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Observations and essays drawn from the Nelder Notes newsletter, as well as interviews and other experimental content about the energy transition and adjacent subjects by veteran energy analyst and journalist Chris Nelder.
You're listening to the Nelder Notes Podcast, a premium feature for Transition Times subscribers. I'm your host, Chris Nelder. This is episode four titled Carbon Capture Follies. You can also find this content in newsletter form at transitiontimes.net. Carbon capture and storage or sequestration technologies are really having a moment.
Chris:Known by various acronyms such as CCS for carbon capture and storage or CCUS, carbon capture, utilization and storage, CDR, carbon dioxide removal, DAC or DAC for direct air capture, DACCS or DACCS for BECCS or BECCS for bioenergy carbon capture and storage. All these technologies seem to be suddenly vogue again with articles about them showing up in my news feeds every day. In casual parlance, CCS is used as a catchall for the whole group. But why are they suddenly vogue again? Some fifteen years after the last CCS hype cycle.
Chris:It's not like they've suddenly become commercial scalable technologies or anything. In fact, as we discussed in Nelder Notes three and Transition Times newsletter five, the total amount of CO2 that's been sequestered for all time globally is equivalent to about 1% of annual emissions just from energy consumption. Not counting CO2 from agriculture, industrial processes, land use, and so on. So so far, CCS or CCUS is a giant nothingburger. So what's all the news coverage about?
Chris:In ExxonMobil's case, it's a chance to tout its investment in CCS. Quote, The US group is building the world's largest CCS business on The US Gulf Coast as it seeks to connect industrial customers to a 900 mile network of pipelines that can transport carbon dioxide into porous rock formations deep underground. Dominic Ganetti, senior vice president for CCS, said Exxon was spending hundreds of millions of dollars a year drilling wells and connecting customers to its $5,000,000,000 plus network of pipelines across Texas, Louisiana, and Mississippi, and was also looking to expand the business overseas. The economics of Exxon's CCS push depend on climate regulations, carbon tariffs, and subsidies once fiercely opposed by much of the oil industry. While the first wave of facilities in recent decades struggled to make money even with public subsidies, global investment in CCS rose to $6,600,000,000 last year from $4,100,000,000 in 2024, while the number of plants operating commercially rose by a third to 77 with a further 44 under construction, end quote.
Chris:And that's about all of the actual hard data in the article. All the rest was about political other commercial plans, hand waving at the presumed future demand from data centers, and the like. There was no mention of how much carbon was actually sequestered or indeed what happened to the carbon at all, which is pretty typical for the sector, actually. Starting in 2003, were treated to years of coverage of FutureGen, the flagship clean coal project in The US. It was the world's first coal fired power plant to integrate CCS with Integrated Gasification Combined Cycle or IGCC technologies.
Chris:It was to capture and store CO2 emissions from coal combustion in deep underground saline formations while producing hydrogen for electricity generation and fuel cell research. But iteration after iteration of the plant failed due to escalating capital costs, permitting delays, financing problems, legal challenges, and competition from rapidly falling natural gas prices and renewables, the same problems that bedevil CCS projects today. Between FutureGen one point o and two point o, however, the project did torch over $378,000,000 in taxpayer subsidies while making it seem like the oil industry was taking emissions seriously and would have a way to capture its emissions eventually. That helped to extend the oil industry's social license to operate for a solid decade or more, which was, of course, the entire purpose of the project. Nearly all commercial CCS projects to date have been paired with enhanced oil recovery or EOR projects, which inject CO2 into oil wells in order to increase their production of new oil.
Chris:How much CO2 gets permanently sequestered in these projects is highly uncertain given the still nascent state of the industry even after two decades of public investment in it. EOR projects can probably retain 60 to 90% of injected CO2 underground over time, but exact retention percentages vary widely by reservoir, flood design, and project maturity, and the literature does not support a single universal percentage applicable to all projects. IEA's 2015 report on this subject was blunt, quote, CO2 EOR is currently not widely used for storage as there is no business case for storage. In absence of a significant carbon price, a business case could, however, be created through relevant incentive policy frameworks in the short term. With novel practices, it is possible to turn today's EOR from a pure petroleum production tool to a means of storing c o two in large quantities, namely EOR plus.
