Spiritus | The Slow Greening Of The World's Biggest Oil Company

The Slow Greening Of The World's Biggest Oil Company

AMIN NASSER, the CEO of Saudi Aramco, declared this year that the age of fossil fuels is far from over. “Peak oil and gas is unlikely to come for some time, let alone 2030,” said Nasser. “We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately, reflecting realistic demand assumptions.”

He would say that. As the head of the world’s biggest oil company (ranked #3 on this year’s Forbes Global 2000 list, down one spot from last year on lower oil prices), Nasser oversees the production of more than 12 million barrels per day of oil and gas.

Aramco is such a behemoth that both its output and $117 billion in net income is more than three times higher even than ExxonMobil (down six spots to #14 on this year's list). Chevron (#22, down four spots) looks like a comparative pipsqueak with merely $20 billion in profits last year. And Aramco isn't going anywhere; with proven reserves of well over 200 billion barrels, it can keep that pace for decades to come.

So Nasser is biased. But the thing is, he’s not wrong. Renewable, zero-carbon energy is so far an addition, not a transition. For all the endless hype about the transition away from oil, gas and coal, the reality is that the world has never relied more on carbon-spewing energy sources than it does now.

“In the real world, the current transition strategy is visibly failing on most fronts,” said Nasser. Renewables can’t scale fast enough, their upfront costs are too high, and they are not as convenient.

For all of China’s advances in erecting solar panels, for example, it still burned a record 5 billion tons of coal last year, 10 times U.S. coal consumption. Electric vehicles now make up 19% of global car sales, yet global petroleum consumption continues to inch past 100 million barrels per day. According to Claudio Galimberti, analyst at consultancy Rystad Energy, “oil demand remains sticky” and will continue to rise “as low-carbon alternatives are not yet sufficiently developed or economically competitive to offset the growing demand for transportation and industrial services.”

So it might surprise you to learn that Aramco, ironically, is already one of the world’s biggest investors in the low-carbon transition. Nasser has dedicated 10% of its $50 billion a year in capital spending to renewables and launched the Aramco New Energies division. This year they completed the Sudair solar project, with 1.5 gigawatts of capacity, while the 2.7 gw Shuaibah solar field will be completed next year. By 2030, Aramco promises 12 gw of solar and wind. The company is in talks with Spanish oil giant Repsol for a stake in its renewables business, building on an existing Repsol JV to make zero-carbon jet fuel using “green” hydrogen and captured carbon dioxide. At Aramco’s Jubail refining complex they are building a system to grab 9 million tons a year of CO2. That will complement an existing process that captures carbon emissions from an ethylene glycol plant and turns it into low-carbon methanol.

Saudi Crown Prince Mohammed bin Salman, right, accompanies Ukrainian President Volodymyr Zelenskyy at the Royal Palace in Riyadh, Saudi Arabia, Tuesday, Feb. 27, 2024.

Associated Press

Yet if Aramco is going to deliver on Nasser’s promise to capture and sequester 44 million tons per year of CO2 by 2035, it will need some new tricks. To hunt them down, Aramco has more than doubled funding to venture capital arm Aramco Ventures, with $4 billion available for investments.

Among the most promising is a new investment of tens of millions of dollars that Aramco Ventures has made into a New Mexico-based startup called Spiritus. Born out of Los Alamos National Lab, Spiritus cofounders Charles Cadieu and Matt Lee have developed a novel technology that they claim absorbs CO2 from the air. And unlike competing CO2 capture technologies, which rely on giant fans and compressors to suck in air, Spiritus’ devices work passively, as quiet as a tree. At the center of Spiritus’ technology are balls about the size of a grapefruit, made of a sorbent material that selectively grabs and holds with molecules of carbon dioxide. Think of a sponge, but with a far more complex structure with orders of magnitude more nooks and crannies.

Cadieu is cagey on exactly what it’s made of and how it works, but he describes the sorbent as functionally akin to how our own lungs’ alveoli grab on to oxygen. “Mammalian lungs — is there anything better? It’s hard to beat hundreds of millions of years of evolution,” he says. The material, believed to consist primarily of carbon-based graphene, chemically binds with the CO2.

Spiritus (latin for breath) will manufacture the material at a plant near Kansas City, and already has a site in Wyoming where it plans to erect structures to hold these sorbent balls. Once saturated with CO2, the balls are collected and put through a process that releases the CO2, which will then be injected deep underground in a licensed and regulated Class 6 disposal well.

