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碳捕获、利用和封存（CCUS）是石油和天然气行业的热门话题。随着世界应对气候变化并瞄准零排放目标，弄清楚如何最大限度地减少碳排放的影响对于生产者的长期健康至关重要。

对于某些人来说，这可能令人困惑，或者对于另一些人来说，这似乎是不可能的。但至少有一家生产商已经将自己确立为碳封存领域的领导者，这源于其对 EOR 的长期承诺。

Denbury Inc. 在隔离方面已确立了“实干”公司的声誉。首席执行官克里斯·肯德尔 (Chris Kendall) 在休斯敦举行的哈特能源能源转型资本会议上详细介绍了该公司的成功。他最近联系了 Hart Energy 的编辑总监 Len Vermillion，以进一步讨论。

在这次采访中，肯德尔讨论了他对 CCUS 的看法，以及为什么该行业并不像某些人想象的那样远离永久封存。他还深入探讨了公司二十年来对 EOR 的承诺，随着政策的变化，公司的独特地位。他们是怎么做到的？

Len Vermillion：我们先来谈谈 CCUS。您对此有何看法？它对行业减排有何帮助？您做了很多事情，所以我想从操作员的角度了解您的想法。

克里斯·肯德尔：当我们考虑减少大气排放时，如果你像我一样，你首先想到的是风能和太阳能以及我们可以用它们做什么。我认为这是首先思考的正确地方。这就是我们所认为的能源转型、减少碳排放和整个能源综合体的重大推动者。这些增长迅速。

“当我们现在与业界交谈时，我们告诉他们，我们今天可以在 EOR 方面为他们提供确定性，因为我们拥有这一点。”——Chris Kendall，Denbury Inc. 首席执行官兼总裁。

不幸的是，他们只能以一定的速度成长，每天你都会看到他们遇到挑战的迹象。无论是放置设施的空间，还是允许沿途（或）濒临灭绝的物种进入您认为是理想候选者的某些区域。最重要的是你拥有它。

那么世界上的能源需求仍然年复一年地以 1% 的速度增长并且不断变化。你的蛋糕一路上越来越大。需要的不仅仅是这个。需要的不仅仅是生物燃料。需要的不仅仅是我们所讨论的其他一些低排放能源。让我着迷的是，当我回顾 Denbury 在 21 年的 EOR 业务中所做的事情时，他们每年输送大量的二氧化碳（现在每年 10、1100 万吨），并排放大量的二氧化碳地下使用现有技术，这不需要技术飞跃才能发挥作用。这可以在比今天更大的规模上完成。

举个例子，今天我们每年从我提到的二氧化碳总量中抽取 300 万吨工业源二氧化碳，并将其放入地下。问题是，如何才能将更多的工业源二氧化碳排放到地下？当我观察世界在工业二氧化碳方面所做的事情时，我只是想抛出一些数字来说明我们的处境和机会是什么。如今，世界每年从工业中捕获约 4000 万吨二氧化碳。当然，世界每年的排放量超过300亿吨，所以4000万吨并不算多。

国际能源署 (IEA) 为 2050 年实现净零排放的未来制定了这一设想，届时所有碳排放都将被抵消。你会发现风能和太阳能是最重要的，你会期望这一点，而且它们将继续增长。但其中最重要的第三项是碳捕获，我认为这让人们感到惊讶。从我的另一端来看，从每年 4000 万吨到 IEA 所说的 2050 年，每年 4000 万吨到超过 70 亿吨。所以，你可以看到我们甚至没有进入这场比赛的第一局。我们只是触及了表面。但即使是 IEA 也表明，碳捕获可以在抵消全球每年 30、400 亿吨二氧化碳排放方面发挥巨大作用。

我们可以大规模地做到这一点。我们可以利用我们多年来一直在 EOR 中使用的地质学知识来做到这一点。我们可以使用接受过二氧化碳处理 EOR 培训的人员，将二氧化碳排放到其他安全可靠的地方。我们甚至可以使用现在拥有的相同基础设施。

所以，我们对此非常兴奋，因为我们看到了规模（并且）我们看到了登伯里在空间中的位置。然后我们就看到了从根本上改变碳排放的机会，这就是我们所追求的。我想我们真的可以在这里做到。

