Tag Archives: CCS

Corporate Knights

HOW CARBONCURE TECHNOLOGIES IS Lowering Concrete’s Enormous Climate Impact | Corporate Knights

Injecting CO2 into concrete as it hardens is helping slash its towering toll on the climate

Concrete is a conundrum. It’s the world’s most heavily consumed manmade material, with nearly three tonnes used per person, every year. Yet for the climate, baking limestone into cement does more harm than practically any other industrial process.

To help cut cement’s supersized carbon footprint, Halifax, Nova Scotia-based startup CarbonCure Technologies is tinkering with the age-old recipe for how cement cures into concrete, its final rock-like form. The company’s answer: carbonated cement.

“Every day millions of tonnes of concrete is produced globally,” says Robert Niven, chief executive and founder. “Every tonne is a lost opportunity to sequester carbon dioxide.”

Devising greener concrete is no easy task, in part because the recipe is deceptively simple and has proven to be such a remarkably good building material for so long.

It is, quite literally, the stuff from which civilization has been built. Today’s cement traces back to formulations first used 7,000 years ago. Some Roman-era structures, such as the domed Pantheon, are as sturdy today as when they were erected two millennia ago.

Today’s megastructures are likewise possible only because of concrete’s peculiar mix of performance and affordability, from the biggest dams to our tallest towers.

The problem? The manufacturing of cement emits 5 per cent of the world’s greenhouse gases, on par with about half of all emissions from car, truck and other road transport. Among industrial sources of CO2, the industry trails only the much larger petrochemicals sector.

Making cement emits roughly equal shares of CO2 at two stages: first, from the fuel used to heat a mix of limestone and traces of other minerals to 1,450 degrees Celsius; and second, from the resulting chemical reaction, where limestone breaks down into lime, giving up nearly half its mass as CO2.

Unless better recipes are devised, emissions will keep growing. A building binge across the developing world is expected to more than double global cement production this decade, according to the Carbon War Room, a London-based think tank.

CarbonCure is tackling that problem by focusing on how cement cures into concrete. The company’s proprietary process injects anthropogenic CO2 – captured from big industrial sources such as natural gas reformers – into the mix as concrete is being formed into an array of masonry products, including blocks and pavers.

As the CO2 percolates through the mix, it triggers a chemical reaction, remaking microscopic bits of limestone in the concrete matrix, permanently locking the gas into a rock-like structure. The resulting concrete block is not only greener; it turns out stronger than the standard stuff.

The carbon savings can stack up quickly. As a rule of thumb, every standard concrete block made using CarbonCure’s recipe sequesters around 30 grams of CO2. Thus, some 3,000 of them can lock up as much CO2 as a mature tree does in a single year.

The first U.S. structure to be built with CarbonCure’s green blocks was completed at the University of California, Davis in the spring. Exterior walls of the Jess S. Jackson Sustainable Winery Building, a one-storey, 8,500-square-foot research facility, were built with more than 2,500 specially manufactured blocks made by Basalite Concrete Products, based in Dixon, California. The result, says Niven, is the lowest-carbon concrete-block wall ever built in the U.S.

CarbonCure is currently working with four partners in North America that are producing its low-carbon blocks, pavers and other masonry products. Atlas Block, a major Canadian concrete manufacturer, is in negotiation to supply the low-carbon blocks for several sports complexes being built for the 2015 Pan Am Games in Toronto. “This is easily the most exciting technological improvement I’ve seen in years,” says Atlas chief executive Don Gordon.

Another dozen partners are in the pipeline, says Niven. In time, he hopes to expand the company’s reach to China – where more than half of the world’s concrete is currently being produced – and other global markets.

He also hopes to see CarbonCure move beyond masonry to apply its process to larger precast structures and ready-mix, the wet slurry of concrete and aggregate delivered in big mixing trucks.

Given that roughly 12 billion tonnes of concrete is produced every year around the world, if CarbonCure can adapt its technology to all concrete types, “the potential to reduce carbon is huge,” Niven says.

Indeed, green efforts are advancing in other aspects of concrete production. Industrial waste, such as fly ash or slag, offers a low-carbon alternative to cement. And major manufacturers such as Lafarge and Holcim are using more low-carbon or carbon-neutral fuels, such as biomass, to replace fossil fuels used in cement kilns.

Taken together, these green steps suggest that concrete could someday be “carbon neutral, or even carbon negative,” says Niven.

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Global CCS Institute

Could expensive oil rescue CCS? A talk with energy expert Michael Levi | Global CCS Institute

As oil prices continue to skirt all-time highs, there’s been a gusher of coverage about how oil producers are turning to ever more costly technologies—from going to ultra deep, to mining tar sands—to eek more oil from the earth. Against this backdrop, I wondered if the case for using CO2 for enhanced oil recovery (EOR) is gaining mind share, or maybe even market share?

To get a better understanding on the impact of sustained high oil prices I turned to Michael A. Levi, The David M. Rubenstein Senior Fellow for Energy and the Environment at the Council on Foreign Relations in New York City. A frequent author (his new book, The Power Surge, is due out this month) and a regular contributor to the CFR’s energy, security and climate blog, Levi is a prolific voice on energy issues, often quoted on the complex interplay between conventional energy, renewables, climate, and politics.

Levi first explored the linkages between high oil prices and EOR-CCS’ prospects last June, a time when oil prices were around 10 per cent lower than recent averages. In his post, Levi steps through a back-of-the-envelope assessment of the potential rewards of scaling up EOR-CCS.

In a 2010 study, Advanced Resources International estimated that a typical CO2-EOR project would require about one ton of CO2 for each 3.8 barrels of produced oil (assuming some recycling). Assuming CO2 available at $15/ton and an oil price of $112 they figured that a typical project could make a profit of about $30/bbl after returning 25% on capital.

Alas capturing and delivering CO2 from power plants costs a lot more than $15/ton. How much more? A lot depends on how much natural gas costs. A recent paper in Environmental Science & Technology uses a central estimate of $6.55/MMBtu and estimates that captured CO2 could be delivered at $73/ton. If prices are instead $5/MMBtu, which is a reasonable expectation in the United States, this would drop by about ten percent, to around $65/ton.

The authors also look at the question probabilistically. They find that there’s a 70 percent chance of being able to deliver CO2 for $100/ton or less. If you shift their natural gas price assumptions down a bit, it’s reasonable to drop this to about $90.

What would this mean for the economics of oil production? Estimated profits at $112/bbl oil would fall to about $18/bbl (part of the extra cost of CO2 would be offset by lower taxes). Once again, though, this is profit in excess of a 25 percent return on capital. Excess profits would be wiped out if oil prices fell to about $75.

Notably, the study to which Levi refers is focused on the cost of CO2 capture from natural gas processing plants—the largest industrial-scale sources of CO2 currently available. Levi’s calculation holds for proposed CCS-from-coal facilities, where planners are aiming at a similar target of delivering CO2 at less than US$100 per ton.

Back to oil prices, then. Given that crude has held steady at around US$100 per barrel in the past few years, Levi’s calculus makes CCS-EOR look like a pretty good proposition. Levi’s bottom line: “I wouldn’t count on high oil prices rescuing power plant CCS. But I wouldn’t write it off entirely either – and, even if there’s only limited deployment, the impact on technological progress could be large”.

