CCUS at Risk: Key Pathway to Net Zero Faces Growing Threats

As if the challenge of lowering global carbon emissions wasn’t difficult enough, new forces are conspiring to make it even tougher. Carbon capture, use, and storage (CCUS) is a critical part of a portfolio of technologies needed to achieve net zero emissions by 2050, according to several leading climate models. In addition to capturing power plant carbon emissions, CCUS can decarbonize sectors such as steel and cement and provide power system flexibility. Yet here in the US, localized opposition and regulatory uncertainty are threatening to kill or severely limit the use of CCUS in the fight against climate change.

CCUS Canceled
On 20 October, developer Navigator CO₂ announced that its large CCUS project the Heartland Greenway had been canceled. The project planned to build a 1,300-mile network of pipelines in the Midwest to transport up to 15 million tonnes of carbon dioxide from ethanol plants and permanently bury the gas in Illinois. The company cited the unpredictable nature of the regulatory and government processes involved in developing the pipelines.

Summit Carbon Solutions has a similar project to capture carbon from more than 30 ethanol plants across the Midwest, transport it in pipelines, and store it underground in North Dakota. The company also has faced regulatory headwinds and recently announced that it was delaying the project by 2 years to 2026.

While the process of capturing and transporting CO₂ for enhanced oil recovery (EOR) has been around for decades, large-scale carbon capture projects for injecting CO₂ deep underground in geologic formations for permanent storage or to make other products (e.g., synthetic fuels, chemicals, and building aggregates) have only recently been taking shape. In fact, only one commercial CCUS facility in the US is injecting CO₂ solely for the purpose of storage (and not EOR)—the Archer Daniels Midland plant in Illinois, which captures and stores about 3,000 tons of CO₂ per day from a bioethanol plant and has been operational since 2017.

The Transportation Challenge
Clareo has assessed technical, economic, and regulatory factors affecting CCUS adoption over the course of our work with major players in this space. In our analysis, CO₂ transportation is likely to be one of the more challenging links in the CCUS value chain. While the US has a robust network of pipelines for natural gas, repurposing those for transporting CO₂ to locations with suitable geologic storage could, in many cases, be both technically and economically challenging. And building new pipelines for CO₂ transportation will face a gantlet of permitting challenges and regulatory uncertainty. The value of an existing CO₂ pipeline network was clearly a key driver in Exxon Mobil’s recent $5 billion acquisition of Denbury, operator of the largest CO₂ pipeline network in the US.

With CO₂ transportation well understood and having been in operation for years for industrial uses and EOR, an important driver will be regulatory permitting and public acceptance of CO₂ transportation and storage. Public opposition to natural gas pipelines has successfully derailed several projects. CO₂ pipelines are facing similar if not more extensive opposition, whether for new or retrofit pipelines.

Regulatory Uncertainty and Community Opposition
There is currently some uncertainty over regulation of CO₂ pipelines because of perceived gaps in regulatory authority for CO₂ pipelines at the federal level, as well as recent federal policy change and pending regulatory changes. Multiple governmental entities have oversight related to pipeline regulation and permitting, including the Pipeline and Hazardous Materials Safety Administration at the US Department of Transportation, the Federal Energy Regulatory Commission, the Bureau of Land Management, and even states, where eminent domain has become a battleground for opposition to new pipelines.

Beyond the hurdles of regulatory approvals for building new pipelines, community opposition can become a catalyst for slowing or stopping new pipeline projects. While oil or natural gas pipelines have been contested for their environmental impact, additional concerns over safety with CO₂ leaks only add to the challenge of developing new CO₂ pipelines.

The recently approved Mountain Valley Pipeline, which literally took an act of Congress to approve, notwithstanding, there have been several new pipeline projects in recent years, including oil, natural gas, and CO₂, that have been delayed or stopped by an increasingly sophisticated and determined community opposition. Denbury’s Delta pipeline rupture in Satartia, Mississippi, that leaked CO₂, forced an evacuation, and sickened residents there has given opponents a new, tangible safety point that could resonate with community groups and politicians.

Signs of Trouble for CCUS
Despite a few examples of repurposing existing gas pipelines in the US to transport CO₂, it’s expected that most CO₂ will need to be transported via newly built pipelines in order to be economical and meet required performance and safety standards. Therefore, the potential of CCUS to meet key decarbonization goals will be determined in part on companies’ ability to navigate a complex and changing regulatory environment while addressing an increasingly vocal opposition to any new pipelines. The cancellation of the Heartland Greenway project and delay of the Summit Carbon Solutions project are signs of serious trouble for CCUS, at least in the US.

To keep this important tool in the fight against climate change, two key challenges for CCUS will need to be addressed: First, federal regulation of CO₂ pipelines (currently in process) needs to be updated to resolve regulatory uncertainty and clarify safety standards. And, second, government and industry need to unite to address safety concerns and better articulate to the public the critical role of CCUS in building an affordable, reliable, and flexible energy system to meet key climate goals.