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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 18
Indirectly this is on topic. DAC is OXY's big bet on their future in CO2 capture, storage, and reuse in EOR. So competitive activities impact OXY and thus Berkshire. It's a long post, so fair warning. Skip if this isn't an area of interest for you.
*****
Darren Woods, CEO of XOM, has recently mentioned more than once in public presentations/interviews that XOM has started a pilot plant in Baytown Texas to test out new technology in this area. I'm an old Exxon hand, and I can attest that this is highly unusual for its CEO to talk about such an event at this extremely early point in a project. My take is that he is wanting to point out that XOM is not only currently investing in CCS (carbon capture and storage) but also in long range technology developments. (Memo: O&G is a very competitive industry. So maybe competing for share of society's minds with OXY and other? I'm grinning.)
He recently spoke on CNN about this subject. Below is a summation of his points - organized again with the help of CoPilot AI. Remarkable technology.
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Current Unaffordability:
Exxon is actively working on technology to remove carbon dioxide emissions directly from the atmosphere. However, the current cost of CO2 removal using this technology is between $600 to $1,000 per ton. At this price point, it is unaffordable at scale for widespread adoption.
Long-Term Potential:
Despite the high costs, Woods believes that direct air capture holds significant long-term potential as a tool to combat climate change. The challenge lies in making the technology more broadly applicable and affordable for society. Exxon has launched a pilot project in Baytown, Texas, to test the feasibility of its proprietary direct air capture process. The goal is to demonstrate the value of the concept and drive further development by reducing costs. He stated the goal of the XOM pilot plant is to reduce current costs by 50% using proprietary technology. If this can be demonstrated, it still will not be sufficient for large scale commercial use. However, it will provide needed evidence to further develop the technology.
Cost Reduction Target:
Woods emphasized that the price needs to come down to somewhere around $100 per ton of carbon captured for the technology to become a viable tool in the fight against climate change Achieving this goal would make direct air capture more accessible and impactful.
In summary, while direct air capture technology faces cost challenges, Exxon Mobil is actively exploring ways to make it more affordable and scalable for global use.
*****
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.
As I've posted before, I'm very skeptical that the OXY process can achieve its projected costs. I'm particularly skeptical that it can do so on the time scale (100 commercial plants by 2035) that is OXY's aspiration. I've also admired the skill with which their CEO is mostly using other people's money (customers and the government) until they learn if their DAC process will be commercially successful.
Given XOM's announcements and interviews, I can assure you that far better XOM engineers than myself have examined the OXY process in depth. Yet they press forward on alternate R&D. Draw your own conclusions.
Since this area interests me, I've tried to speculate what technology XOM is trying. They only say that it is proprietary.
However, I found one hint in an employee/retiree overview. It's only shown as a one step process versus the multi-step process OXY is progressing. Some four decades ago, XOM corporate research was developing specialty amines tailored to the selective removal of H2S and/or CO2 from higher concentration streams - e.g. natural gas, plant emissions. Some of these have been commercialized for many years. I also read of new developments in technology for making extremely high surface area substrates - e.g. a sugar cube size particle would have the surface area of a football field. So one guess is that XOM is working on a combination of these technologies.
In any case, OXY's claims of being uniquely positioned in the CCS and DAC arenas doesn't stand up to scrutiny. XOM has stated that it's objectives in carbon reduction extend beyond using only its own technology. It has a huge project development organization, worldwide distribution chains, and multi-customer relationships around the world. If someone else develops breakthrough technology they see themselves as potential good partners in applying such on a commercial basis.
No. of Recommendations: 3
Texirish,
Thanks for bringing XOM's CO2 capture information to our attention. It sounds like some form of zeolite as noted in the research link below. It is my impression zeolites have been utilized in various petroleum industry processes over the years. Zeolites can have phenomenal surface area.
https://pubs.acs.org/doi/10.1021/acsaem.2c03605Uwharrie
No. of Recommendations: 7
Uwharrie,
Many, many thanks for the link to that article. Lots of good stuff.