In short, the longer the price of crude remains high, and the higher it goes the stronger the case for EOR-CCS. While it may be perilous to speculate on oil prices, the balance of indicators point towards high prices over the long term. Energy-hungry emerging markets such as China and India increasingly drive long-term demand. A recent OECD report speculated that prices could rise as high as US$270 a barrel by 2020, due largely to demand growth in emerging markets.

To keep output rising, companies are already digging deeper—literally and financially—to lift each new barrel of oil. Exxon, for example, will spend a record US$41 billion in 2013 to buoy its long-term output of oil and gas, which it expects to fall by one per cent this year. As oil companies reach for more tools to eek out every last molecule of petrol, especially from wells they already control, it seems that the case for EOR-CCS is only improving.

I caught up with Levi in March to get his take. Here’s an edited version of our conversation.

In the years since the financial crisis hit, oil prices have remained stubbornly high, despite slow growth in much of the developed world. Do sustained high prices reinforce your take on the prospects for oil’s growing role in the future of CCS?

I’ll leave it to others to make predictions on future oil prices. But it is clear that high oil prices make it more attractive to use CCS in EOR. The higher oil prices go, and the longer they remain high, the more incentive there is to invest in CCS EOR.

Short-term variances in oil prices are fairly immaterial. What matters most is that prices have been sustained. This gives people more confidence that prices will remain high over a longer spread, over a longer period of time.

No one invests for the long term based on today’s prices, especially not oil companies, which plan on multi-decade time scales. Power companies also think on very long time scales. Both are capital-heavy industries—familiar with assessing risk, pricing and financing big projects. The difference is that oil companies are more likely to be comfortable taking risks.

Given anemic US growth, why have oil prices remained near their all time highs, when adjusted for inflation?

With the exception of the immediate aftermath of the financial crisis, when oil fell sharply, prices have been historically high. Prices also returned to high levels very soon after the global financial crisis.

When it comes to prices, the slow growth in the United States, following the recession, doesn’t matter in so far as we’re part of the world economy, taking a world price on oil. There’s a lot of growth in demand happening elsewhere, particularly in developing economies like China.

At the same time, even though there’s been a lot made of rising US oil output, in the global market the new sources add up to only modest supply growth. The net result is relatively high, sustained prices. Rising US oil output can help restrain prices at the margin, but it’s unlikely to crash prices on a sustained basis.

That’s partly because marginal North American oil production is fairly expensive. Whether it’s fracked oil in the Dakotas, or oil sands in Canada, these unconventional new sources are relatively costly to exploit, so require fairly high prices to be viable.

Some environmentalists have objected to the idea of CCS-EOR, maintaining that it’s perverse to pump anthropogenic CO2 into the ground to lift out fossil CO2 in the form of oil. For example Joe Romm—a former US DOE official and a leading voice on climate policy via Climate Progress—has argued that CCS-EOR will lead to more net CO2 emissions. Here he is, writing in 2007:

Capturing CO2 and injecting it into a well to squeeze more oil out of the ground is not real carbon sequestration. Why? When the recovered oil is burned, it releases at least as much CO2 as was stored (and possibly much more). Therefore, CO2 used for such enhanced oil recovery (EOR) does not reduce net carbon emissions and should not be sold to the public as a carbon offset… In short, the CO2 used to recover the oil is less than the CO2 released from that oil when you include the CO2 released from 1) burning all the refined products and 2) the refining process itself.

How do you see this issue on the net GHG impact of EOR-CCS?

Focusing only on each CO2 ton in the near term is short sighted. There are two things worth keeping in mind. The first is that at the margin, US oil production tends to primarily displace other oil production rather than supplement it. So if lifting the US barrel, in that case, leaves even a little more CO2 in the ground than the alternative, then it’s a plus. That alone reduces the impact of this practice on net emissions of greenhouse gasses.

The other perhaps more important aspect is, in the short run, what you should be focused on when it comes to CCS and EOR is the opportunity to develop the technology. The goal is to bring down its cost, which will let you apply it on a much larger scale to other industries. If you don’t start somewhere, it’s very hard to get to the point where this technology is cost-effective.

So even if applying CCS to boost EOR doesn’t create a big carbon benefit in the short run, it’s a good bet to deliver a big payoff in the longer run. It’s perhaps the most economically viable path, to ready CCS for commercial use in the electric power sector around the world.

The point is that technologies need niches to scale up, and to bring down costs. If you only focus on technologies that can solve all our problems right now at low cost, it turns out that you don’t have any.

Don’t get me wrong. It’s obviously critical that we reduce net greenhouse gas emissions. But I’m more interested in being able to make huge reductions ten years from now than in the micro-level changes that might happen before this technology is scaled up.

We’ve touched on high priced oil already. The other bogeyman in global energy markets these days is cheap North American natural gas. In early March, a Canadian coal-to-syngas project that was slated to deploy advanced CCS was mothballed in part because of low natural gas prices. Does cheap natural gas alter the calculus on CCS-EOR in any way?

If we’re talking about CCS for synthetic liquid fuels, which you asked about, those require relatively high prices to be viable. Without massive over-investment in that space, I don’t see a stampede toward synfuels. So no, even if we see more synfuels, the shift will not crash the price of oil.

On that note, keep in mind that the one thing that might change the calculus of CCS-EOR is if oil prices crash. But it’s very difficult to crash the price of oil from the supply side, especially when it’s already this expensive, unless you massively overinvest in oil production—which is very capital intensive to do—or develop a very large-scale supply of alternatives.

As far as natural gas-fuelled cars and trucks go, my answer is the same. Yes, natural gas is being used to fuel a growing—but still small—share of fleet vehicles, and yes EVs will consume more natural gas indirectly, in the form of electricity. But will the penetration of natural gas into the US transport sector fundamentally change the economics of oil? I don’t see that in the next 10 years, at least. I think it’s hard to make predictions further beyond that.

With the failure of many publicly backed CCS projects around the globe, do you see EOR as a best bet to push CCS technology ahead?

I think that may well be right. With EOR-CCS, it may not be possible to make money at a large scale without new policy, but it may at least be possible to imagine that one can, and to come closer to cover the costs of scaling up the technology in the process. Conversely, it is impossible for anyone to imagine that they can make money taking the CO2 exhaust from a coal-fired power plant and burying it underground—unless there’s a policy incentive. It’s a pure additional cost.

Entrepreneurs who put money into EOR-CCS may be right, or they may be wrong, but at least a few may be willing to push ahead. In short, CCS-EOR provides short-term economic support for innovation. If you’re concerned about the long-term prospects of CCS, you should be thinking about EOR as the way to support innovation in the technology.

What are the key hurdles then to seeing EOR-CCS progress further, faster?

Will companies have the confidence to invest in this? Are there too many risks that are confusing? Is there too much uncertainty? Are there too many technological unknowns? I think those are bigger factors compared to whether oil prices might crash, or whether the global transport system might flip to natural gas.

There’s some evidence of progress out there. There’s interest in tweaking some tax credits that exist in order to support CCS-EOR. And in his State of the Union address, the president mentioned a US$25 million prize for the first combined cycle natural gas plant to implement CCS. It’ll be interesting to see whether that prize is defined to include projects that use the CO2 for EOR.

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Check out the original post here: http://www.globalccsinstitute.com/insights/authors/adamaston/2013/03/26/could-expensive-oil-rescue-ccs-talk-energy-expert-michael-levi

Global CCS Institute

Looking Ahead: CCS’ Prospects Under Ernest Moniz, Energy Secretary Nominee | Global CCS Institute

Ernest Moniz, President Obama’s newly nominated Energy Secretary, shares much with his predecessor, Steven Chu, outgoing head of the Department of Energy (DOE) and who is returning to an academic chair at Stanford University. Both men are prominent academic physicists, with long track records of advancing energy technology.

