No. of Recommendations: 1
Woods estimate of the current costs of $600-$1000 per ton of CO2 is from DAC projects currently in operation. In a 2018 paper, the people who developed the process that OXY is now attempting to operate on a commercial scale estimated lower costs. OXY has estimated circa $400 a ton of CO2 for its 500,000 ton/year plant now under construction in West Texas. It further estimates reducing this to circa $120 a ton with future improvements in "n" plants, "n" being unspecified.
Woods was asked about this in the last question at last weeks XOM earnings report. He said that some people are now willing to pay very high prices for CO2 reduction credits but that society cannot afford such prices. He stated XOM's estimate that circa $100 per ton is needed.
Three questions, for anyone who can enlighten me about this idea.
1. What do they plan to do with the CO2 they capture?
2. If it is sequestering the carbon underground, wouldn't it make more sense to just use the smokestack emissions of a big natural gas power plant, where CO2 is a high percentage of (say 50%) as opposed to ambient air that has a concentration of about 0.04% CO2?
3. If XOM gets the cost down to $100 per ton of CO2, this means about $100 to recapture the CO2 released by burning 3.15 barrels of oil, so it would add about $100/3.15=$33 to each barrel of oil burned. I can see how the economics of this might work, if we had vast amounts of cheap renewable power that we couldn't use off peak (wind at night, for instance.) Is that cheap off-peak wind/solar power already priced in to the $100/ton target?
Thanks to anyone who can provide any additional insights. I had assumed that most of this DAC research was just spending taxpayers' dollars without an real belief that it would ever make sense, but I am open to being educated away from this cynical viewpoint.
dtb
