By Matt Patterson, September 27, 2021
Texas is the largest producer of oil and natural gas in the United States. As our TxEnergyProject has noted in the past, Texas’ free market-based approach in the oil and gas industry has led to innovation and advancements that allow the industry to flourish while creating cleaner energy solutions and leading the charge in reducing harmful emissions.[i] Competition and innovation, not top-down mandates, are driving clean energy production.
The Texas model continues to prove effective as last week eleven of Houston’s largest energy and chemical companies announced plans to create a large-scale carbon capture and storage (CCS) complex in the Houston area to help decarbonize industrial facilities.[ii] According to a press statement, the cooperating companies are “pursuing the development of a storage site or sites capable of storing up to 50 million metric tons of carbon dioxide per year by 2030 and about 100 million metric tons by 2040 – equal to almost the entire global capacity of existing carbon capture systems.”[iii]
The emerging CCS technology, which is the process of capturing carbon dioxide that would otherwise be released into the atmosphere and instead safely injecting it deep underground, is one example of the technological advancements that oil and gas companies are utilizing to reduce emissions without slowing down energy generation. The announcement of support for the Houston CCS site comes on the heels of a separate announcement that Talos Energy and Carbonvert won a bid to create an offshore CCS site near Beaumont and Port Arthur, Texas in partnership with the General Land Office (GLO). Talos Energy and Carbonvert will “become among the first independent U.S. energy companies with an identified site dedicated to carbon sequestration.”[iv] With industry leaders in Texas showing support for CCS and making significant investments in the technology, commercial viability and accessibility of CCS will likely increase at a quicker and more cost-efficient pace than previously expected.
Additionally, Chevron has announced a partnership with Mercuria Energy Trading to launch 60 compressed natural gas (CNG) stations across the country, 12 of which are to be located in Texas. Andy Walz, Chevron’s president of Americas Fuels and Lubricants, stated that the company is “committed to producing a tenfold increase in renewable natural gas volumes by 2025 compared to 2020 as part of our higher returns, lower carbon strategy” and that the operation of the liquified natural gas (LNG) stations “will advance our renewable natural gas business in support of customers who want to reduce their carbon footprint.”[v] This partnership tracks with Chevron’s goal of growing renewable natural gas production to supply the growing demand in target industries that are not easily electrified, such as aviation and heavy duty transport. The company expects to invest more than $10 billion between 2021 and 2028 (including $2 billion to lower the carbon intensity of their operations) which is more than triple the previous estimate of $3 billion.[vi]
These announcements made by oil and gas industry leaders are a testament to private sector innovation that continues to make Texas a bastion of cleaner energy production. Chevron, Dow, and other companies have proven that a cleaner environment and emissions reduction can be achieved without restrictive government mandates. TCCRI’s TxEnergyProject was founded precisely to highlight such innovation.[vii] Encouraging free market competition to achieve economic prosperity, working toward a cleaner environment, and pushing back against harmful and unnecessary regulatory efforts are principles worth pursuing. With increased uncertainty in the world energy market and attempts by the federal government to radically change the energy landscape, it is more important than ever that Texas has the resources and technology to meet the needs of a growing population.
The TxEnergyProject will bring together elected officials, stakeholders, state agencies, and experts on energy and environmental policy to promote further innovation in the energy industry in Texas. The Project is committed to bringing together all stakeholders to work together toward free market energy solutions. On October 14, TCCRI’s TxEnergyProject will officially launch with a Policy Summit centered around the future of the energy industry in Texas. The event will feature several state agency and legislative officials, including Texas Railroad Commission Chairman Christi Craddick and State Representatives Craig Goldman, Brooks Landgraf, and Andrew Murr, as well as industry experts. To learn more about the event, visit www.txenergyproject.org.
[i] https://www.txenergyproject.org/post/let-the-free-market-work [ii] https://www.houstonchronicle.com/business/energy/article/Houston-carbon-capture-project-grows-support-16462632.php [iii] Ibid. [iv] https://www.txenergyproject.org/post/txenergyupdate-september-2-2021 [v] https://www.chevron.com/stories/chevron-mercuria-announce-cng-fueling-network-joint-venture [vi] https://chevroncorp.gcs-web.com/static-files/ac4310c4-a5c4-429d-abe1-3a9a70a5b8b2 [vii] https://www.txenergyproject.org/