Off the top, a quick rebrand, I’ve jokingly referred to my career as carbon middle management, and recently decided to incorporate that title.

More Energy, Better Economics

The world is consuming more energy, year after year. We are seeing diversification in energy sources, driven in large part by the affordability of each. Operators across the energy sector are looking for ways to reduce costs and improve the efficiency of their value chains.

The scenarios and forecasts around oil and gas are mixed but generally point towards increases in demand over the short to medium term, with a tapering of demand in the medium to long term. The cause of that demand taper will be fundamentally driven by two things: cheaper, better alternatives (like EVs or electrification), and some mosaic of implicit or explicit carbon pricing (Carbon Border Adjustment Mechanism, Domestic ETS, low-carbon fuel standards, etc.)

As we shift towards that future, there will be an increasing competitive advantage in producing lower carbon-intensive oil and gas, but that competitive advantage will only be realized if we have a clear accounting of the emissions.

The oil and gas industry is well aware of this shift. Exxon CEO Darren Woods spoke on the unclear future for combustion of fossil fuels, but noted their value as inputs into key sectors, like the medical field. A group of twenty-plus major industrial companies, including oil and gas producers, created the Carbon Measures initiative to accurately account for product-level emissions across sectors, and tie it in the future to a standards-based framework. Occidental Petroleum CEO Vicki Hollub has been clear on the value of low-carbon oil and gas, and has deployed billions in capital on direct air capture, carbon capture, pipelines, and storage.

There are many ways to realize a lower carbon-intensive oil and gas industry. Mitigating upstream methane leaks is a well-understood technology and process. Carbon capture and storage has been proven at scale, and continues to be deployed around the globe. CO2-enhanced oil recovery has been an underutilized lever but has massive potential upside.

Throughout this series of posts, I’m going to lay out some of the efforts underway to remain competitive as the world moves towards a lower demand future, including all of the technologies mentioned above. Of course, many of these will require policy or regulatory support to deploy at a large scale, like all technologies. But the fact remains that if we are to realize that future, the countries and companies that move first and fastest will be more competitive, maintain or grow market share, and reap the economic benefits of a robust, responsible oil and gas sector.

The proliferation and acceleration of solar, wind, and batteries have been tremendous. All forecasts have greatly underestimated the deployment rates, which continue to rise. The oil and gas industry has been a major player in that deployment story, procuring 6.7 GW as of 2022. The electrification of the patch has been underway for years, with a slowdown only happening because we can’t build fast enough. It may seem paradoxical, but at the moment, the demand for renewables from oil and gas outstrips supply.

The Electrification of the Patch

The oil and gas industry has been and is increasingly embracing electrification for its production and transportation facilities, which involves converting or replacing equipment that runs on fossil fuels (like diesel or natural gas turbines) with equipment that runs on electricity. This conversion is happening across various operations, including the electrification of hydraulic fracturing fleets onshore and offshore production platforms. For permanent offshore assets, this often means installing subsea High Voltage Direct Current (HVDC) cables to connect to an onshore, often low-carbon, power grid or utilizing locally generated offshore wind energy. Onshore, facilities are connecting to regional power grids or installing local renewable sources like solar. The electrified equipment includes everything from electric pumps and compressors to drilling rigs and processing facilities, allowing the industry to move away from less efficient, on-site combustion for power generation.

The primary motivation behind this shift is not solely emissions reductions, but rather the lower cost and increased efficiency of electrification. But there are real emissions benefits associated with this switch. Oil and gas operations, particularly the use of gas turbines and diesel generators for power, are major sources of Scope 1 and Scope 2 emissions, accounting for around 15% of total energy-related emissions globally. Electrification, especially when paired with low-carbon electricity sources, is a key lever for deep decarbonization. Emissions savings are substantial; for instance, the complete or partial electrification of platforms in the Norwegian North Sea is projected to reduce millions of tonnes of CO2 emissions annually, and projects like connecting ADNOC’s offshore operations to a clean onshore grid are expected to cut their offshore carbon footprint by up to 50%. Additionally, electric equipment is often inherently more energy-efficient than its fossil-fuel-driven counterparts, leading to lower operating costs and better system resilience. The replacement of gas-pneumatic devices with electric alternatives also helps abate methane emissions.

