Q&A: Chevron’s $10 Billion, Low-carbon Game Plan

Chris Powers is going back to the future.

But it won’t necessarily be more of the same for this third-generation energy worker who grew up in Jefferson County’s Port Neches, part of the so-called Golden Triangle in Texas.

Powers, who serves as vice president of carbon capture, utilization and storage (CCUS) for Chevron New Energies (CNE), recalled how deep his roots run in not only the energy business but Chevron’s. His dad was a chemical engineer for Texaco and then Motiva, and his granddad worked as pipefitter for Gulf Oil—“ironically unknown at the time, but now in hindsight, three generations with the same company, Chevron, through predecessor companies on different branches of an energy family tree.”

Sitting inside a conference room of Chevron’s office in downtown Houston, Powers spoke about how his more than 20-year career with one of the world’s energy giants is taking him back to the place where he grew up.

Jefferson County, and neighboring Chambers, is the site of the Bayou Bend carbon capture and sequestration (CCS) project that Chevron is developing with partners Talos Energy and Carbonvert. The project boasts nearly 140,000 acres of pore space for permanent CO₂ sequestration onshore and offshore.

“We’re going to have to continue to meet the world’s growing energy demand, so we can’t magically substitute out all of the energy supply that exists.” —Chris Powers, Chevron New Energies

Powers, who started work for Chevron as an upstream process engineer and eventually moved on to leadership roles in the upstream and downstream segments, essentially set up Chevron’s CCUS business from scratch in 2021 when the company launched CNE. The unit was formed amid heightened global focus on lowering emissions.

Eyeing opportunities in CCUS as well as hydrogen, renewable fuels and offsets, Chevron plans to invest about $10 billion in lower-carbon projects through 2028, targeting its emissions and others. Powers sat down with Hart Energy’s Velda Addison, senior editor for energy transition, to speak about CCUS in an exclusive interview.

Velda Addison: Why is CCUS worth pursuing in your opinion? Why should people care?

Chris Powers: I believe that we all should be striving toward a net-zero future, and I fundamentally believe that there is no net-zero future without CCS being part of that. We need to deliver energy in an affordable, reliable and ever-cleaner way. We’re going to have to continue to meet the world’s growing energy demand, so we can’t magically substitute out all of the energy supply that exists.

Hydrocarbons are a huge proportion of the energy mix. Call it about 80%. What [is needed] to both meet growing energy demand and lower the carbon intensity? We need to apply technologies like carbon capture, utilization and storage. All the studies, the IEA, the IPCC, say that in order to meet our net-zero ambitions by 2050 or thereabouts, we’re going to have to deliver CCS at scale to help decarbonize industries that are critical to our society and rely heavily on hydrocarbons.

VA: How would you characterize the state of CCUS in the U.S. today?

CP: It’s starting to get momentum. There have been a number of policies and regulatory proposals that have moved through recently. I think the IRA (Inflation Reduction Act) helps jumpstart some of these projects that have been sort of teetering on the cusp. The other supporting element is just having a clear, transparent, predictable permitting and regulatory environment, so when we start these projects we know there’s a pathway to get them into execution and operation. We’re making progress there. We’re excited about a couple of our projects: one called Bayou Bend that’s not too far from here and a few in California where we think we can start making real progress on our CCUS journey.

VA: Let’s talk a little bit more about those projects. Where are you with the Bayou Bend project? Where are your efforts focused?

CP: Bayou Bend has the potential to be the leading CCS project, certainly in this portion of the world. The development is at both an offshore and onshore lease that we operate in conjunction with our partners Talos and Carbonvert. We’re the operator with 50% interest in the venture.

We recently added 100,000 acres onshore to complement the offshore 40,000-acre position, and we’re well positioned with some of the best geology in the region with accessibility to emitters from both the Houston Ship Channel over to the Golden Triangle to position to be a leading CCS supplier. We’re progressing ahead with engineering work. We’ll be drilling wells later this year that will inform our applications for our Class VI sequestration permits and our projects moving ahead. We’re very excited about the potential it has for the Greater Houston/Beaumont/Port Arthur region.

VA: What would you say to opponents who say CCS is inefficient and expensive?
CP: CCS is going to be a huge component of our net-zero future. The facts are really not in dispute if you go back to any of the reputable third-party studies. Certainly, costs have an opportunity to continue to go down over time.

But just like many new technologies that were developed, whether it’s solar or wind, they all had a cost improvement curve over time. And I suspect we’ll continue to see that in the CCS business. In terms of the efficiency question, this is just like many of the other pieces in the energy mix [and] the energy equation: you’re going to continue to improve operational efficiency and performance over time. We anticipate the same in the CCUS business.

VA: Bayou Bend is not Chevron’s first CCUS project. Can you tell me what you have learned from some of your other CCUS projects, both yours and maybe some other companies, that can help make your future projects a success?

CP: We operate Gorgon in Australia. Gorgon gets a lot of publicity, but what I can say is we’re excited about what we’ve learned at Gorgon because, fundamentally, what we validated is capture technology can work at scale. It’s good to demonstrate it in a sort of fit-for-purpose application for CCS.

We’ve proven that we can put the CO₂ in the ground and it’ll behave in the reservoir as we predicted in the reservoir models. We do something called history matching in the traditional business where you have a model and predict what’s going to happen to the fluids over time. You can do the same thing for a CO₂ injection project. As you inject CO₂, you can monitor where it’s going and compare that to your models.

That gives us learnings to apply in our new CCS developments around the world. I’m actually quite bullish on the potential in many regions. The U.S. Gulf Coast is one, but there are other regions in California and in Asia Pacific that also have favorable geology where we can really make this business scale.

VA: You mentioned earlier starting the CCUS business from scratch essentially. How do you see the carbon management business changing Chevron's overall revenue stream?

CP: These businesses start from a tiny spot relative to the rest of the traditional business. They’re going to grow over time. But even with the “magic of compounding interest” effect—growth on growth—they take years to get to where they’re going to be a substantial portion of the company’s overall valuation or the revenue stack.

That being said, we’re excited about the potential. If you look out a decade and beyond, these new energy businesses—CCUS, hydrogen, offsets and emerging renewable fuels—we do believe they’re going to grow and become a much more significant portion of the company’s overall presence and value.

Our business is long-dated; we put in capital for many of these projects and they take decades to get online and then run for many, many decades after that. So, in due course, the new energies’ projects will grow and they’ll become a more significant portion of the portfolio. I’m bullish on it or else I wouldn’t be in this job.