Could the U.S. East Coast Become a Hot Spot for Carbon Capture Schemes?

(Bold’s Communications Director Mark Hefflinger will join New York radio station WBAI’s “Eco-Logic” program on Wednesday, Aug. 5, to talk about eminent domain, carbon capture, CO2 pipelines, and whether the fossil fuel industry views the U.S. East Coast as a potential hot spot for its carbon capture utilization & storage (CCUS) schemes.)

The key areas currently being targeted by industry for CCUS include the Midwest, where corn ethanol plants produce CO2 as a waste byproduct that companies initially aimed to pipe hundreds of miles to underground sequestration waste dumps, potentially in states including North Dakota, Wyoming, Illinois, and Indiana. However, since the signing of the budget bill (OBBA Act), many advocates of CCUS as a climate solution have signaled new interest in instead supporting the industry’s plans for Enhanced Oil Recovery (EOR), or using the CO2 to extract oil in older or under-producing wells.

Along with the Midwest, the industry sees the Gulf Coast as a prime location for CCUS activity. ExxonMobil acquired Denbury Pipelines, which operates a relatively large network of CO2 pipelines along the Gulf Coast. The industry and industry-friendly states have cited geologic studies showing large volumes of offshore CO2 sequestration potential off the coasts of Texas, Louisiana and Mississippi.

Mississippi was the site of the 2020 rupture of a Denbury-operated CO2 pipeline, in Satartia, MS, that saw hundreds have to evacuate, sent dozens to the hospital, and some victims are still experiencing negative health impacts to this day. Outside of the Midwest and Gulf Coast, California also has a history of oil extraction, and areas in the central part of the state are being targeted for CO2 sequestration

States that already have large fossil fuel extractive industry presence, like the Gulf Coast, are among the states to have applied to the U.S. EPA for “primacy,” or the direct oversight by state agencies for the permitting of the underground sequestration wells where CO2 would be stored under CCS schemes. So far, states granted primacy by the EPA include North Dakota, Wyoming, Louisiana and West Virginia, while eight other states have pending applications before the EPA: Alabama, Alaska, Arizona, Colorado, Mississippi, Oklahoma, Texas, and Utah. Meanwhile, the state of Georgia — or at least major utility Georgia Power — quietly explored the state’s potential for CO2 geological storage with its own study, finding some limited potential for CCS industry in the state.

On the industry side, there are currently over 230 “Class VI” well permit applications for CO2 sequestration pending at the EPA, spread across mainly the states that have applied for primacy, with some exceptions in places like Florida, Ohio, and Pennsylvania.

As the maps above display, the East Coast so far has not been a major target of the current 45Q federal tax credit-fueled gold rush for either the carbon capture industry, or states seeking to capitalize on any geologic potential for CO2 sequestration or use for Enhanced Oil Recovery in older oil fields. But could the U.S. East Coast become a hot spot or eventual for the industry’s carbon capture schemes?

According to the USGS, the potential for geologic sequestration is lower on the East Coast relative to the rest of the country, with a total sequestration potential of 34,000 megatons of CO2 between the Appalachian Basin (20,000) and Atlantic Coast Basin (14,000). The South Florida Basin on its own has potential to store 170,000 megatons. However, from a political standpoint it should be noted Florida Gov. Ron DeSantis has called CCS “a scam,” accusing it of being a part of “climate ideology” that has no place in Florida’s legal framework, and urged lawmakers to reject the idea of carbon sequestration, saying, “Don’t indulge the left with carbon sequestration.”

By comparison, USGS estimates the Illinois Basin, which includes Illinois, Indiana and parts of Kentucky, has space for potentially 150,000 megatons of CO2 sequestration, while the Gulf Coast region — defined here as southern Texas, Louisiana, Mississippi, Alabama and the Florida panhandle — has an estimated 1.8 million megatons of storage potential. In addition to onshore storage, there is additionally a large volume of offshore CO2 storage potential, off the Gulf Coast and Southern East Coast.

While the political backing for strict sequestration of carbon as a means of fighting climate change has taken a back seat in the current administration, the recently passed budget reconciliation bill, One Big Beautiful Bill Act (OBBBA) actually increased the amount of 45Q federal tax credit that can be claimed by companies capturing CO2 for use to drill for more oil via the Enhance Oil Recovery process. Now, companies get the same tax credit handout whether they’re storing CO2 to supposedly fight climate change, or helping the industry continue to extract and pollute forever. In fact, the OBBBA made it more economical for any company to go the EOR route — because in addition to the free money from the government, they can additionally charge oil companies to purchase their captured CO2 for EOR.

With this new financial incentive, areas of the country with older or lower-producing wells that could benefit from EOR to improve revenues could become a target for new carbon capture schemes. The maps above show a large number of older wells in New York and Pennsylvania, and some potential to see a CO2 pipeline along the Ohio River Valley to feed new EOR-based production at those wells.

However, just as in the Midwest where landowners opposed to eminent domain seizure of their land for CO2 pipelines, New York has been home to massive opposition to proposed fossil fuel pipelines going back decades. Likewise, the political climate may be shifting towards more support of carbon capture as a lifeline for the oil industry, rather than for sequestration as a means of fighting climate change. So while Florida may offer potential sequestration space, the political headwinds explain why it has not applied for primacy from the EPA, as any efforts by industry could be met with direct opposition from the Governor.

While there is definitely potential for both geologic CO2 sequestration, and Enhanced Oil Recovery in certain spots along the East Coast — including in New York and Florida — it is relatively smaller compared with other CCS hotspots in the Midwest and Gulf Coast. So far, the industry has not seen the East Coast as a ripe target for development, which may continue until some point that CO2-based Enhanced Oil Recovery extraction of old wells in New York and Pennsylvania looks more economically appealing.

Additional resources: 

bipartisan-policy-center-CCS
2020-06-08 Total Cost of CCS in NE and MW US