The overall trend in oil and gas electrification is one of accelerating growth and investment, though deployment is geographically uneven. The global oil and gas electrification market is projected to see significant growth in the coming years, driven by stricter environmental regulations, increasing carbon pricing mechanisms, and corporate net-zero commitments. Countries like Norway have been leaders in the transition, with a significant percentage of their production already partly or fully electrified using clean power from shore. Chevron has a 29-MW solar farm at one of its California fields that supplies 80% of the field’s power needs. Occidental Petroleum has 16 MW of power supply from solar for its Permian operations.

Major companies are investing billions in building out the necessary electrical infrastructure, effectively becoming electricity distributors themselves in some large onshore basins. This trend signals a fundamental, sustained shift in the industry, where electrification is a cost and efficiency saving mechanism alongside methane and CO2 reductions. However, the challenge for oil and gas electrification isn’t the appetite for cheap power, nor the balance sheet to pay for it, but the ability to actually get power online, regardless of source.

We need permitting reform across the state, inter-regional federal levels, to ensure all customers can receive power from their preferred sources. Whether AI data centers, EVs, or the electrification of industry, we are in a load-growth scenario unseen for decades. We can build fast, we can build safe, but we need to allow for both to happen.

The electrification of the oil and gas patch is an interesting example of how the world is transitioning energy portfolio. The motivation for the industry is cost first, emissions second. Which is great and underlines that destruction in demand will come from lower cost, more efficient technologies. From a climate perspective, if we are producing and using oil and gas, we should want that oil and gas to be as low-carbon intensive as possible. Electrifying the patch achieves both cost and emissions reductions. And that’s not the only place we can get both.

Part two will cover enhanced oil recovery.

As a Non-Resident Fellow at the Foundation for American Innovation, I co-authored (alongside Thomas Hochman) a comment to the EPA on their recent proposal to revisit the Greenhouse Gas Reporting Protocol. That comment is below.

The Foundation for American Innovation strongly supports the Administration’s commitment to regulatory efficiency, market freedom, and unleashing American ingenuity to lead the global economy. We believe that American companies, particularly in the energy and technology sectors, are best positioned to solve the world’s most complex challenges, including the imperative to win the AI race, and create an abundance of energy to increase prosperity.

However, the proposed amendment to the Environmental Protection Agency’s (EPA) Greenhouse Gas Reporting Program (GHGRP) risks destabilizing critical federal policy mechanisms and undermining the competitive advantage that leading US firms have secured. EPA’s objective of reducing the administrative and bureaucratic burden on reporting entities is important; however, amending the GHGRP to eliminate the majority of source categories is an overcorrection that fails to account for the program’s essential role as the preeminent source of verified, standardized, and compulsory data that powers both our competitive advantage in oil and gas and the burgeoning digital economy.

We urge the EPA (RIN 2060–AW76) and instead focus on modernizing and streamlining the GHGRP to enhance its efficiency and ensure the US maintains its global competitive edge.

1. The Value of the GHGRP for American Energy Leadership

The GHGRP is the linchpin for attracting billions in private capital into the demand-driven, low-carbon energy sector, particularly for American oil and gas (O&G) producers who are market leaders in environmental stewardship and high-quality products.

Critical Link to Federal Tax Incentives (45Q & 45V): The success of American innovation in Carbon Capture, Utilization, and Sequestration (CCUS) and hydrogen is underpinned by the 45Q and 45V tax credits. These tax credits are designed to incentivize investment and job creation in technologies that enhance our global competitiveness. The proposed rule acknowledges the vital role that GHGRP has served in facilitating the administration of these tax credits and recognizes that the removal of most source categories under Part 98 would require the Treasury Department and the Internal Revenue Service (IRS) to revise guidance. As written, the proposed rule would have a cascading effect on federal regulatory policy, requiring other federal agencies that rely on GHGRP data to revise existing rules, which would both increase the administrative burden and inhibit taxpayers from claiming tax credits.

