The Midland Basin hub could start injecting carbon dioxide underground in oil and gas country as early as 2025.
Carlos Anchondo
Sept 29, 2023
ENERGYWIRE | An energy waste storage company has unveiled plans to develop a carbon sequestration hub in West Texas, positioning the project as a “low-cost” option to reduce emissions in a region known for oil and gas.
Milestone Carbon, a subsidiary of Houston-based Milestone Environmental Services, said Tuesday that the proposed site would be in Texas’ Midland and Upton counties. The company acquired the rights to more than 10,000 acres of land and pore space in those two counties for “permanent” carbon dioxide storage, according to a news release.
The so-called Midland Basin hub — which has an estimated storage capacity of approximately 30 million metric tons of CO2 over its life — could start injecting CO2 underground as soon as 2025, Milestone Carbon said. If that transpires, the company said, the project would be among the first active storage sites in Texas for permanent geologic sequestration.
“Carbon hubs offer nearby emitters and new facilities safe, reliable, and lower-cost disposal solutions with less pipeline infrastructure build-out requirements,” Chris Davis, a senior vice president with Milestone Carbon, said in an emailed statement Thursday.
Milestone Carbon’s press release did not include a cost estimate for the project, nor did it name contracts with emitters.
In a statement, Davis said emitters are “evaluating capture facilities, which would connect with Milestone Carbon’s sequestration facilities.”
“Commercial negotiations contemplate multiple structures to monetize” the federal 45Q tax credit, Davis said. The credit provides a monetary value for CO2 that’s stored.
Carbon capture and storage “is one of the few near-term decarbonization options for hard-to-abate sectors like cement,” Davis added.
Milestone Carbon’s hub aims to collect CO2 emissions from “heavy industry,” natural gas processing, electricity generation and “other critical industries,” according to the company release.
The hub adds to a list of carbon dioxide storage proposals across the United States, including the Bayou Bend CCS project in Texas and the Cameron Parish CO2 Hub in Louisiana.
Chevron, Talos Energy and Equinor are developing the Bayou Bend CCS project. Carbonvert and Castex Carbon Solutions are developing the Cameron Parish CO2 Hub.
Operations on Bayou Bend are anticipated to begin in the second half of this decade, according to Chevron, and first injection for the Cameron Parish project is expected sometime in 2027.
While a smaller-scale project than the Gulf Coast projects, the Midland Basin hub has a total storage capacity that’s “equivalent to the annual carbon emissions from 6.5 million U.S. passenger cars and trucks,” the company said in its news release.
In West Texas, Occidental Petroleum broke ground earlier this year on a facility named Stratos near Notrees that is designed to extract CO2 from the atmosphere.
Construction on the project is “progressing well,” according to Occidental spokesperson William Fitzgerald. CO2 captured by the direct air capture facility will be stored through a combination of dedicated geologic storage as well as enhanced oil recovery, a process used to recover residual oil.
Davis with Milestone Carbon said the project received a Class II permit in late May from the Railroad Commission of Texas, the state agency that regulates Texas’ oil and gas industry. Class II wells are split into three categories, according to EPA’s website, and include enhanced recovery of oil and, “in limited applications, natural gas,” disposal wells and hydrocarbon storage wells.
None of the CO2 sent to the Midland Basin hub will be stored via enhanced oil recovery, a process where CO2 is used to force oil out of the ground. The Midland site is “exclusively for permanent geologic sequestration,” Davis said.
Milestone Carbon has also applied to EPA for a Class VI well permit. Class VI wells are used to send CO2 underground into rock formations for long-term storage.
Davis said all delivery of CO2 to the hub will happen through pipelines, not trucks.
“Planning is ongoing,” Davis in a statement, when asked for an estimate for how many miles of new CO2 pipeline will be needed for the project. He said there are more than 4 million metric tons of emissions within 30 miles of the Milestone Carbon site, citing EPA data.
A representative of Commission Shift, a nonprofit group created to reform the state’s energy regulation, called for a pause on new CO2 injection facilities in Texas.
“Class II injection wells are causing earthquakes, sinkholes, well blowouts, and contaminating groundwater all across Texas,” said Paige Powell, policy manager with Commission Shift, in an email Thursday.
“Until these systemic issues are addressed by the Railroad Commission, the state of Texas should not permit any new CO2 injection facilities,” Powell said.
Powell also said EPA should reject the agency’s application to obtain primary enforcement authority, or “primacy,” over Class VI wells “based on concerns around Class II program mismanagement and ethics violations.”
Patty Ramon, a spokesperson for the Texas Railroad Commission, said the agency’s Class VI primacy application is under review at EPA.
Ramon did not provide a comment Thursday on questions related to Milestone Carbon’s Class II permit.
A spokesperson for EPA’s Region 6, which includes Texas, did not provide a comment Thursday.
