Texas is poised to become our nation’s direct air capture center
Emily Pickrell, UH Energy Fellow
Right now, much of the conversation about climate change focuses on reducing future emissions.
While this is essential, it is only part of the solution. Some industrial processes – steel, cement and aviation – will prove difficult to decarbonise. Having a way to remove that carbon will be part of the solution.
Emerging direct air capture technology is poised to meet this challenge. It’s a technology that climate activists, the US government and the energy industry all agree is key to tackling hard-to-reduce distributed emissions.
The future of technology just got a huge boost – the Cut Inflation Act. The legislation includes generous support for direct air capture installations. And the learning-by-doing that these facilities will improve project economics in the future.
These incentives complement the 2020 infrastructure legislation, which provided $3.5 billion for four regional direct air capture centers. The objective of such a center is to promote the co-location of complementary infrastructures. To be eligible for government funding, any proposed hub site must demonstrate that it will eventually be able to capture at least 1 million metric tons of carbon dioxide per year.
Due to the funding attached, many states make submissions as to why their location makes sense, talking about regional economic development needs and other factors to make their case.
Yet Texas has a much more compelling and unique story: it can make direct air capture economically feasible, with customers willing to pay for carbon capture and, in doing so, fund the expensive technology.
This is important, as the high cost of direct air capture has been one of the main obstacles to its adoption. Currently, using direct air capture costs about $500 per ton, according to data provided by the University of Houston. These costs could drop to $300 per ton in the coming years as the technology becomes more efficient.
Creating hubs where these costs can be controlled and reduced will be essential for broad commercial deployment when government program funding ends.
This will encourage companies to make the huge investments that these types of emerging technologies need to continue their development, which will lead to further price reductions.
The good news is that several large Texas-based energy companies are already engaging in this type of direct air capture investment.
And they’ve been doing it for years.
Houston-based Occidental Petroleum
The resulting oil changes the overall economics of these projects, converting carbon into a valuable commodity, rather than just waste to be stored.
Much of this carbon dioxide-based EOR takes place in the Permian Basin, where many depleted reservoirs are available to move oil and store carbon. Industry in the Permian Basin has also demonstrated over the past 50 years that it knows how to safely sequester and manage carbon without any significant threat to surrounding communities. Given the importance of public trust in the whole idea of carbon storage, Texas’ track record would be a real asset.
Texas also has favorable storage geology, with onshore storage capacity of between 661 million and 2.4 billion tons of carbon dioxide in its gigantic underground reservoirs. For direct air capture projects in the Texas Permian Basin, there will be no need for extensive pipeline infrastructure to move carbon dioxide to storage facilities.
Again, a great cost saving.
Direct air capture installations are expensive to operate – about half of the overall cost of projects comes from the energy required to operate them. And since the goal is to remove carbon from the atmosphere, carbon-free fuels should be used.
Once again it’s Texas – this time from afar.
The Lone Star State is the largest wind power producer in the United States. Wind energy accounted for 25% of its total generation in 2021, making the types of energy demands from direct air capture seem modest in comparison. And better yet, it could do so without needing a major upgrade to its power line infrastructure — most of the wind generation is already in West Texas.
According to the requirements of the legislation, projects must be able to capture and sequester or use at least one million metric tons of carbon dioxide each year. They must also demonstrate that they could be developed into a regional carbon network for carbon storage.
Several Texas companies are actively working on direct air capture solutions. Chevron and Occidental have both invested in a joint venture to extract carbon directly from the air and then synthesize it into clean transportation fuels. ExxonMobil has spent the past three years working with Global Thermostat on direct air capture to advance “breakthrough technology and ways to scale it.”
The work done by these companies also ensures that they will have plenty of human talent and first-hand experience, in addition to the wealth of energy know-how already available in Texas.
When the announcements arrive, Texas should be high on the list.
The success of emerging technologies such as direct air capture actually depends on their ability to scale further by attracting more investment and becoming cost effective. Businesses should be excited about their ability to make them work and thrive doing so.
No other state can argue like Texas about how prepared it is to make this happen.
Emily Pickrell is a veteran energy journalist, with over 12 years of experience covering everything from oil fields to industrial water policy to Mexico’s latest climate change laws. Emily has reported on energy issues in the US, Mexico and the UK. Prior to journalism, Emily worked as a policy analyst for the US Government Accountability Office and as an auditor for the international aid organization CARE.
UH Energy is the University of Houston’s center for energy technology education, research, and incubation, working to shape the energy future and forge new business approaches in the energy sector.