: market has gotten to since we last discussed it. Anna, 39 00:02:21,080 --> 00:02:23,919 Speaker 1: thank you very much for joining today. Thank you and Alan, 40 00:02:24,000 --> 00:02:24,959 Speaker 1: good to have you on the show. 41 00:02:24,960 --> 00:02:25,280 Speaker 2: As well. 42 00:02:25,560 --> 00:02:27,720 Speaker 3: Thank you, Dana. Very excited for this conversation. 43 00:02:28,160 --> 00:02:30,480 Speaker 1: Well, I'm looking forward to it because this is one 44 00:02:30,520 --> 00:02:33,840 Speaker 1: of those topics that we're revisiting because things have changed, 45 00:02:34,040 --> 00:02:36,440 Speaker 1: and that's always a good thing to see technology move 46 00:02:36,480 --> 00:02:39,680 Speaker 1: forward and for markets to be this kind of constantly 47 00:02:39,720 --> 00:02:43,239 Speaker 1: evolving thing. We're talking about carbon capture and storage today, 48 00:02:43,480 --> 00:02:46,760 Speaker 1: and my first question is a definition, one which does 49 00:02:46,800 --> 00:02:48,640 Speaker 1: seem to be where I head at the beginning of 50 00:02:48,680 --> 00:02:52,239 Speaker 1: many shows, because there's a lot of vernacular and one 51 00:02:52,280 --> 00:02:54,519 Speaker 1: thing I've noticed was that a couple of years back, 52 00:02:54,639 --> 00:02:58,639 Speaker 1: everyone was saying CCUS as opposed to CCS. Now I'm 53 00:02:58,680 --> 00:03:02,680 Speaker 1: noticing CCS being back as the go to term. Would 54 00:03:02,720 --> 00:03:05,040 Speaker 1: you be able to clarify the difference between the two 55 00:03:05,160 --> 00:03:07,360 Speaker 1: and essentially which term we're going to use for the 56 00:03:07,360 --> 00:03:09,559 Speaker 1: remainder of our conversation today. 57 00:03:09,600 --> 00:03:13,200 Speaker 3: Carbon capture and storage is what is referred to as CCS, 58 00:03:13,240 --> 00:03:16,919 Speaker 3: and carbon capture utilization and storage is what is referred 59 00:03:16,919 --> 00:03:21,000 Speaker 3: to as CCUS. Now, the utilization part is important because 60 00:03:21,000 --> 00:03:23,639 Speaker 3: a lot of companies previously thought that they could capture 61 00:03:23,720 --> 00:03:27,240 Speaker 3: carbon and then use it for certain applications like creating 62 00:03:27,240 --> 00:03:30,720 Speaker 3: synthetic fuels or any other particular applications that they would 63 00:03:30,720 --> 00:03:34,400 Speaker 3: look for. But because of the maturity and policy, as 64 00:03:34,440 --> 00:03:36,840 Speaker 3: well as some incentives that are coming out in certain 65 00:03:36,880 --> 00:03:39,840 Speaker 3: markets which favor storage, the industry is starting to slowly 66 00:03:39,880 --> 00:03:42,560 Speaker 3: shift towards storage, and that's becoming a more important part 67 00:03:42,560 --> 00:03:45,080 Speaker 3: of the whole carbon captured discussion. And that's why you 68 00:03:45,160 --> 00:03:48,200 Speaker 3: have rightly noticed that a lot of discussions are now 69 00:03:48,240 --> 00:03:52,680 Speaker 3: focusing on ccs instead of ccus, but both are relevant. 70 00:03:52,840 --> 00:03:55,400 Speaker 1: What was the utilization part? What was it being used 71 00:03:55,440 --> 00:03:57,720 Speaker 1: for in a way that was economically beneficial. 72 00:03:58,400 --> 00:04:02,360 Speaker 3: Historically most of it was used for enhancing oil production 73 00:04:02,560 --> 00:04:05,560 Speaker 3: from oil wells. You captured the CU two injected to 74 00:04:05,600 --> 00:04:08,120 Speaker 3: new oil wells and you increase the output from these 75 00:04:08,120 --> 00:04:11,640 Speaker 3: oil wells. Or you could also use it for carbonation 76 00:04:11,720 --> 00:04:15,600 Speaker 3: of beverages, for example, into your soda. That's also one 77 00:04:15,640 --> 00:04:18,560 Speaker 3: particular application. Or you could use it as a greenhouse 78 00:04:18,680 --> 00:04:23,919 Speaker 3: for increasing agricultural output in greenhouse versus agricultural production. So 79 00:04:24,360 --> 00:04:26,640 Speaker 3: different applications, but not very scalable. 80 00:04:26,680 --> 00:04:29,200 Speaker 1: I would say it's possible I drank a soda of 81 00:04:29,760 --> 00:04:33,640 Speaker 1: CCUS captured carbon. This is something that may have happened 82 00:04:33,640 --> 00:04:34,839 Speaker 1: and I didn't even realize it. 83 00:04:35,040 --> 00:04:37,400 Speaker 3: Yes, if you were in the US, if. 84 00:04:37,279 --> 00:04:39,640 Speaker 1: I was in the US. We'll come to the regional 85 00:04:39,720 --> 00:04:43,640 Speaker 1: aspect of this particular technology application in a minute, but 86 00:04:44,040 --> 00:04:46,360 Speaker 1: let's talk a little bit right now about why this 87 00:04:46,400 --> 00:04:48,560 Speaker 1: is time for us to be talking about this. This 88 00:04:48,640 --> 00:04:52,600 Speaker 1: technology has become more prevalent, more often talked about, and 89 00:04:52,640 --> 00:04:55,520 Speaker 1: really in your mind. I mean, I know why we 90 00:04:55,560 --> 00:04:57,159 Speaker 1: asked you to come on the show, but why do 91 00:04:57,240 --> 00:04:59,880 Speaker 1: you think that there was a catalyst for you to 92 00:05:00,040 --> 00:05:02,400 Speaker 1: you talk about this topic and for us to revisit 93 00:05:02,480 --> 00:05:03,520 Speaker 1: CCS at this time. 94 00:05:03,800 --> 00:05:07,800 Speaker 4: So in the last decade, we've seen huge investment in 95 00:05:07,839 --> 00:05:10,880 Speaker 4: this technology, so many new projects and some Mu's news 96 00:05:10,920 --> 00:05:14,680 Speaker 4: it says capacity being announced. Between twenty twenty since we 97 00:05:15,080 --> 00:05:18,440 Speaker 4: last had a conversation, more than forty million tons of 98 00:05:18,600 --> 00:05:23,480 Speaker 4: capacity has been announced, which might sound huge, but by 99 00:05:23,480 --> 00:05:25,720 Speaker 4: the end of this decade, an additional three hundred and 100 00:05:25,720 --> 00:05:30,120 Speaker 4: seventy million tons of zotocupture capacity has been announced. So 101 00:05:30,400 --> 00:05:33,520 Speaker 4: this has been a massive change over the last few years. 102 00:05:33,760 --> 00:05:35,760 Speaker 3: This is something that we always try to look at 103 00:05:35,800 --> 00:05:38,080 Speaker 3: how fast the industry is moving bar and we try 104 00:05:38,120 --> 00:05:40,599 Speaker 3: to capture it in our market outlooks. And one of 105 00:05:40,600 --> 00:05:43,120 Speaker 3: the things that we started noticing when we went about 106 00:05:43,160 --> 00:05:46,760 Speaker 3: writing this market outlook was two other important things that 107 00:05:46,760 --> 00:05:49,719 Speaker 3: were changing. One is we discussed about the use of 108 00:05:49,760 --> 00:05:54,400 Speaker 3: carbon dioxide and where it eventually ends. And historically most 109 00:05:54,440 --> 00:05:57,000 Speaker 3: of the carbon diexcite, like I mentioned, was used for 110 00:05:57,279 --> 00:06:00,000 Speaker 3: enhanced soil togory. About sixty percent of the carbon great 111 00:06:00,240 --> 00:06:04,440 Speaker 3: capacity historically used the CO two to enhance oil recovery. 