Meeting the ambitious goals of the Paris Agreement signed at COP21 will require industry across the globe to cut its emissions of carbon dioxide and, more broadly, greenhouse gases. There are three main ways to do that. The first is to develop renewable energies. The second is to improve energy efficiency. And the third is to optimize the fossil fuel mix in order to reduce carbon emissions.
That's what carbon capture, utilization and storage, or CCUS, technology does. Specifically, it captures carbon dioxide where it is emitted, then moves it to a site where it will be stored for a long time, usually in natural reservoirs such as saline formations. Alternately, the carbon dioxide can be converted to a form that can be reused — in the oil or chemical industry for example — becoming part of a more or less circular economy.
The sectors most concerned by CCUS technology are primarily the biggest carbon-emitters such as steelmaking, cement manufacturing, chemicals and petrochemicals, and refining. All are energy-intensive. Given its far-reaching potential and the magnitude of its ripple effects system-wide, CCUS may soon be considered a full-fledged industry in its own right.
"But the industry hasn't been built yet," warns David Nevicato, head of the CCUS-CO2 R&D program at Total. "Emitters are rarely located adjacent to storage facilities and the technology we have now is still expensive and energy intensive. Clearly the challenge is to be more energy efficient and disciplined about investment costs."
A concrete example of the problem is that many carbon storage projects have abatement costs ranging from $120 to $170 a metric ton, whereas that same ton rarely trades for more than $10 in European Union markets!
"With current technologies, the cost-cutting challenge is a big one," says David Nevicato. "We must optimize the process, first with projects in places where it is easy to capture the carbon and utilize it or store it on site. That's the whole point and the challenges of R&D at Total: to find new processes and disruptive technologies, innovate, and improve existing ones.
And the challenges abound. For example, capturing the carbon from a coal-fired power plant can lower its efficiency by 8 percent to 15 percent. percentThat's too high a price. Moving carbon as a liquid over long distances via pipelines — in Europe, through existing pipelines that will be available for re-use — trucks or ships employ materials that must be able to withstand very demanding operational conditions. Storing it for lengthy periods requires total control of reservoir integrity.
"We have to come up with a technological solution to each of these challenges," says David Nevicato. "As things stand now, the conditions aren't optimal yet for a market to emerge. But if one does, Total wants to be a leader in it."
Known for long cycles spanning everything from original idea to proof of concept, R&D must adapt. "Given our short deadlines, we have to work differently, be more open to partnerships, start-ups and open innovation to establish new technologies faster," says David Nevicato.
Partnership is the key word in research and development.
"Partnerships, I should say, since there are so many of them," says David Nevicato.
"For some technology assessments, the network we have to assemble to launch the commercial-scale demonstrator is complex. It ranges from European, Chinese and American universities to other oil and gas companies, public research organizations and governments. All while controlling costs. Working via partnerships is not, strictly speaking, anything new. But now it's an imperative."
It's an imperative that will have to progress to an opportunity, then a success, in a complex market. Working with different countries and cultures that have highly varied consumer habits and energy needs is how an efficient solution — or solutions — for a broad swath of the public will create a lower-carbon world.
Total is currently involved in 1,000 R&D agreements with other industrial companies, universities and research organizations.
However, it is also conducting R&D in partnership with other oil and gas industry players. The OGCI, which in the fall of 2014 brought together 10 companies representing around 20 percent of global oil and gas production, announced on November 4, 2016 that it would invest a billion dollars over the next 10 years to develop innovative low-emission technologies and facilitate their commercial scale-up. It will focus on two priorities. The first is accelerating the deployment of carbon capture, utilization and storage (CCUS) technologies.
"A billion dollars over 10 years is 10 million a year for 10 companies, plus the individual investments of each one of them. Total allocates 10 percent of its R&D budget to developing CCUS technologies. It's an unprecedented push," notes David Nevicato.
To make good on the International Energy Agency's (IEA) 2°C Scenario, our planet needs to remove 10 billion tons of carbon a year. This will require massive investments to add to today's limited storage capacities. It amounts to growth of 10 to 15 percent a year, a rate more familiar to new information and communications technology sectors than heavy industry.
But CCUS is still a potential market that Total wants to invest in, for several reasons.
The first is to remove the carbon from oil- and gas-based energy. That may be incumbent on a major industrial operator with a climate strategy. But it's also a response to the market's new requirements.
In other words, customers — mostly in industry — will increasingly want to buy carbon-neutral fuel. Will they pay a premium for it? Don't bet on it. But carbon neutrality is probably what it will take for a company to strengthen or add to its market share.
The second is because carbon storage requires extensive geological knowledge, which oil and gas companies have. In the circumstances, all eyes are on China, the world's top emitter, which is nonetheless being very proactive about fighting pollution. Carbon is also considered a pollutant there.
"We've attended various meetings and forums in China to discuss things with universities and industry and demonstrate our know-how," says David Nevicato.
"The Chinese government is genuinely determined to promote CCUS, even though there's very little storage in the country, and many industrial initiatives are being conducted. China has technology. They're moving fast because they need to make their industry less carbon intensive. Add to that the fact that the costs are low and you'll understand why China may soon help usher in the CCUS market and become a leader in it."
This close collaboration with China is not new: The Total China Scientific Forum has brought stakeholders together for the last seven years. Each year turnout is up and attendees come from more cutting-edge, specialized fields, as this report shows.
The United States, the world's second-biggest emitter, also has all the prerequisites for the emergence of a CCUS market, despite recent events that might leave room for doubt. It has the technology, the storage capacity and some regulatory provisions that are tougher than in the European Union. It also has extensive experience with enhanced oil recovery (EOR), which is one way of utilizing carbon profitably today.
Others will position themselves in the market. Service providers will offer businesses options to manage carbon the way they manage waste. Transporters will move the carbon by ship or pipeline. Traders will buy carbon at the best price and resell it to a storage operator.
So it's a market with great potential. More important, it's a market that could be called "pressing," with the deadlines set during COP21 so close at hand and investment requirements as massive as they are. Total is ready to tackle the challenges.
With 1,382 inventions between 2011 and 2015, of which 858 have been patented, Total's R&D is increasingly influential and getting recognized for it. The Group now ranks among the Top 100 Global Innovators, as presented in a report published by Clarivate Analytics* for 2016.
In compiling the list, Clarivate Analytics took the following factors into account: patent volume (number of unique inventions protected by a granted patent), success rates (number of patents granted in relation to number filed), global reach (the patents filed in the four main markets: China, the European Union, Japan and the United States) and invention influence (number of citations by other organizations).
"We are proud to rank among the Top 100 Global Innovators, " commented Philippe Baptiste, Chief Technology Officer at Total. "We are leveraging science, technology and innovation in our drive to become the responsible energy major. This ranking recognizes our teams' commitment to achieving our ambition."
As a newcomer to the Top 100, Total is one of the three leading oil and gas companies on the list.
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