Perspective  |  August 16, 2023

Stop giving Big Oil a carbon fig leaf

by Jonathan Foley, Ph.D.

The Biden Administration is backing industrial carbon capture schemes that overwhelmingly benefit Big Oil – bolstering their bottom lines and extending a PR lifeline that ensures they can continue polluting – all under the guise of climate action.

Record heat waves. Widespread fires. Devastating storms. The tragic toll of climate change is becoming more evident every day. To avoid even more severe impacts in the future, we must quickly and dramatically cut greenhouse gas emissions – largely caused by fossil fuels. Fortunately, the tools we need to cut emissions through energy efficiency, renewable energy, and beyond are growing quickly, becoming better and more affordable over time.

We will also need some “carbon removal” in the future – where we use nature (with trees or soils) or industrial processes to take carbon dioxide out of the atmosphere, sequester it, and keep it from adding to our climate woes.

In the last few years, more attention has focused on industrial methods, because they can bury carbon in permanent, geologic reservoirs, unlike trees and soils that can burn down or be plowed up. In principle, this makes sense. But in practice, industrial carbon removal is wildly expensive, far too energy- and resource-intensive, and only removes pathetically small amounts of carbon. It’s nowhere near being a viable solution to climate change.

For the foreseeable future, cutting emissions is the most feasible means of addressing climate change. And whatever carbon removal we might eventually develop should only be used to address the final, hard-to-abate emissions left after fossil fuels are phased out. Most of all, carbon removal should never be used as a substitute for cutting emissions, or to help delay phasing out fossil fuels.

So why is the federal government doing exactly the opposite – putting big money behind dubious carbon capture projects, in ways that specifically benefit Big Oil and help delay climate action?

Last week Secretary of Energy Jennifer Granholm announced $1.2 billion in new funding for “Direct Air Capture” projects, including a giant project led by Occidental Petroleum. Unbelievably, we will be giving tax dollars to an oil company – as Big Oil makes record profits – to try to mop up some of the pollution they created. And this is only part of a $3.5 billion DOE commitment to Direct Air Capture projects, and a much larger portfolio of government funding and tax breaks that reads like a love letter to the fossil fuel industry. (This is on top of the estimated $20 billion in other annual subsidies the government already gives Big Oil.)

But this isn’t new. Previous administrations also funded Big Oil’s industrial carbon capture schemes, including ridiculous “Clean Coal” and Carbon Capture and Sequestration (CCS) projects that claimed they would reduce carbon pollution from fossil power plants. Of course, the projects flopped and wasted billions of tax dollars – even prompting a rebuke from the Government Accountability Office.

While these projects were spectacular failures – financially, technologically, and operationally – they did serve one powerful purpose: They provided a fig leaf to the fossil fuel industry. These projects distracted the world with greenwash and helped delay policies intended to phase out dirty fuels. And that’s exactly what they were intended to do.

Now, the Biden Administration is repeating this move. But it’s a mistake, for six big reasons.

First, industrial carbon capture is still far too clunky and expensive – costing thousands of dollars per ton – to put on the taxpayer’s dime. By comparison, cutting emissions through energy efficiency or renewable energy is far cheaper, and saves taxpayers money in the long run. Instead of billion-dollar Big Oil boondoggles, the government should invest in proven climate solutions while funding smaller, more innovative R&D projects that explore cheaper, scalable ways to capture carbon.

Second, industrial carbon removal is comically undersized. Even the largest projects only sequester seconds worth of our annual emissions, at tremendous expense. And no meaningful scaling of this technology – to a size needed to help address climate change – is in sight. Basic physics, and common sense, tells us this is exceptionally challenging.

A graph of annual greenhouse gas emissions showing projected emissions through 2050 and the impact of carbon removal projects.

Currently, carbon removal technologies are so insignificant compared to emissions that they are effectively zero (see the green line on the above graph from the Project Drawdown Roadmap.) Eventually, they will have a role to play in removing the most stubborn emissions. But for now, resources would be better spent on emergency brake solutions and new low-carbon systems to reduce emissions as quickly as possible.