Chris:Advancing to a business model in which long term CO two storage is a revenue stream requires a fundamental shift in thinking and operations. It requires that operators reconsider reservoir management practices and operational choices that explicitly incorporate both increased oil production and storing of CO two as joint business objectives. At present, no site is pursuing this dual objective. How much carbon has actually been permanently stored away using EROR plus methods in the decades since that report was published is uncertain, and estimates vary substantially. The only significant such project appears to be the Weyburn Middale carbon dioxide project in Saskatchewan, Canada, The Shoot Creek project in Labarge, Wyoming, and the Century plant in West Texas handle large amounts of CO two, but much of that CO two was used for EOR rather than dedicated storage.
Chris:And the climate benefit is debatable depending on the accounting framework used and whether downstream oil combustion is included. '1 2024 study for the California Air Resources Board called c o two e r o r, quote, a moral failure, a climate failure, and a threat to public health and the environment all while being publicly funded, end quote. Accordingly, the CCS industry has moved on from underground injection to dedicated geological storage in saline aquifers. There are now operational datasets from projects like Sleipner, Snow Veep, Quest Illinois Basin Decatur, and newer projects in The US. However, the sum total of CO2 that's been stored permanently by humanity to date in saline aquifers is likely less than 100,000,000 tons.
Chris:There are numerous technical issues to be resolved, and a 2024 paper in Nature Communications estimated that achieving even five to six gigaton per year of of global geological storage by 2050 would represent an enormous increase from what is being stored today. The bottom line on CCS is that it does not have a viable standalone business case without policy support or sufficiently high carbon price, and no jurisdiction has yet created a durable market structure that can achieve gigaton scale CCS deployment primarily through carbon pricing alone. That's because storing carbon dioxide permanently does not produce a saleable commodity, but it does add cost and energy consumption and depends on someone paying for avoided emissions. A peer reviewed paper published in May titled recent advancements and assessment of carbon capture technologies for climate crisis mitigation surveys the state of CCS and CCUS critically evaluating performance, costs, and deployment barriers across multiple capture pathways. The paper emphasizes that while a range of capture approaches is technically mature, scaling remains constrained by energy penalties, high energy costs, infrastructure needs, and unresolved questions about long term storage capacity and environmental impacts.
Chris:Quote, technoeconomic analysis indicates that point source capture technologies currently cost 50 to $100 a ton of c o two, whereas engineered carbon removal approaches remains significantly higher at 200 to $600 per ton of CO two. The European Union Emissions Trading System or EU ETS, the largest and most advanced carbon trading market in the world, currently prices carbon at $91 a ton. The US 45 q tax credit regime, the first large scale attempt to create a durable business model for CCS in The US, is in a similar range offering up to $85 a ton of CO two for industrial CCS storage with higher payments for DAC or other removal methods that aren't yet able to achieve anything meaningful. So, the existing carbon markets might be able to sustain investment in point source CCS technologies such as power plants, but direct air capture of c o two is still unaffordable under carbon markets. And these are compliance markets we're talking about, which necessarily means that they only apply to certain sectors and technologies within prescribed limits.
Chris:In the absence of mandates, tax credits, public funding, CCS is still a commercial nonstarter as it has been for literally decades even after burning billions of dollars in taxpayer subsidies. So let's return to our previous question. Why is it getting so much breathless press attention now? Consider Carbon TerraVault's press release from May 14. Quote, the injection of c o two at California's first carbon capture and storage project will be a defining moment, not just for CTV, but for California's energy future, said Francisco Leon, CRC's president and chief executive officer.
Chris:This project will demonstrate to regulators, partners, and the market that carbon storage works here at scale and in a way that is safe, reliable, and commercially viable. CTV was built on this foundation and is positioned to advance the next steps in California's decarbonization, end quote. Or this report from S and P Global from April 14, quote, the carbon capture utilization and storage sector entered its industrial hardening phase in 2026. Global operational capture capacity has reached 73,000,000 metric tons per year with nearly 1,300 projects in the pipeline according to S and P Global Energy Horizon's clean energy technology analytics. The reality shows a market bifurcating between regions that have solved regulatory challenges and those still navigating bureaucratic obstacles.
Chris:From Iowa's cornfields to the North Sea's shipping lanes, the future projects have clear regulation and proven economics, end quote. Or this market report from January 14. Quote, 2026 is poised to be a pivotal year in transitioning CCUS from primarily pilot and demonstration stages toward broader commercial deployment influenced by shifting policy environments, rising investment, and growing technological maturity. The overall global CCUS capacity remains modest relative to the scale of global emissions, but is showing clear growth. As of early twenty twenty five, global operational CO two capture and storage capacity stood at roughly 50,000,000 tons per annum, up slightly from the previous year according to data from the International Energy Agency or IEA.
Chris:A broader view of project activity highlights hundreds of projects in the CCUS value chain, reflecting increasing momentum. Reports identify well over 600 CCUS projects in various pipeline stages with an approximate 15% year on year increase in activity supported by tripling investment toward roughly $6,400,000,000 as of 2024, end quote. The time tested strategy here is obvious. Tout the large number of projects in the pipeline without mentioning that most of them will never materialize, and tout the total size of the investment in them as proof that the technology is real despite the long track record of CCS projects burning billions of dollars in taxpayer money without producing results. If the business case is so good, why is BP choosing this moment when the CCS market is allegedly about to take flight to sell a portion of its equity in projects that have reached major milestones?
Chris:Another recent peer reviewed paper offers its own rather dour assessment of the sector. Quote, despite over $40,000,000,000 invested globally, Carbon Capture and Storage captures and stores less than 0.1% of annual global c o two emissions, raising serious questions about its efficacy as a climate solution. This review addresses the critical disconnect between modeled expectations and empirical outcomes of CCS, offering a comprehensive evidence based reassessment of its technical, economic, and strategic performance. The analysis integrates data from peer reviewed literature, international reports from IPCC, IEA, Carbon Tracker, and investigative journalism evaluating both failed and superficially successful projects, including Petronova, Gorgon, Sleipner, and Insala. These case studies expose recurring patterns of cost overruns, suboptimal capture rates, geological uncertainties, and public liability transfer.
Chris:Projects hailed as successful often fall short when scrutinized against durability, scale, and emissions offset claims. While these findings raise valid concerns, this review does not categorically dismiss CCS. Instead, it emphasizes the need for strategic deployment in specific, hard to abate sectors where alternatives are limited, such as cement production or legacy infrastructure retrofits. Beyond critique, this review explores proven alternatives, renewables, bio based removals, mineralization that offer higher scalability and permanence with fewer systemic risks. Ultimately, the findings underscore that continued reliance on CCS is a high cost gamble that risks delaying the deployment of truly effective climate solutions.
Chris:Yet, if strategized properly, 2026 to 2030 could still mark a decisive turning point in determining its role in the energy transition. The reason for this fresh round of CCS hype is not because the technology has massively improved or because anyone thinks it's a real climate solution. It's simply because the fossil fuel industry needs CCS to work if it's going to have a future and because AI data centers burn a lot of natural gas but need to retain their social license to operate. The reality is that wind and solar have killed the investment case for gas. We've come to the end of the bridge to a low carbon future that gas was asserted to be in the late two thousands through early twenty tens policy framings.
Chris:It's over. And now the outlook for oil has taken a huge and unexpected hit, thanks to the ongoing closure of the Strait Of Hormuz. Now the world is reaching for electrification as a way to get off the oil teat. Data centers and their vast appetite for natural gas to power their plants are just about the only growth sector left for fossil fuels. But the climate imperative can't be sidelined forever.
Chris:Eventually, even the AI juggernaut needs to get aligned with efforts to stop global warming Because the tech titans behind it, like Meta and Microsoft and Amazon and Alphabet, all have decarbonization targets to reach, or at least they did before the AI gold rush made them extremely inconvenient. So the massive industries pouring trillions of dollars into AI data center infrastructure right now need CCS to work. Because if it doesn't, they'll have to rely on new nuclear reactors, conventional or SMRs, which will take far too long to build for the AI Gold Rush, or they'll have to rely on utility scale wind and solar projects, which have their own hurdles and can't be built just anywhere. Remember, there's a huge concentration of data centers in Virginia, the largest in the world. There's no place in that vicinity that could host solar or wind farms sufficient to power those data centers.
Chris:And Trump has gone way out of his way to kill wind projects off the coast of Virginia, so that's a nonstarter too. And that's the simple sad truth about the new CCS craze. It doesn't really work, but as long as the fossil fuel and AI industries need it, we're going to be hearing about it. The end. The Nelder Notes Podcast is produced entirely by me, Chris Nelder.
Chris:You find it along with the companion Nelder Notes newsletter and the Transition Times newsletter at transition times dot net. The Nelder Notes Podcast and newsletter are free today. But if you appreciate them, you can support my work by becoming a premium subscriber now. If enough listeners do, I will keep them free to all.