As Federal Money Flows to Carbon Capture and Storage, Texas Bets on an Undersea Bonanza
Over the last century, the state of Texas has reaped billions of dollars by allowing companies to burrow into the floor of the Gulf of Mexico to extract oil and gas. Now, the General Land Office—the state agency tasked with protecting the vulnerable Texas shoreline and other natural resources—is eyeing carbon sequestration as the next industry to develop in the Gulf.
Angling for a share of $12 billion in federal funding for such projects under the 2021 Infrastructure Investment and Jobs Act, companies are competing to build carbon capture plants next to onshore oil wells, gas wells and other polluting facilities along the coast. At the same time, they are applying for offshore leases that will allow them to store that heat-trapping carbon dioxide deep beneath the seafloor.
Crucial to the effort are a stream of U.S. government grants, followed by generous tax credits for every ton of carbon stored.
In September 2021, Texas’s General Land Office, or GLO, awarded its first lease for carbon sequestration on 40,000 acres of state-owned land near Port Arthur to Talos Energy, a Houston-based oil and gas company. The oil giant Chevron has a 50 percent stake in the project, known as Bayou Bend, which if completed could be the nation’s first offshore carbon storage site.
Last month the GLO announced that it had awarded six more leases for offshore carbon storage that would generate $130 million in bonus payments for the state’s school fund. And in February, the Port of Corpus Christi, the nation’s largest port for oil exports and an economic engine for Texas, said it had received $16.4 million in federal funding to conduct a feasibility study for both onshore and offshore carbon storage projects. The research will be conducted with Texas A&M University, the University of Texas, Talos and Howard Energy Partners, a San Antonio gas company.