LV：登伯里有点独特，你已经在这样做了。你对此并不陌生。我想你提到了 21 年的 EOR。当其他人都热衷于页岩气和其他行业时，你为什么要这么做呢？

CK：我一直说我们是一家独特的公司，并且经历过好与坏。我们仍然是独一无二的。通过此，您可以谈论 CCUS 以及您如何最终进入 CCUS。直接前往某个工厂并捕获工厂的排放物并将二氧化碳放入地下的问题是这是一个昂贵的提议。因此，至少到目前为止，人们还不愿意出去花费数亿美元来做到这一点。但真正起作用的是提高石油采收率。它始于能够从只能使用溶剂提取的老油田生产石油。就像您使用清洁液和一些家庭应用一样，二氧化碳在地下适当的条件下是石油的溶剂。

实际上，我们花了几十年的时间建立了一家涉及大量二氧化碳的业务，我们可以将其泵入油田并利用溶剂效应将石油抽出。我们在这方面做得很好。但这都是在世界需要更多石油的背景下发生的。现在我们处在一个不同的地方。

我的意思是，世界在未来一段时间内将需要更多的石油，但这并不是人们十年前所想象的那种无休止的增长。为了开展更多这项业务，我们需要更多的二氧化碳，这就是我们开始与一些想要捕获工业二氧化碳的人建立联系的方式，例如德克萨斯州的空气产品公司。

我们付钱给他们吸收二氧化碳，因为它对我们的石油生产来说足够有价值。所有这些都证明了这个二氧化碳管道系统的合理性，这是登伯里拥有的美国最长的运营管道系统。这使得我们的车队拥有近 300,000 马力的二氧化碳压缩装置，将二氧化碳转化为液体形式进行使用。这促使我们建立了一支由 100 多名技术人员组成的员工队伍，他们要么是输送二氧化碳的管道的工程师，要么是我们钻探和操作的注入二氧化碳的井的工程师。（它导致了）在地表以下进行地质工作，以确保二氧化碳到达我们想要的地方并停留在那里。我们能够接受这一切，然后当我们看到我们今天的处境时，现在有了一项新政策，实际上显着增强了一些工业排放者决定是否添加昂贵设备的决定。

当我们看到它从提高石油采收率的基础起飞到它要去的地方时，需要在这里插入一件事，提高石油采收率，我谈到的，二氧化碳留在地下。它与石油一起出来，但我们将其分离并立即将其放回地下——最终效果是我们将二氧化碳永久地置于地下。

我们可以通过一些方法将二氧化碳埋入地下，并且永远不需要再出来，而且与石油生产无关。我们可以继续做工业复苏。事实上，我们使用大量二氧化碳来生产石油，这使得石油的碳含量极其低。然后我们可以超越这一点，利用我们现有的人员和管道将二氧化碳注入地下。

LV：你们会增加这些管道或基础设施吗？只要其他人都这样做，你就必须进行这项投资吗？

CK：哦，是的。莱恩，这有什么妙处，我们的目的是大幅发展这项业务。我们可能不会大幅增长的是石油方面。我们认为每天5万桶左右的产量是一个不错的水平，它可以产生足够的现金让我们投资于捕捞和扩张方面的增长。现在，我们拥有了这个令人难以置信的 1,000 多英里管道基础设施的支柱，我们可以建造它。所以，我们并不是从头开始。但我们能做的是，我们可以利用这个支柱，然后我们可以将扩展扩展到我们今天可能还没有进入的高排放领域。

或者，我们可以将容量扩展到可以移动更多的地方，这在这个行业中是相当简单的。我们可以在提高石油采收率之外投资地下储存。因此，仅可用于存储的面积。我们可能不会在今年的最后几周进行这方面的投资，但明年我们将开始看到其中的一些。我们喜欢它的是石油方面的业务，它已经具有一些非常好的品质，（并且它）可以为我们想要进行的投资提供资金。

LV：您刚才谈到了经常被忽视的 CCUS 的利用部分。您能告诉人们这涉及什么以及如何使用它吗？

CK：嗯，这是一个非常棘手的问题，迄今为止，CCUS 缩写中的主要用途是提高石油采收率。你有如此强大的能力，可以利用它将数百万吨工业二氧化碳排放到地下。例如，今天我们每天都会为此注入约 10,000 吨二氧化碳。这样做的另一个好处是，它符合现行法律和现有许可证。因此，如果明天另一家工厂来并说，“我们想向您发送我们的排放量”，我们可以将它们放入 EOR 中，无需新的许可证或其他任何东西。我们可以在今天的情况下做到这一点。现在，如果您超越 EOR 并且正在寻找“问题”的答案，那么就会有很多有趣的事情正在被关注。

