HOUSTON – Under growing pressure from investors to address climate change, Exxon Mobil on Monday unveiled a $ 100 billion project to capture the carbon footprint of major industrial plants in the Houston area and bury it deep under the Gulf of Mexico.
Exxon, the largest U.S. oil company, wants to create a lucrative business from the capture of carbon emitted by petrochemical plants and other industries. But his plan requires significant government support and intervention, including the imposition of a price or tax on carbon dioxide emissions, an idea that has not attracted enough support in Congress in the past.
The company is already capturing carbon which it injects into older fields to produce more oil. Exxon now wants to use its expertise to store the carbon dioxide generated by other industries. But without the price of carbon emissions, many businesses will have little financial incentive to pay Exxon to capture and store their carbon.
The Obama administration has not introduced a cap-and-trade system, which increases polluting companies’ costs by forcing them to buy tradable permits to release greenhouse gases into the atmosphere. California, the European Union and 11 states in the northeast use versions of cap-and-trade. Other governments, including British Columbia and Britain, have imposed a tonne tax on emissions.
Exxon wants to capture carbon from industrial plants along the Houston Ship Channel and pipe it overseas where it is stored up to 6,000 feet below the Gulf of Mexico. The effort will be paid for by industry and government and will, according to Exxon, eventually store 100 million tonnes of carbon, which according to Exxon equates to the emissions of 20 million cars.
The company discussed its idea with national and Texas policymakers and Republicans and Democrats in Congress, Exxon CEO Darren Woods said in an interview. “They see the opportunity and appeal of this idea,” he said. “The question is how do you translate the concept into practice?”
Exxon said its proposal complemented President Biden’s climate efforts, but required the government to accept a price of carbon, something it had not yet done.
“The concept of a price on carbon is critical,” he said. Woods said. “There has to be a way to encourage investment.”
Overseas storage has already taken hold in Europe, where governments have introduced carbon prices and lawmakers are more willing to spend money from taxpayers to address climate change.
Mr. Woods said carbon capture projects, given the right policies, could be a major venture for Exxon around the world. “The potential for these markets is very, very great to the extent that the demand continues to increase to decarbonize society,” he said.