As companies around the world engage in the clean energy transition, carbon capture utilization and storage (CCUS) has been presented as a leading strategy to offset environmental harm.
Chevron Vice President of Carbon Capture, Utilization & Storage Chris Powers (CVX) joins Yahoo Finance at CERAWeek by S&P Global — an annual global energy conference focusing on the industry's biggest goals and challenges — to discuss where Chevron is in the process of achieving its CCUS goals.
Powers outlines some of the challenges of CCUS implementation: "We're working on doing foundational projects that can build the foundations of a business that can grow and scale over time. What we're really trying to do here is to enable decarbonization for many of these industries which are critical to everyday life. We've learned a lot at Gorgon and I think it's actually made us more optimistic about CCUS than it has less. Each reservoir is a bit unique. "
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
JULIE HYMAN: I'm Julie Hyman at the CERAWeek by S&P Global conference in Houston, Texas, as we've been talking about a big topic here, energy transition. And for the energy industry, a big part of that is carbon capture. So our next guest is squarely within that area. He's Chris Powers. He's the vice president of Carbon Capture, Utilization and Storage at Chevron. And thank you so much for being here, Chris.
CHRIS POWERS: Thanks, Julie. I appreciate it.
JULIE HYMAN: So a lot of folks aren't necessarily familiar with what we call CCUS, which is the acronym for what we just talked about. So when we talk about carbon capture, it's effectively pulling carbon dioxide, either out of the air or out of the processes that make refined products or how you get oil and gas out of the ground, and you store it. You bury it in the ground. You try and capture it in a way that it then doesn't add to the atmosphere. Do I have that right? How exactly--
CHRIS POWERS: You've nailed it.
JULIE HYMAN: OK.
CHRIS POWERS: So I think about it as a couple of key steps in the process, simply put. CO2 is produced by nearly all the operations that give us the quality of life that we have today, whether it's producing power, electricity, whether it's producing cement, steel, oil, and gas. You emit CO2 as part of these processes, and with the CCUS business, what we're hoping to do is capture the CO2, either before it's released into the atmosphere or, as you pointed out, take it out of the atmosphere through direct air capture.
You then compress it, dehydrate it, put it in a pipeline, and move it to a site that has suitable storage deep underground, then you inject it in the ground through a wellbore, just like you do in part of the traditional business, and you'll store it a couple of miles underground for geologic time.
JULIE HYMAN: Now this whole endeavor has gotten a little bit of a shot in the arm from the Inflation Reduction Act on the part of the Biden administration and just also a general move towards carbon credits over the past, let's call it, 5 to 10 years. So where is Chevron in this process, and what kinds of projects are you all working on?
CHRIS POWERS: Yeah, we're taking a global look at this the CCUS opportunity. So we're focused squarely though in the US. The IRA has driven a lot of capital into foundational projects in the US, but also across the Asia-Pacific region. So Australia is an area that's very prospective, and we've have some projects that are announced there. In the US, though, our main project is at Bayou Bend, which is in southeast Texas, only about 50 miles to the east of Houston as well.
So what we're looking to do is to find geology that looks very suitable and amenable to store the CO2. We then perform seismic analysis to identify the zones of interest. We'll then drill delineation wells, or we call them appraisal wells, to understand the exact rock properties. We'll then build out our reservoir models, and then you submit your permits to the EPA to receive your Class VI permits, and then that can kick off your project.
JULIE HYMAN: So I was reading a little bit about one of your projects off the Coast of Australia, the Gorgon project, which is a liquefied natural gas project where you're trying to capture some of the CO2. But it sounds like it's really, in some cases, challenging to do. And especially challenging to do economically, not just actually physically. And each of these projects is sort of unique. So how do you do it? How do you scale it and how do you make money off of it at some point down the line?
CHRIS POWERS: Yeah, well, it's early days for all of these energy transition businesses. I think that's the foundational thing to start with. So we're working on doing foundational projects that can build the foundations of a business that can grow and scale over time. And you've got to remember, what we're really trying to do here is to enable decarbonization for many of these industries, which are critical to everyday life. So we've learned a lot at Gorgon, and I think it's actually made us more optimistic about CCUS than it has less. Each reservoir is a bit unique.
And so what we've applied the learnings from Gorgon to look at areas around the globe that are going to have the most prospective geology where we can have the most simple and predictable operations, and that's what's made an area like the US Gulf Coast look very favorable. Because it has the same type of sands that have produced oil and gas for the last 100 years, the same type of deposits are very amenable for CO2 sequestration. So we've done a broad swath and canvassing of geology around the globe. We've identified the areas of interest, and we've secured pore space in those and are hoping to bring projects forward.
JULIE HYMAN: Do we know how long the CO2 will stay captured in these areas? Because this is a relatively new thing that we're doing.
CHRIS POWERS: Yeah, so we're focused primarily on permanent sequestration. Some other companies are focused on enhanced oil recovery. That's not been an area of focus for Chevron. But with the permanent sequestration, the CO2--
JULIE HYMAN: Permanent is permanent. It's never getting out.
CHRIS POWERS: Yeah, and there's a number of different-- on the rock property, interstitial levels, there's a number of different physical mechanisms that cause the CO2 to stay there. But ultimately, you inject it. You have monitoring wells that monitor how the CO2 progresses through the rock over time, and then you will terminate the injection at some 10, 20 inch down the road. You continue to monitor until the CO2 plume stabilizes. And then at that point, that project is finished, and it's the CO2 is stored for geologic time.
JULIE HYMAN: Now, Chris, I want to ask you this-- what role this business plays for Chevron? And I mean, a lot of the other big companies here are doing similar businesses, if not exactly the same. And so I guess I'm curious as we hear more rhetoric about that we are not seeing a sunsetting of oil and gas, where there's still demand for oil and gas. So in that case, what role do these technologies play in your business? And at some point, will we see more of a decrease in demand for oil and gas, and these businesses will much be much more important proportion of Chevron's overall business?
CHRIS POWERS: A few things to unpack there, Julia. I appreciate the question.
JULIE HYMAN: Sorry, I know there was a lot.
CHRIS POWERS: No, that's great. So in terms of-- I'll break your question down piecemeal. We're focused on both lowering the carbon intensity of our own operations as well as building third party facing businesses to help enable the harder-to-abate sectors like cement, steel and power to decrease their emissions over time. So we're tackling both of those pieces of the transition. In terms of the growth, it's going to take it's going to take decades.
These businesses are capital intensive, and you're going to need to invest capital nowadays to grow businesses that are going to be in operation for decades to come. So it's going to be a slow build, but we're optimistic that over time these businesses will play a bigger and bigger role in the energy space. On the terms of the supply stack, we're a firm believer that all forms of energy are going to be required. There's 2 billion people that still want to increase their standard of living around the world.
They live in some level of energy poverty, and you're going to need solar. You're going to need wind. You're going to need nuclear. But you're also going to continue to need oil and natural gas. You're going to need hydrogen. You're going to need CCUS. So if we take a big-tent approach and support all forms of energy, I think we're going to be able to deliver the affordable, reliable, and ever cleaner energy that the world needs.
JULIE HYMAN: And just very quickly, CCUS, do we do you have an estimate at Chevron when it could be profitable, or is it still too early even to say?
CHRIS POWERS: It's very early days for these businesses. The 45Q credits through the IRA, I view those as a foundational enabler to get these businesses moving. And if you think about it, it's not really that much different than what some of the other industries, solar and wind. They also had policy enablement to get started. And then the businesses grow and scale overtime. Cost curves come down. And then the businesses can grow into a market.
