Offshore CO2 storage is a risky business
Key Takeaways:
The injection and geologic storage components of CCS pose numerous risks, which are either being underestimated or completely ignored by the industry as it looks to sell the technology.
Industry and CCS advocates see offshore storage as offering favorable geologic conditions, proximity to carbon dioxide emitters, and simplified
pathways to obtaining pipeline and well permits.
Without real-world, commercial-scale examples of geologic carbon storage operating over long periods, it is difficult to properly assess either the
likelihood or severity of potential problems.
The likelihood of leaks and the lack of effective mitigation options call into question the climate-sparing argument made by CCS advocates, and also raises important questions about the financial implications of CO2 containment failure.
July 8, 2026 (IEEFA) – Oil and gas companies are leasing large tracts in Texas state waters for long-term offshore geologic storage of CO2—an emerging and complex technology that requires highly specialized materials and operations. The Institute for Energy Economics and Financial Analysis (IEEFA)’s latest report provides a detailed review of the risks associated with the injection and geologic storage components of carbon capture and storage projects.
These risks are either being underestimated by the fossil fuel industry.
IEEFA’s report highlights the following significant risks:
- The regulatory environment around offshore geologic carbon storage is under development, untested, or undergoing significant changes in the U.S. It is subject to
uncertainty that can impair access to financing and increase exposure to liability. - Operational challenges, particularly during the CO2 injection and plume stabilization periods, could result in leaks that are more difficult to detect, manage, and mitigate in an offshore project.
- The lack of long-term storage data for commercial-scale projects operating under real-world conditions means projects may be riskier than assumed.
- Potential for higher leakage than anticipated from the storage reservoir calls into question the logic of CCS as a climate solution and presents a risk of long-term liability.
“The duration of the higher risk period is a key problem for CO2 storage projects. Long-term storage projects require predicting future risk over 50 years during the injection and plume stabilization periods and then for hundreds of years post-injection,” said Anika Juhn, IEEFA energy data analyst and author of the report. “In contrast, typical oil and gas projects focus on known risks during the initial phases of project operations and encompass much shorter time scales.”
The likelihood and potential severity of a CO2 containment leak from a geologic storage reservoir is difficult to assess, as CO2 project risk analysis is a new area, with longer timeframes, little current data, and no data on long-term storage—all of which increase uncertainty. But IEEFA’s report finds that the likelihood of leaks is far from zero, and the impact could be serious.
As additional potential sources of CO2 leakage and loss are better understood, the viability of CCS as an effective greenhouse gas emissions solution is further challenged.
