Exxon’s new Gulf of Mexico leases aren’t what they appear

ExxonMobil’s spending spree throughout yesterday’s lease sale within the Gulf of Mexico was vital, specialists say, as a result of the corporate may use the realm for one thing apart from oil and gasoline extraction. Consultants outdoors the corporate speculate that ExxonMobil desires to make use of Gulf waters for a novel goal: sequestering captured carbon dioxide.

The Biden administration auctioned off huge tracts of the Gulf of Mexico to grease and gasoline firms yesterday in one of many largest federal lease gross sales in recent times. The sale drew sharp criticism from environmental teams, which say that permitting new oil and gasoline growth is incompatible with America assembly its local weather targets. However it’s doable that Exxon — the largest bidder in yesterday’s sale — isn’t planning on extracting new fossil fuels in any respect. The corporate stunned analysts by bidding on virtually 100 leases in shallow waters near shore the place fossil gasoline reserves are fairly depleted. That doubtless signifies that Exxon plans to repurpose outdated oil and gasoline wells for carbon storage, or discover new locations within the space to pump captured CO2 underground, specialists inform The Verge.

“There’s simply not sufficient oil to make the bang for the buck price it for them,” says Brian Snyder, an assistant professor of environmental sciences at Louisiana State College.

William Turner, a lead analyst at vitality analysis agency Rystad Vitality, agreed, calling the lease areas “the equal of [Exxon] shopping for up a form of mother and pop operation.”

“This must be for one thing apart from oil and gasoline exploration,” Turner says.

ExxonMobil has but to verify or deny the hypothesis. In an e mail to The Verge, a spokesperson for the corporate stated Exxon would “consider the seismic and subsurface geology for future business potential.”

If specialists’ hunches are proper, this could doubtless mark the primary time that the federal government has leased federal waters for carbon sequestration.

Fossil gasoline firms have offered carbon seize and sequestration (CCS) as a solution to reduce the hurt they do to the planet. The technique entails utilizing new applied sciences to wash planet-heating CO2 out of smokestack emissions. The captured carbon dioxide then must be transported by way of pipelines to locations the place it may be saved underground.

The Gulf of Mexico’s seafloor may grow to be a hotspot for carbon sequestration due to its proximity to plenty of heavy business and current oil and gasoline infrastructure. Consultants have steered captured CO2 could be pumped into outdated oil and gasoline fields within the Gulf or injected into saline aquifers.

ExxonMobil has known as CCS a part of its “ongoing efforts to scale back emissions.” This 12 months, the corporate introduced plans to show the Houston Ship Channel right into a type of hub for CCS. The channel connects Houston to the Gulf of Mexico and is lined with petrochemical crops and different heavy industries. The plan may entail pairing these crops with CO2 scrubbers, after which piping the captured carbon dioxide out to the Gulf. By 2040, the hub may seize as much as 100 million metric tons of CO2 a 12 months, Exxon says. Such an effort would require a joint funding from business and authorities, in accordance with ExxonMobil — to the tune of $100 billion.

Excessive prices like this have traditionally been a prohibiting issue with carbon seize initiatives; they’re what closed the one coal plant outfitted with CCS within the US. However some new funding may grow to be obtainable by the bipartisan infrastructure invoice that Joe Biden signed into regulation this week, which incorporates billions of {dollars} of investments in carbon seize and removing applied sciences and pipelines with a give attention to so-called ‘hard-to-decarbonize’ industries like cement and fertilizer manufacturing.

Many individuals are, unsurprisingly, cautious of fossil gasoline firms’ claims about CCS. Environmentalists and progressive lawmakers have known as CCS a “false answer” for local weather change, saying that it may derail a transition to renewable vitality and preserve the financial system depending on oil and gasoline. Scientists agree that greenhouse gasoline emissions must basically disappear by the center of the century to be able to keep away from catastrophic local weather change, and that may solely be achieved by weaning economies off fossil fuels.

“This business has seen the Gulf as its personal private sewer for a very long time, so the concept that they might flip to the Gulf for this venture is unsurprising,” says Carroll Muffett, president and CEO of the nonprofit Heart for Worldwide Environmental Regulation. “It’s additionally unacceptable as a result of the dangers of carbon seize and storage are vital,” he says. He’s frightened about how building and potential ruptures of latest CO2 pipelines may have an effect on Gulf Coast communities. Excessive concentrations of carbon dioxide, if it leaks out of pipelines or storage wells, will be an asphyxiant to folks and wildlife.

One other concern with CCS is that it has historically been utilized by the oil and gasoline business for what’s known as “enhanced oil restoration” (EOR). Mainly, fossil gasoline firms shoot the captured CO2 underground to push out hard-to-reach oil reserves.

“That might be my concern, that Exxon is definitely doing this not only for storage, however for EOR,” Snyder says. “My guess is that they’re really doing a bit of each.”

The Biden administration has already confronted plenty of criticism for promoting federal water leases to grease and gasoline firms simply days after calling on all nations to slash greenhouse gasoline emissions throughout a United Nations local weather summit in Glasgow. The lease sale was set in movement by the Trump administration, and a Trump-appointed federal decide blocked an govt order by Biden earlier this 12 months to droop new oil and gasoline leases. Nonetheless, environmentalists argue that Biden may have performed extra to cease yesterday’s sale.

However whereas the Biden administration may not have needed to carry the lease sale, if ExxonMobil is in reality planning to retailer captured CO2 within the Gulf, that might change the administration’s calculus.

“You may hypothesize with this, that possibly this will get the eye of the administration to say ‘Okay, possibly we have to rethink fully shutting down new leasing,’” Turner says.