我看到了一些我认为有潜力的东西。其中一个领域称为 electra 燃料，他们将使用二氧化碳作为输入来帮助生产低碳电力。我认为我们会看到一些潜力。但除此之外，我所看到的一切在可以应用的规模方面看起来都非常具有挑战性。一个很好的例子就是看到一些人考虑在混合混凝土时将二氧化碳注入混凝土中，它会在混凝土中根深蒂固，并且非常有效地永久锁定二氧化碳。

但我确信你所看到的，当你看到混凝土搅拌站时，它们并不位于炼油厂和发电厂方便的区域。你必须将二氧化碳运输到混合地点，我认为这对可扩展性来说是一个真正的挑战。因此，对我来说，我们的回收是一种经过验证的、可扩展的二氧化碳利用方式。或许这种 electra 燃料概念可以得到发展。否则，我认为你最好的选择就是把它埋在地下安全的地方。

LV：我想我们谈论的真的是永久隔离？您认为我们离这个目标还有多远？

CK：是的，我们就在不远的地方。莱恩，我们现在的关键策略之一是让登伯里沿着我们的基础设施添加一系列存储站点，这些站点将成为这种性质的存储，即封存。还有其他正在进行中的项目也正在发生这种情况。我们在整个行业中都看到了这一挑战，即以这种方式注入二氧化碳，您需要 EPA（环境保护局）VI 级许可证。迄今为止，据我所知，美国环保局只颁发了两张VI级许可证。目前还有更多的项目正在进入这个过程，但批准的时间还不确定。过去更是五年多，太可怕了。

美国环保局表示，他们认为现在可以在两年内完成这些工作，我认为这是可以容忍的。但还有两年时间。因此，现在正在付出巨大的努力来实现这一切。许多不同的经典许可证正在组合在一起。但我认为我们可能还需要几年时间才能看到第一个。

当我们现在与业界交谈时，我们告诉他们，我们今天可以在 EOR 方面为他们提供确定性，因为我们拥有这一点。然后，在允许的情况下，我们可以过渡到封存。他们喜欢这样，因为这让他们现在就可以开始他们的项目，而不必担心如果有人的许可证没有获得批准会发生什么。

LV：现在很多人都在开始项目吗？

CK：有一些。现在还处于早期阶段。举个例子，我刚刚参加的小组讨论中，加州资源公司的首席执行官表示，他们已经为他们在加州进行的一些工作启动了 VI 级许可。老实说，就在大约一周前，我们宣布与墨西哥湾沿岸中游合作伙伴就封存地点达成协议，他们也已经启动了该流程。那是在休斯顿西南部。有一些，但就像我说的，现在还处于早期阶段。我认为再过一两年我们就会开始真正看到很多这样的东西聚集在一起。

LV：什么是负碳油？因为我认为您之前已经谈论过这一点。给我解释一下。

CK：我很高兴你问了这个问题。我要去参加阿斯彭研究所全球能源论坛，这是一次很棒的活动，因为它汇集了来自各个领域的人们。有些像我这样的人正在领导这家公司，甚至有人只是直接领导能源公司、勘探与生产公司。然后政府中就有坚决反对的人。这是一个很好的论坛，每个人都可以在安全的环境中讨论这些问题。但一路上，有趣的是，很多人都说，“看，我们喜欢你们正在做的事情以及你们如何管理二氧化碳”，但你们正在生产石油，而我们只能“我能容忍这一点。”

“我们可以通过一些方法将二氧化碳埋入地下，并且永远不需要再出来，而且与石油生产无关。” 我们可以继续做工业复苏。事实上，我们使用大量的二氧化碳来生产石油，这使得石油的碳含量非常低。”

我们说，“是的，但它是一种低碳油。”但他们并没有完全明白。我们真的开始研究围绕它的一些数字，Len，底线是，从地下开采一桶石油所需要的二氧化碳量，比从地下开采出来后所排放的二氧化碳量要多得多。 。举一些数字，即从一桶石油中获得的总排放量。我不知道您是否听说过 EPA 范围 1、2 和 3 指定，但范围 1 是直接排放，例如您为开展业务而运行的发动机，无论是车辆还是压缩机。范围 2 是您使用的电力，例如间接排放。

