The ponoases pulled by Romania after 150 years of oil extraction. What obligations do we have regarding CO2 storage?

Petrom and Romgaz, Romania’s two oil and gas producers, will be obliged, at the level of 2030, to ensure a carbon dioxide storage capacity in the country that will facilitate the underground storage of 9 million tons of CO2 per year, according to a presentation on CCUS (carbon capture utilization and storage) made by the Oil and Gas Employers’ Federation (FPPG).

According to an E-nergia.ro report, the obligation for Romania comes from the NZIA (Net-Zero Industry Act), a European regulation already voted by the Parliament and through which our country is assigned 9 of the 50 million tons per year, carbon storage capacity across the European Union, a target to be met by 2030.

Romania is responsible for the second share, in terms of volume, in the EU, after the Netherlands

Romanian companies producing hydrocarbons have such a large share according to historical reasoning, the quoted source shows. Romania has a 150-year tradition of hydrocarbon extraction (even now it is one of the few oil and gas producing countries in the EU) and as such, according to Brussels’ interpretation, Romanian companies, which have long used these hydrocarbons which emitted CO2, must now ensure the capacity of carbon capture and storage.

Romania tried to oppose this approach, but despite the efforts of our MEPs and the industry, Brussels could not be prevented from basically punishing Romanian oil companies now because the country was one of the oldest and largest oil and gas producers in Europe. And as it is still one of the few countries still extracting oil and gas, it was unable to find enough states to support its position when the NZIA was negotiated.

The costs of implementing a carbon storage capacity of 9 million tons per year, as well as the penalties for possible non-compliance on the part of the companies concerned, are not yet definitively calculated, especially because the CCUS technology is still in its infancy. However, one of the FPPG experts, at the request of the press, made a rough calculation – just ensuring a storage capacity of 9 million tons per year, for 20 years, would cost the two Romanian companies around 4.5 billion Of euro. In addition, storage, transport and storage would cost around 15 billion euros, e-nergia.ro cites.

The benefits of carbon storage and the reaction of the companies concerned

Once the solutions are identified and the chain is created, carbon storage will also bring advantages from which the companies that spent the money to create the storages will start to recoup their investments. This is where the resulting CO2 will be stored by industries that cannot fully decarbonize, a classic example being that of cement. Storage exempts them from paying for carbon certificates (now it is 60 euros per ton emitted, but it can also reach 90 or even 150). Almost all climate scenario models require the implementation of CCS, say those from FPPG in the studio, according to the quoted source.

“Oil and gas operators in Romania have emphasized that before any decision is made regarding the implementation of CCS projects at the national level, it is necessary to carry out environmental impact studies, to validate that it is safe to do so of projects, in relation to local communities. Responsibility for such environmental impact studies should be clearly assumed at national level by the authorities with powers in this sector. These assessments should not be left to operators, especially as there are several Member States that have formally banned underground CO2 storage, and others are on the way to doing so,” the study says.

“The oil and gas industry has increasingly signaled the need for the Romanian State to assume an active role in ensuring access to public funding or other financial support schemes, being essential for CO2 storage projects, due to investments with the use capital intensive, long project development periods (8-10 years) with an uncertain price of the CO2 trading scheme as a measure to avoid costs along the entire value chain for such a long period and a long investment recovery period due to the longevity of operations and the risk of longevity of environmental liabilities,” the study added.

How the carbon storage process takes place

Carbon capture and storage (carbon sequestration) is a set of technologies aimed at the safe permanent capture, transport and storage of CO2 that would otherwise be released into the atmosphere. Geological sequestration is a proven method of underground CO2 storage where it is injected underground into deep rock formations for long-term storage, and among the best places are depleted oil and gas deposits, onshore or offshore , but also in saline aquifer structures, as shown by the FPPG.

However, the technology is quite expensive and, even if it has lower risks than in other situations (CO2 does not burn), it still requires the identification of areas that allow its storage for at least 20 years. And before the actual storage, it is necessary to capture the carbon and transport it to the storage place, so we are talking about a whole chain and an entire industry that needs to be created.