Fossil fuel companies’ hopes of sequestering captured GHG emissions at the bottom of the Gulf of Mexico were dashed last week when a federal court overturned giant oil and gas a lease sale held by the Biden administration last November. ExxonMobil was the biggest spend at the time, bidding for nearly 100 shallow leases. As the tendered areas were not expected to be very profitable for oil and gas drilling, experts suggested that ExxonMobil would use the areas to store the captured CO2.
But late last week, U.S. District Court Judge Rudolf Contreras overturned leases issued during the November sale. The huge sale, which sold 80.8 million acres at auction in the Gulf of Mexico, was challenged in federal court by environmental groups when it was first announced in August. Activists criticized the Biden administration for conducting the sale, even when it promised to reduce pollution on the planet.
In a court opinion issued late last week, Contreras writes that the Ocean Management Bureau made a “serious mistake” in deciding to keep leasing sales and had to consider how selling oil and gas produced there to foreign consumers would generate greenhouse gas emissions. His decision means that the internal department will have to conduct a new environmental review that takes into account how fossil fuels extracted from areas sold at auction in November would contribute to climate change.
ExxonMobil declined to comment On the edge on the court’s decision and how it could affect the company’s plans to capture and store carbon dioxide. Earlier this month, the company promised to reach net zero emissions for its operations by 2050, a relatively limited commitment to the climate as it excludes emissions that come from burning oil and gas products the company sells.
ExxonMobil cited carbon capture and storage (CCS) as a strategy to reduce pollution. CCS involves the use of devices to capture the carbon dioxide that power plants and industrial facilities produce and then find places to store this CO2 underground.
“ExxonMobil believes that the largest CO2 storage facility in the United States is in the Gulf of Mexico,” said Todd Spitler, a spokesman for Exxon’s low-carbon solutions business, in an email to E&E news.
ExxonMobil works with Shell, Chevron and about a dozen other companies to develop CCS technologies in the Houston industrial zone. These companies have recently estimated that they can store up to 50 million metric tons of CO2 per year, part of the amount of storage they believe is available along the Gulf Coast by 2030 and then doubled by 2040. The Gulf of Mexico’s proximity to industrial, oil and gas facilities along the Houston Canal and Chemical the Louisiana Corridor made it a desirable carbon capture zone.