We Can Multi-Task on Infrastructure, Reducing CO2

Mark Green
Posted December 16, 2019

We and others in our industry talk frequently about how the United States has the ability to meet the dual challenges of securing affordable, reliable energy while our nation also addresses the risks of climate change (see here and here). API President and CEO Mike Sommers:

“With record-setting natural gas production and LNG export growth, the U.S. doesn’t have to choose between energy security and environmental progress. Instead, we can expand our economy, supply affordable energy and drive down emissions of carbon dioxide – all made possible by innovative techniques, like hydraulic fracturing and horizontal drilling.”

ExxonMobil Chairman and CEO Darren Woods at the 2017 CERAWeek energy conference:

“I want to challenge the assumption made by many that a growing economy and a cleaner environment are mutually exclusive, that as we step forward in developing more oil and natural gas, our environment, including our climate, must step back. … I believe the assumption that affordable energy and a cleaner environment are a zero-sum game is mistaken. It underestimates the power of technology. The zero-sum view is a static one, and the world of energy is anything but static. All things being equal, this view is understandable. But technology changes the equation. It makes a dream – growing the economy while reducing emissions – a reality.”

Certainly, this industry mindset comes through in two new reports from the National Petroleum Council – one on deploying, at scale, carbon capture, use and storage (CCUS) technologies into the energy and industrial marketplace, and another on the need for new energy infrastructure.

Key points from the NPC’s CCUS analysis:

• Global energy demand is expected to increase 25% to 30% by 2040, and access to energy is fundamental to improving the quality of life.
• U.S. leads the world in CCUS deployment, with about 80% of the world’s carbon dioxide capture capacity.
• While the U.S. is the world leader, its 25 million tonnes of CCUS capacity represents less than 1% of the CO2 emissions from stationary sources. Widespread CCUS deployment is essential to meeting the dual challenge at the lowest cost.
• Actions are needed to drive wider deployment, including clarifying existing tax policy and regulations, increasing national support, and more government and private research.

Our industry is positioned to play a key role in CCUS expansion, which itself can boost the U.S. economy. NPC:

Continued U.S. leadership in CCUS can create domestic jobs, benefit the economy, and augment energy security priorities. The U.S. oil and natural gas industry has the expertise, capability, and resources to partner with governments and stakeholders in expanding the Unites States’ leadership position in CCUS.

Sommers:

“Our industry is leading the way in meeting the world’s growing energy demand while delivering solutions to reduce greenhouse gas emissions. The natural gas and oil industry continues to drive emissions to their lowest levels in a generation, and as this study shows, we can build on this progress by fostering collaboration between the private and public sectors and advancing CCUS research and development. We urge Congress to make bipartisan CCUS legislation a priority and support innovative efforts to reduce emissions and achieve environmental progress.”

At the same time, NPC’s second report, on infrastructure, urges a number of steps to support adding capacity to a network that is near maximum capacity – focusing on overlapping and duplicative regulatory requirements, inconsistencies across multiple federal and state agencies and unnecessarily lengthy administrative procedures that have “created a complex and unpredictable permitting process.” Underlining that point, the report includes the graphic below from the Associated General Contractors of America, which shows the permitting process under the National Environmental Policy Act (NEPA). You don’t have to be able to read the graphic to get a good idea of how complex the NEPA process is:

NPC specifically notes infrastructure bottlenecks that need solutions, including natural gas pipeline access to New England/New York, channel capacity in the port of Houston and insufficient natural gas and oil export capacity. NPC also urges Congress to fully appropriate revenue coming into the Harbor Maintenance Trust Fund to properly maintain waterways. Sommers:

“Investing in energy infrastructure is essential to sustaining and growing America’s energy leadership, keeping energy costs low for working families and promoting economic development. But red tape is stalling infrastructure projects not just in the energy industry, but across the entire U.S. economy. As we consider ways to unlock America’s infrastructure potential, modernizing the National Environmental Policy Act’s maze of permitting rules is a necessary step to ensure safe and environmentally responsible development of the nation’s vast energy resources.”

 NPC:

Americans depend on reliable and affordable energy without always being aware of the vital role that oil and natural gas play in maintaining their way of life. Assuring that way of life requires a resilient and growing energy transportation system so that energy can be moved from supply points and delivered to consumers safely.