112 00:06:04,720 --> 00:06:07,200 Speaker 3: But when we look into the future twenty thirty twenty 113 00:06:07,240 --> 00:06:10,240 Speaker 3: thirty five, we are starting to see that flip. About 114 00:06:10,440 --> 00:06:14,120 Speaker 3: seventy five percent of the carbon capture capacity is now 115 00:06:14,160 --> 00:06:17,479 Speaker 3: trying to use the carbon dioxide and storing it away 116 00:06:17,520 --> 00:06:21,719 Speaker 3: permanently in deep geological reserves, when compared to just twenty 117 00:06:21,720 --> 00:06:24,760 Speaker 3: five percent today. So huge shift in terms of like 118 00:06:24,920 --> 00:06:27,599 Speaker 3: where we are sending the carbon dioxide that we're starting 119 00:06:27,640 --> 00:06:30,040 Speaker 3: to capture. And the other one is, of course we're 120 00:06:30,040 --> 00:06:32,960 Speaker 3: starting to see a divergence in terms of the geographical 121 00:06:33,160 --> 00:06:36,880 Speaker 3: footprint of the projects that are starting to be announced. Historically, 122 00:06:36,880 --> 00:06:39,320 Speaker 3: the US has been the largest market. The US continues 123 00:06:39,360 --> 00:06:42,880 Speaker 3: to be the largest market, but new large projects are 124 00:06:42,880 --> 00:06:48,080 Speaker 3: starting to come up in markets such as Canada, the UK, Germany, Netherlands, 125 00:06:48,279 --> 00:06:51,320 Speaker 3: and even the Middle East. So that's another difference that 126 00:06:51,360 --> 00:06:53,360 Speaker 3: we're starting to see when we look at the market 127 00:06:53,440 --> 00:06:54,880 Speaker 3: over the last three to four years. 128 00:06:55,279 --> 00:06:57,359 Speaker 2: Just thought something to what Alan has just said. 129 00:06:57,520 --> 00:07:00,920 Speaker 4: Another pig defense is in which sector is the capacity 130 00:07:00,960 --> 00:07:04,000 Speaker 4: is actually being added, And historically most of the capacity 131 00:07:04,160 --> 00:07:07,160 Speaker 4: was in natural gas processing plants, but now we see 132 00:07:07,279 --> 00:07:12,480 Speaker 4: lots of investment in sectors like hydrogen and cement and power, 133 00:07:12,680 --> 00:07:16,920 Speaker 4: especially in the US, and this diversification in terms of 134 00:07:17,040 --> 00:07:20,360 Speaker 4: verre city is supplied is also driving this huge capacity 135 00:07:20,680 --> 00:07:21,720 Speaker 4: boom that we're seeing. 136 00:07:22,000 --> 00:07:25,480 Speaker 1: So you mentioned that the US has been and continues 137 00:07:25,520 --> 00:07:27,320 Speaker 1: to be a dominant player in this space. So let's 138 00:07:27,360 --> 00:07:30,360 Speaker 1: talk a little bit about the geographical split. This is 139 00:07:30,400 --> 00:07:33,000 Speaker 1: a popular technology from what you're telling me, in the West, 140 00:07:33,200 --> 00:07:36,520 Speaker 1: but why why do you think that it is found 141 00:07:36,640 --> 00:07:38,920 Speaker 1: predominantly in North America and in Europe. 142 00:07:39,160 --> 00:07:41,520 Speaker 3: It's two reasons. One is, like I said, one of 143 00:07:41,560 --> 00:07:45,360 Speaker 3: the reasons for the dominance of the US when it 144 00:07:45,400 --> 00:07:48,000 Speaker 3: comes to carbon captic capacity is that the oil and 145 00:07:48,040 --> 00:07:50,560 Speaker 3: gas companies in the US have been at the forefront 146 00:07:50,600 --> 00:07:54,239 Speaker 3: of using this technology to improve the oil output from 147 00:07:54,400 --> 00:07:57,760 Speaker 3: their production facilities. And that's one of the reasons that 148 00:07:57,920 --> 00:08:01,400 Speaker 3: many of the projects that were initially located were in. 149 00:08:01,360 --> 00:08:04,640 Speaker 1: The US, and is that because perhaps national oil companies 150 00:08:04,640 --> 00:08:08,560 Speaker 1: are less interested at least until this point, in directly 151 00:08:08,560 --> 00:08:10,720 Speaker 1: managing their emissions with this technology. 152 00:08:11,080 --> 00:08:13,760 Speaker 3: It's two ways. One is the emissions is one part 153 00:08:13,800 --> 00:08:15,480 Speaker 3: of it. The other part is, of course, like how 154 00:08:15,520 --> 00:08:18,280 Speaker 3: do you increase the efficiency of your oil and gas 155 00:08:18,320 --> 00:08:21,000 Speaker 3: production as well and improve its output. So I would 156 00:08:21,000 --> 00:08:23,720 Speaker 3: say it's a balancing of both of these different parameters. 157 00:08:23,840 --> 00:08:26,720 Speaker 3: But it also looks at how some of these US 158 00:08:26,720 --> 00:08:29,240 Speaker 3: based oil and gas companies were looking at this technology 159 00:08:29,240 --> 00:08:31,760 Speaker 3: as a way to understand how carbon capture works out. 160 00:08:31,840 --> 00:08:35,400 Speaker 3: And there has been some historical incentives that also helped 161 00:08:35,600 --> 00:08:38,480 Speaker 3: in propping up this industry in the US and even 162 00:08:38,559 --> 00:08:42,000 Speaker 3: in markets like Canada where you used the captured carbon 163 00:08:42,080 --> 00:08:45,040 Speaker 3: dioxide in order to extract more oil and it created 164 00:08:45,040 --> 00:08:48,280 Speaker 3: a value stream for the captured carbon dioxide. Unfortunately, in 165 00:08:48,320 --> 00:08:51,440 Speaker 3: other markets outside of North America, we did not see 166 00:08:51,480 --> 00:08:54,840 Speaker 3: a value proposition for using the carbon dioxide that was captured, 167 00:08:54,880 --> 00:08:57,200 Speaker 3: and that's as a result you see very little projects 168 00:08:57,320 --> 00:09:00,000 Speaker 3: that were built in other markets. And when it comes 169 00:09:00,000 --> 00:09:02,400 Speaker 3: comes to why the US is leading, a lot of 170 00:09:02,440 --> 00:09:06,199 Speaker 3: that is coming down to again the activity of the 171 00:09:06,320 --> 00:09:09,640 Speaker 3: largest players in the market today, they're understanding about the technology. 172 00:09:09,800 --> 00:09:13,920 Speaker 3: And also because the Inflation Reduction Act actually came out 173 00:09:13,960 --> 00:09:17,400 Speaker 3: with huge incentives that were offered to carbon capture projects 174 00:09:17,520 --> 00:09:19,480 Speaker 3: over the next ten to twelve years. 175 00:09:19,360 --> 00:09:23,480 Speaker 1: So the usiras created financial incentives for this to do well. 176 00:09:23,679 --> 00:09:27,840 Speaker 1: But before that took place, you mentioned efficiency being something 177 00:09:28,000 --> 00:09:30,520 Speaker 1: that these companies, the oil and gas community is looking 178 00:09:30,559 --> 00:09:34,240 Speaker 1: for when they're looking at ccs. Is it something that 179 00:09:34,640 --> 00:09:37,480 Speaker 1: helps them make money in the right circumstances or is 180 00:09:37,480 --> 00:09:39,760 Speaker 1: it always an additional cost For the. 181 00:09:39,720 --> 00:09:42,160 Speaker 3: Oil and gas companies, they had to pay a very 182 00:09:42,160 --> 00:09:46,920 Speaker 3: small amount for getting the carbon dioxide from an industrial 183 00:09:46,920 --> 00:09:50,040 Speaker 3: facility or even their own applications. So if they owned 184 00:09:50,040 --> 00:09:53,280 Speaker 3: a refinery or if they owned a natural gas processing facility, 185 00:09:53,440 --> 00:09:57,240 Speaker 3: they already had to remove the carbon dioxide from these 186 00:09:57,440 --> 00:10:00,440 Speaker 3: processes and as a result, you ended up adding a 187 00:10:00,480 --> 00:10:03,920 Speaker 3: cost to your existing operational facility. Now you could use 188 00:10:03,920 --> 00:10:06,920 Speaker 3: that carbon dioxide to increase your oil output or your 189 00:10:06,920 --> 00:10:09,640 Speaker 3: gas output on the other hand, which meant you created 190 00:10:09,720 --> 00:10:12,960 Speaker 3: more value by using that cost to create more revenue 191 00:10:13,080 --> 00:10:15,840 Speaker 3: or profit from using that. So that was basically the 192 00:10:15,880 --> 00:10:17,960 Speaker 3: balancing act that the companies were trying to achieve. 