Exxon Mobil is going to make $3 billion in carbon sequestration investments over the next five years. Exxon Mobil has gotten a lot of criticism for not branching out into green energy solutions. This is their first move towards fighting global warming and a greener earth. Aside from buying stock in the oil company, how can you invest in as part of your ESG investing and profit from this activity. Exxon’s approach will be to capture carbon dioxide from industrial plants and storing it so that it does not enter the atmosphere in the first place. There will be many ways to reduce carbon dioxide and potential carbon sequestration investments go forward.
What Is Carbon Sequestration?
The short version is that carbon sequestration is getting carbon dioxide out of the atmosphere and putting it somewhere. The actual version is a lot more complex as you can see by browsing the USGS report about Baseline and Projected Future Carbon Storage in the Great Plains. This forty page document discusses land use, reforestation, planting trees on unforested land, and preserving wetlands as well as giving a nod to technologies for storing carbon dioxide.
As noted in an informative article by EcoWatch, there are many ways to accomplish carbon sequestration. Planting trees works because they take carbon out of the air and turn it into wood. The sort of approach that Exxon Mobil is aiming at is already in use as EcoWatch notes in a power plant in Decatur, Illinois by Archer Daniels Midland, the agricultural and ethanol-production giant. They capture the carbon dioxide as it is created by burning fossil fuels, concentrate it into liquid, and inject it into deep rock formations. Alternatively, the CO2 can be captured and used in the creation of plastics or concrete.
A way to sequester carbon that does not require burying it far beneath the surface of the earth is to create biochar, this is partially burned material which is still rich in carbon. This material can be spread on agricultural land where it enriches the soil.
Direct Carbon Capture Technology
A process that shows long-term promise was developed by a University of Arizona professor, Klaus Lachner. It captures CO2 directly from the air which means it can be set up anywhere. At the current time the process takes a lot of energy and costs about $30 for each ton of CO2 it captures. It has the potential to remove a hundred million tons of CO2 per day from the air but that would cost $3 billion a day or about $1 trillion a year! But, this sort of approach set up with solar or wind power could collect CO2 day and night without using any fossil fuel or nuclear energy to power the process.
Modern society adds about 40 billion tons of CO2 to the atmosphere. Removing 110 million tons a day would take out 36.5 billion tons a year which would make a serious dent in the yearly increase of CO2 in the air.
Climeworks, a Swiss company, is using this process at the current time. Their costs at this time make the process too expensive but they aim to reduce how much it costs to do this and hope to start making a dent in global emissions by 2025.
Companies Employing Carbon Sequestration Technology
Your carbon sequestration investments will be targeted at companies employing one or more of the effective technologies and developing new ones. Today these include Exxon Mobil, NRG Energy, Fluor Corporation, Dakota Gasification Company, and Chevron in the USA. Carbon Engineering Ltd. is located in Canada. Others are Shell in the Netherlands, Total in France, Equinor in Norway, ADNOC Group in the UAE, and China National Petroleum Corporation in China.
As with all developing technologies the race may not be won by the one that invents a process but those that adapt it and employ it efficiently. As the USA gets back into promoting and enforcing energy policies aimed at reducing global warming, those companies that best-comply with existing regulations will also benefit the most.
Carbon Sequestration Investments – Slideshare Version