Third, industrial carbon removal is extremely energy intensive. If powered by fossil fuels, these projects lose much of their potential benefit. And even if they are powered by solar, wind, geothermal, or nuclear energy, there is an opportunity cost: That carbon-free energy could have been used to displace coal- and gas-powered electricity instead, reducing emissions more than carbon capture plants can absorb. Until fossil fuels are phased out, using renewable or nuclear energy for carbon removal is counterproductive.

Fourth, the carbon dioxide pumped into the ground by these projects is often used to drive oil back out. So-called “enhanced oil recovery” negates any possible benefits of carbon capture and uses tax dollars to subsidize oil production. (Unbelievably, the 45Q tax credit pays industry $60 per captured ton when it’s used for oil recovery.) This uses government funding to increase emissions, not removing them as intended.

Fifth, even if industrial carbon capture eventually scales, it will do nothing to address the other environmental, social, and health impacts fossil fuels have on the world, especially in marginalized communities. An estimated 8.7 million people a year die prematurely from air pollution (not greenhouse gasses) caused by fossil fuels. (This is larger than deaths from smoking, warfare, and handguns combined.) Carbon capture does nothing to address this; in fact, it gives a lifeline to fossil fuels to continue polluting.
Finally, and most importantly, these projects give the entire fossil fuel industry a huge greenwashing boost, extending a PR lifeline to this polluting industry. And Big Oil loves it. Vicki Hollub, CEO of Occidental Petroleum (which just received half of the $1.2 billion in carbon capture funding), said that because of Direct Air Capture, “…we don’t need to ever stop oil,” and that the technology gives the industry “a license to continue to operate for…60, 70, 80 years…”. She says the quiet part out loud, without shame, and she’s not alone. Exxon-Mobil CEO, Darren Woods, says, “Carbon capture is going to play a really important role. It is a technology that exists today. It's one that we have a lot of experience in.” 

Industrial carbon capture is Big Oil’s favorite form of climate action because it greenwashes the industry, distracting us from the need to phase out fossil fuels, all at taxpayer expense.

In other words, they’re not just wasting money on a bad climate solution – they’re actually using tax dollars to fund a system that deliberately undermines larger climate action.

If you don’t believe they’re betting on industrial carbon capture as a lifeline, consider that Occidental Petroleum just bought Carbon Engineering, one of the biggest firms in this space, for $1.1 billion. To Occidental, with a market cap of $56 billion, this will represent less than 2% of their business, and be the best PR investment they’ve ever made.

Proponents of industrial carbon capture will likely scoff at these criticisms, and say throwing a few billion dollars at it is small change compared to the whole federal budget. But they’re missing the point. Let’s try to ignore the fact that this is still several billion dollars (on top of many billions already wasted) and that far more promising climate solutions aren’t nearly as well funded. The issue isn’t just the money, or the clunky technology, it’s the fact they’re helping greenwash Big Oil and finance “predatory delay” – distractions that intentionally delay action to cut fossil fuels. In other words, they’re not just wasting money on a bad climate solution – they’re actually using tax dollars to fund a system that deliberately undermines larger climate action.

Advocates may also point out that the world eventually “needs” viable carbon removal, and that it will take government investment to bring it to scale. They’re right on that point. But we should not fall for schemes that cost taxpayers billions for boondoggles, remove minimal carbon at enormous cost, while handing Big Oil a PR bonanza. 

Instead, we should find more practical, cost-effective ways to remove carbon from the atmosphere that do not benefit Big Oil. A good first step will be to stop funding these ridiculous projects, end tax breaks for enhanced oil recovery, and forbid any federal carbon capture funds to be used by fossil fuel interests. Next, investing in truly innovative carbon removal ideas at American universities, national labs, and non-profits will undoubtedly yield promising new approaches.

We are in a race against time to address climate change, and we need to make every day, and every dollar, count like never before. That means doing what works quickly and cost effectively now, and researching promising solutions for the future – while avoiding obvious delay tactics pushed by special interests. We simply cannot afford any more oil-soaked pork.

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