193 00:10:18,000 --> 00:10:22,320 Speaker 1: Here has the emissions trading scheme in Europe, so the 194 00:10:22,320 --> 00:10:26,559 Speaker 1: EU ETS has that been a big catalyst for ccs. 195 00:10:27,040 --> 00:10:29,280 Speaker 3: Like I said, the Europe has never been a big 196 00:10:29,320 --> 00:10:33,280 Speaker 3: market for carbon capture and storage, except for some of 197 00:10:33,360 --> 00:10:36,360 Speaker 3: the markets in the Nordics, such as Norway, where a 198 00:10:36,400 --> 00:10:39,559 Speaker 3: certain carbon tax in the very early stages in the 199 00:10:39,200 --> 00:10:41,080 Speaker 3: in the in the in the nineties, and you know 200 00:10:41,120 --> 00:10:43,840 Speaker 3: in the early two thousands started promoting a lot of 201 00:10:43,920 --> 00:10:48,360 Speaker 3: carbon capture projects in Norway. But beyond Norway, carbon capture 202 00:10:48,360 --> 00:10:51,080 Speaker 3: has never been a tool that has been used effectively 203 00:10:51,280 --> 00:10:53,240 Speaker 3: for emissions reduction in Europe. 204 00:10:53,440 --> 00:10:57,120 Speaker 1: Let's talk a bit about prices then, because we're here 205 00:10:57,280 --> 00:11:00,480 Speaker 1: talking about different schemes that make it more than official 206 00:11:00,679 --> 00:11:02,640 Speaker 1: in certain parts of the world because the government is 207 00:11:02,679 --> 00:11:05,920 Speaker 1: supporting it. What is the current cost and really what 208 00:11:05,920 --> 00:11:08,920 Speaker 1: are some of our projections around where ccs might go 209 00:11:09,080 --> 00:11:10,360 Speaker 1: from a pricing standpoint. 210 00:11:11,000 --> 00:11:13,880 Speaker 4: So these one of the things we have recently explored 211 00:11:14,000 --> 00:11:17,440 Speaker 4: in our research, looting at the cost of capture per 212 00:11:17,480 --> 00:11:20,240 Speaker 4: ton of CO two in various different industries, some of 213 00:11:20,280 --> 00:11:22,960 Speaker 4: which we've mentioned already, And the type of industry makes 214 00:11:22,960 --> 00:11:26,720 Speaker 4: a huge difference because in each industry of gases that 215 00:11:26,800 --> 00:11:29,480 Speaker 4: are emitted from which we capture the COO two from 216 00:11:29,720 --> 00:11:33,040 Speaker 4: have varying concentrations of CO two. The higher the concentration, 217 00:11:33,320 --> 00:11:35,559 Speaker 4: that cheaper it is to capture it. So for high 218 00:11:35,600 --> 00:11:40,040 Speaker 4: concentration sources like natural gas processing and ethanol, the costs 219 00:11:40,040 --> 00:11:44,040 Speaker 4: are cheaper and they vary between twenty to forty dollars 220 00:11:44,080 --> 00:11:47,040 Speaker 4: per ton of CO two, whereas in other sectors where 221 00:11:47,120 --> 00:11:50,160 Speaker 4: concentration of cootwo is lower, like in hydrogen and cement, 222 00:11:50,320 --> 00:11:53,680 Speaker 4: the costs can be as high as eighty dollars per time, 223 00:11:53,800 --> 00:11:55,000 Speaker 4: so almost double. 224 00:11:55,160 --> 00:11:57,760 Speaker 2: And this is because when concentration of cootwo is. 225 00:11:57,720 --> 00:12:01,720 Speaker 4: Lower, more energy is needed, more where solvents are needed, 226 00:12:02,160 --> 00:12:04,920 Speaker 4: and per equipment is needed to capture the same amount 227 00:12:04,960 --> 00:12:05,960 Speaker 4: of SOO two. 228 00:12:06,160 --> 00:12:08,640 Speaker 1: So let's talk about those industries where this is a 229 00:12:08,960 --> 00:12:13,640 Speaker 1: really prime solution. You mentioned cement, steel, I'm hearing hard 230 00:12:13,640 --> 00:12:16,000 Speaker 1: to abate sectors. This is one of the solutions for 231 00:12:16,080 --> 00:12:20,800 Speaker 1: those parts of the economy that cannot electrify readily. What 232 00:12:20,840 --> 00:12:23,760 Speaker 1: would you say, or maybe the top few, top five 233 00:12:24,440 --> 00:12:28,680 Speaker 1: hard to abate sectors where CCS is really becoming increasingly popular. 234 00:12:29,280 --> 00:12:30,840 Speaker 3: There are two ways to look at it. One is 235 00:12:30,880 --> 00:12:34,080 Speaker 3: based on the announced pipeline of projects from now through 236 00:12:34,080 --> 00:12:36,600 Speaker 3: twenty thirty five, and the other is in sectors where 237 00:12:36,720 --> 00:12:39,160 Speaker 3: it is essential to deploy ccs in order to get 238 00:12:39,200 --> 00:12:41,520 Speaker 3: to net zero. So let me address it in two parts. 239 00:12:41,720 --> 00:12:44,560 Speaker 3: On the first part, which is based on the announced 240 00:12:44,600 --> 00:12:47,240 Speaker 3: pipeline of projects, when we look at the period from 241 00:12:47,280 --> 00:12:50,000 Speaker 3: now through twenty thirty five, most of the carbon capture 242 00:12:50,040 --> 00:12:54,640 Speaker 3: capacity is now targeted towards the production of hydrogen or ammonia, 243 00:12:54,960 --> 00:12:58,120 Speaker 3: and again a large portion of it located in the 244 00:12:58,240 --> 00:13:01,800 Speaker 3: US and then comes in streets such as power, where 245 00:13:02,160 --> 00:13:05,679 Speaker 3: again about nineteen percent of the capacity by twenty thirty 246 00:13:05,720 --> 00:13:08,880 Speaker 3: five based on the announced pipeline of projects, could be 247 00:13:08,920 --> 00:13:12,320 Speaker 3: for capturing CU too from coal and gas power plants 248 00:13:12,520 --> 00:13:15,320 Speaker 3: in various parts of the world substantial number again, and 249 00:13:15,360 --> 00:13:18,720 Speaker 3: the third largest category when it comes to cthiu's capacity 250 00:13:18,760 --> 00:13:21,440 Speaker 3: by twenty thirty five could be natural gas processing, which 251 00:13:21,480 --> 00:13:23,880 Speaker 3: is the dominant use case today. So these three sectors 252 00:13:24,040 --> 00:13:26,720 Speaker 3: still become one of the most important ones. But the 253 00:13:26,760 --> 00:13:30,080 Speaker 3: interesting part here is that hydrogen and power were not 254 00:13:30,240 --> 00:13:32,880 Speaker 3: historically big sectors for carbon capture, and they are starting 255 00:13:32,880 --> 00:13:35,840 Speaker 3: to be emerges. Two very important sectors for carbon capture 256 00:13:35,880 --> 00:13:38,679 Speaker 3: capacity by twenty thirty five, and you talked about hard 257 00:13:38,679 --> 00:13:41,480 Speaker 3: to beat industries like cement and steel. These industries do 258 00:13:41,600 --> 00:13:44,360 Speaker 3: require carbon capture in order to reduce emissions and to 259 00:13:44,400 --> 00:13:46,720 Speaker 3: get to net zero. But when you look at the 260 00:13:46,720 --> 00:13:49,480 Speaker 3: timeline between now and twenty thirty five, unfortunately very few 261 00:13:49,520 --> 00:13:52,200 Speaker 3: companies are really looking at investing in this technology in 262 00:13:52,280 --> 00:13:54,680 Speaker 3: order to reduce emissions. As a result, only about seven 263 00:13:54,679 --> 00:13:57,120 Speaker 3: percent of the capacity by twenty thirty five could be 264 00:13:57,280 --> 00:13:58,880 Speaker 3: deployed in these two sectors. 265 00:13:59,240 --> 00:14:03,280 Speaker 1: How low in CCS technology actually get the emissions coming 266 00:14:03,320 --> 00:14:06,440 Speaker 1: from these sectors. I'm assuming that it does not get 267 00:14:06,480 --> 00:14:10,360 Speaker 1: to zero, it does not wipe out the emissions. I'm 268 00:14:10,520 --> 00:14:14,560 Speaker 1: also assuming that it varies widely depending upon the density 269 00:14:14,760 --> 00:14:16,680 Speaker 1: of the carbon, as you had mentioned, So I guess 270 00:14:17,000 --> 00:14:19,160 Speaker 1: what the question I'm really asking is how good is it? 271 00:14:19,200 --> 00:14:23,680 Speaker 1: How effective is it in removing carbon from carbon intensive industries? 