Valkor and its group of divisions and companies is a unique ESG principled energy company. This is not an oxymoron or an attempt at "greenwashing". We believe that it is both the responsibility of and an opportunity for the energy industry to lead in the effort to stop climate change.
In fact, we believe that the energy industry is our best chance to actually reverse CO2 levels through existing infrastructure and assets. Low carbon electricity is not enough, as only about 1/3 of energy consumption is electric and many, if not most, vehicles, plants and processes cannot readily be electrified. Truly we see that green fuels, gas and liquid are necessary to decarbonize the other 2/3 of energy consumption. Hydrogen is in its infancy and faces many challenges, but hydrocarbons are a mature industry with the expertise and assets to achieve a carbon free future.
Our own Research & Development indicates and others agree that natural gas and oil can be produced in a truly Carbon Neutral (full life cycle) manner – and possibly even carbon negative. CO2 flooding has long been a method of increasing oil production, typically sequestering as much as 2/3 of the CO2 without effort. But historically, the minimum CO2 was used in these processes.
We can now achieve 100% sequestration through closed loop systems, and we are targeting the maximum CO2 in these processes. And substantial progress is being made towards the target of not just full life cycle carbon neutral oil and gas, but carbon negative. Meaning that burning a gallon of gasoline or a cubic foot of natural gas would actually end up with a net negative CO2 footprint, because that energy had been produced as part of a process sequestering 3rd party CO2 in excess of the CO2 output from exploration, production, transport, refining, and consumption of that product.
As shown above, all energy is currently brown to some degree. Considering the full life cycle cost of each power source coal has the largest CO2 footprint, but even solar and wind have a net positive CO2 footprint. We need to go farther. Combining Carbon Capture and Sequestration with certain oil and gas reservoir types can achieve huge reductions in carbon footprint, potentially even negative.
The life cycle cost (according to IAEA) of a barrel of oil is approximately 500 KG, including exploration, drilling, production, transport, refining and ultimately burning it in a vehicle. Typical Enhanced Oil Recovery only injects 10-20 KG per barrel produced. But certain reservoirs can be pushed much farther, simulations suggest that in shallow heavy oil fields may be able to hold as much as 700 KG or more per barrel produced, making the driving a gas powered automobile with such fuel carbon negative. With natural gas, particularly Coal Bed Methane, the sequestration can be much higher and bind chemically. There is even the possibility of Hydrogen production as a byproduct.
There are challenges on this path. First, the additional CO2 must come from other emitters for now until direct air capture is a reality. Second, sequestration is limited to certain reservoirs, such as ours in Utah, to achieve high amounts of sequestration and permanent capture. Further, all production must be closed loop to recapture any CO2 returning for reinjection.
But the problem has been defined, and we are moving fast. In oil production, Valkor intends to demonstrate a minimum 30% carbon offset before the end of 2022 (150 kg/bbl) with a target of 100% carbon offset by mid-2023 (500kg). In natural gas, we are seeking to demonstrate a 100% carbon offset natural gas in a test coal bed methane well before the end of 2022.