Cadieu insists that their costs will be well below $100 a ton and that the initial Wyoming site will sequester 2 million tons a year. This would be extremely lucrative given the $180 per ton in carbon capture and sequestration tax credits available under the Inflation Reduction Act. Executives at Aramco Ventures say that once Spiritus has proven out the tech, they intend to deploy it in the Kingdom.

Saudi Aramco generated $117 billion in net income over the past 12 months on $490 billion in revenue — higher than any other outfit on the Forbes Global 2000. This year they plan to distribute $124 billion in dividends, which equates to about a 6% yield.

Aramco stock trades just barely above its 2019 IPO price, at a market cap of $1.9 trillion. The Saudi government still owns more than 90% of the company, and this month raised $12 billion in a secondary stock offering of less than 1% of shares. With nearly $100 billion in cash against $77 billion in borrowings, Aramco’s fortress balance sheet gives Nasser near infinite options to pursue growth. Much of that will come inside the Kingdom. Oil projects Marjan and Berri will each add more than 250,000 barrels per day of production capacity, while the newly announced Jafurah gas field will flow 2 billion cubic feet per day by 2030, while the $8 billion Fadhili Gas Plant expansion will add another 1.5 bcfd.

But Aramco, after decades as an insular operator, is keen to diversify globally. It’s investing $6 billion in a petrochemical plant in China, bought 40% of Gas & Oil Pakistan, acquired Chilean gas station chain Esmax for $370 million, and picked up a stake in Australian LNG developer MidOcean Energy.

The rumors are that Nasser is hungry for more deals, especially ones that could help meet Aramco's promise of net-zero carbon emissions by 2050. A reasonable target could be BP (market cap $100 billion), which has been too busy reshuffling its top executive ranks to join in the ongoing flurry of Big Oil M&A. BP slipped 19 spots on this year's Global 2000 to #47.

BP of course has far flung global oil and gas assets, but what may actually interest Nasser more is its recently consolidated renewables arm LightsourceBP, which boasts 60 gigawatts of wind and solar projects in the pipeline. That would go a long way toward the gradual greening of Saudi Aramco.

Rewind.earth

Biomass carbon removal and storage

Tel Aviv, Israel

R&D

Rewind.earth uses cranes off of boats to sink agricultural and forest residues to the oxygenless bottom of the Black Sea, the largest anoxic body of water on Earth. Oxygenless water dramatically slows biomass decomposition. The lack of living organisms in the Black Sea limits any potential ecosystem risks. This process allows for affordable and environmentally safe carbon removal.

Carboniferous

Biomass carbon removal and storage

Houston, TX, US

R&D

Carboniferous sinks bundles of leftover sugarcane fiber and corn stover into deep, salty, oxygenless basins in the Gulf of Mexico. The lack of oxygen in these environments–and therefore absence of animals and most microbes–slows the breakdown of biomass so it is efficiently preserved and stored durably in ocean sediments. The team will conduct experiments to determine the functional stability of sunken biomass as well as the interaction with ocean biogeochemistry.

Vycarb

Ocean alkalinity enhancement

Brooklyn, NY, US

58 tons

Vycarb uses a reactor to add limestone alkalinity to coastal ocean water, resulting in the drawdown and storage of atmospheric CO₂. Their dissolution system has a novel sensing apparatus that base tests water, dissolves calcium carbonate, and doses alkalinity into the water at a controlled amount safe for dispersion. Their closed system makes it easier to measure the amount of dissolved alkalinity added and CO₂ removed.

Arbon

Direct air capture

New York, NY, US

173 tons

Arbon uses a 'humidity-swing' process to capture CO₂ from the air. The sorbent binds CO₂ when dry and releases it when wet. This process uses less energy than approaches that rely on changing temperature and pressure to release CO₂. The sorbent’s ability to bind CO₂ has been shown to remain stable over thousands of cycles. Both of these innovations could reduce the cost of DAC.

Vaulted

Biomass carbon removal and storage

Houston, TX, US

1,666 tons

Vaulted injects organic waste into durable wells, where the carbon in the waste is sequestered as it decomposes. Using a specialized slurry injection technology, their process can handle a wide range of organic carbon sources with minimal energy and upfront processing. Their system has the potential to be deployed quickly at large scales.