272 00:14:24,320 --> 00:14:28,040 Speaker 4: So this varies a lot. Most facilities aim for at 273 00:14:28,160 --> 00:14:31,080 Speaker 4: least ninety percent of the COETO to be captured, and 274 00:14:31,120 --> 00:14:33,680 Speaker 4: there's some facilities that have proven to be able to 275 00:14:33,760 --> 00:14:37,120 Speaker 4: capture a ninety five percent. There's interesting companies that claim 276 00:14:37,200 --> 00:14:39,440 Speaker 4: that they can capture more than ninety nine percent of 277 00:14:39,480 --> 00:14:42,040 Speaker 4: their emissions. But this is something that has only been 278 00:14:42,040 --> 00:14:46,560 Speaker 4: tested at small scale facilities and not actually been employed 279 00:14:46,600 --> 00:14:49,320 Speaker 4: in commercial plants. So it's something that we're also finding 280 00:14:49,360 --> 00:14:52,200 Speaker 4: very interesting. How much can they actually capture and can 281 00:14:52,240 --> 00:14:54,360 Speaker 4: they prove that they can capture as much as they 282 00:14:54,400 --> 00:14:55,320 Speaker 4: claim they come. 283 00:14:55,760 --> 00:14:57,760 Speaker 1: Well, then let's talk a little bit about the different 284 00:14:57,800 --> 00:15:02,240 Speaker 1: technologies that are out there. What is the dominant CCS 285 00:15:02,280 --> 00:15:06,000 Speaker 1: technology and is there a good amount of innovation either 286 00:15:06,080 --> 00:15:09,080 Speaker 1: from within oil and gas companies who are using CCS 287 00:15:09,160 --> 00:15:12,000 Speaker 1: or actually with startups that are VC funded. Really where's 288 00:15:12,040 --> 00:15:15,520 Speaker 1: the change coming from in terms of advancement of this technology, 289 00:15:15,520 --> 00:15:17,720 Speaker 1: because it's been around for quite some time. I mean, 290 00:15:17,760 --> 00:15:21,680 Speaker 1: this has been a topic that the industry within decarbonization 291 00:15:21,840 --> 00:15:24,440 Speaker 1: we have discussed for many years. 292 00:15:24,760 --> 00:15:28,720 Speaker 2: I guess let's start from the beginning. There's firstly, three main. 293 00:15:28,720 --> 00:15:31,000 Speaker 4: Parts of the process that we can capture CO two 294 00:15:31,160 --> 00:15:34,920 Speaker 4: from pre combustion, post combustion, and oxy combustion capture, and 295 00:15:35,000 --> 00:15:38,120 Speaker 4: their names kind of reveal what these means. So pre 296 00:15:38,160 --> 00:15:41,720 Speaker 4: combustion removes COO two from fossil fuels before the fuel 297 00:15:41,800 --> 00:15:44,920 Speaker 4: is actually burned, and this has a big benefit in 298 00:15:44,960 --> 00:15:48,320 Speaker 4: the sense that this gas has high partial pressures of 299 00:15:48,520 --> 00:15:51,160 Speaker 4: CO two, which makes the process quite efficient, but this 300 00:15:51,320 --> 00:15:55,160 Speaker 4: is hard to retrofit and implement that existing facilities. Post 301 00:15:55,160 --> 00:15:59,440 Speaker 4: combustion cupture happens after the fuel is combusted, and this 302 00:15:59,640 --> 00:16:02,040 Speaker 4: is the most commonly used approach and what most of 303 00:16:02,080 --> 00:16:05,320 Speaker 4: these large scale industrial plants use. Now, this is very 304 00:16:05,320 --> 00:16:07,920 Speaker 4: easy to retrofit to existing plants, but is a less 305 00:16:07,960 --> 00:16:12,480 Speaker 4: efficient process. And then, lastly, oxyfuel combustion is when instead 306 00:16:12,520 --> 00:16:15,400 Speaker 4: of air, we use a pure oxygen stream for a 307 00:16:15,440 --> 00:16:19,200 Speaker 4: combustion of the fuel and this generates a nearly pure 308 00:16:19,280 --> 00:16:23,680 Speaker 4: stream of cootwo which bypasses any subsequent capture processes and 309 00:16:23,880 --> 00:16:25,520 Speaker 4: the costs associated with them. 310 00:16:25,800 --> 00:16:28,720 Speaker 2: But how do we actually capture the CO two? How 311 00:16:28,760 --> 00:16:30,680 Speaker 2: do we actually get it? So? 312 00:16:31,000 --> 00:16:34,440 Speaker 4: The liquid absorption is by far the leading and most 313 00:16:34,480 --> 00:16:37,680 Speaker 4: mature technology and is the only technology that has been 314 00:16:37,800 --> 00:16:41,360 Speaker 4: used in large scale commercial plants. In this technology, the 315 00:16:41,480 --> 00:16:46,120 Speaker 4: CO two is essentially dissolved in a solvent, a liquid 316 00:16:46,200 --> 00:16:48,840 Speaker 4: solvent and is then released to create this pure CO 317 00:16:49,080 --> 00:16:52,560 Speaker 4: two stream that we can capture and the solvent is regenerated. 318 00:16:52,840 --> 00:16:58,320 Speaker 4: Many companies provide this technology, for example, MHI it'swishy and shell. 319 00:16:58,520 --> 00:17:02,000 Speaker 4: They provide aimine based solvents to capture CO two, and 320 00:17:02,080 --> 00:17:04,919 Speaker 4: aimines have been around for years as this is the 321 00:17:05,000 --> 00:17:08,680 Speaker 4: benchmark technology, it's what has been traditionally used. But today 322 00:17:08,760 --> 00:17:12,240 Speaker 4: this is quite expensive, it has quite high energy requirements. 323 00:17:12,640 --> 00:17:16,280 Speaker 4: It spares some environmental concerns in terms of aimines being 324 00:17:16,359 --> 00:17:19,040 Speaker 4: leaked in the atmosphere. So there is a few companies 325 00:17:19,080 --> 00:17:22,520 Speaker 4: that are working on developing new innovative solutions, solvents with 326 00:17:22,560 --> 00:17:25,760 Speaker 4: different chemistries that don't rely on aimings at all, but 327 00:17:25,840 --> 00:17:29,879 Speaker 4: also completely different approaches like solid absorption where the CO 328 00:17:30,119 --> 00:17:34,119 Speaker 4: two is trapped but in the pores of very highly 329 00:17:34,160 --> 00:17:37,400 Speaker 4: porced materials, or things like membrane. 330 00:17:37,080 --> 00:17:40,920 Speaker 1: Capture and by quite expensive. Put that in nominal terms 331 00:17:40,960 --> 00:17:41,199 Speaker 1: for me. 332 00:17:41,760 --> 00:17:45,680 Speaker 4: So as we talked about earlier, this varies so much 333 00:17:45,720 --> 00:17:49,480 Speaker 4: depending on the concentration of CO two in the off cases, 334 00:17:49,600 --> 00:17:52,840 Speaker 4: and it can vary from around forty dollars per ton 335 00:17:52,880 --> 00:17:55,520 Speaker 4: of CO two to eighty dollars per ton of CO two. 336 00:17:55,760 --> 00:17:59,600 Speaker 4: But as mentioned, the energy requirements for these plants are huge. 337 00:18:00,080 --> 00:18:03,560 Speaker 1: Is there more to add? Are there more technology advancements 338 00:18:04,119 --> 00:18:07,919 Speaker 1: that are quite different technically speaking from the one you 339 00:18:08,000 --> 00:18:09,159 Speaker 1: just outlined. 340 00:18:09,119 --> 00:18:12,680 Speaker 4: So other than what I just talked about, so developing 341 00:18:12,720 --> 00:18:17,960 Speaker 4: different new more efficient solvents, new sorpents, solid serpents, and membranes. 342 00:18:18,040 --> 00:18:21,640 Speaker 4: Many companies are working on the equipment itself and how 343 00:18:21,640 --> 00:18:24,480 Speaker 4: the process works. And many companies are not looking at 344 00:18:24,560 --> 00:18:29,119 Speaker 4: creating modulary solutions, which makes capital expenditure much lower. They 345 00:18:29,160 --> 00:18:32,920 Speaker 4: can create these standardized solutions that also leads to economies 346 00:18:32,960 --> 00:18:35,400 Speaker 4: of scale, so they can reduce cost a lot. Many 347 00:18:35,400 --> 00:18:38,960 Speaker 4: companies are looking at implementing KEAT integration and recovering their 348 00:18:38,960 --> 00:18:42,800 Speaker 4: systems to lower these huge energy requirements that we talked about. 