Texas Leads in Carbon Sequestration

By Valerie Volcovici and Leah Douglas
Reuters

Texas has seen surging interest from companies hoping to bury carbon dioxide in its oilfields, positioning the state at the forefront of a government-subsidized program to combat climate change.

However, pumping CO2 underground could exacerbate ongoing issues like earthquakes and well blowouts in the Permian Basin, complicating public support.

"Without legitimate oversight of underground injection in Texas, we expect more geyser-like well blowouts, sinkholes, leaks from plugged and unplugged wells, and injection-induced earthquakes," said Virginia Palacios, executive director of Commission Shift, a Texas watchdog group advocating for stricter regulation of the oil and gas sector.

While such incidents have been rare with CO2 injection technology over the decades, the unprecedented volume of carbon proposed for burial raises concerns among activists and researchers.

Carbon sequestration is crucial to U.S. government efforts to lower emissions linked to global warming. The Biden administration's 2022 Inflation Reduction Act, a landmark climate-change legislation, includes billions in subsidies for CCS projects.
Although President-elect Donald Trump has pledged to dismantle the IRA, energy experts suggest CCS subsidies will likely persist due to bipartisan backing.

Several companies, including Occidental Petroleum (NYSE:OXY), are looking to capitalize on IRA subsidies, especially in Texas, where supporters argue the underground geology is suitable for storing liquid and gaseous waste.

Permit Applications Surge

In the past year, applications to the Environmental Protection Agency for carbon injection permits in Texas have surged by 63% to 43, establishing the state as a national leader.

Despite this, Texas faces challenges related to drilling wastewater disposal underground. The Texas Railroad Commission (RRC) has been tackling leaks and blowouts from orphan wells and earthquakes induced by increased underground pressure from water injection.

Interviews with Texas landowners and researchers indicate that the proposed CO2 projects demand more oversight than the state can provide to mitigate environmental and safety risks.

The RRC is seeking authority from the EPA to manage its own permitting program for carbon sequestration to expedite approvals. The EPA is considering this request while evaluating Texas' wastewater permitting after blowouts occurred.

The RRC stated it can effectively regulate CO2 injection wells, noting that it has increased staff. Experts believe Trump's victory enhances Texas' chances of gaining this authority; North Dakota received its oversight authority during Trump's first term.

Reasons for Concern

A significant Texas project is the Stratos direct air capture venture in Ector County, a collaboration between Occidental and asset manager BlackRock (NYSE:BLK). It's anticipated to inject 8.5 million metric tons of CO2 annually starting next year.

The county has many abandoned wells risking eruptions if underground pressure rises and CO2 degrades cement plugs, reports oil and gas attorney Sarah Stogner, who represents landowners affected by blowouts.

Since 1993, 19,700 wells have been drilled in the area, with 19 orphan wells having no responsible company to ensure their plugging, including three near the Stratos site.

Raymond (NS:RYMD) Straub, a hydrogeologist, expressed concern over Occidental's attention to orphan wells in the project vicinity during an EPA hearing in October.

Occidental's spokesperson William Fitzgerald assured that extensive site surveys ensured safety, stating, "There is more than 3,000 feet of confining rock layers above the sequestration zone to securely contain the CO2."

A pilot project by agribusiness ADM in Illinois, aimed at demonstrating the technology's feasibility, has encountered leaks and setbacks, heightening apprehension.

ADM's spokesperson Jackie Anderson claimed the leaks posed no risk to surface or groundwater or public health, expressing confidence in CCS technology.

Dominic DiGiulio, an independent energy analyst and former EPA official, highlighted that CO2 can corrode cement casings in plugged wells, warning, "These abandoned wells will in fact leak."

A 2023 paper from Chinese researchers stated that CO2 injection could also heighten earthquake risks.

Concerns have been raised over the potential for large leaks to acidify groundwater and displace oxygen, endangering people and animals, according to nonprofit Pipeline Safety Trust.

"This is supposed to be permanent storage," noted Carolyn Raffensperger, executive director of the Science and Environmental Health Network. "If it can’t even contain it for 10 years, why do we think it can contain it forever?" in reference to ADM's project.