Schaper Energy Consulting

The Carbon Corner - Issue #59

Published 7 months ago • 6 min read

In a world grappling with the urgent need for climate action, these stories showcase innovative solutions and collaborative endeavors driving progress toward sustainability. In today's issue of The Carbon Corner, we will discuss Exxon's acquisition of Denbury. We will also cover stories of Red Trail Energy and's creation of voluntary carbon removal credits and Chevron's partnership with Angola to explore low-carbon projects. These diverse initiatives exemplify the global effort to combat climate change and build a greener future through technology, innovation, and collaboration.

Exxon Expands Low Carbon Solutions with $4.9 Billion Denbury Acquisition

Exxon has made a significant move in expanding its Low Carbon Solutions business by acquiring Denbury, a carbon capture, utilization, and storage company, in a deal valued at $4.9 billion. This acquisition includes a 2% premium on Denbury's closing price and amounts to 0.84 Exxon shares per Denbury share. With this deal, Exxon now owns the largest CO2 pipeline network in the United States, spanning over 1,300 miles, including key areas in Louisiana, Texas, and Mississippi, and access to 15 strategically located onshore carbon storage sites.

Exxon's Chairman and CEO, Darren Woods, expressed enthusiasm about this transaction, calling it a significant step forward in their Low Carbon Solutions business's profitable growth. The partnership with Denbury's talent and CO2 pipeline network enhances Exxon's position in the low-carbon sector and enables them to address industrial customers' decarbonization needs while reducing their own emissions.

Additionally, the deal includes Gulf Coast and Rocky Mountain oil and natural gas operations with reserves exceeding 200 million barrels of oil equivalent by the end of 2022. These operations generate approximately 46,000 barrels of oil equivalent per day and offer opportunities for carbon capture initiatives. Exxon anticipates a substantial annual reduction of 100 million metric tons in carbon dioxide emissions as a result of this strategic move.

As of Q3 2023, Exxon's market capitalization stands at $428.83 billion with a modest price-to-earnings (P/E) ratio of 10.73, while Denbury has a market capitalization of $4.56 billion, a P/E ratio of 9.47, and recorded revenues of $1,489.85 million over the past twelve months. This acquisition underscores Exxon's commitment to advancing its low-carbon initiatives and expanding its presence in the growing carbon capture and storage market.

Blue Flint Ethanol Plant Implements Carbon Sequestration for Sustainable Fuel Production

The Blue Flint ethanol plant near Underwood, North Dakota, has embarked on a significant environmental initiative by implementing carbon sequestration and underground storage of carbon dioxide (CO2). This makes it the second ethanol plant in the state to adopt carbon sequestration, with the Red Trail Energy plant at Richardton being the other. Harvestone, the owner of Blue Flint, has initiated this move as part of its broader "Vision Carbon Zero" initiative. The company aims to produce renewable fuel with a "zero lifecycle carbon intensity" to minimize its environmental impact, with carbon capture and storage playing a pivotal role in achieving this goal.

Harvestone's CEO, Jeff Zueger, shared that the plan is to store 200,000 tons of CO2 annually, which is equivalent to removing emissions from 43,000 vehicles. While the current intention is permanent storage of the captured CO2, there is potential for future commercial use. Moreover, this effort to "de-carbonize" ethanol could create opportunities for producing sustainable aviation fuel, as reducing the carbon intensity of ethanol is a crucial step in becoming a feedstock for such fuels. The captured CO2 will be stored in the Broom Creek formation, approximately a mile below the surface. This marks a significant stride toward a more sustainable and environmentally friendly ethanol production process.

Red Trail Energy and Team Up to Pioneer Carbon Removal Credits in the Renewable Market

Red Trail Energy (RTE), a prominent ethanol producer in North Dakota, has teamed up with to pioneer an innovative approach in generating voluntary carbon removal credits. This collaboration aims to tackle the pressing issue of carbon dioxide (CO2) emissions and promote sustainability within the renewable market. RTE's ethanol plant in Richardton, ND, will take center stage in becoming the first and largest production facility to introduce third-party verified CO2 removal credits sourced from bioethanol CO2 capture and storage to the voluntary carbon market. These credits will undergo rigorous evaluation and certification through's carbon removal standard and registry, ensuring compliance with strict environmental and carbon accounting standards.

The CO2 sequestered by Red Trail Energy during the fermentation process will be offered as removal credits, providing an opportunity for forward-thinking companies to offset their carbon footprint and embrace eco-friendly practices. These credits will be made available through Renewable Products Marketing Group (RPMG), Red Trail Energy's trusted marketing firm, with an initial offering expected soon. Red Trail Energy has been a pioneer in bioenergy facilities in the United States, incorporating carbon capture and storage technology (BECCS) since 2022, successfully capturing around 180,000 metric tons of CO2 annually, extracted directly from the fermentation process and safely stored underground in a state-certified Class VI well within the Broom Creek Formation.

This groundbreaking partnership between Red Trail Energy and positions RTE at the forefront of driving sustainability in the renewable market, inspiring businesses and industries to actively combat climate change by acquiring certified carbon removal credits.

Noya: The Startup Scaling Up Carbon Removal with Innovative Modular Technology

Noya, a startup founded by Josh Santos '14, is taking on the challenge of accelerating direct air carbon removal to combat climate change. They are developing a low-power, modular system that can be mass-produced and deployed worldwide to capture and store carbon dioxide (CO2) from the atmosphere. Noya plans to power its system with renewable energy and locate its facilities near injection wells for underground carbon storage. Third-party auditors will verify the amount of captured CO2, which will then be sold as carbon credits to help organizations achieve their net-zero emissions targets.

Noya's system is akin to "solar panels for carbon negativity," and it can be scaled by stacking these modular units like LEGOs. The company is currently building its first commercial pilot facility and aims to establish a full-scale commercial facility capable of removing millions of tons of CO2 annually. Noya has already secured millions of dollars in presales from organizations like Shopify, Watershed, and a university endowment.

Josh Santos was inspired by his time at MIT, where he learned about the importance of leveraging privilege to make a positive impact on the world. After working at Tesla and Harley Davidson, he founded Noya in 2020 with a focus on carbon capture. Noya's modular units are compact, efficient, and designed to remove around 60 tons of CO2 from the atmosphere annually. Santos believes that carbon removal can scale without government mandates, but he also sees increasing government and public support for carbon removal technologies worldwide as they address the urgent problem of climate change.

Chevron Partners with Angola to Explore Low-Carbon Projects and Clean Energy Initiatives

Chevron, the US-based energy corporation, is set to explore various low-carbon projects in Angola, Africa, following a Memorandum of Understanding (MoU) signed between Chevron New Energies and the Angola Government. The collaboration aims to investigate opportunities related to hydrogen, biofuels, and carbon capture and storage (CCS) in Angola. Additionally, they plan to establish a regional center of excellence to attract and promote low-carbon investments in the area. Jeff Gustavson, President of Chevron New Energies, hopes this effort will contribute to affordable, reliable, and cleaner energy while assisting industries and customers in achieving their decarbonization goals.

Chevron New Energies, launched in 2021, focuses on creating business lines that offer lower carbon solutions across the value chain, including hydrogen, carbon capture, utilization, and storage, and other low-carbon opportunities. Clay Neff, President of Chevron International Exploration and Production, emphasized Chevron's long-standing commitment to Angola and its dedication to supporting the country in developing a low-carbon future. Angola, at the 26th United Nations Climate Change Conference (COP26), pledged to increase its renewable energy capacity to 70% of its energy mix by 2025. They also accelerated their emissions reduction target from 2030 to 2025, aiming for a 14% reduction compared to business-as-usual emissions, with a further 10% conditional on support. This collaboration between Chevron and Angola aligns with global efforts to combat climate change by advancing low-carbon solutions.

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We hope you enjoyed reading this week and hope to see you back next week for more!

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