349 00:18:43,119 --> 00:18:45,320 Speaker 4: These are some of the things they're working on. Also 350 00:18:45,560 --> 00:18:49,680 Speaker 4: simpler things like the arrangement of the equipment, how them 351 00:18:49,840 --> 00:18:53,919 Speaker 4: solid out serpents are packed in the equipment that's being used. 352 00:18:54,280 --> 00:18:55,880 Speaker 2: Just lots is going on. 353 00:18:57,720 --> 00:19:00,639 Speaker 1: So we're talking an awful lot about the captured technology, 354 00:19:00,680 --> 00:19:02,399 Speaker 1: but I want to pivot a little bit to talking 355 00:19:02,400 --> 00:19:05,119 Speaker 1: about what happens after we have all this carbon. So 356 00:19:05,200 --> 00:19:09,960 Speaker 1: if it's not going into my next soda, where is 357 00:19:10,040 --> 00:19:13,439 Speaker 1: it being stored and what are we actually doing with 358 00:19:13,480 --> 00:19:15,120 Speaker 1: it to make sure that it doesn't go back into 359 00:19:15,119 --> 00:19:15,880 Speaker 1: the atmosphere. 360 00:19:16,720 --> 00:19:19,440 Speaker 3: Very good question, thankfully, if it's in soda, it ends 361 00:19:19,520 --> 00:19:22,920 Speaker 3: up in human beings. But otherwise what generly used to 362 00:19:23,000 --> 00:19:25,880 Speaker 3: happen is it used to be used for enhanced oil recovery. 363 00:19:26,040 --> 00:19:28,720 Speaker 3: And as I mentioned, most of the capacity that's expected 364 00:19:28,760 --> 00:19:31,200 Speaker 3: to come in the next ten to fifteen years is 365 00:19:31,280 --> 00:19:34,680 Speaker 3: actually now pivoting towards storing this carbon for long periods 366 00:19:34,680 --> 00:19:37,720 Speaker 3: of time in deep geological reserves. It can be saliine 367 00:19:37,760 --> 00:19:41,200 Speaker 3: equifers or depleted oil and gas reserves. About seventy five 368 00:19:41,200 --> 00:19:43,960 Speaker 3: percent of the capacity, as I mentioned. Now, the big 369 00:19:44,040 --> 00:19:47,360 Speaker 3: question there is whether we have the infrastructure to ensure 370 00:19:47,520 --> 00:19:49,800 Speaker 3: that the CU two that is captured in these industrial 371 00:19:49,840 --> 00:19:54,000 Speaker 3: facilities get transported and the storage facilities and the transport 372 00:19:54,040 --> 00:19:57,960 Speaker 3: infrastructure is available. And that becomes another important aspect when 373 00:19:57,960 --> 00:19:59,639 Speaker 3: we think about carbon captured. 374 00:20:00,119 --> 00:20:04,160 Speaker 1: Is it transported? Is it put on trucks, trains, pipelines. 375 00:20:04,640 --> 00:20:07,119 Speaker 3: It can be done on any of these, but typically 376 00:20:07,359 --> 00:20:11,720 Speaker 3: most of them target to use pipelines, large pipelines where 377 00:20:11,880 --> 00:20:15,399 Speaker 3: you compress the carbon dioxide into a fluid state and 378 00:20:15,440 --> 00:20:19,080 Speaker 3: then push it along these pipelines into storage way wells 379 00:20:19,160 --> 00:20:23,560 Speaker 3: which are either within land boundaries or even offshore. And 380 00:20:23,840 --> 00:20:28,000 Speaker 3: it depends on the strategy from a company's perspective as 381 00:20:28,000 --> 00:20:30,680 Speaker 3: well as you know what different countries have in mind 382 00:20:30,720 --> 00:20:33,000 Speaker 3: when it comes to how to address the CEO to 383 00:20:33,080 --> 00:20:34,359 Speaker 3: that is being captured. 384 00:20:34,240 --> 00:20:37,360 Speaker 1: We're putting it into the ground. Are there specific geological 385 00:20:37,400 --> 00:20:40,760 Speaker 1: conditions which must be required in order to be able 386 00:20:40,800 --> 00:20:44,520 Speaker 1: to store it or is it really just up to 387 00:20:44,600 --> 00:20:47,480 Speaker 1: having the space from a land use standpoint in order 388 00:20:47,520 --> 00:20:48,360 Speaker 1: to put it somewhere. 389 00:20:48,720 --> 00:20:51,760 Speaker 3: Typically the best places to park your CEO two is 390 00:20:52,000 --> 00:20:55,879 Speaker 3: deep geological reserves like Celia aquifers, which are either found 391 00:20:56,040 --> 00:20:59,400 Speaker 3: within land boundaries or even offshore. Now, what I mentioned 392 00:20:59,440 --> 00:21:02,600 Speaker 3: when it comes to how different countries are looking at 393 00:21:02,640 --> 00:21:05,720 Speaker 3: it differently, is that most of the capacity that is proposed, 394 00:21:05,880 --> 00:21:08,880 Speaker 3: say in the US, looks at storing carbon dioxide within 395 00:21:08,920 --> 00:21:11,439 Speaker 3: the land boundaries on shore, but when you come to 396 00:21:11,520 --> 00:21:15,159 Speaker 3: Europe there's a slightly different approach where most countries like 397 00:21:15,240 --> 00:21:18,040 Speaker 3: Germany for example, do not want carbon dioxide to be 398 00:21:18,040 --> 00:21:20,840 Speaker 3: stored within their land boundaries and as a result, they 399 00:21:20,840 --> 00:21:24,640 Speaker 3: want to push it outside deep offshore into depleted oil 400 00:21:24,640 --> 00:21:27,960 Speaker 3: and gas reserves or even Serie aquifers which are offshore. 401 00:21:28,000 --> 00:21:30,840 Speaker 3: So that becomes a different approach in how different countries 402 00:21:31,119 --> 00:21:34,280 Speaker 3: identify where they want to store the carbon dioxide that's captured. 403 00:21:35,000 --> 00:21:37,640 Speaker 1: How do we ensure that it stays where it's being stored. 404 00:21:38,040 --> 00:21:39,919 Speaker 3: That's a very good question, and that's something that the 405 00:21:39,920 --> 00:21:42,720 Speaker 3: industry is starting to like figure out in how do 406 00:21:42,760 --> 00:21:47,080 Speaker 3: we ensure and monitor and verify that the carbon dioxide 407 00:21:47,080 --> 00:21:49,800 Speaker 3: that we inject into these wells stay there for long? 408 00:21:50,119 --> 00:21:53,280 Speaker 3: It depends on the specific geology in some certain cases, 409 00:21:53,400 --> 00:21:58,240 Speaker 3: but overall, companies are starting to use technology AI and 410 00:21:58,320 --> 00:22:01,280 Speaker 3: the deep machine learning as well as digital expertise that 411 00:22:01,359 --> 00:22:03,840 Speaker 3: many of these oil and gas companies have developed over 412 00:22:03,840 --> 00:22:07,159 Speaker 3: the last few years to understand how the geology in 413 00:22:07,200 --> 00:22:10,399 Speaker 3: these wells work and how it behaves as you inject 414 00:22:10,400 --> 00:22:13,199 Speaker 3: more carbon dioxide into these wells. And they're starting to 415 00:22:13,200 --> 00:22:16,399 Speaker 3: put up new technology which will continuously measure if what 416 00:22:16,440 --> 00:22:18,800 Speaker 3: they're trying to achieve is being achieved in terms of 417 00:22:18,920 --> 00:22:21,760 Speaker 3: keeping the carbon dioxide in there for long periods of time. 418 00:22:22,160 --> 00:22:25,080 Speaker 1: So you reference the transportation in storage is a bit tricky. 419 00:22:25,400 --> 00:22:28,439 Speaker 1: How tricky is this how well? Actually, to put it in 420 00:22:28,440 --> 00:22:31,960 Speaker 1: another way, we were talking earlier about technology advancements in 421 00:22:32,080 --> 00:22:34,840 Speaker 1: terms of the actual capture technology. Are there a lot 422 00:22:34,840 --> 00:22:38,080 Speaker 1: of eyes on trying to solve this transportation in storage question. 423 00:22:38,359 --> 00:22:40,520 Speaker 1: And you know, I'm just sitting here having a moment 424 00:22:40,560 --> 00:22:42,840 Speaker 1: also thinking about the fact that we recently did a 425 00:22:42,880 --> 00:22:47,080 Speaker 1: show on grids and how incredibly underinvested and important they 426 00:22:47,119 --> 00:22:50,520 Speaker 1: are for that sector. So I can only imagine that 427 00:22:50,600 --> 00:22:52,000 Speaker 1: this has a similar parallel. 