Chu proved to be a vocal advocate for clean energy technologies, especially in the realms of renewables and transportation, funneling billions in stimulus dollars into early stage R&D through DARPA-e and buoying mid-stage companies such as Tesla with federal loans. Under Chu’s watch, carbon capture and storage (CCS) remained a priority, with efforts to press ahead with FutureGen 2.0, but lacked the urgency that many stakeholders wanted to see.

Assuming a quick Senate approval—Moniz is widely regarded to face a relatively easy confirmation—so what’s in store for CCS under a Moniz-led DOE? On the downside, Moniz takes charge in a period of ever-tightening fiscal policy, so will all but certainly have less public money to deploy than did Chu.

If the conditions of the recent sequester hold, the budget for the DOE’s Fossil R&D program—under which FutureGen and other carbon capture programs are funded—will be cut by 5 per cent, or US$25 million.

On the upside, Moniz enters his new post with far more experience in rough-and-tumble Beltway tactics than did Chu. Moniz served in the second term of President Clinton’s cabinet, first as Under Secretary of Energy, and later as Associate Director for Science in the Office of Science and Technology. Moniz has frequently testified before Congress, as well.

In terms of CCS, if past is precedent, there’s reason to be hopeful, maybe even a little optimistic.

I spent some time conducting some research to map out Moniz’ work and statements on CCS. Here’s what I found. If you have other examples, please comment and add more in the comments.

As Tamar Hallerman notes at GHG Monitor, Moniz has co-authored several high-profile works on energy technology and policy in which carbon is a central issue. In The Future of Coal (2007, MIT Energy Initiative) CCS is addressed front and center, vital to extending coal’s tenure in an environmentally tolerable way. The report formally recommends both a carbon price and that the Energy Dept. alter practices in its Fossil R&D regime to accelerate the development of CCS. Retrofitting of Coal-Fired Power Plants for CO2 Emissions Reductions (2009, MIT Energy Initiative) offers far more detail on these issues. In the Summary for Policy Makers section which Moniz co-authored, he makes a detailed case for increased federal emphasis on CCS. A few quotes (emphasis added):

“The US Government must move expeditiously to large-scale, properly instrumented, sustained demonstration of CO2 sequestration, with the goal of providing a stable regulatory framework for commercial operation.”

“Real world” retrofit decisions will be taken only after evaluation of numerous site-specific factors.

CO2 capture cost reduction is important.

A robust US post-combustion capture/oxy-combustion/ultra-supercritical plant R&D effort requires about US$1 [billion per] year for the next decade.

The Federal Government should dramatically expand the scale and scope for utility-scale commercial viability demonstration of advanced coal conversion plants with CO2 capture.

The program should specifically include demonstration of retrofit and rebuild options for existing coal power plants. New government management approaches with greater flexibility and new government funding approaches with greater certainty are a prerequisite for an effective program.

Time is of the essence.

About a year ago, Moniz sat down with The Energy Switch Project to document his views across the full range of conventional and renewable energies, and related technologies. I’ve pasted below two out-takes, where he comments on coal, CCS and carbon pricing.

In the video above, Moniz makes the following statements (abridged transcript):“Coal of course is a very widely used fuel, particularly for the power sector, with the US China and India combined using about 60 per cent of the world’s coal. So if we’re going forward particularly with carbon control in the future, we simply have to figure out a way to employ coal.

The answer has to be then for a serious solution: the ability to capture CO2 and sequester it underground. The problem right now is cost. Today we would probably be adding six, seven, eight cents per kilowatt-hour to electricity produced by coal… For a brand new coal plant, we’re probably talking that’s on top of six to seven cents. So let’s call it a doubling of the cost at the plant of the production of electricity.

We might or might not be willing to pay that in the United States, but it is very difficult to understand China and India being willing to pay this kind of a premium.

Do I believe today we can start safely injecting billions of tons into an appropriate reservoir? Absolutely. That’s a different statement however to do with 30, 40, or 50 years, however, and I think those things will work out as we do it.

The other near-term issue is that we really have very little idea as to how to regulate, how to assign liability [for CCS]. The EPA is in fact working on this, but certainly it cannot be based on the old types of regulatory structures put in place for water injection.”

From the same interview, he also comments on carbon pricing, saying:

“Certainly it will never be cheaper to capture and store CO2 than it is to release it into the atmosphere so the reason we’re doing it in fact is because carbon will have a price and ultimately it has to be cheaper to capture and store it than to release it and pay a price.

If we start really squeezing down on carbon dioxide over the next two decades, that [price] could double, it could eventually triple.

I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push towards efficiency, it brings along with a push towards clean technologies in a conventional pollution sense. It brings along with it a push towards security. After all, the security issues revolve around carbon-bearing fuels.

Now, I think it is very important that any funds associated with that be recycled efficiently to productive uses and to address distributional questions because some of the poor may bet hit harder. There’s a lot of work to do, but in the end, if you take one simple thing, that’s the direction I think we need to go in.”

You can check out a continuous stream of Moniz’ full 22-minute interview on Vimeo, or pick and choose Moniz’ comments on a single topic, in short 1-2 minute segments, the interview is conveniently split into shorts by topic.

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Check out the original post here:

http://www.globalccsinstitute.com/insights/authors/adamaston/2013/03/19/ccs%E2%80%99-prospects-under-energy-secretary-nominee-ernest-moniz

Global CCS Institute

Innovative funding for a groundbreaking CCUS plant: The financing behind TCEP’s polygen CCUS facility | Global CCS Institute

Over the past year, the Texas Clean Energy Project (TCEP) has emerged at the front of a small pack of US projects that aim to sell their CO2 to oil drillers. By doing so, TCEP may just re-write the rules of CCS, shifting the focus from government-backed sequestration efforts, to commercially-funded projects to capture and sell CO2 to recover oil and other industrial uses. This approach shifts CCS to CCUS (carbon capture utilisation and sequestration).

This reorientation was on display at the annual meeting of the Electric Power Research Institute (EPRI), the R&D arm of the US utility industry, in Pittsburgh in May, where for the first time petroleum engineers were present in tellingly large numbers. Testament to CCUS’ rise, the event was the stage for a major push on national policy to formally tie enhanced oil recovery (EOR) together with the goal of carbon capture. (Find details of the National Enhanced Oil Recovery Initiative (NEORI) at this post with two of the principles behind the initiative: Part I here, and Part II here).

TCEP emerged as another standout at the conference as a pioneering project that’s fully funded and on track to build a first-of-its-kind ‘poly-gen’ power plant, which converts coal into three saleable outputs: power, CO2 and industrial chemicals. I’ve written about TCEP previously here at the Global CCS Institute: first here in a Q&A with Laura Miller, former Mayor of Dallas, who has joined the team developing the project, and again in an update on the project’s progress.

At the May EPRI meeting, I got the chance to learn more about the innovative financing and business model that’s bringing TCEP to life. W. Harrison Wellford, chief executive of Wellford Energy, offered the perspective of the investment community on the project. As a financial advisor to the project, Wellford sees TCEP as a game changer in the way power generation has been conventionally developed and financed. Power plants aren’t just about electricity anymore. Think of it this way, he said: “We will pay about US$45 million for coal at mine mouth for this plant. That will produce at the end of day US$750 million in sales” of a mix of products. “You’re taking a very cheap fuel resource, and creating a valuable product through the alchemy of a plant like this.”