因此，对于您使用的电力，您必须计算电力产生方式的排放量。这取决于你在哪里。您可能在某个完全可再生的地方。你可能在某个全是煤炭的地方。以 Denbury 的业务为例，范围 1 和范围 2 的排放量合计略低于每桶 200 磅二氧化碳。

所以，你说，好吧，每桶 200 磅，这很有趣。但范围 3 排放是很多人真正困扰的问题，这些排放主要与汽油、柴油或从石油中产生的喷气燃料的燃烧有关。这个数字，只是为了比较我提到的200磅，一桶石油的范围3排放量是1,000磅。与 Scope 1 和 2 相比，这是一个很大的数字。

加在一起，您会看到每桶 1,200 磅。EOR，就像我说的，二氧化碳永久留在地下。我们公司生产每桶石油平均需要消耗约 1,700 磅二氧化碳。因此，当我们看到它时，我们会说：“好吧，我们每桶注入 1,700 磅。” 该桶的总占地面积为 1,200 磅。这实际上是一个碳负桶，与世界上任何其他桶都不一样。”我们把它放在我们的公共材料中，人们确实看到了它。他们明白我们现在在说什么。

我们实际上正在与第三方合作来验证碳强度分数，以便我们在谈论它时可以有更多的钱。但事实就是如此。我们称其为蓝色油只是因为我们认为它与其他石油明显不同。Len，当我们使用工业来源的二氧化碳时，我们才会计算它。我们的部分业务使用天然来源的二氧化碳，但我们大约四分之一的生产是基于工业来源的二氧化碳，这才是真正发挥作用的地方。

LV：让我问一下表格和税费。45Q 扣押税收抵免的未来是什么？这将如何帮助更多公司加入？

CK：拥有我们所拥有的一切真是太棒了，而我们今天所拥有的一切实际上是在今年年初就到位的。因此，即使在 45 季度，我们仍处于早期阶段。只是为了正确看待它。根据该计划，我们每吨二氧化碳可享受 50 美元的税收抵免。

如果我们观察整个捕获成本，就会发现植物的性质具有非常低的捕获成本。然后你就会发现捕获成本非常高的植物。例如，燃煤发电厂捕获二氧化碳的排放流非常复杂。为什么这很重要，因为 50 美元的信贷基本上可以让你以非常低的成本攻克天然气加工或氨制造商等行业，但它不会触及燃煤电厂。燃煤电厂的价格需要上涨到每吨 100 美元以上。

然后还有一大堆不同的高排放行业，例如水泥制造商。所以，我们现在看到的政策是每吨 50 美元足以让人们兴奋并让他们开始行动。但人们普遍认识到，如果我们真的想实现这些大数字，就像我提到的国际能源署提出的那样，政策需要加快步伐。因此，以两党的方式，共和党人和民主党人都支持这一点，但以两党的方式，他们被纳入了这项和解法案中，我认为它现在就在众议院中。我认为它有可能在未来几天内进行投票。

但 45Q 有所增强，每吨上涨 50 美元至 85 美元。这将使美国每年另外一亿多吨的排放量被捕获，所以我们对此感到兴奋。我认为很可能无论以这种形式还是其他形式，它都会过去，并且会在这里出现。它只会让事情变得更好。最终，我认为我们需要更多的激励措施来诚实地捕获那些更复杂的排放，例如燃煤发电。我认为这些都会到来。我不确定它会是什么样子，也不知道他们什么时候会来，但过道两边都有支持。

LV：为什么运营商真的应该对 CCUS 感到兴奋，为什么他们应该认真对待它并成为其中的一部分？

CK：我喜欢这个问题，Len。我的意思是，这对我们来说非常简单，因为我们传统的 EOR 业务以及我们随之开发的所有 CO 专业知识，但一般来说是运营商。几个月前，我在北达科他州的一次石油会议上对几千人说了这句话。“看起来，而不是被视为问题的一部分，”我不太同意这一点，但这是我们被视为一个行业的一种方式，而不是被视为作为问题的一部分，我们可以被视为解决方案的一部分。如果我们使用与石油和天然气相同的技术，无论是建造和运营管道、钻井、观察地下，还是充分了解地下是什么以及如何安全地容纳其中的流体。这些都适用于 CCUS。”