• 45Q Verification: For secure geological storage or enhanced oil recovery projects utilizing Class VI or Class II injection wells, the Treasury Department mandates the use of GHGRP Subpart RR reporting to verify secure storage and quantify the credit amount. Repealing the GHGRP immediately removes the necessary legal and technical reporting framework for claiming 45Q, risking the halt of 48 existing monitoring, reporting and verification plans for EOR fields, and over 190 announced CCUS projects representing billions in private investment. As Tier One and Tier Two shale oil inventories are decreasing, EOR is an important tool to maintain US market share, O&G jobs, and energy security. 45Q is a crucial economic driver that facilitates the continued operation of otherwise depleted reservoirs, and the removal of key GHGRP source categories jeopardizes the viability of these operations and American energy dominance.

• 45V Verification: Hydrogen projects relying on natural gas must demonstrate their emissions intensity to qualify for 45V credits. GHGRP data provides the verifiable, government-backed lifecycle emissions data required for O&G inputs to secure project financing and access the highest credit tiers. Suspending the emissions reporting from petroleum and natural gas systems (Subpart W) until RY2034 would undermine the credibility and accessibility of the 45V credit and discourage investment in the US hydrogen economy.

Low-Carbon O&G Competitiveness: O&G production has a verifiable, economy-wide advantage in emissions intensity compared to foreign competitors, including Russia, Venezuela, and China. This superior performance is quantified and validated by the GHGRP. As major markets like the European Union implement the Carbon Border Adjustment Mechanism (CBAM) and other emissions-based trade tariffs, the GHGRP provides American exporters with the only internationally credible, federally verified dataset to prove their commercial superiority and out-compete foreign producers. In this way, eliminating the GHGRP represents a form of disarmament in the face of global trade competition. While the proposed rule would not prevent O&G producers from developing and reporting through alternative voluntary frameworks, these alternative approaches lack the credibility and integrity of the GHGRP.

2. The Digital Economy’s Reliance on Verifiable Energy Data

The explosive growth of Artificial Intelligence (AI) and Hyperscale Data Centers demands reliable, low-carbon power, often supplied in the form of natural gas with certified low-emissions intensity attributes.

Hyperscalers depend on GHGRP data; as hyperscale data centers are more widely deployed, they are coming under increased scrutiny from local communities around both electricity costs and environmental impact. Relying on dozens of fragmented, expensive, and non-standardized third-party verification schemes – the inevitable result of the proposed rule – will be inefficient and lack the regulatory integrity that a federal program provides. The GHGRP’s uniform, compulsory, and publicly available data is the only way for the digital industry to efficiently and credibly track the emissions intensity of the energy they purchase to power their operations. Innovation and deployment thrive on reliable data.

3. GHGRP Repeal is a Net Cost Burden

The proposed rule estimates that the suspension of Subpart W reporting until 2034 and the elimination of all other reporting categories will save American businesses billions in compliance costs. But the compliance cost savings are unlikely to outweigh the increased cost of private, third-party verification. The resulting cost increases will be passed to consumers, and will jeopardize the competitiveness of the US energy sector while new voluntary reporting frameworks are developed.

If the proposed rule is implemented as written:

• Companies relying on the data for 45Q/45V tax credits, international trade compliance, or state-level policy will not stop measuring and verifying emissions. They will simply be forced to develop and deploy fragmented, duplicative, and bespoke monitoring, reporting, and verification (MRV) systems.

• Repeal will inevitably spur the proliferation of divergent sectoral and state-level reporting programs, requiring multi-state operators to comply with a costly and complex patchwork of standards. This regulatory burden will far exceed the cost of complying with one, uniform federal program.

• The total cost to industry will be higher as businesses internalize the costs of developing private MRV systems, pay third-party auditors (who lack the GHGRP’s data authority), and navigate dozens of conflicting state regimes.

