The oil and gas industry, known for its significant
contribution to greenhouse gas (GHG) emissions, must actively participate in
reducing CO2 emissions to address the ongoing concerns of global warming.
Despite the existence of sustainability claims and the implementation of the
Paris Agreement, which aimed to limit temperature increases, the industry
continues to generate substantial carbon footprints. Therefore, it is crucial
for every sector, including oil and gas, to take significant steps towards
reducing emissions to help control rising temperatures.
Introduction
Despite sustainability claims, industries are clearly
contributing to the generation of enough carbon footprints to cause
temperatures to rise. Even after countries and key industry players agreed to
the famous Paris Agreement to limit temperature increases, global warming still
remains a growing concern in the modern world. To keep the temperature under
control, every industry, especially the oil and gas industry, must contribute
to reducing CO2 emissions, as it has always been a heavy contributor to GHG
emissions.
Despite the fact that the majority of key players are taking
strict measures to reduce their carbon footprints, governments and regulatory
bodies around the world are becoming more stringent and bringing in strict
measures to curb emissions. For all CO2 emissions that exceed the permitted
limit, businesses must incur a cost or charge known as carbon pricing. This
carbon tax measures a company’s carbon footprint and the extent to which
society bears the consequences. These businesses then have to sell their
products at a premium price to increase their profit per product. This tax is
not only inconvenient for the brand’s overall image because of harmful production
practices, but it also has the potential to reduce market share due to
increased prices.
So, to reduce the carbon footprint, is decarbonization
the answer?
Decarbonization Trends
In the current market scenario, decarbonization can be a
great way to achieve collective and individual sustainability goals.
Decarbonization strategies must be developed in accordance with geography,
regional policies, and other factors. The popular decarbonization trends have
been interesting for the industry and show enough promise. These include:
– Eliminating methane leaks and flaring.
– Relying on renewable technologies.
– Scaling up carbon capture usage and storage.
– Understanding GHG emissions across the cycle.
The key aspect of going greener and adopting decarbonization
in the oil and gas industry has gained traction because of ongoing mergers and
partnerships across the value chain. Players are collaborating, and the
industry’s dynamics are changing at breakneck speed.
Methods of Decarbonization
Decarbonization of industry or processes will be critical to
meet the net zero emission goal and companies are reducing carbon emissions in
a variety of ways. The most promising decarbonization methods are:
Increased capacity for renewable energy: The power sector
accounts for one-third of domestic emissions. The industry is dominated by
thermal power, which contributes significantly to carbon emissions. Its carbon
footprint can be reduced by using renewable energy sources for power
generation. This would require an additional 50–70 GW capacity, contrary to ~12
GW current capacity addition per year. However, the transition would require
trillions of dollars in investment while lowering the cost of power generation,
which would directly benefit end users. Shifting to renewable energy sources
has a dual benefit in terms of nature, i.e., a reduction in carbon emissions
and a decrease in the rate of power generation.
Increased EV penetration: Widespread adoption of EVs can
help reduce carbon emissions quite impressively. Currently, the transportation
sector emits ~250 Mtpa (mega tons per year) of CO2 and electrification of
mobility will likely reduce emissions. In 2022, EV penetration will be only 2%,
but the industry is expected to grow by ~40%, and penetration will rise to
30-35%, reducing emissions to 150-180 Mtpa. However, the major barriers to mass
adoption in India are the high cost of EVs and the scarcity of charging and
swapping infrastructure.
Carbon Capture, Storage, and Utilization (CCSU): It is the
most promising decarbonization technology. Due to the high capital and
operating costs, the technology is currently being tested on a small scale
(pilot projects). However, companies are working to improve the economic
feasibility and commercialization of the technology. It is expected that the
technology will help in reducing carbon emissions at a faster rate than other
methods or techniques, particularly in the oil and gas industry.
Introduction of CCSU
CCSU involves the capture of CO2 from sources such as oil
and gas plants, power generation units, industrial manufacturing facilities,
and so on. The captured CO2 is compressed and transported by pipeline. This can
then be used in a variety of applications, such as chemical production or
injected into deep geological structures for long-term CO2 storage. In 2021, 44
Mt of CO2 was captured globally from 35 commercial CCU facilities around the
world. With the recent announcements of more than 200 facilities, it is
expected that CCU technology will be able to capture more than 220 Mt of CO2
per year by 2030.
In India, there is currently no dedicated commercial-scale
CCSU project. However, a few pilot scale projects are
currently underway, such as IOCL R&D’s amine and biological enzyme-based
carbon capture plant and Tata Steel Jamshedpur’s pilot-scale carbon capture
plant for capturing 5 TPD CO2 from the blast furnace. The technology is
expected to be used commercially in the near future.
Commercial scale technologies for CCSU
Because the technology is still in its infancy, a few commercially
available carbon capture technologies include:
Solvent-based absorption: In this technique, CO2 is passed
through the absorber unit and is absorbed using the solvent. The CO2 -rich
solvent is routed to the stripper, where CO2 is extracted and the lean solvent
is regenerated for reuse. The CO2 -rich steam is passed through the compressor,
where it is compressed at an extremely high pressure (>75 bar) for pipeline
transportation. Air Liquide Amine, Kansai Mitsubishi Carbon Dioxide Recovery
(KM CDRTM’s) proprietary amine solvent, and Baker Hughes Chilled Ammonia
Process (CAP) technology are a few examples of proven technologies for
solvent-based absorption.