我和我们公司有一个市政厅，我说，“石油和天然气，我们总是在耗尽我们的水库。” 当你最大限度地加快自己破产的速度时，你就已经尽力了。”如果你仔细想想，确实是这样。我说，“我们即将进入的这个世界，它永远不会结束。” 在我们的有生之年不会。氨厂、钢厂、水泥厂、发电厂等将长期存在排放。我们可以利用我们拥有的相同技能，成为降低排放量并帮助实现低碳未来的关键部分。”这对我们公司来说是令人难以置信的鼓舞。我的意思是，很多人，尤其是业内的年轻人，他们被他们在新闻中看到的内容甚至是他们的一些朋友所殴打。这是我们可以参与解决方案的一部分，我认为这非常棒。

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Carbon capture utilization and storage (CCUS) is a hot topic among the oil and gas industry. As the world tackles climate change and zeroes in on zero-emission goals, figuring out how to minimize the impact of carbon emissions is vital for the long-term health of producers.

It might seem baffling to some or impossible to others. But at least one producer has already established itself as a leader in carbon sequestration, and that stems from its long-time commitment to EOR.

Denbury Inc. has established its reputation as a company “that is doing it” when it comes to sequestration. CEO Chris Kendall talked about the company’s success at length at Hart Energy’s Energy Transition Capital Conference in Houston. He recently connected with Hart Energy’s editorial director, Len Vermillion, to further the discussion.

In this interview, Kendall discussed his thoughts on CCUS and why the industry isn’t as far-off from permanent sequestration as some may think. He also delved into the company’s unique position as the policy changes thanks to two decades of commitment to EOR. How’d they do it?

Len Vermillion: Let’s talk about CCUS first. What are your thoughts on it, and how can it help emissions reduction in the industry? You’re doing a lot of it, so I want to get your thoughts from an operator point of view.

Chris Kendall: When we think about reducing emissions in the atmosphere, if you’re like me, the first place your thoughts go are to wind and solar and to what we can do with that. I think that’s the right place for thoughts to go first. That’s what we’ve seen as the big movers in energy transition in reducing carbon emissions and our whole energy complex. And those have grown rapidly.

“When we’re talking to industry right now, we are telling them that we can provide them certainty today in EOR because we have that.” – Chris Kendall, CEO and president, Denbury Inc.

Unfortunately, they are only going to be able to grow at some rate, and every day you see signs of how they run into challenges. Whether it is space to put the facilities, permitting along the way (or) endangered species in some of these areas that you would think were ideal candidates. The bottom line is that you have that.

Then you have energy demand in the world still growing year-in, year-out, at 1% and change. Your pie is getting bigger along the way. There needs to be more than just this. There needs to be more than biofuels. There needs to be more than some of the other low-emission energy sources that we’ve talked about. What’s fascinating to me is when I look back on what Denbury has done over 21 years of the EOR business, moving massive amounts of CO₂—10, 11 million tons a year right now—and putting massive amounts of CO₂ underground using technology that is existing, this is not something that needs to take a technological leap to work. This is something that can be done at a much greater scale than it is today.

Just for example, today we’re taking 3 million tons of industrial source CO₂ a year out of that whole amount of CO₂ I mentioned and putting that underground. The question is, how can you put more industrial source CO₂ underground? When I look at what the world is doing with industrial source CO₂, just to kind of throw out a couple of numbers that might show where we are and what the opportunity is. Today, the world is capturing about 40 million tons of CO₂ from industry a year. Of course, the world is emitting more than 30 billion tons a year, so 40 million is just not much.

The International Energy Agency (IEA) put together this scenario for a net-zero future by 2050, where all carbon emissions are offset. You would see that wind and solar are top, and you’d expect that, and those will continue to grow. But the great No. 3 in there, which I think surprised people, is carbon capture. To go with my other end of the spectrum from that 40 million tons a year to what the IEA is talking about in 2050 is taking that 40 million to over 7 billion tons a year. So, you can see we’re not even in the first inning of this game. We are just scratching the surface. But even the IEA shows that carbon capture can play that big of a role in offsetting the 30, 40 billion tons a year of CO₂ emissions that the world has.

And we can do it at scale. We can do it with geology that we know about that we’ve been using for years and years for EOR. We can use people that are trained in handling CO₂ for EOR to put CO₂ in other places where it’s safe and secure. We can even use the same infrastructure we have now.

