New York—Valero Energy's teaming up with BlackRock Global Energy and Navigator Energy Services to build an industrial scale carbon capture storage pipeline serving US Midwestern biofuel refineries will help lower the refiner's carbon footprint and greenhouse emissions.
Valero, the first mover among US refiners into the renewables fuels space, is an anchor tenant for the pipeline which will be able store 5 million of CO2 annually. The 1,200 mile pipeline, due in service late 2024, will run across the Nebraska, Iowa, Minnesota, and Illinois where storage facilities will be located, the company said in a March 16 statement.Valero and other refiners are using a myriad of ways to reduce their carbon footprint and the carbon intensity of their products, and carbon capture storage is just one tool in their arsenal.
Valero is the world's second largest producer of corn ethanol with 1.7 billion gallons/year of production from 14 plants stretching across the Midwest along the path of the proposed pipeline. Valero expects the ethanol plants to offset 4.7 mt CO2 equivalent by 2025, according to its sustainability report.
During its Jan. 28 earnings call, Valero's COO Lane Riggs said it was using ethanol plants as a test case to understand and learn more about the process of sequestration because "the gas coming off the plant is largely carbon dioxide" which means "they don't have to treat it before they sequester it."
"So we are trying to understand that, how that works, try to understand the technology and certainly all the policy and all the other sort of regulatory regime that's going to be around carbon sequestration," Riggs said.
Testing the watersSome refiners, like PBF Energy, who have yet to formally issue a sustainability report or get into the renewables space, said on its Feb. 11 fourth quarter results call it is evaluating whether to repurpose an idled hydrocracker to make renewable diesel at its 190,000 b/d Chalmette, Louisiana, refinery as a way to offset the rising cost of RINs, which have doubled since the third quarter of 2020.
RINs are renewable credits that refiners must buy if they cannot meet their annual renewable volume obligation under the Renewable Fuels Act by blending or producing renewables.
Refiner Calumet Specialty also floated the idea that it would co-process hydrocarbons along with renewable feed at its 37,000 b/d Great Falls, Montana, refinery. Plans include converting a 24,000 b/d gas oil hydrocracker to run between 10,000 b/d and 12,000 b/d of renewable feedstock while maintaining the ability to continue to run between 10,000 b/d and 12,000 b/d of crude.
But before it commits to the project, the company is looking for a partner to help defray the cost of the conversion, most likely a renewable feedstock supplier which will also determine what kind of feedstock it uses
Across the Canadian border, Tidewater Midstream is also considering a 3,000 b/d stand-alone renewable diesel and renewable hydrogen complex at its 12,000 b/d refinery in Prince George, British Columbia.
The project is still in the evaluation phase as the company seeks funding. CEO Joel McLeod said on the March 11 fourth quarter results call if the company "can achieve a financing plan" within the next 60 days it is possible for the plant to be online in early 2023.
The company has already received about C$100 million of commitments from the province of British Columbia in the form of BC Low Carbon Fuel Standard Credits, which based on current market value, will fund about 45% of the project.