We urge the EPA to recognize GHGRP’s value as a source of verifiable, consistent data that serves as a cornerstone of American energy and digital competitiveness. Rather than repeal the GHGRP, a final rule should encourage innovation through regulatory clarity.

A Misleading Constraint: Re-evaluating the Global Storage Capacity and the Limits of Technical Assessment

The recent publication in Nature regarding the constraints on global CO2​ storage capacity, while executed within its self-defined parameters, presents a narrative that fundamentally misrepresents the feasible potential of carbon storage, and by extension carbon capture and storage (CCS), direct air capture (DAC), and bioenergy CCS (BECCS). By imposing overly restrictive criteria on a couple of key parameters and excluding mineral storage, the study severely underestimates the potential of CO2​ storage. The reductionist view of available capacity, particularly in the public communication, risks creating a premature sense of scarcity. This rebuttal argues that the technical availability of CO2​ storage is not the limiting factor for large-scale CCUS deployment and that the distraction created by this capacity debate is unhelpful to the real limiting factor: a lack of long-term, durable, and adequate incentives.

1. Even with Artificial Limits, Geologic Storage Capacity Remains Abundant

A core issue with the study is that even though the authors artificially constrain technical storage capacity, they still misplace the conclusion. The remaining capacity is thousands of gigatons, enough to help lower temperatures by 0.7C °C, and as we know, every tenth of a degree counts.

Considering current global annual CO2​ emissions are around 40GtCO2​, even a “severely constrained” capacity of, say, 1,400 GtCO2​ represents well over three decades of total global emissions, and more crucially, many decades of addressable industrial and power sector emissions suitable for capture. When viewed through the lens of a 2∘C or 1.5∘C decarbonization pathway, CCUS deployment is expected to scale up gradually over the next few decades, reaching its peak contribution in the second half of the century. The available capacity, even under the paper’s restricted lens, is far greater than the projected cumulative CO2​ that can realistically be captured and stored by 2050 or likely even 2100. The debate over the absolute GtCO2​ number, therefore, becomes a statistical exercise rather than a practical constraint on deployment planning. The planet has, for all intents and purposes, plenty of geologic capacity to meet climate mitigation needs in this century.

2. Lack of Technical Basis for Depth-Based Storage Constraints

A significant methodological flaw lies in the utilization of overly restrictive depth criteria to limit the calculated storage volume. While the authors are correct to consider and include a minimum depth at which CO2 becomes a supercritical, dense fluid that descends instead of ascends like CO2 does as a gas, the necessary temperature (31.1 °C) and pressure (7.38 Mtpa) are typically met by the time one reaches 800m down. Also, while minimum depth constraints are necessary to ensure the CO2​ remains in a supercritical, dense phase, the implementation of arbitrary maximum depth limits fundamentally lacks a sound geological or engineering basis.

The study appears to rely on historical precedents or generalized economic thresholds rather than the maximum pressure and temperature limits of modern drilling and injection technology. Modern oil and gas operations routinely drill and complete wells to depths exceeding 4,000 meters (13,000 feet) in both onshore and offshore settings. The technical capacity to characterize, drill, and inject CO2​ into formations at these greater depths is demonstrably mature.

3. Exclusion of Mineral Carbonation Undermines the True Potential

This study focuses exclusively on geologic storage in deep saline aquifers and depleted reservoirs. It notes but neglects the mature and highly permanent potential of mineral carbonation. Mineral storage (or carbon mineralization) involves reacting CO2​ with naturally occurring silicate minerals (like basalt or peridotite) to form stable, solid carbonate minerals. This process provides arguably the most durable form of carbon sequestration, mimicking natural weathering at an accelerated pace.

While the engineering challenges related to energy input and reaction kinetics remain, pilot projects on peridotites are up and running in the Gulf, and Carbix has stored over 100,000 tons year in Iceland. More importantly, the capacity associated with global mafic and ultramafic rock formations is theoretically orders of magnitude larger than saline aquifer capacity, effectively rendering the capacity question moot from a geological standpoint. Any study aiming to represent the “technical limits” of sequestration must, at a minimum, include the recognized global potential of mineral storage as a critical long-term component.

