Exxon expands Gulf Coast carbon storage network
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Exxon said it obtained over 271,000 acres in Texas state waters for subsurface CO2 storage from planned Gulf Coast projects.
Why it matters: The lease is the country's largest offshore storage site — and an important part of Exxon's emerging Gulf infrastructure for the tech, the company said.
The big picture: "You can see the pieces coming together for a very, very significant CCS system, and we've established a very clear leadership position in the early stages of this industry," Dan Ammann, who heads Exxon's low-carbon unit, said in an interview.
State of play: Today's announcement comes roughly a year after Exxon closed its $4.9B acquisition of oil producer Denbury, which Exxon coveted for its big CO2 pipeline network that will serve its projects.
- In recent years Exxon has struck several industrial capture deals in the region — the latest arrived this week — and has several onshore storage sites.
- The coastal lease "gives us a lot of flexibility between onshore and offshore" when allocating volumes, Ammann said.
What's next: The first project, at a CF Industries site in Louisiana, is targeted to come online next year.
- Between deals with outside companies and CCS at its own Baytown complex in Texas, Exxon thus far plans to capture over 14 million tons of CO2 annually.
Reality check: In the U.S. and worldwide, CCS visions have long outpaced real action.
- Ammann notes that Exxon still needs underground injection permits in Gulf states under EPA's Class VI program.
- EPA has granted Louisiana authority (or "primacy"), while it's still the lead agency elsewhere in the region.
The intrigue: Exxon didn't disclose the cost of the lease but noted it will benefit the Texas Permanent School Fund.
The bottom line: Nothing is guaranteed, but more pieces are falling into place in the Gulf.
