Last week in Houston our team walked clients through our new CCUS work. The questions were mostly about the math. Our hype curve (slide 5) puts carbon capture and storage in the trough of disillusionment, CO₂-enhanced oil recovery (EOR) on the plateau of productivity, and direct air and ocean capture earlier on the curve. Peak CCUS hype was a good two to three years ago, but there are opportunities.
EOR has a market for CO₂. Buying it at $30/t, our breakevens run $47/bbl to $51/bbl, and recycling more helps: going from a 50% to 70% recycle rate saves $4/bbl. Adding the $85/t 45Q credit reverses that calculation. CO₂ left in the reservoir turns from a cost into revenue, and the oil becomes a bonus. Our breakeven falls to $33/bbl at a 70% CO2 recycle rate and $14/bbl at 50%, amongst the cheapest oil we see on the continent. Integrated operators like Occidental and ExxonMobil are best placed to benefit.
Supplying that CO₂ is harder. Capture costs came in 77% above our prior estimate. The $85/t credit covers capture costs for 46% of U.S. capturable CO₂, but it must also pay for transport and storage. For a single source, 100 miles of pipe and a storage site add $20/t to $30/t, leaving $55/t to $65/t for capture. Even at $65/t, only a quarter looks economic. There is a reason natural gas processing and ethanol are leading CCUS growth this year.
Shared pipes and storage could bring those costs near $5/t each, putting $75/t capture sources within reach. CF Industries, ExxonMobil and Energy Transfer hold 39 Mt of the cheapest CO₂ across 34 sites, and are natural anchors for that kind of hub.
Power demand brings new candidate emissions as capacity expansion adds new gas-fired emitters. Amongst retrofit candidates, 478 of 638 combined-cycle units can support capture and earn a 10% return if they secure $100/MWh power purchase agreement (backed by a buyer paying for low-carbon power). But the analysis assumes baseload operation, and we expect gas capacity factors to fall through 2030. This might look better in the model than on the ground.
Cheaper energy will not help. Energy accounts for 9% to 39% of capture cost, so even a 90% cut in energy requirement lowers capture costs for gas plants by only 9% to 11%. Ironically, efficiency does not pay here. The newer H-class turbine costs more to capture from than F-class, $153/t versus $133/t, because its exhaust is more dilute and offers less usable heat.
The other end is niche. Direct air capture drew no venture funding in 1H26, and Microsoft accounts for 44% of carbon removal purchases. That is a long way from industry hype. I think the way back runs through shared pipes and storage, and that takes cooperation and aggregation at a scale we do not see yet. Until then, do not discount the niches where the right source, pipe and reservoir under one owner and you get oil at $14/bbl.
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