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In the past hundred years, Texas has earned billions of dollars by permitting companies to drill into the Gulf of Mexico’s floor for oil and gas extraction. Presently, the General Land Office, responsible for safeguarding Texas’ vulnerable coastline and other natural resources, is considering carbon sequestration as the next prospective industry in the Gulf.
In a bid to secure a portion of the $12 billion federal funding allocated for projects in the 2021 Infrastructure Investment and Jobs Act, companies are vying to construct carbon capture plants adjacent to onshore oil wells, gas wells, and other environmentally harmful facilities along the coastline. Simultaneously, they are seeking offshore leases to facilitate the storage of carbon dioxide, a greenhouse gas, deep beneath the seafloor.
A crucial aspect of the initiative involves receiving a continuous flow of grants from the U.S. government, accompanied by generous tax credits for each ton of carbon sequestered.
In September 2021, the General Land Office, or GLO, awarded its first lease for carbon sequestration on 40,000 acres of state-owned land near Port Arthur to Talos Energy, a Houston-based oil and gas company. The oil giant Chevron has a 50% stake in the project, known as Bayou Bend, which if completed could be the nation’s first offshore carbon storage site.
Last month the GLO announced that it had awarded six more leases for offshore carbon storage that would generate $130 million in bonus payments for the state’s school fund. And in February, the Port of Corpus Christi, the nation’s top port for oil exports and an economic engine for Texas, said it had received $16.4 million in federal funding to conduct a feasibility study for both onshore and offshore carbon storage projects. The research will be conducted with Texas A&M University, the University of Texas, Talos and Howard Energy Partners, a San Antonio gas company.
The GLO has refused to disclose any specific information regarding the six offshore leases issued last month. This includes details such as the location and size of the storage sites, as well as the identities of the companies involved. Although the GLO announced in August that the projects had received approval, the agency clarified that the leases had not been officially “executed” at that time.
The oil and gas industry maintains that carbon capture and storage technology, or CCS, can significantly reduce greenhouse gas emissions and hasten the nation’s progress toward net-zero status — the point at which the volume of heat-trapping gases released by power plants, oil refineries, factories and other major emitters would be equal to what is removed.
However, environmentalists and scientists contend that CCS fails to meet these assertions. Currently, the technology has not been extensively implemented, and the outcomes have been inconclusive. This implies that despite the construction of billion-dollar facilities for carbon capture and sequestration, emissions still persistently rise.
Relying on the oil and gas industry’s data, the nonprofit Institute for Energy Economics and Financial Analysis reported last September that 10 of 13 major CCS projects around the globe had failed or underperformed by wide margins. “It doesn’t work for as long as people claim it does, and there are significant uncertainties about how long it can be stored underground,” said Dennis Wamsted, an energy analyst at the institute.
Carbon capture technology essentially acts as a giant filter. When natural gas is burned at a power plant, most of the emissions typically flow directly into the atmosphere. But when a capture facility is attached to the power plant’s smokestacks, gases fed through the facility separate the carbon molecules from other pollutants through a series of chemical reactions.
After isolating carbon molecules, they can undergo pressurization and compression to form a liquid. This liquid, which resembles the process used in transporting oil and gas through pipelines, is then intended to be transported to a sequestration well. In a manner similar to drilling wells for oil and gas, the CO2 is subsequently sent back underground and securely trapped beneath layers of rock and sediment.
The threat of leaks and explosions
Leakage is a major concern. In another study casting doubt on the viability of CCS, Italian researchers estimated that if storage wells leaked at a rate of 0.1 percent — a likely scenario, based on what scientists have observed so far — an additional 25 gigatons of carbon would be added to the atmosphere by 2100.
Scientists, environmentalists and frontline communities also worry that the pipelines that transport pressurized carbon dioxide to storage wells could explode, putting nearby communities at risk: Three years ago in Satartia, Miss., dozens of people were hospitalized and hundreds evacuated after a CO2 pipeline ruptured. Emergency responders were impeded when the heavy concentration of carbon dioxide in the air prevented their vehicles from working.
