With increasing pressure to fight climate change, scientists and leaders agree that carbon capture, use and storage (CCUS) is a cost-effective solution to meet emissions goals made under the Paris Agreement.
Although aggressive efforts are needed to meet the net-zero goal, oil and gas companies are making significant progress in deploying CCUS projects at scale, according to JP Brisson, partner at Latham & Watkins’ law firm.
“More than 30 [CCUS] projects are in operation globally with more than 40 under development,” Brisson said in a video interview with Hart Energy’s Faiza Rizvi, adding that U.S. oil and gas companies are well-positioned to make progress in the area.
“There are several reasons for this,” he said. “First of all, U.S. is a leader in CO2 injection and sequestration. Companies in the U.S. have been injecting CO2 since the 1970s, which builds credible extensive capability.”
Additionally, he said the U.S. is blessed with world class sequestration capacity, which is primarily located in Texas, California and Midlands. Brisson also noted how CCUS is a potential revenue driver.
“There are revenue drivers in 2021 that did not exist 10 years ago such as 45Q tax credit that provides a credit of up to $50/ton sequestered using a CCS project,” he said. “This, obviously, is a significant incentive of developing CCUS projects in the oil and gas sector.”
Further, Brisson discussed permitting considerations that companies need to be aware of for future CCUS projects.
“It is a highly regulated activity, especially if one wishes to generate tax or environmental credit,” he explained. “There are significant permitting requirements…they essentially involve a permitting regime called a Class 6 which is administered by EPA.”
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- Global progress toward CCUS (0:33)
- Carbon capture in the U.S. (1:27)
- Carbon credits (4:02)
- Permitting considerations (6:26)
- ESG driving CCUS? (10:22)
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