Oil and Gas Climate Initiative: Joint Declaration on Accelerating the CCUS Industry

Policy Details

Policy Details

Originating Entity
Last Action
Made public.
Date of Last Action
Sep 23 2019
Date Introduced
Sep 23 2019
Publication Date
Sep 28 2019
Date Made Public
Sep 23 2019

SciPol Summary

On September 23, 2019, during the week of the UN Climate Change Summit, the OCGI (Oil and Gas Climate Initiative) announced the launch of a new “Kickstarter Initiative” to develop carbon capture, use, and storage technology worldwide.  The OGCI also committed to working with the Clean Energy Ministerial, a global forum to bring relevant public and private stakeholders together on major clean energy projects.   The OCGI is made up of 13 major oil and gas companies, representing approximately 30% of oil production worldwide.  Membership includes BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental, Pemex, Petrobras, Repsol, Saudi Aramco, Shell and Total.  In a joint declaration from the member company CEO’s,the OGCI stated that “carbon capture, utilization and storage (CCUS) is an essential part of a broad set of solutions needed to create more sustainable low-carbon energy and industrial systems in support of the Paris Agreement climate goals.”  

The Kickstarter Initiative is an effort to create large-scale CCUS facilities in 5 different hubs worldwide as a proof of concept to boost investment in and implementation of large-scale carbon capture.  The primary hubs are in the United Kingdom, Norway, the Netherlands, China, and the US, and were chosen for a variety of reasons, including:

  • the presence of significant emissions from several sources in an area to consolidate carbon capture infrastructure;
  • demonstrated and potential government commitment to decarbonizing heavy industry
  • the existence of regional infrastructure or natural resources that allow for the storage, use, or export of CO2 elsewhere

The OGCI companies pledge to provide investments and industry expertise and work with local and national governments to develop policies that would facilitate CCUS deployment in the hubs.  The OGCI 2019 annual report describes the different timelines and ambitions for each hub:

  • The Teesside UK hub, also known as the “Clean Gas Project”, began as a response to the UK’s commitment to full decarbonization by 2050. OGCI Climate Investments acquired the project and is working with the UK government to establish policy and market solutions so that member companies can begin front-end engineering and design in 2020.  The project will require around $3 billion in investments and will provide a policy and engineering roadmap to advance other CCUS hubs, with a potential impact of removing and storing 6 million metric tons of CO2 (mtCO2) per year by 2030.
  • The Full-Scale Open Source CCS Project Norway hublaunched in 2016 by the Norwegian government with the goal of creating a transport and storage service to take CO2from multiple sites across Europe and store it permanently in a depleted reservoir in the North Sea.  While Gassnova, the state-run oil company, will be managing the development of CCUS on initial industrial users, the OGCI will be responsible for developing and managing the transportation and storage elements.  The service hopes to capture and sequester 5 mtCO2 per year by 2030.  
  • The Rotterdam Hub in the Netherlandsbegun in 2017 with collaboration between the Rotterdam Port Authority and two state-owned energy companies to develop a pipeline to store CO2from the immediate port area and store it in the North Sea. Porthos, a small team focused on transport and storage, initiated plans to build a pipeline to transport CO2.  OGCI member companies with operation in the area (BP, Exxon, and Shell) are both working to incorporate CCUS into their operations and are providing technical expertise for storage plans.  The first storage site is planned to become available in 2023 and the project has ambitions to sequester 10 mtCO2 per year by 2030. 
  • The Xinjiang CCUS Hub in China begun in early 2019 by the state-owned China Natural Petroleum Corporation (CNPC) with the goal of both decarbonizing industry and increasing domestic oil supply.  The plan is to use captured CO2from nearby chemical and industrial plants for Enhanced Oil Recovery, a process that uses CO2to scrub additional oil from a reservoir.  The OGCI will work with CNPC on R&D and will work with the local government and CNPC officials to develop policy frameworks.  The goal is for the project to sequester 3 mtCO2per year by 2025. 
  • The Gulf of Mexico, United States, was recognized as a high potential site, with  a combination of heavy industry, universities, several member companies, and good geological potential.  Additionally, of the 200 mtCO2/ year emitted in the region, 35mtCO2are pure streams ideal for sequestration.  While no CCUS hubs have been planned yet, the OGCI hopes to develop a commercialization roadmap for the region by working with local governments and leveraging the US Treasury’s 45Q tax credit which would subsidize CCUS for each ton sequestered.   

In total, the OGCI hopes to assist the five projects sequester 24 mtCO2per year by 2030. According to the International Energy Agency (IEA) Sustainable Development Scenario (SDS), to achieve Paris Climate Goals, CCUS will have ramp up quickly to store 2,000 mtCO2 per year by 2030.  

OGCI is launching this project because, as stated in their 2019 annual report, it believes that CCUS is“important to our commercial future, and that of our industrial customers, as the world transitions to a net zero emissions future.”  However, scientists have called into question the potential of CCUS.  The European Academies Science Advisory Council, for example, released a report in January 2018 stating that negative emissions technologies have “limiting realistic potential” and cannot compensate for inadequate climate change mitigation.  

Additional goals of the OGCI beyond the Kickstarter Initiative mentioned in the September 23rd press release include commitments to: 

  • Reduce the methane and CO2 intensity of upstream oil and gas operations 
    • Methane and CO2 intensity is a metric that describes the emissions per unit of production of oil and gas, not total emissions
  • Invest in R&D startups with over $1 billion committed to clean energy technologies  

In addition, all OGCI member companies have “pledged to support policies that attribute an explicit or implicit value to carbon.”  

The Kicktarter Initiative was announced during the UN Climate Summit in New York. Critics saw the release as a defensive tactic by the oil and gas industry in response to increased calls for action from investors and activists.  The OCGI proposals do not include any measures that would decrease oil and gas production, prompting claims of greenwashing.  Nonetheless, Jérôme Schmitt, the chair of the OGCI steering committee, stated that group “sees our work on reducing methane emissions, carbon intensity and development of a commercial carbon capture utilization and storage industry as a necessity, not an option, in meeting the world’s climate goals.”  

SciPol Summary authored by