Spiritus

Direct air capture

Los Alamos, NM

713 tons

Spiritus uses a sorbent made from commercially-available materials and a passive air contactor that requires little energy to capture CO₂. The CO₂-saturated sorbent is then regenerated using a novel desorption process, capturing the CO₂ and allowing the sorbent to be reused with less energy than a higher-heat vacuum chamber typically used in direct air capture approaches. The high-performance, inexpensive sorbent and lower regeneration energy provide a path to low cost.

Planetary

Ocean alkalinity enhancement

Nova Scotia, Canada

937 tons

Planetary harnesses the ocean for scalable removal. They introduce alkaline materials to existing ocean outfalls like wastewater plants and power station cooling loops. This speeds up the sequestration of CO₂ safely and permanently as bicarbonate ions in the ocean. Planetary then verifies the removal through advanced measurement and modeling techniques.

Mati

Enhanced weathering

US and India

1,513 tons

Mati applies silicate rock powders to agricultural fields, starting with rice paddy farms in India. These rocks react with water and CO₂ to produce dissolved inorganic carbon that is subsequently stored in the local watershed and eventually in the ocean. Mati relies on rice field flooding and higher subtropical temperatures to accelerate weathering, and extensive sampling and soil and river modeling to measure removal and deliver co-benefits to smallholder farmers.

Holocene

Direct air capture

Knoxville, TN, US

332 tons

Holocene captures CO₂ from air using organic molecules that can be produced at low cost. In the first step of their process, CO₂ is captured from air when it comes into contact with a liquid solution. In the second step, a chemical reaction crystallizes the material as a solid. That solid is heated up to release the CO₂, minimizing energy wasted in heating water. Holocene’s process runs at lower temperatures, further reducing the energy required, increasing energy flexibility, and lowering overall cost.

EDAC Labs

Enhanced weathering

Baltimore, MD, US

317 tons

EDAC Labs uses an electrochemical process to produce acid and base. The acid is used to start the recovery of valuable metals from mining waste, and the base is used to capture CO₂ from air. The acid and base streams are then combined to produce metals that can be sold for applications such as batteries, and solid carbonates, which permanently store CO₂.

CarbonRun

Ocean alkalinity enhancement

Nova Scotia, CA

1,291 tons

CarbonRun enhances the natural ability of river currents to weather abundant, low-cost limestone and reduce river acidity levels. This benefits river ecosystems locally and enhances the rivers’ ability to capture CO₂ from the atmosphere. Rivers, which are natural carbon transport systems, then deliver CO₂ to the ocean for permanent storage in the form of bicarbonate.

CarbonBlue

Direct ocean removal

Haifa, Israel

400 tons

CarbonBlue uses calcium in a closed-loop cycle to mineralize, separate, and remove dissolved CO₂ from water. This results in a pure stream of CO₂ that can be durably sequestered. Their approach can operate in freshwater or saltwater and can rely on waste heat for the regeneration process. The team plans to integrate with desalination plants and other water-withdrawing industries, reducing energy usage and costs.

Carbon Atlantis

Direct air capture

Munich, Germany

275 tons

Carbon Atlantis is using a process known as electrochemical pH-swing. Their system uses a solvent to capture CO₂ and an acid to release it. This approach is inspired by recent innovation in Proton Exchange Membrane fuel cells and electrolyzers, making the process both cost-effective and energy-efficient. The CO₂ is then run through

Banyu Carbon

Direct ocean removal

Seattle, WA, US

360 tons

Banyu Carbon uses sunlight to capture CO₂ from seawater. A reusable, light-activated molecule that becomes acidic when exposed to light causes carbon dissolved in seawater to degas as CO₂, which is then stored permanently. Because only a small portion of the visible light spectrum is needed to trigger the reaction, this is a highly energy-efficient approach to direct ocean removal.

Alkali Earth

Enhanced weathering

Northfield, MN, US

1,351 tons

Alkali Earth uses alkaline byproducts from industrial processes as carbon-removing gravel to apply to roads. These minerals act as a sink for atmospheric CO₂, storing it permanently while cementing road surfaces. The formation of CO₂-containing minerals within the gravel can be directly measured, leading to high-confidence in resulting removals.

Airhive

Direct air capture

London, UK

943 tons

Airhive is building a geochemical direct air capture system using a sorbent that can be made out of cheap and abundant minerals. This sorbent reacts rapidly with atmospheric CO₂ when mixed with air in Airhive’s fluidized bed reactor. Coupled with a regeneration process that’s powered by electricity to release the CO₂ for geologic storage, this provides a promising approach to low-cost DAC.