TCEP is drawing attention from beyond US shores. On 13 August, a group of Chinese investors including China Petrochemical Corp. (or Sinopec, China’s national oil company), announced it was in late-stage talks to invest US$1 billion to acquire an equity stake in the project. If completed, the deal would be the largest investment by China in the US power market to date, according to The Wall Street Journal. The move would advance a growing movement to link China’s rapidly expanding power sector with US advanced coal technologies. See this post for background on US-China joint efforts in CCS.

Sales outlook

To understand TCEP’s current financing, it’s necessary to first have a clear view on what the plant will produce. In his slides, Wellford explained that the project would yield three major streams of revenue: power, CO2 and urea. The following details are adapted from slides that Wellford presented.

  • Power – The plant will produce electrical output of 400 MW gross, with 160 MW net available for sale to the grid. The balance is consumed to drive CO2 and chemical manufacturing operations at the facility. Discussions for terms of the power off-take arrangements are set at 30-year, fixed price, as a base load generator in the Electric Reliability Council of Texas (ERCOT) and per volume terms set out in a power purchase agreement. ERCOT operates the regional grid, encompassing the state of Texas and a few bordering regions. At peak demand, ERCOT consumes over 65,000 MW.

  • CO2 – Sales of CO2 are expected to be set up as 15-year, rolling contracts. Wellford explained that the project has attracted interest from multiple parties in EOR markets, looking to draft contracts and sketch out term sheets. The revenue from these CO2 sales is not dependent on carbon legislation, Wellford emphasized. Pricing will be linked to market rates for West Texas Intermediate (WTI), a benchmark indicator for US oil markets. When up and running, TCEP will operate at a 90 per cent capture rate, yielding some 2.7 million tons of CO2 per year. The annual current demand for CO2 in the region for EOR is estimated to be more than ten times that amount, at 33 million tons. The CO2 will be qualified as Verified Emissions Reductions on the American Carbon Registry.
  • Urea – A major market participant  has contracted to take urea produced by TCEP, and includes the plants full annual production. In this case, prices will be tied to actual secondary sales to downstream consumers, subject to a floor, on the downside, and on the upside, to price sharing mechanisms. Urea production is predicted to hit 720,000 tons per year at full operation. Currently the US market for urea, used primarily as a raw ingredient in fertilizer, is 8.5 million tons per year. Of that, some 5 million tons are imported.

Financing

Wellford emphasized that getting TCEP off the ground has been as much a financial challenge as an engineering feat, and perhaps more so. He commented:

“To finance a project like this, we would typically go to power markets. But they don’t know anything about EOR. To go around the world and try to make a case for an Integrated Gasification Combined Cycle (IGCC) plant for risk, but to educate them in two other industries – chemical fertilizers and oil and gas – that’s a lot harder… We’ve made a lot of progress educating people on how this will work. And I think we’ll succeed, but it hasn’t been easy.”

The TCEP Project is fully funded through project financial close, Wellford said. As of his talk, the bulk (US$1.3 billion, or 52 per cent) of project finance, is coming from debt in the form of bonds and bank loans. The next largest share (US$845 million or 31 per cent) is from equity and tax equity. The balance (US$415 million, 17 per cent) is from an Energy Department grant. He pegged total project costs at US$2.995 billion.

Wellford emphasized the importance that tax benefits have played in bringing TCEP to reality. The project has tapped three separate federal tax incentives, the combined long-term benefit of which totals roughly US$1.49 billion. Here’s how they break down, according to Wellford’s slide:

  • US$313 million: Advanced Coal Program investment tax credit (ITC) at or before COD, awarded in 2010 and contract signed with IRS;
  • US$253 million: carbon sequestration tax credits possible over first 10 years; and
  • US$925 million: MACRS accelerated depreciation tax benefits over first 5 years.

Long-term prospects for CCUS

Wellford made a case that, longer term, CO2 demand in TCEP’s market will continue to rise, further improving TCEP’s financial performance. Responding to a question after his presentation, Wellford explained TCEP modelled its revenue projections at a price of around $20 per ton of CO2, but that market prices since then have risen to over $30 per ton.

In the Permian Basin, which includes West Texas and a few bordering regions, using CO2 for EOR has been going on for more than four decades. Currently, CO2 is moved throughout the region in a network of pipelines operated by Kinder Morgan, Trinity Pipeline and others. The bulk of CO2 transferred into the region comes from geological reservoirs in the Rockies or from CO2 stripped from methane during refinery. Annually about 33 million tons of CO2 is shipped into the region for injection; another 60 to 70 million tons is re-injected back into wells, from CO2 that surfaces with oil and gas.

Each ton of CO2 yields two to three barrels of oil.  Some of the region’s drillers such as Occidental Petroleum produce all of their oil using EOR. Yet the market is short of CO2, and apart from TCEP, there are no other viable sources of anthropogenic CO2 in the region at such a late stage of development. Current geologic CO2 sources are in decline, and while new geological sources have been identified, they are too distant to be economically delivered to the region.

Wellford Energy background

By way of background, Wellford Energy is a financial advisor to clean energy companies and projects in the US, Europe, China, and Latin America. The firm focuses on matching projects with private investment from domestic and international sources, and on non-dilutive public funding. The company focus on climate-friendly technologies, including CCUS, compressed air and other technologies to store renewable energy, and low-carbon transportation technologies. Its partners include Summit Power (which is developing TCEP), Kleiner Perkins Caufield & Byers, and Prometheus Capital Partners.

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Check out the original post online here:

http://www.globalccsinstitute.com/insights/authors/adamaston/2012/09/12/innovative-funding-groundbreaking-ccus-plant-financing-behind

Global CCS Institute

Project update: Promising results of pilot tests for Codexis’ enzyme-based carbon capture system | Global CCS Institute

On 9 July, Codexis announced promising results from a pilot-scale demonstration of its enzyme-based carbon capture process at the National Carbon Capture Center in Wilsonville, Alabama.

The test, performed on flue gas from a Southern Co. coal-fired power plant, is the largest-ever successful demonstration of enzyme-based carbon capture. The capture rate was the equivalent of “1,800 average sized trees per day,” according to Redwood City (Calif.)-based Codexis.

Though better known for its work developing enzymatic catalysts for the production of advanced (cellulosic) biofuels, Codexis is also tapping its deep know-how in enzyme science to develop a carbon capture technology.

I first caught up with this project on behalf of the Institute last year, when CO2  Solution, of Quebec City, Canada renewed a collaboration with Codexis on biology-based carbon capture technologies.

This project began to take shape back in May 2010, when Codexis received US$4.7 million from the US Department of Energy’s Advanced Research Projects Agency – Energy (ARPA-E) program to exploit an active enzyme called carbonic anhydrase, or CA, which catalyzes the transfer of CO2 in nature.

Working with enzymes under license from CO2 Solutions, Codexis undertook an effort to rapidly improve the enzyme’s performance. The results: the largest improvement in enzyme performance in Codexis’ history, amounting to a two-million-fold improvement in thermal stability at temperatures between 140oF and 180oF (60oC and 82oC).

The CA enzyme show promise to perform at lower operating temperatures, lower pressures, and lower pH levels than many current and pending processes. A lower operating temperature promises to substantially reduce parasitic energy loss compared to current state-of-the-art monoethanolamine (MEA) technology.

