Everyone likes a pat on the back, a bit of credit now and then, but do big prizes really work? Elon Musk must think so as he’s offering $100 million (about 0.05% of his net worth) to any team that comes up with the best way to capture carbon. Carbon capture and storage (CCS) of course remains a serious challenge on the road to net-zero, but for Mr Musk the publicity alone must be worth the offer. After all, he now runs the biggest car company in the world by market cap and if the experts are to be believed, sales of his ‘zero emissions’ Teslas are set to go through the roof this year.
Teslas only really run on ‘clean’ energy if carbon capture is part of the equation. Source: Pixabay.
When it comes to carbon capture, Elon Musk is in good company. Big oil has long recognised that CCS has to be part of its transition future. But just to put the Musk offer in perspective, a new CCS plant can cost around $1 billion in investment and so far, most governments have been reluctant to do their bit with subsidies. Th is may change of course as climate change commitments are upgraded at COP26, the UN Climate Conference which is due to take place in Glasgow in December this year and because the Biden administration is already talking and acting tough on the environment. As part of its $2 trillion climate plan the US government is offering generous tax breaks for CCS projects and there are already more than 30 of these off the starting blocks.
In the meantime, oil and gas companies continue the painful process of transition with business confidence down and more consolidation in the offing according to the latest industry outlook report by the consultancy DNV GL. The name of the game of course is still transition, CCS included, but amid all the doom and gloom there are positive notes in the report, aptly entitled Turmoil and Transformation.
Firstly, big oil and gas companies know a lot about managing big projects, be they oil and gas, or indeed renewable energy. Secondly, just over 20% of senior oil and gas professionals maintain that their companies will actually increase their investment in oil and gas projects during 2021. Thirdly, the report says the digital revolution is set to continue apace which should mean even more AI-driven, less carbon intensive operations. According to DNV GL Vice President Hans Kristian Danielsen, “there are signs that our sector may invest to transform rather than cut its way out of the present crisis.” Surely there’s an O&G candidate for that Elon Musk prize?