So, we are very fired up about it because we see the scale (and) we see the place that Denbury has in the space. And then we just see the opportunity, fundamentally to make a difference in carbon emissions, which is what we’re all after. I think we can really do it here.

LV: Denbury is kind of unique, and you have already been doing this. You’re not new to this. I think you mentioned 21 years of EOR. Why were you actually doing this when everybody else was into shale and everything else?

CK: I have always said that we’re a unique company, and that has been through good and bad. We’ve remained unique. Through that, you talk about CCUS and how you end up in CCUS. The problem with just going straight to some plant and capturing emissions off of the plant and putting the CO₂ underground is it’s an expensive proposition. So up until now, at least, people haven’t been willing to just go out and spend hundreds of millions of dollars to do that. But what did work was enhanced oil recovery. It started from being able to produce oil from older oil fields that can only be extracted using, essentially, a solvent. Just like you’d use a cleaning fluid and some household application, CO₂ at the right conditions underground is a solvent for oil.

We actually built a business over a couple of decades that had a lot of CO₂ involved that we could pump into oil fields and use that solvent effect to get oil out. We did very well with that. But it was all in the context of a world that needed more oil. And now we’re in kind of a different place.

I mean, the world’s going to need somewhat more oil for some time in the future, but it’s not this endless growth that might have been what people thought 10 years ago or so. To do more of this business, we needed more CO₂, and that’s how we started connecting to some folks who would be capturing industrial CO₂, like Air Products down in Texas.

We pay them to take the CO₂ because it was valuable enough for us in the production of oil. All that justified this pipeline system for CO₂ that is the longest operated pipeline system in the United States, which Denbury has. It led us to have almost 300,000 hp (horsepower) of CO₂ compression in our fleet to get CO₂ to a liquid form to use it. It’s led us to build a staff of over a 100 technical people who are either engineers for pipelines that move CO₂ or wells that we drill and operate that inject CO₂. (It’s led to) the geologic work of looking under the surface to make sure that the CO₂ is going where we want it to and staying there. We were able to take all that, and then when we see where we are today, now you have a new policy in place that has actually significantly enhanced some of the industrial emitter decisions whether to add that expensive equipment.

Where we see it taking off to where it is going from that base on enhanced oil recovery—I need to interject one thing here, enhanced oil recovery, what I talked about, the CO₂ stays in the ground. It comes out with oil, but we separate it and put it back in the ground immediately—the net effect is that we’re putting CO₂ permanently underground.

There are ways that we can put CO₂ underground that never need to come back out that aren’t associated with oil production. We can continue doing industrial recovery. The fact that we use so much CO₂ to produce oil makes it incredibly low carbon. And then we can go beyond that and just inject CO₂ underground, using what we have already in terms of people and pipelines.

LV: Will you increase those pipelines or that infrastructure? Is that an investment that you will have to make as long as, well, everybody else is?

CK: Oh yeah. What’s neat about it, Len, our intent is to grow this business significantly. What we won’t probably grow significantly is the oil side. We think that the 50,000 barrels a day or so that we operate at is a good level, and it can generate enough cash for us to invest in the growth of the capture and the expansion side. Now, we have a backbone from this incredible 1,000-plus-mile pipeline infrastructure that we can build off. So, we’re not starting from scratch. But what we can do is we can take that backbone, and then we can put extensions into high-emission areas that we might not quite be in today.

Or, we can expand the capacity to where it can move more, which is fairly straightforward in this business. We can invest in underground storage outside of enhanced oil recovery. So, acreage that can be used just for storage. We’ll be making investments in that probably not in the last few weeks of this year, but we’ll start to see some of that next year. What we love about it is the oil side of the business (is) it already has some really great qualities to it, (and it) can fund those investments that we want to make.

LV: You were talking about the utilization part of CCUS that often gets overlooked. Can you tell people what that involves, and how it can be used?

CK: Well, it’s a very tricky question, and to date, the primary utilization that is in the CCUS acronym is enhanced oil recovery. You have this great ability to put literally millions of tons of industrial CO₂ underground using that. For example, today we are injecting, on any given day, about 10,000 tons of CO₂ just for that. What’s also nice about that is that’s under existing law and existing permits. So, if another plant came tomorrow and said, “We’d like to send you our emissions,” we could take them and put them into EOR with no new permits or anything. We could do that under what we have today. Now, if you go beyond EOR and you’re looking for an answer to the “U,” there are a lot of interesting things being looked at.