428 00:22:52,400 --> 00:22:54,960 Speaker 3: Absolutely, you're right in that you can draw a parallel 429 00:22:54,960 --> 00:22:58,000 Speaker 3: to this, because transportation and storage is now looking like 430 00:22:58,040 --> 00:23:00,760 Speaker 3: one of those factors that can be the biggest bottlenecks 431 00:23:01,000 --> 00:23:03,920 Speaker 3: for this industry to scale again. In our market outlook, 432 00:23:03,920 --> 00:23:06,919 Speaker 3: we try to track what is the announced capacity of 433 00:23:07,000 --> 00:23:10,320 Speaker 3: transport in storage facilities that is being rolled out over 434 00:23:10,320 --> 00:23:12,360 Speaker 3: the next ten to fifteen years, and what we see 435 00:23:12,359 --> 00:23:15,000 Speaker 3: is that for the four hundred and twenty million tons 436 00:23:15,200 --> 00:23:18,840 Speaker 3: of carbon captured capacity that could be online by twenty 437 00:23:18,880 --> 00:23:22,960 Speaker 3: thirty five, only about two fifty million tons of transport 438 00:23:23,000 --> 00:23:26,000 Speaker 3: and storage infrastructure is being proposed by the same period 439 00:23:26,040 --> 00:23:30,200 Speaker 3: of time, So only about half of the captured carbon 440 00:23:30,480 --> 00:23:34,000 Speaker 3: can be transported or stored based on the announced transport 441 00:23:34,000 --> 00:23:37,199 Speaker 3: and storage infrastructure by twenty thirty five, which means this 442 00:23:37,320 --> 00:23:39,520 Speaker 3: is going to be one of the biggest bottlenecks for 443 00:23:39,720 --> 00:23:43,080 Speaker 3: the carbon captured facilities to scale. All these industries can 444 00:23:43,119 --> 00:23:45,360 Speaker 3: capt carbon, but they don't know what to do with it. 445 00:23:46,000 --> 00:23:50,600 Speaker 1: Transporting anything over a distance is going to require permitting 446 00:23:50,760 --> 00:23:54,960 Speaker 1: and a view on environmental impact in local communities. Not 447 00:23:55,000 --> 00:23:58,679 Speaker 1: only well, there's two questions within this, how difficult is 448 00:23:58,680 --> 00:24:01,320 Speaker 1: it to get these permits and then ultimately how long 449 00:24:01,640 --> 00:24:03,760 Speaker 1: does it take to build some of these projects. 450 00:24:04,160 --> 00:24:06,479 Speaker 3: It is certainly turning out to be very difficult to 451 00:24:06,520 --> 00:24:08,960 Speaker 3: get these new permits. Let me give you an example. 452 00:24:09,280 --> 00:24:12,640 Speaker 3: Some of the projects that companies such as Summit Carbon 453 00:24:12,680 --> 00:24:16,240 Speaker 3: Soedutions or Navigate to SEO two Ventures have now proposed 454 00:24:16,240 --> 00:24:18,879 Speaker 3: in the US, which is by far the most mature 455 00:24:18,880 --> 00:24:21,520 Speaker 3: market when it comes to carbon capture solutions, are now 456 00:24:21,680 --> 00:24:26,600 Speaker 3: facing huge permitting delays because the initial applications that they 457 00:24:26,640 --> 00:24:29,840 Speaker 3: submitted with states in the Midwest such as North Dakota 458 00:24:29,920 --> 00:24:33,680 Speaker 3: or South Dakota were initially declined. And many of these companies, 459 00:24:33,680 --> 00:24:35,920 Speaker 3: like Navigate to SEO two Ventures, are now saying these 460 00:24:35,960 --> 00:24:37,639 Speaker 3: projects are on hold and we are now going to 461 00:24:37,680 --> 00:24:40,280 Speaker 3: revisit the entire project and see where we can find 462 00:24:40,320 --> 00:24:43,639 Speaker 3: other alternative paths to make these projects happen. So it 463 00:24:43,760 --> 00:24:47,119 Speaker 3: is becoming a big hassle to build these pipelines and 464 00:24:47,160 --> 00:24:49,600 Speaker 3: get the permits for these pipelines. And these are long 465 00:24:49,640 --> 00:24:53,120 Speaker 3: infrastructure projects, long duration infrastructure projects. We can take six 466 00:24:53,200 --> 00:24:56,240 Speaker 3: seven years sometimes in the making to build over thousands 467 00:24:56,240 --> 00:24:57,359 Speaker 3: and thousands of miles. 468 00:24:57,760 --> 00:25:00,160 Speaker 1: I've got two questions. One is near term and one 469 00:25:00,200 --> 00:25:03,040 Speaker 1: is long term. But let's start with the nearer term. 470 00:25:03,080 --> 00:25:05,480 Speaker 1: And by nearer term, I mean let's say the next 471 00:25:05,520 --> 00:25:09,719 Speaker 1: decade or so. How critical is this technology to the 472 00:25:09,760 --> 00:25:12,520 Speaker 1: future of a net zero world when it comes to 473 00:25:12,560 --> 00:25:14,960 Speaker 1: the oil and gas industry or in some of the 474 00:25:14,960 --> 00:25:17,600 Speaker 1: hard twobate sectors that you also outlined that really rely 475 00:25:17,760 --> 00:25:20,040 Speaker 1: on this technology to bring their emissions down. 476 00:25:20,160 --> 00:25:22,719 Speaker 4: So this decade has a huge impact on the long term, 477 00:25:22,760 --> 00:25:26,320 Speaker 4: So let's talk about both. In our net zero scenario, 478 00:25:26,600 --> 00:25:30,399 Speaker 4: as we said previously, in this decade, we expect carbon 479 00:25:30,400 --> 00:25:33,280 Speaker 4: capture capacity to grow to around four hundred and twenty 480 00:25:33,440 --> 00:25:36,560 Speaker 4: million tons, which is a huge number. But in our 481 00:25:36,680 --> 00:25:40,959 Speaker 4: net zero scenario, this number for twenty thirty is one thousand, 482 00:25:41,000 --> 00:25:44,240 Speaker 4: seven hundred and fifty million tons. That's one point seventy 483 00:25:44,240 --> 00:25:47,480 Speaker 4: five billion tons of CO two. Now we need in 484 00:25:47,480 --> 00:25:51,639 Speaker 4: our net zero scenario by twenty thirty, So as this 485 00:25:51,760 --> 00:25:55,080 Speaker 4: makes it obvious that the announced projects are far behind 486 00:25:55,240 --> 00:25:58,320 Speaker 4: what we need to see to twenty thirty to reach 487 00:25:58,400 --> 00:26:01,080 Speaker 4: net zero, and we're touching up twenty thirty, but what 488 00:26:01,160 --> 00:26:05,479 Speaker 4: about twenty fifty? So in twenty years time, by twenty fifty, 489 00:26:05,720 --> 00:26:09,120 Speaker 4: in our net zero scenario, we expect cicis to contribute 490 00:26:09,160 --> 00:26:14,040 Speaker 4: about ten percent of emissions of eightmen in power, twenty 491 00:26:14,080 --> 00:26:17,719 Speaker 4: one percent in steel, and a huge seventy five percent 492 00:26:17,800 --> 00:26:22,160 Speaker 4: in cement, which translates to about seven point five billion 493 00:26:22,359 --> 00:26:25,240 Speaker 4: tons of CO two being captured to twenty fifty in 494 00:26:25,359 --> 00:26:27,480 Speaker 4: order for us to reach net zero. So, going back 495 00:26:27,480 --> 00:26:29,639 Speaker 4: to your question, we think it's going to be a 496 00:26:29,680 --> 00:26:33,280 Speaker 4: massive contributor to being able to reduce AT emissions in 497 00:26:33,440 --> 00:26:34,919 Speaker 4: various different sectors. 