As you say, zeolites have been used in petroleum processes for many decades. My first exposure was in 1955 when I reported to work at the Exxon Research & Development Labs in Baton Rouge. I was assigned to the catalyst development section. They had a big effort underway to discover natural zeolites that would negate competitor patents as catalysts. They didn't. Zeolites were just coming into prominence in catalytic cracking which became, and remains, the core process in petroleum refining after distillation. Fluid catalytic cracking was developed at ERDL just prior to WWII. The original 100 B/D pilot plant still stood during my day. I was actually responsible for a 1B/D pilot plant where we tested catalyst developments in my early years. They started construction on the first commercial unit (FCCU 1)before the pilot plant work was finished. Few people realize the importance of the 100 octane aviation gasoline sent from BR to Britain during early WWII.
No one was thinking of zeolites for carbon capture at that time.
No. of Recommendations: 0
Correction: Esso Research and Development Labs. Exxon came along much later as Esso was outlawed in the US as a violation of the Standard Oil monopoly breakup. (Esso = SO = Standard Oil) Esso still in use in places outside the US. I remember going though Enco (Energy Company) and Humble as interim names before Exxon and now ExxonMobile.
No. of Recommendations: 5
Texirish,
Your 100 octane comment brought back a memory. I served on an industry committee thirty years ago with a fellow who had worked on a 100 octane fuel and engine testing project during WWII. He said high performance military aircraft were experiencing pre-detonation issues at high altitudes. This led to the new developments in fuel blends and octane ratings you mentioned. This gent was a mechanical engineer and was on the engine team.
Another local gentleman now long gone was involved with Pratt & Whitney's development of the engine that powered the B-29. His team was tasked with finding a way to get 125 hp out of a one cylinder engine. Their work led to developments including sodium filled exhaust valves to shed the awesome heat from the valve. Of course, the single cylinder design they tweaked was to become the basis for the 18 cylinder R-3350 engine.
Zeolites are great vehicles for all sorts of chemical processes. My chemistry background tells me while zeolites and catalysts can do heavy lifting, there will still be an energy cost to process highly dilute atmospheric CO2. It may be solar energy supplied or nuclear energy supplied or maybe fusion energy one day. At any rate there will be a lot of energy needed to capture and put away CO2.
Uwharrie
No. of Recommendations: 0
No. of Recommendations: 1
Few people realize the importance of the 100 octane aviation gasoline sent from BR to Britain during early WWII.
This and the Rolls Royce Merlin engine in the Spitfire are what saved Britain.
No. of Recommendations: 4
According to Winston Groom's book, "The Aviators", Jimmy Doolittle was the primary force for Shell producing 100 octane gas in the mid-30's. The US Army had decided to use 87 octane for all their motors, from motorcycles up to planes, but the tests that Doolittle helped conduct convinced them that 100 was vastly superior. I would hate to get into a Shell/Esso tiff so I recommend everyone read Groom's book. It is about the lives of Doolittle, Rickenbacker and Lindberg.
Rgds,
HH/Sean
No. of Recommendations: 6
I would hate to get into a Shell/Esso tiff
No tiff here. Catalytic cracking to produce high octane components and many others was a well known process prior to the advent of fluid bed catalytic cracking. The ability to make 100 octane gasoline was known.
But prior to the Esso process innovation catalytic cracking was a fixed bed process. Heated feedstock would be fed into a bed of cracking catalyst and products produced. However this also resulted in a buildup of carbon on the catalyst which lost efficiency. So the feedstock would be cut off and air used to burn the carbon off the catalyst. It was a cyclical process.
The Esso process breakthrough was to fluidize the cracking catalyst so that it could be moved around like a liquid. The catalyst was made a finely ground powder which could be suspended in the heated high boiling point liquid feedstock. As the cracking reaction took place, the feedstock was converted to vapors, suspending the catalyst as a fluid. At the top of the reactor cyclones separated the catalyst from the vapors. It was then sent to the regenerator where carbon deposits were burnt off regenerating the catalyst and heating it. It was then returned to the reactor as a slurry to mix with the feedstock. Thus the cyclic process was converted to a continuous process with significantly increased throughputs.
When this process was demonstrated in a 100 B/D pilot plant, it proved so successful that construction of the first commercial fluid catalytic cracking unit (FCCU)was started while development work was still underway on the pilot plant. (It was still standing in 1955 when I started work at ERDL.)
The rush was to bring significant catalytic cracking capacity online as quickly as possible to provide more capacity for, among other things, components for 100 octane gasoline. WWII was a major influence.
The FCCU process now dominates catalytic cracking with some 400 commercial units worldwide.
The development was a process development. Fluid bed catalytic processing has also now been extended to other refinery processes.