The process shows potential upfront savings for materials, as well. “The benefit of being able to use carbonate solutions is that they’re some of the cheapest, most environmentally benign, most commonly used chemicals,” Alex Zaks, chief technology officer and vice president for research at the St. Louis-based biotech company Akermin told Tamar Hallaman of GHG Monitor. She noted:

Although enzyme-induced capture is still seen by the Department of Energy as an experimental technology, researchers conducting R&D work with the natural catalyst argued that enzymes could be the breakthrough technology needed to help usher in a cheaper and more efficient second wave of carbon capture technologies. “I think this technology can be a game changer,” said Zaks.

According to highlights presented in Pittsburgh on 11 July at the 2012 NETL CO2 Capture Technology Meeting, by Luan Nguyen, a technical engineering manager at Codexis, the system shows the promise to outperform comparable MEA systems by these measures:

  • reduce capex by about 9 per cent compared with a reference model, post-combustion carbon capture plant;
  • decreased parasitic losses of energy for carbon capture by about 30 per cent; and
  • enable a novel biocatalytic process for carbon capture that increases the levelized cost of energy (LCOE) by about 41 per cent, less than half the increase predicted for the state-of-the-art MEA process.

As to future steps that could take this technology closer to application, Nguyen mapped out three goals:

  • first, to design and scale-up process and equipment for a larger, 0.1–0.5 MWe slip-stream demonstration, up from the current 10kWe test system. A second-generation system, could potentially reduce the systems’ impact on LCOE to less than 35 per cent, from 41 per cent;
  • second, Codexis hopes to continue to evolve enzyme via its proprietary CodeEvolver technology to further improve system performance and lower production cost; and
  • lastly, the company is looking to engage with strategic partners to pursue commercialization.

For John Nicols, President and CEO of Codexis, the unprecedented large and rapid performance gains the company achieved during these trials highlights the potential for very dramatic gains for enzyme performance in carbon capture, as well as other industrial applications. “Codexis has pushed enzyme-based carbon capture technology to a level that surpassed all expectations,” Nicols said in a statement, “We’ve succeeded in demonstrating that this could be a viable solution.”

The announcement comes on the heels of Nicols’ appointment as new CEO in June. Nicols joined Codexis from Albemarle, a specialty chemicals firm, where he served as Senior Vice President, Strategic Development and Catalysts.

~

Check out the original post online here:

http://www.globalccsinstitute.com/insights/authors/adamaston/2012/08/22/project-update-promising-results-pilot-tests-codexis

Global CCS Institute

Computer modeling identifies optimal zeolites that could slash parasitic energy loss, and costs, for CO2 capture | Global CCS Institute

Dramatic advancements in software efficiency, hardware speed, and modeling accuracy have helped scientists assess a huge database of some 4 million CO2 absorbing minerals, pointing the way to new, lower-cost carbon capture methods.

The researchers have identified a large group of extant and new zeolite materials that could help lower, by as much as a third, the parasitic energy costs associated with removing CO2 from power plant emissions.

Published online in May 2012 in the journal Nature Materials, the anlysis was developed by scientists from three institutions: the Electric Power Research Institute (EPRI), the Lawrence Berkeley National Laboratory (LBNL) at the University of California, Berkeley, and Rice University in Houston, Texas.

In the new study, researchers identified dozens of zeolites — many commonly used in industrial processes — that could significantly improve the energy efficiency of carbon capture technology.

“We believe we can beat current state-of-the-art carbon capture technology by about 30 per cent,” study co-author Michael Deem, Rice’s John W. Cox Professor of Bioengineering and professor of physics and astronomy said in a phone interview. Reducing parasitic power losses during CO2capture could increase a generator’s sellable electric power “by 10, or maybe 15, per cent” based on a back-of-the-envelope estimate, said Deem. “That’s a lot of money.”

The predicted performance gains are relative to current methods, where CO2 is bubbled through a bath of amines. To release the CO2, the amines are heated to boiling, and then the CO2 is compressed into a liquid to be sequestered or used otherwise. Up to one third of the power plant’s steam output is diverted to boil the amines and liquefy the CO2 for shipment.

Computer rendering of the carbon-capture characteristics of a zeolite structure. The arrangement of (red) oxygen atoms and (tan) silicon atoms influences the pore spaces, depicted as green, blue, grey colored surfaces, where CO2 can be captured. Credit: B. Smit/UC-Berkeley.

The new study used computational techniques to identify zeolites that promise to absorb and release CO2 using less energy. Deem explained that Zeolites are a good candidate for this role because they have long been studied, and are used industrially to refine gasoline, as well as to make laundry detergent and other chemically engineered products.

Speaking with GHG News, co-author Berend Smit, a professor of Chemical and Bimolecular Engineering at the University of California-Berkeley, explained:

This round of testing focused exclusively on parasitic load, or the energy penalty needed to separate the CO2 from flue gas, currently considered one of the major cost barriers to the commercial deployment of CCS.

[…]“If the parasitic energy doesn’t go down significantly, then it’s not worth looking at other properties,” Smit said. Of those 5 million materials tested, Smit said roughly 500 turned out to be “promising”…

Comprised mostly of silicon and oxygen, the performance of Zeolites varies by their nanoscale porosity. Made up primarily of silicon and oxygen molecules, the size and shape of pores vary by the geometric linkages made between molecules. In a chemical reaction, each pore acts like as microscopic reaction vessels, bonding and interacting with molecules that fit into the cavity.

The work of Deem et al., focused on sorting through a huge database of zeolite compositions. The roots of the work date back to 2007, when Deem and his colleagues used computers to calculate millions of atomic formulations for zeolites. Adding to this catalog since then, Deem’s database now contains some 4 million structures of zeolite.

In this latest study, the researchers pushed zeolite analysis to a higher level, using a new computer model designed by a team at Berkeley/LBNL to identify candidates well suited for CO2 capture. This model was refined with the addition of technical criteria of ideal carbon capture material, provided by technical experts at EPRI.

Coordinating Deem’s existing zeolite data, with new computational methods, add the additional CO2-capture characteristics, the team predicted the energy demands to capture and release CO2 for all the materials in the zeolite database.

Hardware advancements played a big role too. Given the complexity of the analysis, conventional computational methods using central processing units — or CPUs, the costly, complex chips that serve as the brain of most PCs — would have taken roughly five years to simulate each of the millions of zeolite models in Deem’s database.

Instead, the Berkeley/LBNL team adapted the model to run on graphics processing units, or GPUs, which are specialized, lower-cost processors typically used to render graphics in computers. Switching to GPUs, Deem explained, was integral to the project’s success: “It would have been unfeasibly large to do the old way. Instead of years, the calculation took about a month.”

The graph (below) summarizes the researchers’ findings. The green line gives the current cost of CO2capture through amine recovery. Red dots represent commerciall- available zeolites, while blue dots (both solid and circles) are predicted materials.

“The black curve is the envelope of the best possible performance, within zeolites,” explained Deem. “So if yours is close to this, you can be confident you’re close to best performance.”

The model suggests there are dozens of currently available Zeolites that promise to capture carbon at lower costs than current amine processes.  Speaking with GHG News, Smit explained the top candidates will go through further analysis to assess other criteria, such as diffusion limitations and reactions with water.

And if those fail to yield viable performance characteristics or are unavailable because of patent issues, Deem added, the model predicts a large number of viable compounds that can begin to be explored.

