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The Panther Companies April 11, 2024 2 min read

The Race Is On: Carbon Sequestration Projects Gaining Speed

There’s a new kind of well in town: the carbon sequestration well. Injection wells are now more important than ever in meeting net zero goals. In oil and gas, it is common to find Class II injection wells.  Most often they are used to inject carbon dioxide to increase production in depleted oil reserves, known as Enhanced Oil Recovery(EOR). The newer Class VI well is specifically used to inject CO2 for carbon sequestration and permanent storage. 

Drilling companies are leveraging their drilling experience and geological knowledge to establish carbon sequestration projects for the newer Class VI wells.  The backdrop of net zero goals and incentives from the Inflation Reduction Act (IRA) brings drilling companies to the forefront of the movement to store carbon in underground geologic structures.

Carbon Capture Utilization and Storage

Carbon Capture Utilization and Storage (CCUS) is a beneficial tool in the race toward net zero goals. Advancements in carbon capture are not limited to a single industry but include many sectors, such as cement, iron, steel, and power. Once captured, CO2 can be either utilized or stored. Utilization techniques are evolving and awaiting mass adoption across industries. Meanwhile, the capacity for geological storage is abundant in areas where necessary infrastructure is already in place. 

Final Permitting Seeing Completion

The federal EPA permitting process for Class VI wells has been historically slow, in some cases taking up to two years. Projects in 2023 saw many setbacks and delays in permitting, which caused a slowdown in the approval and implementation of carbon sequestration projects. To speed up the permitting process North Dakota, Wyoming and Louisiana have been granted Primary Regulatory Authority (Primacy) over Class VI wells. Texas hopes to follow soon. Allowing states permitting primacy should streamline and speed up the permitting and increase the number of Class VI wells that are drilled.

New Incentives for Carbon Storage

With a prior value of $50 per ton of captured CO2 and projects' estimated costs at $50-70 per ton, margins were too tight for substantial investment and development of CCUS. Incentives outlined in the IRA go a long way toward making CCUS progress possible. Now, at the $85 per ton promised by the IRA, projects should be profitable, and companies should be more willing to provide the upfront capital needed to get these projects in motion.

CCUS in Texas and the Gulf Coast

Granting permitting primacy to more states sets the state for rapid development of carbon injection Class VI drilling.  The Gulf Coast region around Texas, Louisiana, and Mississippi is poised for rapid deployment of carbon injection wells due to:

  • Proximity to high-emitting industry
  • Existing infrastructure from the oil and gas industry
  • Available capacity in CO2 pipelines 
  • Extensive geological knowledge of the region
  • High-capacity, high-quality storage options 
  • Low transportation costs

Planning is underway for comprehensive storage projects that drill many wells, some for injection of CO2 and twice as many to monitor the plume's underground movement. As more permits are approved, Class VI drilling along the Gulf Coast will gain momentum.

Get in the Game

When planning your next CCUS project, rely on the knowledge and expertise of Panther Fluids. Panther’s extensive knowledge of the drilling landscape in Texas and Louisiana provides accurate and efficient support for your CCUS project. We offer comprehensive fluids management and full-service wellsite services to ensure your CCUS project runs efficiently and sustainably. Partner with Panther to guarantee your CCUS project runs smoothly.