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The Case for Both CO2 Utilization and Underground Sequestration

The Case for Both CO2 Utilization and Underground Sequestration

We see it all the time. One technological option is pitted against the other in an “all or none” argument. People take sides on what’s right and wrong, bets are made, money is spent, and battles begin. This should not be the case for dealing with the problem of too much CO2. Both underground sequestration pathways and utilization pathways should be developed and should co-exist because time is of the essence, and both make sense. We need to do as much as we can as quickly as possible. In addition, there are very likely to be crossover benefits between both CO2 pathways.  All stakeholders can serve the same end goal which is to rebalance the Earth’s overabundance of CO2 in the atmosphere and find ways to more sustainably produce the basic products the world needs and uses every day.

So, How Big is the CO2 Problem?

Today, CO2e[1] levels in the atmosphere are higher than at any point in at least the past 800,000 years. Measured in parts per million (ppm), CO2e has steadily risen from under 200 ppm to 412.5 ppm as of 2020[2]. The U.S. Energy Information Administration estimated that in 2019, the United States emitted 5,130 million metric tons of CO2e, while the rest of the world emitted 33,621.5 million metric tons[3]. The annual emissions of CO2e is growing by around 1.5% annually, so without aggressive intervention, atmospheric concentration of CO2e will likely exceed 650 ppm by 2050.

Reducing CO2

There are really only two practical ways of reducing CO2 emissions. The first is geologic carbon sequestration, which is the process of capturing and storing carbon dioxide (CO2) in deep underground geologic formations. This model of dealing with CO2 waste is akin to landfilling solid waste where a landfill site is identified, the landfill is built, and garbage is transported to the landfill for permanent storage. With this approach there are significant costs to develop, permit and build the landfill and tipping fees for waste disposal. In the long run, landfills fill up because most of the waste is not recycled. Landfills are covered so that emissions from the deteriorating waste aren’t vented directly into the atmosphere and so that a portion of the gases can be used as renewable energy.

With underground CO2 sequestration, the CO2 is usually pressurized until it becomes a supercritical fluid, and then it is injected deep underground into porous rock formations in geologic basins. This method of carbon storage was developed for enhanced oil recovery (EOR) to get more crude production from older producing wells. In EOR, the supercritical CO2 is injected into the oil-bearing formation in order to drive the oil towards the production wells, in most cases also reducing the viscosity of the oil and allowing it to flow more easily to the surface.

In general, underground sequestration (1) focuses on industrial, point sources that would otherwise be emitting CO2 into the atmosphere, (2) captures the CO2, (3) concentrates it, (3) pressurizes it and then (4) deposits it underground. Industrial emitters can do this one by one or they can team up to achieve economies of scale.

Thanks to the oil industry, underground CO2 sequestration is a well-developed technology with fairly low technological risk. However, it is extremely capital intensive. Suitable injection wells are expensive to find, permit, develop, build and operate. Moreover, multiple industrial emitters usually need to come together and make commitments in order to achieve economies of scale and to support the huge capital investment. Industrial companies that choose this pathway must commit to pay significant dollars each year for as many as 10 to 20 years in order to dispose of their CO2. Large underground sequestration projects can run into the billions of dollars and take 5 or more years to develop, permit and build. Government subsidies often play a key role in the overall economics of these projects. It is unclear how underground sequestration projects are sustainable in the long term without a combination of government subsidies and tipping fees.

An example of this kind of project is ExxonMobil’s CCS Innovation Zone, a $100+ Billion project being evaluated in Texas.  ExxonMobil is developing the project along the Houston Ship Channel and surrounding industrial areas with the objective of capturing all the CO2 emissions from the petrochemical, manufacturing and power generation facilities located there. The CO2 would be compressed and piped into natural geologic formations thousands of feet under the sea floor.