498 00:26:35,040 --> 00:26:37,000 Speaker 1: And for those who aren't familiar with the net zero 499 00:26:37,040 --> 00:26:39,600 Speaker 1: scenario coming from benf it's part of our new energy 500 00:26:39,640 --> 00:26:42,320 Speaker 1: outlook where we essentially start with the end in mind 501 00:26:42,359 --> 00:26:44,159 Speaker 1: and we say, if we want to reach net zero 502 00:26:44,359 --> 00:26:47,520 Speaker 1: as a planet by twenty fifty, what is it going 503 00:26:47,560 --> 00:26:49,480 Speaker 1: to take for the different sectors that we cover in 504 00:26:49,560 --> 00:26:52,359 Speaker 1: order for it to get there? And needless to say, 505 00:26:52,480 --> 00:26:55,760 Speaker 1: there is a speed and scale discussion in the immediate term. 506 00:26:56,160 --> 00:26:57,920 Speaker 1: I have a follow on question though, when it comes 507 00:26:57,960 --> 00:27:00,280 Speaker 1: to this, which is, we know what it is that 508 00:27:00,320 --> 00:27:02,719 Speaker 1: we need to do. But for those who are in 509 00:27:02,800 --> 00:27:07,679 Speaker 1: businesses and looking at investing in technologies and large infrastructure projects, 510 00:27:07,720 --> 00:27:09,920 Speaker 1: they want to make sure that these projects are going 511 00:27:09,960 --> 00:27:12,920 Speaker 1: to continue to make money for them for a long 512 00:27:12,960 --> 00:27:15,359 Speaker 1: period of time. The parallel I can think of is 513 00:27:15,760 --> 00:27:18,120 Speaker 1: natural gas. If you're going to build a new gas 514 00:27:18,200 --> 00:27:20,119 Speaker 1: fired power station, you want to know that you're going 515 00:27:20,160 --> 00:27:23,720 Speaker 1: to be able to actually use it, and in some circumstances, 516 00:27:23,800 --> 00:27:29,560 Speaker 1: the policy environment does not necessarily make that particular project favorable, 517 00:27:29,720 --> 00:27:31,840 Speaker 1: even if it has a short term benefit from a 518 00:27:31,880 --> 00:27:35,200 Speaker 1: carbon emission standpoint. So as we enter a phase where 519 00:27:35,640 --> 00:27:39,560 Speaker 1: we're talking increasingly about oil demand dropping off and we 520 00:27:39,600 --> 00:27:42,720 Speaker 1: may have actually already reached peak oil demand in the 521 00:27:42,760 --> 00:27:46,040 Speaker 1: oil and gas industry and the application of CCS, do 522 00:27:46,080 --> 00:27:48,600 Speaker 1: we have a feel for whether or not there's cause 523 00:27:48,720 --> 00:27:52,080 Speaker 1: to be concerned on the CCS side of the business, 524 00:27:52,359 --> 00:27:54,840 Speaker 1: or even in the transportation and storage end of things, 525 00:27:55,240 --> 00:27:59,400 Speaker 1: not having a long term viable future for these technologies 526 00:27:59,640 --> 00:28:03,480 Speaker 1: in the hum hypothetical world where we actually do decarbonize 527 00:28:03,520 --> 00:28:05,680 Speaker 1: at the speed that we need to in order to 528 00:28:05,720 --> 00:28:06,440 Speaker 1: reach net zero. 529 00:28:06,760 --> 00:28:09,960 Speaker 3: There are some industries which, even in the long term, 530 00:28:10,119 --> 00:28:13,520 Speaker 3: do not have many pathways to completely face out the 531 00:28:13,640 --> 00:28:16,399 Speaker 3: use of fossil fuels, and one of them is the 532 00:28:16,400 --> 00:28:21,360 Speaker 3: petrochemicals industry. For example, the world is developing, population is rising, 533 00:28:21,600 --> 00:28:25,760 Speaker 3: people are dependent more and more on consuming plastics, for example, 534 00:28:26,000 --> 00:28:29,760 Speaker 3: or any other chemicals that are produced from the petrochemicals industry, 535 00:28:29,840 --> 00:28:32,840 Speaker 3: and all of this petrochemicals industry would require some fossil 536 00:28:32,880 --> 00:28:36,000 Speaker 3: fuel feedstock, which when it goes through the process in 537 00:28:36,040 --> 00:28:40,280 Speaker 3: the petrochemical refineries, produces emissions, and you need to capture 538 00:28:40,280 --> 00:28:43,400 Speaker 3: those emissions, and as a result, there is a stream 539 00:28:43,440 --> 00:28:47,120 Speaker 3: of opportunity for carbon capture in that industry. For example. Similarly, 540 00:28:47,160 --> 00:28:49,480 Speaker 3: for cement, the world is going to build more buildings, 541 00:28:49,560 --> 00:28:52,960 Speaker 3: especially in the developing world, and we need cement to 542 00:28:53,440 --> 00:28:56,880 Speaker 3: build the roads, the buildings, everything in these places. And 543 00:28:57,000 --> 00:29:01,000 Speaker 3: cement has a particular feature in that the process involves 544 00:29:01,400 --> 00:29:04,120 Speaker 3: creating about fifty to sixty percent of the emissions and 545 00:29:04,160 --> 00:29:06,560 Speaker 3: not just the fuel that is burnt in the manufacturer 546 00:29:06,560 --> 00:29:09,320 Speaker 3: of cement. So even if we in a hypothetical world 547 00:29:09,680 --> 00:29:13,560 Speaker 3: entirely switch out the fuels in a cement manufacturing facility 548 00:29:13,560 --> 00:29:17,200 Speaker 3: with clean fuels, you still end up having about fifty 549 00:29:17,280 --> 00:29:19,760 Speaker 3: to sixty percent of CO two emissions from the process 550 00:29:19,760 --> 00:29:22,320 Speaker 3: which needs to be captured. So there are these sectors 551 00:29:22,520 --> 00:29:25,920 Speaker 3: which would still rely on CCS as a technology to 552 00:29:26,280 --> 00:29:28,880 Speaker 3: abate their emissions in an net zero world, and that 553 00:29:29,040 --> 00:29:32,440 Speaker 3: is what is the stream that will help develop some 554 00:29:32,520 --> 00:29:35,560 Speaker 3: of these transport and storage infrastructure remain viable, as well 555 00:29:35,600 --> 00:29:37,840 Speaker 3: as all the investments that's going into these space. 556 00:29:38,760 --> 00:29:41,080 Speaker 1: That really helped me think about the future for this 557 00:29:41,200 --> 00:29:45,959 Speaker 1: industry because I know that it's increasingly complex, as we 558 00:29:46,000 --> 00:29:48,640 Speaker 1: talk about in this room, but there does seem to 559 00:29:48,680 --> 00:29:50,840 Speaker 1: be when I look at the net zero scenario, you 560 00:29:50,880 --> 00:29:54,800 Speaker 1: see certain industries drop off at certain points in the future, 561 00:29:55,160 --> 00:29:57,920 Speaker 1: assuming that things actually do follow that trajectory. And again 562 00:29:57,960 --> 00:30:00,959 Speaker 1: it's a scenario, not a forecast. Those are very different things. 563 00:30:01,240 --> 00:30:04,240 Speaker 1: But the number of industries that CCS is applicable to 564 00:30:04,560 --> 00:30:07,240 Speaker 1: it's interesting and illuminating for me with you guys here 565 00:30:07,280 --> 00:30:09,520 Speaker 1: on the show. Let's talk a little bit then about 566 00:30:09,520 --> 00:30:12,760 Speaker 1: the policy makers who also see this solution. In particular, 567 00:30:12,800 --> 00:30:15,000 Speaker 1: as we've established in the West, and there are two 568 00:30:15,000 --> 00:30:20,160 Speaker 1: ways to go about policy intervention with technology and carbon. 569 00:30:20,320 --> 00:30:23,280 Speaker 1: There's carrot and their stick. Who's doing the carrot and 570 00:30:23,280 --> 00:30:26,560 Speaker 1: who's doing the stick, and what are we seeing in 571 00:30:26,600 --> 00:30:31,600 Speaker 1: the policy space that's making CCS an increasingly viable carbon 572 00:30:31,600 --> 00:30:32,680 Speaker 1: emissions technology. 573 00:30:33,040 --> 00:30:36,400 Speaker 4: So we talked already about many of these new growth 574 00:30:36,480 --> 00:30:38,760 Speaker 4: being in the US and there's a reason for it, 575 00:30:38,800 --> 00:30:42,520 Speaker 4: and it's the Inflation Reduction Act which has made the 576 00:30:42,640 --> 00:30:45,560 Speaker 4: us B a leader in this. 577 00:30:45,800 --> 00:30:48,520 Speaker 1: Technology, which is definitely a carrot hundred percent. 