I see some that I think have some potential. One area is called electra fuels where they will use carbon dioxide as an input to help produce low-carbon electricity. There’s some potential for that I think we’ll see. But beyond that, everything that I see looks very challenged in how much scale you can apply. A good example is just seeing some folks looking at injecting CO₂ into concrete when it’s being mixed, and it gets ingrained in the concrete and is pretty effective at permanently locking up the CO₂.

But I’m sure what you’ve seen, when you’ve seen concrete mixing plants, they’re not in areas that are convenient to refineries and power plants. You have to transport the CO₂ to the mixing site, which I think is a real challenge to the scalability. So to me our recovery is a proven, scalable way of utilizing CO₂. Maybe this electra fuels concept can be something that could grow. Otherwise, I think your best choice is to bury it underground in safe places.

LV: I guess what we’re talking about really is permanent sequestration? How far do you think we are away from that?

CK: Yep, and we’re not far. One of our key strategies right now, Len, is for Denbury to add a series of storage sites along our infrastructure that will be storage of that nature, sequestration. There are other projects underway where that’s happening as well. The challenge with that, and we see it across the whole industry, is that to inject CO₂ in this manner, you require an EPA (Environmental Protection Agency) Class VI permit. To date, as far as I know, there have only been two Class VI permits that the EPA has ever issued in the United States. There are many more being put into the process right now, but then there’s uncertain timing of the approval. In the past, it was more than five years, which is terrible.

The EPA has stated that they think they can do them now in two years, which is more tolerable, I’d say. But it’s still two years. So, there’s a tremendous effort right now being put forward to make all this happen. And many different classics permits are being put together. But I think that we’re probably a couple years away from seeing the first of those.

When we’re talking to industry right now, we are telling them that we can provide them certainty today in EOR because we have that. And then we can transition into sequestration when it’s permitted. And they like that, because that lets them start their projects now without wondering what happens if somebody’s permit does not get approved.

LV: Are a lot of people starting projects at this point?

CK: There are a handful. It’s early days, still. Just as an example, the panel I just got off of, the CEO of California Resources said that they have initiated Class VI permitting for some work that they’re doing in California. Honestly, just a week or so ago, this agreement that we announced for a sequestration site with Gulf Coast Midstream Partners, they had already initiated the process as well. That’s to the southwest of Houston. There’s some of it, but it’s like I said, it’s early days. I think in another year or two we’ll start to really see a good number of these coming together.

LV: What is carbon-negative oil? Because I think you were talking about that before. Kind of explain it to me.

CK: I’m glad you asked. I’m going to the Aspen Institute Global Energy Forum, which is an awesome event because it brings together people from all ends of this spectrum. There are people like me that are leading this company or even people (who) are just leading straight up energy companies, E&Ps. Then you have people in the government who are adamantly opposed to that. And it’s a nice forum for everybody to just talk about these issues in a safe environment. But along the way, what was interesting is a lot of these guys said, “Look, we love what you’re doing and how you guys can manage CO₂, but you’re producing oil, and we just can’t tolerate that.”

“There are ways that we can put CO₂ underground that never need to come back out that aren’t associated with oil production. We can continue doing industrial recovery. The fact that we use so much CO₂ to produce oil makes it incredibly low carbon.”

We said, “Yeah, but it’s a low-carbon oil.” And they didn’t quite get it. We really started to work on some numbers around it and the bottom line, Len, is that it takes a lot more CO₂ to get a barrel of oil out of the ground than it will ever emit once you get it out of the ground. And just to put some numbers around that, the total emissions that you get from a barrel of oil. I don’t know if you’ve heard of EPA Scope 1, 2 and 3 designations, but Scope 1 is direct emissions like your motors that you’re running to do your business, whether it’s a vehicle or a compressor. Scope 2 is electricity that you use, for example, indirect emissions.

So, the electricity that you use, you have to count the emissions for how that electricity was generated. It depends on where you are. You may be someplace it’s all renewable. You may be someplace it’s all coal. For Denbury’s business, just for example, those Scope 1 and 2 emissions together are just shy of 200 pounds of CO₂ per barrel.