As industry begins to sort through the candidates his research has helped identify, Deem is looking forward to add still further attributes to his zeolite database, to further refine for CO2 performance as well as mapping out other potentially valuable chemical interactions.

The team’s research was supported by the Department of Energy (DOE), the Advanced Research Projects Agency-Energy (ARPA-E) and EPRI’s Office of Technology Innovation.

Check out the original post here: http://www.globalccsinstitute.com/community/blogs/authors/adamaston/2012/07/18/computer-modeling-identifies-optimal-zeolites-could

Global CCS Institute

NEORI’s promise: Pairing utilities with big oil to revitalize CCS development – Part 2 | Global CCS Institute

It’s rare that a big industry has a major appetite for the waste of another huge industry. Yet when that happens, shouldn’t it be a no-brainer for the two to get together and solve one another’s problems?

In the case of carbon capture, the utility and oil sectors are trying to do just that – though with limited success to date.

The utility sector has a super abundance of waste CO2 it hopes to dispose of constructively. What’s more, it can benefit from deep-pocketed offtakers to help fund development of carbon capture systems.

Meanwhile, vast regions of the US oil industry are nearly desperate for fresh sources of CO2. to help drive oil out of ageing wells in a process known as enhanced oil recovery (EOR). Their current sources of CO2, mostly geologic CO2 reservoirs, are maxed out.

Yet so far, the two big industries haven’t been able to join forces on a large scale. This market mismatch may soon find a solution if a coalition led by the Center for Climate and Energy Solutions in Washington, DC can push through the National Enhanced Oil Recovery Initiative.

NEORI brings together key industry players from the oil and utility sectors and proposes a set of revenue-positive federal and state incentives that will help spur the construction of a first generation of carbon capture infrastructure on power plants and other industrial emitters, to feed the CO2 to the oil industry. As important, perhaps the effort has attracted bipartisan support in an era of near-paralysis on many political fronts.

To learn more the promise, mechanics and timing of NEORI, I connected with Eileen Claussen, President of C2ES, and Judi Greenwald, Vice President for Technology and Innovation at C2ES. The second half of our conversation follows. The first part was published last week..

What’s the potential impact of this approach on domestic oil supplies?

Eileen Claussen: NEORI estimates that our proposed new federal tax credit for captured CO2 capture will quadruple the amount of domestic oil currently produced annually through enhanced oil recovery –to 400 million barrels a year in the outyears – while cutting CO2 emissions by a total of 4 billion tons over the next 40 years. In addition, we will be generating new tax revenue for states and for the federal government, as I said, these incentives will more than pay for themselves. And we will be gaining vital experience and creating valuable infrastructure supporting broader deployment of carbon capture and sequestration in the future.

CO2 captured from varying sources – whether coal fired power plants, or industrial factories, or other – will come at different costs, yet we need to develop capture solutions for all of them. How does NEORI work to encourage development of CO2 capture from a range of potential sources?

Judi Greenwald: The cost of carbon capture at power plants and industrial facilities varies considerably. Also, CO2 capture technologies are in different stages of development, and as with any emerging technology, costs will fall over time after repeated demonstrations. This is why NEORI recommends establishing tranches and sub-tranches for different technologies under a competitive bidding process. The three main tranches would be a pioneer tranche, an electric power tranche, and an industrial tranche. The pioneer tranche would be for commercial-scale, ‘first-mover’ projects that would only move forward with sufficient government support to offset the technical and financial risk of CCS in both the electric power and industrial sectors. The other two tranches would be for projects using more advanced CCS technology in the electric power and industrial sectors. The industrial tranche would include sub-tranches for both lower-cost and higher-cost CCS technologies. Overall, the goal is to ensure that sufficient credits are allocated across all applications for CCS. This approach would take advantage of lower-cost carbon capture sources to pay for the incentives for higher-cost carbon capture sources. It would drive costs down in the tranches with the highest current capture costs, but take advantage of the sources with the greatest CO2 supply potential.

As proposed, NEORI promises to gain bipartisan support. This is remarkable in particular for a climate technology, and all the more so in an era of intense partisanship. How do the politics line up on this issue?

Eileen Claussen: At a time of economic struggle, fiscal crisis and political gridlock, we at C2ES believe the NEORI proposal is an encouraging example of how we can and must make progress on the climate and energy challenges we face. As much as we would like to see comprehensive solutions to our climate and energy challenges, those solutions are not on the immediate horizon. But if we come at these issues one by one, look for opportunities where interests converge, and are open to compromise, we can arrive at practical solutions benefiting our economy, our security and the environment.

At the Capitol Hill event where NEORI announced our recommendations in February, a bipartisan group of members of Congress were on hand to express their support. Given the political gridlock in Washington in this election year, it was reassuring to see lawmakers from both political parties step up and say they agree that this is important work. Senator Kent Conrad (D-ND) and Congressman Mike Conaway (R-TX) welcomed the NEORI’s recommendations at the Capitol Hill event. Senators Max Baucus (D-MT), Kent Conrad (D-ND), John Hoeven (R-ND), Richard Lugar (R-IN), and Congressmen Mike Conaway (R-TX) and Rick Berg (R-ND) released written statements of support.

Where are we on the timeline for NEORI? What next?

Eileen Claussen: Will we see comprehensive legislation on this issue pass the Congress this year? That’s unlikely. But we do think we have a shot at Section 45Q reform this year. Still, the NEORI recommendations have started the conversation and we feel optimistic that we can see progress on this issue in the not-too-distant future no matter who controls the Presidency and the Congress next year.

Rarely in the current political climate do Republican and Democratic lawmakers in Washington rally together in support of anything. So we need to make the most of this opportunity. Everyone who supports CO2-EOR has an obligation to educate their representatives in Washington and in state capitals around the country about the benefits this can deliver for our economy, our national security and the environment.

Scaling up CO2-EOR means bringing together vastly different business cultures – the oil industry and the utility sector – along with environmental groups. How do you bridge these gaps?

Eileen Claussen: The idea behind this initiative was to bring together a diverse group of stakeholders and try to come to agreement about what needs to happen to realize CO2-EOR’s potential. This is why the NEORI coalition includes industry, environmental advocacy groups, labor, and state officials who can work on both sides of the aisle and at both the state and federal level to stimulate the expansion of CO2-EOR.

Were these conversations easy? In a word, no. The diversity of the group meant we had some very tough discussions.

But in the spirit of the saying ‘nothing that is worthwhile is easy’, the final participants in this project stuck with it, and they reached consensus recommendations.

The petroleum industry regards CO2 from EOR as permanently stored. But for experts, policy makers, and regulators from the CCS world, this question is open. What do we know about the permanence of CO2-EOR?

Judi Greenwald: CO2 injection in EOR wells is regulated under existing policies and regulations. CO2 is contained by a series of physical and chemical trapping mechanisms over time. Experience from commercial-scale CO2-EOR projects, some of which have been in operation for decades, shows that CO2-EOR can be performed in a manner that is safe for both human health and the environment. The University of Texas Bureau of Economic Geology’s Gulf Coast Carbon Center has found no evidence of CO2 leakage from the SACROC oil field, where CO2 has been injected for EOR since 1972 (NEORI: CO2-EOR Safety).

Has there been any modeling on the net CO2 impact of this approach, given that units of anthropogenic CO2 are pushed into the ground to liberate units of petroleum CO2?

