Seizing the carbon capture opportunity for US energy dominance

But in this black-gold rush to “drill baby, drill,” the administration risks throwing the baby out with the bathwater — the baby being carbon capture, and the bathwater being former President Joe Biden’s signature climate law, the Inflation Reduction Act.

Long regarded as a tool to boost the efficiency of oil production, carbon capture primarily entails capturing carbon dioxide emitted from fossil-fueled power plants and industrial facilities, converting it to a liquid, and reinjecting it into underground reservoirs where oil and gas have naturally accumulated over millions of years.

First used in Texas and regulated by the Environmental Protection Agency since the 1970s, this injection process, known as enhanced recovery, increases the amount of oil or gas recovered from reservoirs by 30% to 60% or more. It is also safe, with the EPA requiring that liquids used in the process be injected into Class II wells, which are specially designed steel and cement structures drilled into reservoirs to absorb pressure, prevent leaks, and protect groundwater.

Beyond enhanced recovery and other use applications, captured carbon can also be stored. Either way, the end result is less carbon dioxide, a greenhouse gas, in the atmosphere, which is why the Biden administration encouraged carbon capture, utilization, and storage with federal grants and the Inflation Reduction Act’s bipartisan 45Q tax credit, providing $60 for every ton of carbon captured and used and up to $85 for every ton captured and stored.

Leveraging these incentives, the U.S. fossil fuel industry invested heavily in carbon capture to drive forward large coal, oil, and gas projects and the building of major industrial facilities, creating hundreds of thousands of good-paying jobs in the process.

But the Trump administration can and must do much more to leverage carbon capture to maximize the efficiency, productivity, and competitiveness of America’s fossil fuel industry and achieve energy dominance.

Already, Exxon Mobil, the United States’s largest oil and gas company, has captured almost 150 million metric tons of carbon dioxide. The company estimates that, by 2050, the carbon-capture-and-storage market will be worth $4 trillion — about 60% of the $6.5 trillion market that it predicts for oil and gas by then.

Elsewhere, Occidental Petroleum is investing in research to convert carbon dioxide into lower-carbon synthetic fuels, which are similarly projected to grow significantly between now and 2050. With carbon capture, U.S. fossil fuel companies are well-positioned to meet this demand and create new opportunities to expand and dominate energy markets abroad.

Outside oil and gas, the construction industry is also exploring ways to manufacture cement with synthetic materials made from captured carbon dioxide, as opposed to expensive raw materials primarily sourced from abroad. By enabling cost-effective domestic cement manufacturing, carbon capture can help increase the affordability and competitiveness of U.S.-made cement, in turn helping to reduce America’s heavy reliance on foreign cement imports.

But with the world on track to capture 1 billion metric tons of carbon dioxide by 2030, there will soon be way too much carbon to repurpose for enhanced recovery, synthetic fuels, cement manufacturing, or any other application. The only way to safely manage this excess carbon is by storing it deep underground, half a mile or more below the Earth’s surface, in the same geological formations that have trapped and stored oil, natural gas, and naturally occurring carbon dioxide for millions of years.

With the technology and geology to store up to 21.2 trillion metric tons of carbon dioxide safely for thousands of years, the U.S. is better equipped to do this than any other country. And in 2010, the EPA established a new well class, Class VI, to make it happen.

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And yet, despite nominally encouraging increased development and deployment of carbon-capture technologies, Biden’s EPA slow-walked review of Class VI permit requests, ultimately approving only three of the more than 160 applications submitted, including 17 from Exxon, Chevron, and Shell, none of which have, to date, been approved. At the same time, the previous administration also secretly encouraged environmental activist groups to “keep fighting” Exxon’s carbon-capture project in Texas.

For Trump to succeed in achieving U.S. energy dominance, his administration and Congress must succeed where the Biden administration stumbled, eliminating EPA permitting roadblocks and safeguarding the 45Q tax credit so that U.S. fossil fuel producers can develop and deploy carbon capture, utilization, and storage technologies to compete in and dominate global energy markets.

Louis G. Navellier is the founder and chairman of Navellier & Associates, a family office that manages over $1 billion in private accounts.