Offshore injection projects like those proposed in the Gulf present other challenges. Sequestered carbon dioxide can move through geologic layers, particularly when older oil and gas wells already provide pathways. At an early CCS project in Norway, for example, researchers found that carbon stored beneath the seafloor began to migrate upward toward shallower rock layers, posing the possibility of leaks. Those injection wells were originally drilled in the late 1990s and have since been under constant monitoring and study.Globally, there are no uniform guidelines for how long CCS wells need to be monitored, even though their reliability remains uncertain, Wamsted said.
Nonetheless, Texas has enthusiastically entered the fray. For the state, which has long channeled royalties from oil and gas leases into funding for public schools — some $3.7 billion has flowed into state coffers since the state began leasing offshore land for drilling in the 1960s — the potential dividends of undersea carbon storage are clear.
Onshore, CCS projects are proliferating as well, mainly around the petrochemical refineries on the Gulf Coast and the massive oil and gas drilling fields in the Permian Basin in West Texas. Oil executives say the existing pipeline infrastructure in the basin, coupled with the federal incentives, makes it a prime location for CCS, with tax credits flowing for every ton of carbon captured and injected underground.
Even the King Ranch in South Texas, one of the largest cattle ranching operations in the country, may soon have a carbon capture and storage plant, in this case pulling the emissions from belching cows and manure out of the ambient air.
The CCS projects that have been announced so far inevitably raise concerns about whether they will support the oil and gas industry in the long run, rather than accelerating the transition away from fossil fuel production and consumption. Additionally, the continuous doubts surrounding the effectiveness of the capture technology and the possibility of leakage from storage wells prompt critics to question whether the federal incentives will have a negative impact instead of a positive one.
“The current situation involves a significant effort by the industry to actively promote carbon capture and storage as a crucial solution,” stated Nikki Reisch, director of the climate and energy program at the Center for International Environmental Law. “It serves as their escape plan, allowing them to perpetuate the idea that we can still rely on fossil fuels moving forward.”
Wamsted points to the first and only CCS facility to operate so far at a U.S. power plant: the Petra Nova facility, which was tacked onto a 1970s-era coal plant at the W.A. Parish Generating Station outside Houston. The capture and storage operation received $190 million in funding from the federal Department of Energy and went online in late 2016.
“It claimed it was capturing 90% of the carbon, but our research showed that it was likely capturing 70 to 75% of the carbon coming through the project,” Wamsted said. “What you get down to is the fact that carbon capture equipment that has been run, tested and operated so far does not operate nearly as well as proponents say.”
The CCS facility needed its own natural gas generator to function, releasing methane, a highly potent heat-absorbing gas, which wasn’t captured at all.
In another environmental paradox, Petra Nova’s captured carbon was used for “enhanced oil recovery,” a technique in which pressurized CO2 is pumped into an existing oil or gas well to squeeze out the last of the fuel deposits. After the CCS facility was mothballed in 2020, a spokesperson for NRG Energy, which backed the project, was quoted as attributing the decision to a nosedive in oil prices. The carbon capture facility reopened on Sept. 5.
Locally, community advocates pushed for the Parish coal plant to be shut down altogether because of concerns about climate change and air quality. Instead, after the infusion of $1 billion in investment by private companies and the federal government, the coal plant is likely to remain open for years.
Area residents are suffering the consequences. A 2018 study by Rice University researchers linked air pollution from the coal plant, including sulfur dioxide and ozone emissions, to hundreds of excess deaths and cases of asthma and other respiratory illnesses in the region.
Alexander Spike, a climate justice advocate for Air Alliance Houston, expressed that the communities experiencing chronic and neglected air pollution issues are the ones bearing the brunt of the consequences. According to Spike, the industry fails to be transparent about the implications of carbon capture for these communities, resulting in their unfair treatment for the benefit of industry profits.