Judi Greenwald: To get at the net impact, the key question is: what would have happened otherwise? NEORI’s view is that CO2-EOR displaces other oil production that also would have resulted in CO2emissions, so any emissions benefit from the CO2 capture is a net benefit. Also, using captured CO2 clearly has net CO2 benefits compared to using naturally-occurring CO2.

With that said, there are a range of estimates as to how large the net emissions benefit is. For example, one study estimates that the Weyburn CO2-EOR project produces oil that is ’40 pe rcent carbon-free’ compared to conventional oil production due to stored CO2 emissions that offset tailpipe CO2 emissions (see Taglia, Enhanced Oil Recovery, July 2010, page 14).

We think more work is necessary in this area. It is necessary to better quantify the emissions benefit of CO2-EOR because it will help make the case for CO2-EOR.

See the original story here: http://www.globalccsinstitute.com/community/blogs/authors/adamaston/2012/07/10/neori%E2%80%99s-promise-pairing-utilities-big-oil-revitalize

Global CCS Institute

NEORI’s promise: Pairing utilities with big oil to revitalize CCS development – Part 1 | Global CCS Institute

What’s in a letter? In the case of carbon capture and sequestration, or CCS, the ever more frequent addition of a U – short for use, or utilization – to the familiar acronym crystalizes a shift in thinking. Carbon dioxide is increasingly being seen as a potential money-making byproduct, rather than simply as a costly, harmful waste to entomb.

This shift got an official nod in May with the renaming of a top US meeting in the field. Over the past decade, EPRI – the Electric Power Research Institute, the research arm of the US utility industry– has convened an annual CCS meeting. Last month, that acronym grew by a U, to CCUS, with the opening of the 11th Annual Carbon Capture, Utilization & Sequestration Conference in Pittsburgh.

Even as publicly-backed CCS efforts are facing funding woes and political friction, CCUS is gaining traction precisely because of that U. The oil industry boasts deep pockets and a nearly insatiable appetite for CO2. Today, the industry gets its CO2 from natural deposits, but those are running out, even as demand is rising. When pumped into ageing oil wells at high pressures, CO2 has a unique ability to push out oil left behind by most other extraction techniques. What’s more, with more than 40 years of monitoring of enhanced oil recovery (EOR) sites, petroleum engineers are certain the CO2 stays put when pumped into these wells.

The marriage of EOR with CCS shows tantalizing promise to help fund efforts to scale up CCS processes, dramatically boosting US output from extant oil fields, all while potentially stashing gigaton-volumes of CO2 back into the earth. “CO2-EOR is perhaps the option with the greatest near- to mid- term potential, but the one about which policy makers know the least,” says Judi Greenwald, vice president for technology and innovation at the Center for Climate and Energy Solutions (C2ES) in Washington, D.C.

If EOR-CCS is such a game changer, why haven’t the oil and utility industries tied up a deal sooner? In short, price. The cost of captured CO2 has been too high, and oil has been too cheap. But with the former inching down and the later rising steadily, efforts are intensifying to nudge these two huge industries. If so, big oil can help fund the development of large-scale CCS. Today, oil drillers are buying CO2for EOR at around US$40 per ton, about half of what it costs to extract CO2 from current-generation CCS facilities. Of course, if the scale of CCS grew, CO2 prices would fall as the technology improved. Yet funding large scale projects has remained a work-in-progress.

Speaking at EPRI’s CCUS meeting last month, Greenwald and Eileen Claussen, president of C2ES, outlined an ambitious vision to solve this market inefficiency. Spearheaded by C2ES, the National Enhanced Oil Recovery Initiative (NEORI) brings together key industry players from the oil and utility sectors and proposes a set of revenue-positive federal and state incentives that will help spur the construction of a first generation of carbon capture infrastructure on power plants and other industrial emitters, to feed the CO2 to the oil industry. As important, in an era of near paralysis on many political fronts, the effort has attracted bipartisan support.

I followed up with Eileen and Judi after the conference to get their take on the promise, mechanics and timing of NEORI. The first half of our conversation follows. The second half will be posted next week.

In the US, the past year or two has seen a shift in the focus on sequestering CO2, to using CO2 whether as an input for chemical processes, or to help with enhanced oil recovery. Does CCUS represent a bridge to CCS?

Eileen Claussen: The potential for CCS to reduce emissions is undeniable. Studies show that CCS technology could reduce CO2 emissions from a coal-fueled power plant by as much as 90 percent. Modelling done by the International Energy Agency (IEA) forecasts that CCS could provide 19 percent of total global GHG emission reductions by 2050. That includes reductions from coal and natural gas-fired power plants, as well as all other sources.

But what we are doing right now to develop these technologies is not enough; it’s not even close to enough. We have two decades at most to deploy these technologies at the scale needed to achieve substantial reductions in emissions.

The participants in the NEORI believe that EOR using captured CO2 offers a safe and commercially proven method of expanding domestic oil production that can help the U.S. simultaneously meet future need for domestic oil, spur domestic investment, and help advance CCS as well.

This approach shifts the CCS problem from a largely public cost, into one where the private sector has incentive to invest. How do NEORI’s participants prioritize these benefits?

Eileen Claussen: NEORI’s participants agree that energy security, domestic investment, and environmental protection are important. But different participants would prioritize these goals differently. We all agree on the solution – incentivizing the use of captured CO2 in enhanced oil recovery – but we don’t necessarily agree on which reasons for doing that are most important. For some, the highest priority is increasing our nation’s energy security by reducing dependence on foreign oil, including oil that is imported from unstable and hostile nations. CO2-EOR potential in the United States equals 26-61 billion barrels of oil with existing technology. With next-generation techniques, the potential rises to 67 to around 140 billion barrels. Current US proven reserves are estimated to be 20 billion barrels, so we are talking about at least doubling US. oil potential. That’s huge.

For others, the highest priority that CO2-EOR addresses is creating economic opportunity. If we do this right, it will create jobs, boost tax revenues, and reduce the US trade deficit. We can put dollars we now spend on oil imports to work right here in the US economy.

How much money are we talking about? One estimate, from Advanced Resources International, projects that the reduction in oil imports associated with CO2-EOR would add up, year by year, to US$600 billion by 2030. (For further details on economic impacts, NEORI: Economic Benefits of CO2-EOR.)

And for still others, the priority addressed by CO2-EOR is protecting the environment. Capturing and storing CO2 from industrial facilities and power plants will reduce US greenhouse gas emissions, while getting more American crude from areas already developed for oil and gas production. By fully developing American reserves that are amenable to this practice, we could reduce CO2 emissions by 10-19 billion tons, an amount equal to 10-20 years of emissions from personal vehicle use in this country.

And the bonus is that it can help us further the commercial deployment of the CCS industry in this country – not just with coal and natural gas power plants, but with other domestic industries such as natural gas processing, ethanol and ammonia production, and steel and cement manufacturing. Driving innovation in CCS technology will allow us both to take advantage of our nation’s vast fossil fuel resources and achieve much larger CO2 emission reductions.

I have worked on the climate issue for many years now, and I assure you this is a big deal. Reducing US CO2 emissions by up to 19 billion tons while also advancing CCS technology would be a major achievement.

Can you put this in context? Relative to the other climate and energy solutions on the table, from renewables, to EVs, to greener buildings, how does CO2-EOR stack up?