578 00:30:48,920 --> 00:30:51,840 Speaker 4: So last year we saw the updates in the forty 579 00:30:51,840 --> 00:30:55,480 Speaker 4: five Q credits which now give companies that are able 580 00:30:55,520 --> 00:30:58,680 Speaker 4: to start construction of these carbon cupture facilities by twenty 581 00:30:58,760 --> 00:31:02,320 Speaker 4: thirty two dollars per ton of sootwo that they store 582 00:31:02,640 --> 00:31:05,400 Speaker 4: or sixty dollars per ton of sooto that they utilize, 583 00:31:05,440 --> 00:31:09,560 Speaker 4: which a Sin talked about before, can be enhancing oil recovery, 584 00:31:09,840 --> 00:31:13,239 Speaker 4: using in synthetic fuels and different things like that, and 585 00:31:13,280 --> 00:31:15,520 Speaker 4: this can cover some of the costs that we talked 586 00:31:15,560 --> 00:31:19,800 Speaker 4: about earlier, especially for high concentration sources where the carupture 587 00:31:19,880 --> 00:31:24,000 Speaker 4: costs are lower than the benefit dis credits provide, so 588 00:31:24,040 --> 00:31:27,480 Speaker 4: they can really make carbon cupture economically viable business case. 589 00:31:27,600 --> 00:31:30,400 Speaker 4: And this also explains why sixty five percent of the 590 00:31:30,480 --> 00:31:33,760 Speaker 4: new capture capacity that we see, especially in hydrogen, is 591 00:31:34,040 --> 00:31:37,520 Speaker 4: in the US. Also, this kind of deadline to twenty 592 00:31:37,600 --> 00:31:40,080 Speaker 4: thirty two is really pushing for projects to happen now 593 00:31:40,120 --> 00:31:42,080 Speaker 4: because we talked about how long it takes for some 594 00:31:42,120 --> 00:31:44,760 Speaker 4: of these projects to be implemented and how long permitting 595 00:31:44,800 --> 00:31:45,480 Speaker 4: takes and all of that. 596 00:31:45,640 --> 00:31:48,080 Speaker 2: So for a project to start construction. 597 00:31:47,800 --> 00:31:50,400 Speaker 4: In less than ten years time, some of these things 598 00:31:50,480 --> 00:31:54,800 Speaker 4: have to be initiated now. Other countries giving carrots Canada 599 00:31:54,880 --> 00:31:59,160 Speaker 4: providing huge copex support and providing up to fifty percent 600 00:31:59,200 --> 00:32:03,680 Speaker 4: of POINTERSS hypocupture project capital expendicture and again, as we 601 00:32:03,800 --> 00:32:08,000 Speaker 4: talked about earlier, capital costs is the single largest cost 602 00:32:08,080 --> 00:32:11,640 Speaker 4: component of these projects and the initial investment that these 603 00:32:11,640 --> 00:32:14,920 Speaker 4: companies have to make is huge and for industry these 604 00:32:15,040 --> 00:32:17,840 Speaker 4: ranges from around one hundred and seventy million dollars to 605 00:32:18,080 --> 00:32:20,800 Speaker 4: more than a billion dollars, which makes the importance of 606 00:32:20,840 --> 00:32:23,360 Speaker 4: the support obvious. And then coming back to the UK, 607 00:32:24,040 --> 00:32:27,080 Speaker 4: the country has put on the site twenty billion pounds 608 00:32:27,120 --> 00:32:32,440 Speaker 4: to support capocupture projects for the decapitalization of especially industrial hubs. 609 00:32:32,560 --> 00:32:35,680 Speaker 4: So I think these three are the main ones in 610 00:32:35,760 --> 00:32:38,880 Speaker 4: terms of carrots, So it seems that carrots is the 611 00:32:39,080 --> 00:32:41,360 Speaker 4: approach to goal for most of these countries. I don't 612 00:32:41,400 --> 00:32:44,400 Speaker 4: have many good examples for sticks, but will be testing 613 00:32:44,480 --> 00:32:45,480 Speaker 4: to see how that costs. 614 00:32:45,960 --> 00:32:48,600 Speaker 1: My last question, which is really a burning question I've 615 00:32:48,600 --> 00:32:51,120 Speaker 1: had since we've been going through this, is that if 616 00:32:51,120 --> 00:32:54,320 Speaker 1: it really is this incredible use case to bring down 617 00:32:54,520 --> 00:32:57,880 Speaker 1: emissions right now in the oil and gas industry, which 618 00:32:57,920 --> 00:33:01,400 Speaker 1: are creating a large number of emissions, what is it 619 00:33:01,480 --> 00:33:04,560 Speaker 1: going to take for this technology to be useful in 620 00:33:04,640 --> 00:33:07,200 Speaker 1: other parts of the world, perhaps where there are national 621 00:33:07,240 --> 00:33:10,560 Speaker 1: oil companies who don't have the same market based incentives 622 00:33:10,640 --> 00:33:13,080 Speaker 1: through their share price to be looking at things like this. 623 00:33:13,800 --> 00:33:16,640 Speaker 1: What would be the right environment for ccs to be 624 00:33:17,000 --> 00:33:17,760 Speaker 1: all over the world. 625 00:33:18,200 --> 00:33:20,800 Speaker 3: The one thing we need to realize is CO two 626 00:33:21,320 --> 00:33:25,160 Speaker 3: is a waste and capturing that CO two is going 627 00:33:25,200 --> 00:33:27,960 Speaker 3: to cost more. Be it an oil and guest company 628 00:33:28,040 --> 00:33:31,120 Speaker 3: or a cement factory or a steel factory, carbon capture 629 00:33:31,160 --> 00:33:33,840 Speaker 3: is an additional cost, and as a result, governments would 630 00:33:33,840 --> 00:33:37,000 Speaker 3: have to either provide incentives to support the deployment or 631 00:33:37,040 --> 00:33:39,280 Speaker 3: on the other hand, put a very high carbon tax. 632 00:33:39,360 --> 00:33:41,280 Speaker 3: So one of these two would have to happen. 633 00:33:41,640 --> 00:33:44,760 Speaker 1: As we scale this technology, costs are likely to come 634 00:33:44,800 --> 00:33:48,040 Speaker 1: down some. Do you think that that will end up helping. 635 00:33:48,160 --> 00:33:51,360 Speaker 3: For most of the industrial applications? Carbon capture is a 636 00:33:51,360 --> 00:33:54,920 Speaker 3: mature technology, as we discussed previously, and as a result, 637 00:33:55,120 --> 00:33:58,520 Speaker 3: the amount of reduction in cost is going to also 638 00:33:58,560 --> 00:34:01,320 Speaker 3: be fairly limited to some of the technologies that we've 639 00:34:01,320 --> 00:34:04,000 Speaker 3: seen like solar wind or batteries. What we could see 640 00:34:04,040 --> 00:34:07,520 Speaker 3: is for point source carbon capture industrial sources cost COUD 641 00:34:07,600 --> 00:34:10,080 Speaker 3: forarby about forty to fifty percent over the next two 642 00:34:10,120 --> 00:34:13,279 Speaker 3: to three decades. So that's not substantial. It's good, but 643 00:34:13,400 --> 00:34:16,279 Speaker 3: it's not substantial. And as a result, it's going to 644 00:34:16,280 --> 00:34:18,640 Speaker 3: be a cost and it's going to help, but you 645 00:34:18,680 --> 00:34:20,520 Speaker 3: still need incentives to make this happen. 646 00:34:21,120 --> 00:34:24,120 Speaker 1: Okay, Well, on that note, thank you very much for 647 00:34:24,320 --> 00:34:27,440 Speaker 1: walking me through the future of the application of this 648 00:34:27,560 --> 00:34:31,120 Speaker 1: well established technology, which looks like it has an increasingly 649 00:34:31,280 --> 00:34:34,840 Speaker 1: interesting future. Alan, Anna, thank you very much for joining today. 650 00:34:35,080 --> 00:34:35,680 Speaker 2: Thank you, Tana. 651 00:34:35,840 --> 00:34:38,160 Speaker 3: Great to be Thank you, Dana, thank you for having me. 652 00:34:47,320 --> 00:34:50,680 Speaker 1: Bloomberg NEF is a service provided by Bloomberg Finance LP 653 00:34:50,840 --> 00:34:54,239 Speaker 1: and its affiliates. This recording does not constitute, nor should 654 00:34:54,280 --> 00:34:58,319 Speaker 1: it be construed as investment advice, investment recommendations, or a 655 00:34:58,360 --> 00:35:01,880 Speaker 1: recommendation as to an investment or other strategy. Bloomberg ne 656 00:35:01,920 --> 00:35:05,439 Speaker 1: EF should not be considered as information sufficient upon which 657 00:35:05,480 --> 00:35:09,160 Speaker 1: to base an investment decision. Neither Bloomberg Finance LP Nor 658 00:35:09,200 --> 00:35:12,640 Speaker 1: any of its affiliates makes any representation or warranty as 659 00:35:12,680 --> 00:35:15,520 Speaker 1: to the accuracy or completeness of the information contained in 660 00:35:15,560 --> 00:35:18,680 Speaker 1: this recording, and any liability as a result of this 661 00:35:18,760 --> 00:35:20,520 Speaker 1: recording is expressly disclaimed.