4. The Vast, Uncharacterized Global Storage Potential

The study, like most large-scale global assessments, is fundamentally limited by the availability of high-quality geological data. The resulting capacity numbers are, by definition, based on known and characterized sedimentary basins. This limitation is particularly egregious when assessing the global potential, as immense swathes of the planet remain underexplored for CO2​ storage potential.

This is especially true across the continent of Africa (save for Nigeria, South Africa, and Kenya) and in many parts of Asia and South America. These regions contain large, deep sedimentary basins that, while well-known to geologists, lack the dense network of seismic surveys and well data necessary to transition from “theoretical” capacity to “effective” or “practical” capacity estimates. The absence of data does not equate to the absence of storage.

5. Global Capacity is Not the Limiting Factor; Site-Specific Availability Is

The communication surrounding constrained capacity estimates often conflates two distinct issues: global storage capacity and commercial site-specific availability.

1. Global Capacity is a geological maximum: the total volume of pore space that could theoretically hold CO2​. This is shown to be abundant.

2. Commercial Availability in a specific country or region is an economic and regulatory reality: the volume of storage that can be proven, permitted, financed, and brought online at a specific industrial hub today.

The true bottleneck is not that the globe has limited CO2​ storage; it is the immense effort and time required to convert a theoretical basin into a commercial, permitted injection site—a process that involves years of seismic acquisition, characterization drilling, regulatory review, monitoring, public engagement, and most importantly, financial incentives to capture the CO2 in the first place.

6. The Real Limiting Factor: Long-Term Market Signals for Capture

Finally, the focus on storage capacity availability is a classic case of misplaced scrutiny. The primary limiting factor for large-scale CCUS deployment is the long-term market signal and financial viability of the capture and storage process itself.

Capture facilities, especially industrial sources and power plants, require multi-billion-dollar investments and multi-decade commitments. These investments will not materialize unless there is absolute regulatory and market certainty that the cost of carbon will remain sufficiently high, or the value of captured and stored CO2​ (via tax credits, like 45Q in the U.S., or contract-for-difference schemes) is guaranteed for the lifespan of the asset. The technical capacity of a storage reservoir 1,000 kilometers away is irrelevant if the chemical plant or cement factory cannot secure the finance to build the capture unit in the first place. Resolving the long-term price certainty for carbon management is the necessary and sufficient condition for accelerating CCUS deployment, not proving the 1000th GtCO2​ of geological capacity. As a final point of perspective, the study also misses that while CCS might only add 1200-1500 Gt CO2 mitigation capacity by their measures, that’s more than the 800-1000 Gt CO2 difference between 1.5 and 2.0 °C in the Paris Agreement, for which it could provide a critical buffer.

Conclusion

This study, and the communication and press following its release, do not accurately represent the technical limits of CO2​ storage capacity, in any real sense. Employing a narrow and technically questionable set of constraints, particularly regarding depth and the omission of mineral storage, it offers a deeply conservative lower-bound estimate rather than a true reflection of the planet’s vast geological potential. The subsequent narrative, suggesting a capacity bottleneck, is a critical distraction from the real issues with CCUS deployment, which are overwhelmingly economic, regulatory, and infrastructural. The focus must be shifted from the false premise of storage scarcity to the genuine challenge of creating predictable, durable policy and long-term market signals necessary to finance, deploy, and govern capture technology at the requisite scale.

Go check it out!

https://workweek.com/2023/09/13/a-trillion-dollar-carbon-removal-industry/

An absolutely historic day for DAC. I wrote about it here:

https://breakthroughenergy.org/news/direct-air-capture/


DOE official release here:

https://www.energy.gov/oced/regional-direct-air-capture-hubs-selections-award-negotiations

https://www.energy.gov/fecm/project-selections-foa-2735-regional-direct-air-capture-hubs-topic-area-1-feasibility-and