Energy Analytics Financial Services

CCUS: Separating winners from losers

byIan Nieboer

The Inflation Reduction Act supercharged activity along the carbon capture, utilization and sequestration (CCUS) value chain and accelerated the race to secure partnerships with emitters and landowners for CO2 storage. As excitement turns to action, attention is shifting to evaluating risks along the value chain and to the factors that will distinguish successful projects. Enverus’ Energy Transition Research* (ETR) team’s “Carbon Management Trifecta” provides a rubric to identify winning and losing strategies.

What is the “Carbon Management Trifecta”?

The carbon management trifecta (Figure 1) describes the combination of factors that contribute to winning CCUS strategies. Successful projects require access to favorable conditions across three dimensions:

  • Superior asset quality.
  • Innovation ecosystems.
  • Supportive partners.
diagram-showing-carbon-management-trifecta
FIGURE 1 | Carbon management trifecta.

Superior asset quality

To achieve superior asset quality, the combined cost of CO2 capture, transportation and storage is sufficiently low and the potential scale is sufficiently large, creating an economic source-to-sink value chain. Variation across each dimension is extreme. For example, ETR’s analysis shows only 1% of Appalachia emissions can be captured below $50/tonne, versus 65% in Louisiana.

Subsurface analysis of Louisiana’s Oligocene-Miocene Sands and Appalachia’s Oriskany Sandstone reveal even larger differences in storage potential (Figure 2). Only 1% of Appalachian storage potential in the Oriskany breaks even below $85/tonne, versus around 100% in Oligocene-Miocene Sands of Southern Louisiana.

subsurface-evaluation-of-carbon-storage-potential
FIGURE 2 | Subsurface evaluation of Southern Louisiana and Appalachian carbon storage potential.

Innovation ecosystems

Innovation ecosystems connect the policies, regulations, access to capital and business models available to support a commercial CCUS project. For example, the emissions profile of Pennsylvania (Appalachia) is dominated by power generation and emissions reduction targets could be addressed with zero-emission power sources. Louisiana’s emission profile, in contrast, contains a larger share of hard to abate sources and likely will require negative emission solutions like CCUS. Faster adoption rates, strong emissions targets and a streamlined permitting process are examples of how a strong innovation ecosystem accelerates the learning curve and increases efficiencies.

Supportive partners

Supportive partners refers to the relationships with the various stakeholders impacted by the project, such as operators in the value chain, the general public, investors, landowners and government. For example, ETR’s analysis shows Louisiana pore space ownership is far less fragmented than in Appalachia (Figure 3), simplifying the owner relationships and minimizing associated execution risk.

map-showing-pore-space-ownership
FIGURE 3 | Pore space ownership in Southern Louisiana and Appalachia.

Each week Enverus Intelligence® | Energy Transition Research analysts spotlight our favorite ideas in Energy Transition Today. Sign up here to have it sent to your inbox.

To learn more visit the link below to watch our on-demand webinar: CCUS: Everything and the Carbon Sink.

*About Enverus Intelligence®| Energy Transition Research.
Enverus Intelligence Research, Inc. (EIR) is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Energy Transition Research is [a research division of EIR focused on {Ian N. description}].  Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. See www.enverus.com/disclosures for additional information.

Ian Nieboer

Ian Nieboer

Ian leads the Enverus Intelligence - Energy Transition Research team. Previously, Ian worked in product management roles in Enverus’ growing ESG business, leading Enverus’ Global (International) Energy Analytics business and as a publishing analyst with Enverus’ Intelligence - Oil & Gas Research team where he helped investors and asset owners navigate the energy market. Over his career he has covered operators and assets (both conventional and unconventional) across North America and around the Atlantic rim. In addition to publishing frequent research notes, Ian delivers conference presentations, television interviews and advisory mandates for corporate and institutional clients.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

energy-transition
Energy Transition
ByCarson Kearl

In a world where energy value can make up a small portion of the revenue stream from emerging business models, what else is at play? Enverus Intelligence Research® views effective energy transition business as taking advantage of two key additive...

field-representative
Intelligence Oilfield Services
ByErin Faulkner

Permitting information for oil and gas wells is one of the most readily available and least lagged pieces of data on industry activity, but it is often seen as a poor indicator of future drilling activity.

Enverus Press Release - Exploring falling rigs and rising production
Energy Analytics Minerals
ByEnverus

While horizontal drilling and hydraulic fracturing significantly enhance well productivity, they have had the opposite effect on the land department.

operators
Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

All seven regions covered by the Enverus Day Rate Survey saw rates rise sequentially for the second time in three months in January as confidence started to strengthen among U.S. land drilling contractors.

accurate-grid-forecastin
Energy Transition Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

Ørsted took a blade to its project pipeline, reducing its ambition to 35-38 GW of installed capacity by 2030 from the previous 50 GW.

ofs-blog
Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

SLB has reaffirmed its 2024 financial guidance, part of an effort by international oilfield services companies to reassure investors after the Saudi Ministry of Energy called off plans to increase its maximum sustainable capacity by 1 MMbo/d to 13 MMbo/d...

EV-parent-image-4
Analyst Takes Energy Transition
ByEnverus

Despite the relatively scant incentives for buying an EV in the U.S. compared to other countries, the U.S. Environmental Protection Agency (EPA) presented its plan in 2023 to tighten tailpipe emissions regulations.

Enverus Blog - Increase visibility and efficiency with OpenTicket Mobile digital field ticketing software
Trading and Risk
ByEnverus

Amid significant volatility in global energy markets, U.S. President Joe Biden’s decision to temporarily halt approvals for pending liquefied natural gas (LNG) projects seems to defy conventional trading wisdom. This audacious move has given rise to a variety of viewpoints...

Enverus Blog
Intelligence Trading and Risk
ByEnverus

In the ever-changing energy landscape, understanding market fluctuations, weather conditions and system resilience is paramount when factoring ideas for trading opportunities.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Get Energy Transition Research updates straight to your inbox by filling out the form below.

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert