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2 May 2019

Arizona carbon capture plan brings carbon offset down to $100 a ton

Whenever we hear the term Carbon Capture we cringe. This is because it is often associated with the idea of keeping everything the same and changing relatively little in the fossil fuel industry. An energy industry based on digging stuff up and transporting it to somewhere to burn, carries with it the carbon tarnish of that transportation, and the continual cost of digging it up. It is intrinsically more expensive than wind or solar. If you add another layer of effort to the process, that of taking out the carbon from the air, it seems doomed to be permanently economically inferior.

The experiments in simply “taking” carbon out of the air seem the least attractive, since taking it from a gas prior to burning it, or trapping carbon in a chemical bond as it escapes a chimney, at least attacks the problem where the CO2 is most concentrated.

However one that was licensed outside this week seems worthy of a mention and was researched at Arizona State University and has been licensed to a company called Silicon Kingdom Holdings (SKH). It comes in the form of an agreement to deploy carbon capture technology developed by Professor Klaus Lackner, director of Arizona University’s Center for Negative Carbon Emissions. SKH has been sold the exclusive rights to Arizona University technology.

The biggest problem, according to Lackner is that most carbon capture technologies use a lot of energy and that this brings its own carbon footprint. It seems that until now for every 2 tons of carbon captured in this way, you need to burn a ton to create the electricity to run it.

Not anymore says Lackner. The problem is that all other carbon capture devices need to drive pumps to suck air into them. The technology he describes as a mechanical tree, is claimed to be thousands of times more efficient at removing CO2 from the air and doing it with less energy. The captured carbon can then either be used or buried depending upon who you are and how you feel about it. The temptation is to create a process to turn it back into fuel, eliminating the extraction mechanisms such as digging for oil, coal and gas and making the process cyclical.

It is an approach that we have heard many times, and it has never turned out to be attractive financially. Perhaps this one will be different, but that will rely on details that Lackner is not currently giving out.

The technology uses the wind to blow air through the system. Does that mean that where there are strong winds, for instance in precisely the same places that wind farms are positioned? And does that perhaps mean it could even be part of the same structure?

The idea is that this makes the process passive requiring less cost. Somehow Lackner feels this makes it a scalable solution.

In the past thinkers have suggested setting aside a piece of land the size of Newfoundland (400,000 square kilometers) and the rest of the world paying for CO2 extraction services to whichever unlucky operator and country is the recipient of all these mechanical trees.

Now what Lackner is saying is that these can be installed on the same economic basis as wind farms. One produces electricity, the other fuel, both have an upfront cost.

What is the business model you ask? Well we suspect that it will be carbon offsets all over again, companies that pollute can carry on as they are, paying for the installation of such a device, to take as many tons of CO2 out of the air, as they are putting in. The Carbon that is collected can also be sold as fuel, we suppose to those very same companies which are paying for the carbon offset, creating a virtuous carbon cycle.

The press release says that “If this is deployed at scale the technology could lead to significant reductions in the levels of CO2 in Earth’s atmosphere, helping to combat global warming.”

The “mechanical tree” is a novel geometry which is agnostic to the wind direction. Each one contains a stack of sorbent filled disks. When the tree-like column is fully extended and the disks spread apart, air flow makes contact with the surfaces and the CO₂ gets bound up. During regeneration, the disks are lowered inside the bottom container. Inside the chamber, the CO2 is released from the sorbent. The released gas is then collected, purified, processed and put to other uses, while the disks are redeployed to capture more CO2.

Can we do the math here? Humans release 38 billion metric tons of CO2 into the atmosphere annually. So what’s it going to take to build enough of these machines? It can be done for $100 per metric ton, says Lackner, making the annual cost something like $3.8 trillion. To be honest if that were true, it may well be viable in that there is probably that much subsidy paid to coal, gas and oil interests in the world – could that somehow be diverted?

Well actually no, if you divert subsidy then these companies or their customers would have to find that subsidy money somewhere else or go bust? So can these companies afford to pay that $3.8 trillion a year out of profits? Perhaps there was aa time when they could, but again no. Mostly because they are paying for the extraction rights and extraction costs, including salaries of all their staff, and as renewables brings down the price of energy, so the fossil fuel companies have to remain profitable on tighter and tighter margins. Of course if they get their fuel from this process as well, they can fire everyone and save on those extraction costs? We’re not sure this is very different from renewables then.

We could have governments pay this money as a further subsidy, but remember this is Opex, not Capex. It is not a one off payment and then the carbon cycle is fixed, it is a continuing payment. Spend this much once on renewables and you would have enough electrical energy to run the entire world’s electricity supply with enough left over to replace gas (petrol) in cars, and that would be capex – a one off payment with some continuing costs (staff) and a 25 years replacement cycle. There would be enough revenue coming in to pay for replacement costs plus those salaries, plus exploration for more places to locate renewable resources. All for a one off payment.

So this type of technology has to be seen as one of two things. Firstly it is a way for us to put off renewables, continue to invest in extraction of oil and gas, and know that there is a technically feasible way of saving the planet once it gets really scary. Secondly it can be seen as a back stop, something to do a little of once renewables are in place, because we missed some of the IPCC targets, and as a result are feeling that climate changes needs to be rewound a bit for a year or two, but not permanently.

Climate change deniers are very fond of “escape” technologies of this type, but it will mean economic hardship, continued high prices for energy and living with the consequences of CO2 build up for a lot longer – with the worry that there is no viable business plan to pay for it. We then arrive back at a New Green Deal but 10 years later, and this time the agenda is controlled by fossil fuel companies.

The next step is for SKH to deploy clusters of these column shaped mechanical trees (See picture below), made up of 12 columns which can remove 1 metric ton of CO2 per day. They will be deployed in a pilot CO2 farm targeting 100 metric tons per day of CO2. The technology will then be deployed to full scale CO2 farms in multiple locations, each capable of removing up to 3.8 million metric tons of CO₂ annually. But SKH does not say in detail what it’s business model is. We reckon some legislators may embrace this approach under regimes like the current Trump administration in the USA – which is pro fossil fuel. However before that even happens, we have to see if the $100 a metric ton numbers stack up over time.1