Solvent-based absorption can be done through two methods:
i. Chemical solvent-based CCU: This method is
preferred for low CO2 concentrations and partial pressures. The most popular
chemical solvents for CCU are amine-based solvents such as ethanolamine,
diglycolamine, diethanolamine, and ammonia.
ii. Physical solvent-based CCU: This method is
preferred for streams with high CO2 concentrations and partial pressures. The
physisorption technique is used primarily for absorption. Physical solvent
regeneration occurs at low temperatures and pressures, resulting in high power
consumption. Methanol, Dimethyl ether of polyethylene glycols (DEPG), and other
common solvents are used for physical solvent-based
absorption.
Adsorption: This technology is
used to capture gas streams with moderate to high pressure and a medium CO2
concentration. In adsorption-based CO2 , molecules selectively adhere to the
surface of the adsorbent material and form a film, followed by the diffusion of
other gases. The desorption of CO2 from the system can be accomplished in the
final step by either decreasing pressure or increasing temperature. For
commercial absorption-based CCSU, technologies such as Air Products Vacuum
Swing Adsorption (VSA) and UOP PolybedTM PSA systems are used.
Cryogenic Separation: In this
process, the CO2 stream is cooled to a low temperature (~ -50 C) at a high
pressure, which makes the process very energy-intensive.
The consumption is in the range of 600–700 Kwh/t CO2 . A few commercial
technologies available in the market are Air Liquide’s CryocapTM Technology,
and UOP’s Ortloff Dual Refrigerant CO2 Fractionation (DRCF).
Research-phase technologies
for CCSU
Microalgae-based biotechnological
CCSU
The novel technology is currently
at the lab and pilot scales, and it is expected that the technology will be
used for large-scale CCSU in the future. The major advantage of the technology
is its low cost and sustainability. Microalgae have a unique ability to capture
CO2 (10-50 times more than terrestrial plants) and utilize captured carbon as a
nutrient. Researchers are working to develop a new strain of microalgae that
has a much higher CO2 absorption capacity. The high carbon-absorbing microalgae
can be integrated with the flue gas for CO2 absorption. These gases will then
pass through a cleaning process in which metal traces and other harmful
components are removed from them. After cleaning, the flue gases are passed
through the microalgae, which will capture CO2 and use the captured carbon as a
nutrient. Additionally, the researchers are working on the use of microalgae
for the production of biofuels and other value-added products. However, the
success of the technology will depend on various external factors such as
climatic conditions, strains of microalgae, the nature of gas, and others.
How CCU will impact India?
At COP26 in 2021, India announced
that it would achieve net zero emissions by 2070. Currently, India’s per capita
CO2 emission is 1.8 tons per year, which is 40% less than the global average.
India currently emits 2.9 Gtons of CO2 per year on average, making it the
world’s third-largest emitter after China and the United States. Steel, power,
automotive, aviation, cement, and agriculture account for 70% of domestic emissions.
With the development of the
economy, it is anticipated that emissions will increase in the future. As a
result, CCSU can play a critical role in helping with decarbonization and
achieving net zero emissions by 2070. Integrating CCSU into each industry is
neither technologically nor economically feasible. However, it is simple to
incorporate into the oil and gas industry. The absorbed CO2 can be used as a
feedstock for the production of specialty carbonates such as ethylene carbonate
and propylene carbonate, as well as for food and beverage applications
(carbonated drinks, dry ice, etc.) and the production of polymers
(polycarbonate, carbon fiber, etc.).
The Challenges for CCSU
Technology
i. Change in processes in emitting industries: It
has been observed that the industry is replacing fossil fuels with electricity
or new energy sources, and it is anticipated that the trend will continue in
the future. Currently, changing the source to other energy alternatives is much
easier and has a relatively low cost as compared to setting up and operating a
CCSU unit.
ii. Cost of capture: The significantly high CAPEX
and cash costs of the commercial CCU are the major barriers to the mass
adoption of this technology. The optimization of OPEX can be a route to
reducing the cash cost of the process. Companies are working to reduce the
through low-cost sources of heat/ steam for solvent regeneration and meet the
electricity duty requirements of other carbon capture technologies.
iii. Transportation safety: As part of the widespread
adoption of technology, CO2 must be transported via pipeline. However,
pipeline-related accidents/ incidents can be a barrier to transportation. There
have been no major failures or accidents associated with the CCSU, but as mass
adoption grows, the CCSU may pose safety risks.
Way Forward
Moving forward, we may see a proper revenue stream/model
from the CCSU as the stored chemicals can be used as a feedstock to produce
relevant products to meet corporate goals. We can anticipate large-scale
commercialization of carbon capture (across refineries and major chemical
factories) by 2028 – 2030, as companies will have developed the process for
better utilization of chemicals (produced from carbon capture) by that time.
However, as of now, only a few licensors are commercializing the technologies.