So, you say, OK, 200 pounds per barrel, that’s interesting. But Scope 3 emissions are what a lot of people really struggle with, and those are the emissions that are primarily associated with the combustion of the gasoline or the diesel or the jet fuel that’s created from the oil. The number, just to compare that 200 pounds that I mentioned, the Scope 3 emissions of a barrel of oil are 1,000 pounds. It’s a big number compared to your Scope 1 and 2.

Together, you’re looking at 1,200 pounds per barrel. EOR, like I said, the CO₂ stays in the ground permanently. On average for our company to produce that barrel of oil takes about 1,700 pounds of CO₂. So when we look at it, we say, “Well, we’re injecting 1,700 pounds per barrel. The total footprint of that barrel is 1,200 pounds. This is actually a carbon negative barrel, unlike any other in the world.” We put it in our public materials, and people really see it. They understand what we’re talking about now.

We’re actually working with a third party to get the carbon intensity score verified so that we can have a little bit more in our hip pocket when we’re talking about it. But that’s what it is. We called it blue oil just because it’s something that we think is distinctly different from other oil. And we only count it, Len, when we’re using industrial-source CO₂. We use natural-source CO₂ for part of our business, but about a quarter of our production is based on industrial-source CO₂, and that’s where that really comes into effect.

LV: Just let me ask about the forms and the taxes. What’s the future of 45Q tax credit for sequestration, and how will that help get more companies on board?

CK: It’s great to have what we have, and what we have today was put in place just literally at the beginning of this year. So, we are still early days, even in 45Q. And just to put it in perspective. We have a tax credit of $50 per ton of CO₂ that is sequestered under that program.

If we look at the whole spectrum of cost of capture, the nature of the plant has a very low cost of capture. Then you have plants that have a very high cost of capture. For example, a coal-fired power plant has a very complicated emission stream to capture CO₂. Why that matters is that a $50 credit is basically going to enable you to attack very low cost to capture industries like natural gas processing or ammonia manufacturers, but it won’t touch the coal plants. The coal plants, you need to get up above $100 a ton.

Then there’s a whole bunch of different high-emission industries like cement manufacturers, for example. So, what we see happening in the policy right now is that $50 a ton is enough to get people excited and to get them started. But it is broadly recognized that if we really want to achieve those big numbers, like I mentioned that the IEA put out, policy needs to move much faster. And so, in a bipartisan way, Republicans and Democrats both support this, but in a bipartisan way, they’ve put in this reconciliation bill that’s sitting in, I think it’s sitting in the house right now. I think there’s a chance it’ll get voted on in the next few days.

But there is an enhancement to 45Q that increases at $50 per ton to $85 per ton. And that will allow another more than a hundred million tons per year of emissions in the U.S. to be captured, so we’re excited about that. I think there’s a good likelihood that either in that form or some other form, it will pass, and it will come out here. It’ll just make things that much better. Ultimately, I think that we need even more incentives to honestly capture those more complicated emissions, like coal-fired power. And I think those will come. I’m not sure what it will look like or when they will come, but the support is there on both sides of the aisle.

LV: Why should operators really be excited about CCUS, and why should they really take it seriously and be part of it?

CK: I love that question, Len. I mean, it’s very straightforward for us because of our legacy EOR business and all of the CO₂ expertise that we developed along with that, but operators, in general. I said this to a couple thousand people at a petroleum conference in North Dakota a few months ago. “Look, instead of being viewed as being part of the problem,”—which I don’t really agree with but that is a way that we’re viewed as an industry—“instead of being viewed as part of the problem, we can be viewed as part of the solution. If we use the same technologies that we have used in oil and gas, whether that’s building and operating pipelines, drilling wells, looking underground and having a good understanding of what is underground and how secure fluids can be contained there. Every bit of that applies to CCUS.”

I had a town hall with our company, and I said, “Guys, oil and gas is, we’re always depleting our reservoirs. You’re doing your best when you’re maximizing how fast you are putting yourself out of business.” Kind of, if you think about it. I said, “This world we’re going into, it will never end. Not in our lifetimes. There will be emissions from ammonia plants and steel plants and cement plants and power plants for a long time. And we can be a key part of making those emissions low and helping achieve this lower carbon future, using the same skills that we have.” It’s just incredibly invigorating to our company. I mean, a lot of people, especially the young folks in the industry, they’re getting beat up by what they see in the news and even some of their friends. This is something where we can be part of the solution, which I just think is fabulous.