Judi Greenwald: Of the many solutions to our climate and energy challenges we are working on here at C2ES, CO2-EOR is perhaps the option with the greatest near to mid- term potential, but the one about which policy makers know the least. CO2-EOR is an important strategy for deploying CCS, which will be needed to keep coal (and natural gas) as part of our electricity generation portfolio while reducing CO2 emissions across economic sectors. But public and policymaker awareness of the potential of CO2-EOR is limited, despite its diverse benefits. CO2-EOR offers the opportunity to enhance national security, decrease foreign trade deficits, and create domestic jobs and economic opportunity. What’s more, tax incentives given for CO2-EOR are likely to pay for themselves as federal and state governments receive revenues from increased EOR oil production.

What’s the problem with the current federal treatment of CO2 and how does NEORI propose to change them?

Eileen Claussen: Today, the major hurdle preventing the growth of EOR is there’s not enough readily-available CO2. And this is why our organization joined with the Great Plains Institute to convene the NEORI.

NEORI’s centerpiece recommendation is a competitively awarded, revenue-positive federal production tax credit for capturing and transporting CO2 to stimulate CO2-EOR expansion. This federal tax credit would more than pay for itself because it will lead to additional oil production subject to existing tax treatment (see below a chart forecasting cost of such an incentive, along with the increased tax revenues generated by increased oil output). The new incentive will enable a variety of industry sectors to market new sources of CO2 to the oil industry, and to reduce their carbon footprints. It will drive innovation and cost reduction in CO2 capture and compression, and help build out a national CO2 pipeline system.

For the near term and until the broader credit is in place, NEORI also recommends specific ‘good government’ changes to improve the workability of the existing carbon capture and storage credit known as Section 45Q.

Of course, states also have an important role to play in fostering CO2-EOR deployment. This is why NEORI identifies existing state policies that should serve as models for policymakers in other states to adopt and tailor to their particular needs. These policies include cost recovery for CCS power projects, long-term off-take agreements for CCS power, severance tax reductions for oil produced by CO2-EOR, and others.

Federal tax incentives: Annual revenues, annual costs, and net annual revenues to the Government (2013-2052) (Millions of $)

Watch for the second half of this interview next week.

Check out the original post here: http://www.globalccsinstitute.com/community/blogs/authors/adamaston/2012/07/06/neori%E2%80%99s-promise-pairing-utilities-big-oil-revitalize

Global CCS Institute

MIT study refines estimate of CO2 storage capacity of US saline aquifers | GCCSI

Deep, saline aquifers in the US have sufficient capacity to sequester a century’s worth of CO2emissions from the nation’s coal-fired power plants, according to a research team at the Massachusetts Institute of Technology who published their findings in the Proceedings of the National Academy of Sciences on April 3.

The findings substantially refine estimates of the storage capacity of these reservoirs, which the Global CCS Institute recognizes as having the most promising potential of any geological storage option. Previous measures of their capacity in the US spanned from a few years’ of CO2 emissions, to tens of thousands of years’ worth.

Earlier assessments tended to oversimplify the problem, leading to the wide range. “We felt that there was such a big disparity in numbers out there that CCS deserved a closer look,” team leader Ruben Juanes, MIT’s ARCO Associate Professor in Energy Studies in the Department of Civil and Environmental Engineering, told The New York Times.

MIT researchers improved the accuracy of these estimates by building a more detailed mathematical model. Previous models were “missing some of the nuances of the physics,” said Christopher MacMinn, a doctoral researcher and co-author of the study, via a press release.

Image: MIT

The MIT team modeled micron-scale fluid dynamics to better understand how liquefied CO2 is trapped in deep saline aquifers. Including some 20 parameters, the team designed the mathematical model to be flexible enough to evaluate the potential of saline aquifer formations at the scale of hundreds of miles, and in different regions of the US.

“The key is capturing the essential physics of the problem,” said Michael Szulczewski, a doctoral researcher and co-author of the study, “but simplifying it enough so it could be applied to the entire country.”

Using glass beads to simulate the way liquefied CO2 would percolate through the tiny poor spaces of deep rock formations, the approach helped the MIT team to better understand rates of injection and how the CO2 is sequestered through the dynamics of capillary trapping and solubility trapping. Of key concern was estimating the pressure and rates of CO2 injection necessary to prevent fracturing of the reservoir or its over-capping structures.

The study “demonstrates that the rate of injection of CO2 into a reservoir is a critical parameter in making storage estimates,” said Howard Herzog, a senior research engineer with the MIT Energy Initiative and another co-author of the PNAS paper, in a release.

While this study is focused on the saline aquifers in the US, the method can be extended to similar geologies around the world, MacMinn added.

The abstract for the paper, Lifetime of carbon capture and storage as a climate-change mitigation technology is published at PNAS.

Also, below is a video where Juanes and his team members explain their work. The first half-minute or so is a basic overview of carbon storage. Stick with it; starting around 0:45 Szulczewski goes into greater detail of the model’s approach to the subsurface dynamics of CO2 injection.

Global CCS Institute

Project update: In Canada, partners pull the plug on CA$1.4billion TransAlta CCS project | GCCSI

A group of energy companies abandoned a project to capture, use and store 1 million tons of CO2 per year from the flues of an Alberta coal-fired power plant.

Pointing to weak project economics, TransAlta, Canada’s largest investor-owned electricity generator announced on 26 April that its partners Capital Power and Enbridge would halt the CA$1.4billion project after completing initial engineering and design studies. Construction was due to start this year.

According to TransAlta’s first quarter results, the partners “determined that although the technology works and capital costs are in line with expectations, the revenue from carbon sales and the price of emissions reductions are insufficient…”. The Pioneer plant aimed to sell CO2 for enhanced oil recovery, but found no firm buyers.

“What’s really needed, of course, is a regulatory framework on CO2 that puts a value on that CO2 – a significant value,” Don Wharton, vice-president of policy and sustainability at TransAlta, told The Globe and Mail. Wharton added that: “If [a price on carbon is] done properly, then CCS projects, as well as other emissions-reducing projects, would be more encouraged to go ahead.”

The province of Alberta currently charges certain industrial emitters CA$15 per ton of CO2 beyond a pre-determined level. That price doesn’t support the cost of the project, and there’s “little certainty on future revenue”, Cheryl Wilson, carbon capture and storage analyst at Bloomberg New Energy Finance told Bloomberg News. “Pioneer had too many factors working against it.”

Located about 70 kilometers west of Edmonton, the project was slated to capture 1 million tons of CO2 from the exhaust of TransAlta’s Keephills 3 facility, a 450-megawatt coal-fired power plant that went on line in September 2011 at a cost of roughly CA$2 billion.

A portion of the captured CO2 was to be sold to oil and gas drillers operating in the nearby Pembina oil fields, to enhance the recovery of oil from mature wells. Another share of CO2 was to be permanently sequestered in deep saline formations nearby, as well.

The Pioneer project was granted public funding in October 2009. The lion’s share, CA$436 million, was committed by the province of Alberta, and another CA$343 million was pledged by the Canadian Government. The Global CCS Institute also put up AU$5 million.

According to TransAlta, the company and its partners had spent just CA$30 million on the project to date, with CA$20million of that coming from government.

Speaking to Thomson Reuters News, Chris Severson-Baker, managing director of the Pembina Institute, an Alberta-based environmental think tank, said: “Within Alberta, this was the one coal-plant application of CCS and it was the most important application. There are significant emissions from coal operations… and there are few other options to mitigate greenhouse gas emissions from those types of operations without CCS.”

Meanwhile, the province has funded three other CCUS projects which will reach critical decision points in the next year or so. These are: