Stay on topic in your discussions, and avoid making off-topic or irrelevant posts. If you want to discuss a different topic, it is okay provided you mark the subject starting 'OT:', and also consider posting on a different board.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 1
No. of Recommendations: 10
Whether DAC helps or not, who knows. At least the investment in Oxy is positive.
Vicki continues to do a masterful job of using OPM - Other People's Money - to fund her venture into DAC. She now has money from Blackrock, the US government, and customers for product offtakes from airlines to Amazon. The estimated cost of CO2 recovered from this first - half scale - plant is estimated by OXY at around $400 per ton, so any products derived from it aren't going to be cheap. (It takes about one-half ton of CO2 to recover a barrel of EOR oil for example.) OXY gets lots of favorable publicity for their efforts and maybe even some boost to their stock price. Even foreign governments are announcing plans to build a demonstration unit based on OXY technology. Meanwhile OXY's cash flow is largely going into dividends, buybacks, and repurchase of high interest rate preferred stock.
Back at the ranch (West Texas) the estimated cost of the initial, half-scale, commercial plant has increased to $1.3 billion and has been delayed to 2025 by supply and other issues. So far, the technology has only been demonstrated in a small scale pilot plant. I do think that Carbon Engineering has done a lot of good work in providing design data for the demonstration unit. And the technology is based on using a combination of modified unit operations already used in other industries. The two major questions will be:
(1) Can they get these plant segments to work together under oil field conditions in a continuous operation?
(2) Can they achieve cost reductions to get the cost of recovered CO2 somewhere around $100 per ton?
On question (1) I'm an old retired chemical engineer with some experience in scaling up from pilot plants to commercial operations. I've spent hours studying the DAC plant design. I can only say it involves a lot of liquids, slurry, and solids handling at various elevated temperatures including what is basically a cement plant to spring loose the CO2 absorbed from the air. Energy recovery and reuse is going to be very important to costs. It's going to be a challenging plant to operate.
On question (2) OXY has stated that it sees paths to reduce the recovered CO2 to the circa $100 per ton goal by the Nth plant. They haven't specified what number N is.
Still they project 70-100 commercial plants in operation by 2035.
I think Vickie is being wise to use OPM funding.
No. of Recommendations: 2
Tex,
Appreciate your perspective. Yes, at least it's not our money!
No. of Recommendations: 6
The two major questions will be:
(1) Can they get these plant segments to work together under oil field conditions in a continuous operation?
(2) Can they achieve cost reductions to get the cost of recovered CO2 somewhere around $100 per ton?
Say they do get the price way way down to $100/ton eventually - that is still adding $50/ton to each barrel of oil burned, right? (One barrel of oil ends up generating about $475 kg of CO2, so removing a ton of CO2 is basically removing the CO2 generated from burning 2 barrels.)
A barrel of oil costs about $80 right now. Putting the price to $130 (by virtue of a carbon tax, for instance), would be a much more economically sensible way to limit CO2 in the atmosphere, and you could build 1000s of new schools with the money instead of building 100s of these multi-billion dollar factories. But I know that is politically impossible, so I guess we have to live with these monstrously expensive efforts to lower the CO2 in the atmosphere. At least it's not at OXY shareholders' expense, but as a (non-US) taxpayer, I find these things disturbing...
dtb