So no tiff intended on the origin of 100 octane ave-gas.
The Germans continued to use cyclic processing. Their 100 octane ave-gas supplies were very limited compared with the allies. Ditto Japan. Of course, both countries had limited access to oil supplies. This proved a major, even critical, advantage for the Allies.
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I wish the general public had a better understanding of all the technology that is needed to provide the easy access we enjoy to gasoline, lubricants, plastics,clothing, and other essentials of modern life.
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
No. of Recommendations: 14
Three questions, for anyone who can enlighten me about this idea.
With trepidation I attempt simple answers to DTB's complex questions.
1. What do they plan to do with the CO2 they capture?
Right now, it is to sequester it underground in formations where it won't be released again in the future. Deep saline reservoirs are one primary target. Old oil field are another, but they run the risk of old oil wells not being properly sealed off. The key will be how trustworthy those disposing of the CO2 may be judged.
There are possible alternate uses from EOR to as raw materials for both building materials or low carbon fuels. But these are at very early stages. EOR is proven, but the cost of CO2 recovery must be balanced against the current costs of CO2 from natural sources.
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?
Smokestack emissions are a mixture of CO2 emissions with nitrogen gases and other combustion products. The concentrations are much lower than 50%, and sequestering them is a far different animal than just CO2. CO2 dissolves, and can be compressed to a liquid. The other components don't. So the CO2 must be separated.
You're right about concentration mattering in cost. The highest concentration sources now are from ethanol production and ammonia production. So these will be immediate targets followed by emissions from cement plants, power plants, and industrial plants such as refineries and petrochemical plants. DAC will, by an order of magnitude, be more difficult. It's the "Holy Grail" aspiration. Yet people are working on it.
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?
Coping with CO2 emissions isn't simply an issue of the cost of generating electricity. Many critical products to modern civilization can't be derived from electricity. These include transportation fuels for airlines, heavy transport (at present) etc., fertilizer for food, cement, steel, plastics, lubricants, synthetic clothing (circa 70% of supply) pharmaceuticals, and many other uses. We have to have O&G to produce these. So we must find a way to reduce their emissions. And, yes, society will have to pay a higher cost for products derived from O&G if they wish a lower carbon future. This can be done, but it won't come free. We'll all have to pay our parts, either directly, or via repaying government debts. There's no magic answer to reducing carbon emissions.
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These are short answers to key questions. But I think they're basically on target. Others may disagree.
No. of Recommendations: 2
Great explanation of the difference between fixed and fluidized bed processes. Thanks for that. And as I was at ER&E in Linden in the early '80s my heart is on the Esso side.
Rgds,
HH/Sean
No. of Recommendations: 6
OK, thanks, that helps.
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?
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Smokestack emissions are a mixture of CO2 emissions with nitrogen gases and other combustion products. The concentrations are much lower than 50%, and sequestering them is a far different animal than just CO2. CO2 dissolves, and can be compressed to a liquid. The other components don't. So the CO2 must be separated.
You're right about concentration mattering in cost. The highest concentration sources now are from ethanol production and ammonia production. So these will be immediate targets followed by emissions from cement plants, power plants, and industrial plants such as refineries and petrochemical plants...
Smokestack emissions can be quite high, and there are some attempts to sequester CO2 this way already. Coal generating plants typically have about 13% CO2, which is already 300 times more than what is found in atmospheric air, so it seems a priori like a more sensible place to start. And if you burn methane (natural gas), you can get 25% CO2 if you burn it cleanly enough (combined cycle generators), and even higher (for some reason that I don't understand) if you use ethanol or LNG (
https://thundersaidenergy.com/downloads/co2-concen...).
Of course, there are problems with using a dirty mix of hot gases, and for practical purposes, you have to capture the CO2 near where you can bury it, which is not always the optimal place to put a power plant.
Is CO2 really liquefied before it is sequestered? If so, I didn't know that, but this seems to confirm your statement:
https://www.1pointfive.com/geologic-sequestration?..."Once captured, the CO2 is purified and compressed into a supercritical phase—a state with combined properties of gas and liquid.
Next, this CO2 is injected deep below the surface via a high-integrity well and intoan underground reservoir—often more than 5,000 feet down. Once the CO2 reaches the reservoir, it is securely sequestered through four trapping mechanisms..."
dtb
