A renewed push to reduce the world’s carbon emissions has sparked excitement in many technologies and stocks, with no exception to carbon capture.
While the world looks to reduce carbon emissions, the US market is eager to profit off carbon capture technologies, hinging on the IRS guidance and clarification of section 45Q of the Internal Revenue Code. The US currently houses 10 projects specifically related to CCS (Carbon Capture and Storage) and is looking to add at least 3 more. Pending the outcome of the IRS guidance to 45Q, companies may be in line to make $250 per ton of CO2.[1]
Previously, CCS has existed but is incredibly expensive, energy intensive, and not significant enough to make a dent in overall carbon emissions. A renewed enthusiasm has spiked as major oil companies like Exxon, Chevron, and others have made a comprehensive push to make the technology cheaper and more importantly, more efficient. Carbon capture would begin with natural gas power plants and expand into capturing methane to produce hydrogen, storing the CO2.[2]
Furthermore, the newest push of DAC (Direct Air Capture) technologies has energized big oil industry. The emissions of natural gas power plants can be captured in a plethora of ways and utilized to produce electricity. Big oil players are looking to capitalize on the return revenue of both producing more electricity more efficiently and selling the captured concentrate of CO2 to storage facilities for unexpected revenue.[3]
While the Oil and Gas Industry remains volatile in an election year, CCS technology has the major oil companies optimistic about the future of the fossil fuel industry. 2020 looks to be an innovative and rejuvenating year for fossil fuels and CCS may be technology to revive the industry.
[1] https://www.forbes.com/sites/jeffmcmahon/2020/02/05/new-carbon-capture-technologies-just-waiting-for-irs-green-light/#4f1373ad78aa
[2] https://www.wsj.com/articles/carbon-capture-is-winning-fans-among-oil-giants-11581516481
[3] https://energyfactor.exxonmobil.com/science-technology/stop-carbon-dioxide-emissions-power-plants/?utm_source=google&utm_medium=cpc&utm_campaign=XOM+%7C+Corp+%7C+ELH+%7C+Traffic+%7C+Non+Brand+%7C+Technology+%7C+Carbon+Capture+%7C+Phrase&utm_content=Non+Brand+%7C+Carbon+%7C+Capture+%7C+2&utm_term=carbon+capture&&gclid=EAIaIQobChMIgsjGwc3y5wIVyJ-zCh1yhwI-EAAYASAAEgJg3vD_BwE&gclsrc=aw.ds
