Exxon floats $100 billion carbon storage project requiring public, private financing
Exxon Mobil on Monday floated a proposal for a public-private carbon storage project that would collect planet-warming carbon dioxide emissions from U.S. petrochemical plants and bury them in deep under the Gulf of Mexico. The plan would require “$100 billion or more” from companies and government agencies to store 50 million metric tons of CO2 by 2030, with capacity potentially doubling by 2040, Joe Blommaert, president of Exxon’s Low Carbon Solutions business, said in an interview. Blommaert outlined the plan on Monday, about two months after the largest U.S. oil producer appointed him to run a new Low Carbon Solutions business that could profit from selling carbon-reduction technology and services. Houston has a large concentration of “hard-to-decarbonize” industry near the Gulf, said Blommaert. “We could create an economy of scale where we can reduce the cost of the carbon dioxide mitigation, create jobs and reduce the emissions,” he said. SHAREHOLDERS URGE CHANGE Exxon, which suffered a $22.4 billion loss last year, is battling shareholder groups that want the company to shift to cleaner fuels, including a hedge fund that wants four board seats to drive proposed changes. Exxon has pledged to increase spending on low-carbon projects and lower the intensity of greenhouse gas emissions. While many oil and gas companies have seized on carbon capture programs to offset emissions, “it is not something that’s going to save them from having to go through the energy transition,” said Rob Schuwerk, executive director of the North American office of Carbon Tracker Initiative, a think-tank that analyzes the financial implications of a clean fuel transition. Burying carbon dioxide underground “is not going to be a solution that works to preserve fossil fuel industries for an extended period of time,” said Schuwerk. The carbon storage project is proposed for the Houston Ship Channel, a 50-mile (80-km) long waterway that is part of the Port of Houston and home to dozens of refineries and chemical plants. Exxon acknowledges that the proposal will require enormous support from other companies and from federal, state and local government agencies. PURSUING RIVALS The company is contacting potential partners on the project among its refining and chemical rivals. Investors, banks and government officials have been receptive, said Exxon spokesman Casey Norton. The project aims to capture CO2 from the 50 largest industrial emitters along the Houston Ship Channel, said Guy Powell, vice president of Low Carbon Solutions. CO2 would be piped to offshore reservoirs up to 6,000 feet (1.83 km) below the sea floor, he said. Exxon projects carbon capture will be a $2 trillion market by 2040. The company has supported a carbon tax that would use market incentives to reduce emissions and supported the United States rejoining the Paris climate accord. “This could be the catalyzing project that puts carbon capture on the fast track,” said Powell. “There’s a lot of investment money looking for a home in these ESG-type investments, he said.
Indian Oil Corporation to supply oxygen to hospitals in Delhi, Haryana, Punjab
After Reliance Industries Ltd, state-owned Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) have begun diverting oxygen produced at their refineries to supplement the availability of medical oxygen in states worst hit by COVID-19. In a statement, IOC said it has “begun the supply of 150 tonnes of oxygen at no cost to various hospitals in Delhi, Haryana and Punjab.” “The first batch of the lifesaver medical grade oxygen was dispatched today to Maha Durga Charitable Trust Hospital, New Delhi,” it said. “Delhi is already facing an oxygen emergency situation.” In the face of a massive surge in demand for medical oxygen during the second wave of the pandemic, IOC has diverted the high-purity oxygen used in its Mono Ethylene Glycol (MEG) unit to produce medical-grade liquid oxygen at its Panipat refinery and petrochemical complex in Haryana. The throughput of the unit has also been scaled down for a more critical cause. In a separate statement, BPCL said it has started supply of 100 tonnes of oxygen at no cost. “The company will be supplying around 100 tonnes per month,” it said. With average daily cases of COVID-19 rising again since last one month, the demand for oxygen has significantly risen. In fact, in most parts of the country, the cases are hitting new peak, thereby disrupting the demand-supply scenario for medical oxygen. Last week, Reliance’s twin oil refineries in Jamnagar in Gujarat through minor process modification converted industrial oxygen into medical-use oxygen that can be administered to COVID-19 patients low on oxygen. In all, 100 tonnes of oxygen is being supplied from the Jamnagar refineries free of cost. BPCL is also supplying 1.5 tonnes per day of medical oxygen to Kerala from its Kochi Refinery. Last year, BPCL had supplied around 25 tonnes of medical oxygen when the average daily cases had risen in October-November. The Kochi Refinery has a provision to produce and store liquid oxygen of 99.7 per cent purity. Oil refineries can produce limited volumes of industrial oxygen in air-separation plants meant for nitrogen production. Scrubbing out other gases such as carbon dioxide can convert it into medical-use oxygen with 99.9 per cent purity. Reliance operates the world’s largest oil refining complex at Jamnagar in Gujarat. IOC Chairman S M Vaidya reiterated the firm’s unstinted support to the country at this critical hour in every possible way. “All through the pandemic, our prime focus has been to ensure the supply of essential fuels 24X7. We have also stepped up the production of raw material for PPEs, and we are now providing lifesaving medical oxygen to hospitals. “Our expertise and assets, including refineries, pipelines, petrochemical units, bottling plants, terminals and aviation fuel stations, will continue to serve the people despite the stiff challenges”, he added. As the COVID-19 cases in the country continue to rise, the demand for medical-grade oxygen too is growing rapidly. “The current initiative by IOC aims at supporting the states in fighting the battle against COVID-19,” the statement added.
Oil falls amid surging coronavirus infections in India, other countries
Oil prices fell on Monday amid mounting concerns that surging caseloads of coronavirus infections in India and other countries will lead to stronger measures and hit economic activity, along with demand for commodities such as crude. Brent crude was down 43 cents, or 0.6%, at $66.34 a barrel by 0139 GMT, after rising 6% last week. U.S. oil was down 42 cents, or 0.7%, at $62.71 a barrel, having gained 6.4% last week. “With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi. India reported 261,500 new coronavirus infections on Sunday, taking cases to nearly 14.8 million, second only to the United States, which has reported more than 31 million infections. India’s deaths from COVID-19 rose by a record 1,501 to reach a total of 177,150. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said in a statement late on Sunday. Japanese companies believe the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for a further blow to business, a Reuters monthly poll showed. Japan has had far fewer COVID-19 cases than many other major economies, but concerns about a new wave of infections are rising fast, according to their responses in the poll. A slower rollout of vaccinations compared with other Group of Seven advanced countries and the lack of a sense of crisis among the public will trigger a new wave of infections, some companies wrote in the poll.