Carbon Capture and Utilization Projects Run by Oil and Gas Companies: A Case Study from Russia

Alina Cherepovitsyna (), Ekaterina Kuznetsova, Aleksandr Popov and Dmitry Skobelev
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Alina Cherepovitsyna: Luzin Institute for Economic Studies, Subdivision of the Federal Research Centre, Kola Science Centre of the Russian Academy of Sciences, Apatity 184209, Russia
Ekaterina Kuznetsova: Luzin Institute for Economic Studies, Subdivision of the Federal Research Centre, Kola Science Centre of the Russian Academy of Sciences, Apatity 184209, Russia
Aleksandr Popov: Research Institute “Environmental Industrial Policy Centre”, 42 Olimpijskij Prospect, Mytishchi 141006, Russia
Dmitry Skobelev: Research Institute “Environmental Industrial Policy Centre”, 42 Olimpijskij Prospect, Mytishchi 141006, Russia

Sustainability, 2024, vol. 16, issue 14, 1-23

Abstract: As oil and gas companies are one of the major greenhouse gas emitters, they face increasing responsibility to address climate challenges. This highlights the necessity of integrating decarbonization options into their operations to meet global climate objectives. While progress in technologies for capturing, utilizing, and storing CO 2 (CCUS technologies) is often attributed to oil and gas companies, CCUS projects in the sector predominantly focus on carbon storage, namely CO 2 injection for enhanced oil recovery, which presents limited possibilities. Meanwhile, carbon capture and utilization (CCU) technologies offer a promising avenue for producing valuable products from CO 2 , a potential that has been underexplored in theory and practice within the oil and gas sector. This study analyzes the development of the full CCU cycle by oil and gas companies, assessing the economic viability of such projects. It includes a content analysis of research materials on CCU deployment and a case study modeling the economic viability of producing methanol from CO 2 in Russia. The findings indicate that the estimated minimum price for CO 2 -based methanol to achieve project payback is USD 1128 per ton, compared to approximately USD 400 per ton for traditional methanol. This price gap underscores the need to foster the development of low-carbon technologies, markets, and measures to support these projects. In the domain of CCU projects, cost-reduction measures could be more applicable, while regulatory measures, such as carbon taxes, currently have a limited impact on the economic viability of these projects.

Keywords: CCU; oil and gas companies; CO 2 utilization; methanol; Russia; decarbonization; CO 2 -based products; economic viability; CCU projects; low-carbon diversification (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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