Supporters of the technology argue that CCS is just a single approach to tackle the challenging and overwhelming mission of curbing greenhouse gas emissions to protect the environment. Susan Hovorka, a research scientist at the University of Texas and the lead investigator for the university’s Gulf Coast Carbon Center, stated, “This undeniably contributes to solving the problem by serving as a tool in our arsenal. It is not the right moment to dismiss this tool.”
A bid for state “primacy’’
That Texas came to own the oil-rich land beneath the seafloor is, in some ways, a quirk of history. In 1836, when Sam Houston is said to have drawn the boundaries of the independent Republic of Texas, he extended its coastal border 10.3 miles outward, following Spanish colonial precedent. Texas entered the Union nine years later, and for nearly a century afterward, the U.S. government paid no mind to the boundary, allowing the state to do what it pleased.
But when oil began flowing from those state-owned lands, federal officials began to take an interest. States like Louisiana and Mississippi only claimed land rights 3.5 miles from the shore, and any royalties from oil and gas recovered past that boundary were collected by the federal government.
Between the 1940s and 1953, a dispute over the ownership of submerged lands ensued between the states and the federal government. This contentious matter reached the U.S. Supreme Court through three distinct lawsuits, while also being subject to extensive deliberations in Congress.
Today, although Texas still owns all of the land within 10.3 miles of its coast, it does not have sole authority to greenlight carbon sequestration wells in the Gulf of Mexico. Classified as “Class VI wells,” all such sites are currently regulated by the federal Environmental Protection Agency.
But Texas and Louisiana, another state that is ramping up CCS projects, have asked the EPA for “primacy” in regard to the wells, which would allow state agencies to grant permits for and oversee them.
Critics say that if the EPA were to grant states primacy, removing the federal hurdles, sequestration wells would acquire permits for underwater carbon storage at a quicker pace. States already permit and regulate other types of injection wells on land, known as Class II wells, which are used for enhanced oil recovery, said Paige Powell, a policy expert at Commission Shift, a watchdog group that seeks reforms in oil and gas oversight in Texas.
In Texas, securing primacy would mean that the EPA handed over authority to the state Railroad Commission, which has a spotty track record on enforcing existing oil and gas regulations. “When you look at Class II injection wells, we see induced seismicity and sinkholes,” Powell said. “We’re seeing blowouts that are like geysers.”
She added that we have been making efforts to demonstrate that the Railroad Commission is mishandling its Class II program, and it is not advisable for the EPA to grant them further authority.
The commission is currently responsible for cleaning up and maintaining thousands of abandoned oil and gas wells that bankrupt companies have left behind all over the state. In the future, the state may also be on the hook for abandoned CCS projects: Its lease agreement for the Bayou Bend project, for example, says the GLO will take over management of carbon storage wells if the investors decide to walk away from the venture.
In a written statement, the agency stated, “It is mandatory for our lessees to adhere to both state and federal laws. The Environmental Protection Agency’s permitting process involves assessing and addressing potential environmental hazards, along with ongoing monitoring throughout the injection phase of the project.”
At the same time, Texas lawmakers have sought to deflect corporate responsibility for any problems arising at sequestration wells from the oil and gas industry. House Bill 4557, introduced last spring in the hope of encouraging investment in CCS projects, would have limited the types of civil suits residents could bring against companies in the event of a disaster. The bill died in committee, but Powell says it is likely that discussions will be revived in two years when the Legislature next meets; it convenes for five months every other year.
Environmental advocates are concerned about the potential repercussions of handing over regulatory control to the state, considering the growing momentum for CCS projects in Texas.
“The world standard for carbon sequestration is 99% of the CO2 stored for a thousand years,” Powell said. “That means we need to monitor it for a thousand years. But there are major concerns that companies are going to be able to hand over their liability for carbon injection wells to the state after 10 or 50 years.”
Disclosure: Air Alliance Houston, NRG Energy, Rice University and Texas A&M University have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
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