Delek US Holdings' Big Spring Refinery Selected by the Department of Energy for Carbon Capture Project
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Insights
The announcement by Delek US Holdings regarding their selection by the DOE to negotiate a cost-sharing agreement for a carbon capture pilot project is a significant development for the company and the energy sector at large. The financial backing from the DOE, covering 70% of costs up to $95 million, is a substantial investment that underscores the federal commitment to carbon capture technology as a means to address climate change and transition to cleaner energy sources.
From an energy sector perspective, the deployment of Svante Technologies Inc.'s second-generation carbon capture technology at the Delek Big Spring refinery represents a strategic move towards sustainability. The expected capture of 145,000 metric tons of CO2 annually could set a precedent for the industry, potentially lowering the economic barriers to the adoption of such technologies. This initiative also aligns with broader market trends where investors are increasingly valuing companies that proactively reduce their carbon footprint and contribute to environmental sustainability.
Moreover, the project's ability to maintain production capabilities while implementing carbon capture is crucial. It suggests that Delek US is not only seeking to reduce emissions but also to do so without sacrificing operational efficiency. This balance is vital for the company’s financial performance and for maintaining investor confidence in an industry often scrutinized for its environmental impact.
The involvement of the Department of Energy in supporting Delek's carbon capture project through a cost-sharing agreement is a clear indication of the government's support for innovative solutions to carbon emissions. The Big Spring refinery's fluidized catalytic cracking unit (FCCU) is an integral part of the refining process and its selection for the pilot project highlights its significance in the sector's efforts to decarbonize.
Carbon capture and storage (CCS) is a critical component in the transition to a low-carbon economy, particularly for hard-to-abate sectors like oil refining. The DOE's decision to fund a significant portion of this pilot project could serve as a catalyst for further policy initiatives and funding opportunities aimed at reducing greenhouse gas emissions. It also reflects a broader shift towards sustainability that could influence future regulatory frameworks and incentivize other companies to follow suit.
The expected reduction in pollutants such as SOx and particulate matter is an additional environmental benefit that aligns with health and environmental regulations. By demonstrating a commitment to reducing harmful emissions, Delek US may gain a competitive advantage and set industry benchmarks that could shape future environmental policies.
The creation of approximately 200 construction and operations jobs in 2027 and 2028 as a result of the carbon capture project at Delek's Big Spring refinery is a noteworthy aspect of the announcement. This job creation is particularly significant given the ongoing energy transition and the need for a skilled workforce that can support new technologies and infrastructures.
The partnership with the International Union of Operating Engineers (IUOE) and the United Steelworkers (USW) indicates a collaborative approach to labor relations and workforce development. Establishing a carbon capture schoolhouse is a forward-thinking strategy that addresses the growing demand for specialized skills in the energy sector. By investing in education and training, Delek US is not only contributing to the local economy but also fostering long-term employment stability and career advancement opportunities in a rapidly evolving industry.
Such initiatives can have multiplier effects on the local economy, stimulating additional job growth in ancillary industries and services. The emphasis on skill development is also in line with broader economic trends where upskilling and reskilling are becoming essential for workers to remain competitive in the job market.
"We are honored and pleased the DOE has selected Delek's carbon capture project," said Avigal Soreq, President and Chief Executive Officer of Delek US. "The selection of the Big Spring refinery validates its competitive advantage, solid operations, and the opportunities in our assets. Carbon Capture is important for decarbonizing hard-to-abate sectors."
"This project will position Delek US as a strong leader in the energy transition while meeting our financial and other objectives for stakeholders and maintaining our disciplined approach to capital allocation," Soreq added. "We look forward to working with the DOE and leading industry partners to advance carbon capture technology in a safe and environmentally responsible manner."
The project will deploy Svante Technologies Inc.'s second-generation carbon capture technology at the Delek Big Spring refinery's fluidized catalytic cracking unit (FCCU), while maintaining existing production capabilities and turnaround schedule. Expectations for the project are to capture 145,000 metric tons of carbon dioxide per year, as well as reduce health-harming pollutants, such as SOx and particulate matter. Carbon dioxide is expected to be transported by existing pipelines for permanent storage or utilization. A goal of the Big Spring refinery FCCU pilot is to achieve cost reductions and help commercialize carbon capture technology.
As part of Delek's commitment to the communities in which we operate, this project provides opportunities for advancement of our skilled workforce. Delek will partner with the International Union of Operating Engineers (IUOE) and the United Steelworkers (USW) to execute the project. In addition, a carbon capture schoolhouse will be established to equip current and future workforces with valuable skillsets needed for the energy transition. The project is expected to create approximately 200 construction and operations jobs in 2027 and 2028.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, renewable fuels and convenience store retailing. The refining assets consist primarily of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. Pipeline assets include an ownership interest in the 650-mile Wink to Webster long-haul crude oil pipeline. The convenience store retail segment operates approximately 250 convenience stores in West Texas, New Mexico, and
The logistics operations include Delek Logistics Partners, LP (NYSE: DKL). Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. Delek US Holdings, Inc. and its subsidiaries owned approximately
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Information about Delek US Holdings, Inc. can be found on its website (www.delekus.com), investor relations webpage (ir.delekus.com), news webpage (www.delekus.com/news) and its Twitter account (@DelekUSHoldings).
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FAQ
What is the carbon capture pilot project that Delek US has been selected for?
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