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Chevron, Exxon seek state backing for Australia carbon
capture, hydrogen projects
By
Emily Chow
May
17, 2023
![](images/images_05_23_2023/Chevron%20Logo.jpg)
The
logo of oil company Chevron is seen in Los Angeles, California, United
States, April 12, 2016. REUTERS/Lucy Nicholson
ADELAIDE, May 17 (Reuters) - Chevron
Corp (CVX.N) and
Exxon Mobil Corp (XOM.N),
the two largest U.S. fossil fuel companies, are seeking Australia's
backing for carbon capture and storage (CCS) and hydrogen projects as
they look to increase investment in a bid to slash intensity of carbon
emissions.
Scaling up CCS projects and generation of hydrogen from renewable
energy are crucial for Australia, the world's largest exporter of
liquefied natural gas (LNG), to wean its economy off carbon, even as
it seeks to meet LNG demand from top buyers such as Japan and South
Korea.
"Support doesn't just need to be dollars but it's that political
support," David Fallon, general manager of energy transition at
Chevron Australia, said at the Australian Petroleum Production and
Exploration Association (APPEA) conference.
Australia aims to cut carbon emissions by 43% by 2030, and reach net
zero by 2050. It is home to the world's largest commercial CCS
project, Gorgon, run by Chevron, which has struggled to hit capacity.
Fallon pointed to how Chevron was prioritising CCS investment in the
United States because of favourable policy measures such as tax
credits.
"That marginal dollar that you're looking to spend at the end of your
budget, that will make a difference," Fallon said.
Australia announced its
own plans to scale up its
offshore CCS capability on Tuesday, following big incentives by the
United States, and Britain's $24 billion commitment in such projects
over the next two decades.
A CCS process captures carbon dioxide (CO2) generated from industrial
activity, transports it, and then stores it underground.
"Australia is actually in a very advantageous position, as long as I
think we have the right policies that will enable that," Irtiza H
Sayyed, president of ExxonMobil's low carbon solutions in Asia
Pacific, also said at the conference.
"For long-term investments to make sense, we need to have predictable
policy," Sayyed said.
Executives from Inpex Corp (1605.T),
Japan's biggest oil and natural gas explorer, and Australia's top
independent gas producer Woodside Energy Group (WDS.AX) also
pushed for policy certainty.
"Ministers, senior ministers, and governments seem to be quite
skeptical of the technology for whatever reason. The feeling is that
they're not so supportive of it," said Bill Townsend, senior vice
president at Inpex.
Separately, Australia announced in its
annual budget last week it would invest
A$2 billion to scale up
development of its green hydrogen industry.
"We should be thinking about the cheapest form that we can get. It
stands to reason that would be blue hydrogen," Townsend said. Blue
hydrogen is produced from natural gas with carbon emissions removed
via CCS.
"If you want to stimulate that and get hydrogen into the mix, it has
to be economically attractive."
Writing by Sudarshan Varadhan; Editing by Robert Birsel
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