Utilizing CO2 as a Feedstock

A second, and arguably a more sustainable, pathway for dealing with CO2 emissions is to look at CO2 as a primary feedstock instead of a waste byproduct. HYCO1’s technology very efficiently converts or “reforms” CO2 alongside CH4 into building block chemical gases of carbon monoxide (CO) and hydrogen (H2).  People often think, “Oh, carbon monoxide is bad stuff”, but in the world of making high value carbon-based products, CO and H2 are considered to be valuable chemical gases because they are the core building block molecules used in dozens of varying combinations to synthesize hundreds of downstream chemicals and products. People also tend to look at methane as a bad thing simply because it’s a fossil fuel. However, when the carbon in both the CO2 and the CH4 molecules can be simultaneously converted into high value products at low cost, well then you have something that can change the world. Instead of two bad greenhouse gases, you really have two very potent and valuable feedstocks that can be used to sequester carbon. H2 and CO as chemical gases are essential for the production of an enormous number of high value products, steel and plastics for starters.

Consider the following list of products – all made with or using CO and H2 – which represent hundreds of billions of dollars in total annual product value:

Waxes Isocyanates
Sustainable Aviation Fuel (SAF) Formaldehyde
Base Oils (Group IV+) Dimethyl Ether
Methanol Lubricants
Solvents Acetic Acid
Steel Vinyl Acetate Monomer (VAM)
Ammonia Oxo-alcohols
Dimethyl Carbonate (DMC) Ethyl-Methyl Carbonate (EMC)


In each of the above products, CO2 and CH4 can be effectively reformed and used to sequester carbon. In most of the above products, the carbon from both the CO2 and CH4 gets locked into or permanently sequestered in the end product for decades, if not centuries.  In other cases such as SAF, the desired product is an essential transportation fuel that is designed to be burned so the carbon is expected to be re-released into the atmosphere. But, making aviation fuel from recovered CO2 is vastly more sustainable than making it from crude oil. The former is a circular use of CO2 as a primary feedstock whereas the latter is a linear use of CO2. Circular not linear is the most sustainable way forward for Planet Earth.

The Future of Carbon is Not Linear

During the past century, the world got really good at extracting coal, crude oil, and natural gas out of the ground and combusting it as fuel or converting it into other downstream products. The world economy was based on a simple formula: produce and emit through a linear, “consume and dispose” economy. That was the old way of doing things.

Today, we find ourselves scrambling to reverse decades-old industrial processes that have become overdependent on emitting CO2 into the atmosphere.

HYCO1 believes that the path forward is not an “Either/Or” proposition, but rather a “BOTH” proposition, especially in the short and medium term.

CO2 conversion / utilization projects built alongside large point-source CO2 emitters or direct air capture (DAC) plants can take their CO2 “over the fence” as primary feedstock to make products that displace crude oil-based products. With HYCO1, the world’s carbon economy can become circular. The number of potential CO2 utilization projects is not measured in the hundreds but in the thousands. HYCO1 believes that CO2 utilization projects can and should be built all around the world – wherever there is a significant CO2 point source emitter.

Pipelines that connect industrial point-source CO2 emitters across vast distances and inject CO2 into select underground disposal wells can be an effective and safe way to decarbonize. Building over-the-fence utilization projects at industrial sites where underground sequestration is either not possible or not economic or may take too long is also a viable path for decarbonization. The reality is that both CO2 utilization pathways working alongside each other in a circular CO2 ecosystem can become symbiotic and sustainable. Both pathways can work in harmony to decarbonize more and do it faster than by trying to do it all one way.  

The future that HYCO1 envisions is a future where CO2 gathering systems and pipelines get built and get interconnected with CO2 utilization projects all throughout the country, where these CO2 aggregation systems serve to provide backup supply of CO2 used as feedstock which can help facilitate and secure ESG project financing (because of more reliable CO2 supply) and optimize the uptime of CO2 utilization projects (i.e., so that utilization projects can run even when the CO2 host is down for whatever reason). It is a future where utilization projects can be built in places where underground sequestration projects are not possible and vice versa. It is a future where both sides, in fact everyone all around the world, can work together to achieve a better outcome for all. The future of carbon is not linear, it is circular; it is also not competitive, but collaborative

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