Challenges to the Development and Commercialization of CCS

Cheyenne A. Alabanzas 2009 ASME Intern University of Alaska – Anchorage

Overview

Premise What is CCS?

Current projects Challenges Conclusion Recommendations Questions

Importance of Coal in the US

Cheap Price per kWh, as of April 2009: Coal Petroleum Liquids Natural Gas $0.76

$3.12

$1.50

Derived from EIA website, http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

Abundant – US has recoverable reserves of 262 billion short tons – At current rate of consumption, coal will be an energy source for the next 250 years.

Importance of Coal in the US

Coal provides about 50% of the nation’s electricity.

Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through April, 2009 Source: Energy Information Administration, http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

The need for CCS

Coal is a dirty fuel.

80% of US greenhouse gas emissions come from coal and petroleum fuels.

US recognizes the need to cut carbon emissions by mid-century.

What is CCS?

Carbon Capture and Storage (or Sequestration) is a broad term for technologies involving three main steps: 1) capturing the CO2 from the combustion of fossil fuels at stationary sources 2) transporting it to the storage site and, 3) storing it underground in geological formations.

Source: Japan Exploration Company, Ltd., http://www.japex.co.jp/english/images/technology/gainen.jpg

Current commercial projects

Sleipner (Norway) – Started in 1996 after Norway implemented carbon taxes – ~12 million metric tons of CO2 injected – No leakage detected Snohvit, Weyburn, In Shalah Small pilot demonstration projects around the world Source: World Coal Institute, http://www.worldcoal.org/carbon-capture-storage/

Status of CCS

Congress has recognized the need for more CCS R & D in the US.

The technologies to capture, transport and store CO2 exist.

What’s next?

Why isn’t there a large-scale demonstration project that integrates all of these?

Scale of CCS is at the gigaton.

Challenges to CCS deployment

No national strategy to regulate GHG emissions High cost for installing CCS technology Uncertainty in how to address CO2 under existing statutes Ensuring safety and security of CO2 storage Long-term liability and monitoring

Regulating GHG Emissions

No cap-and-trade or carbon tax for GHG emissions Some portfolio standards are technology restrictive.

High cost of CCS

Estimated cost of one large-scale project is $1 billion per year. – Capture is the most expensive component due to the energy penalty.

– Increases cost of electricity by 2 – 7 cents per kWh. Current average cost for US: 9.7 cents per kWh – No price on carbon + high cost of CCS = companies reluctant to invest in an “unproven” technology

CO2: Pollutant, Waste or Commodity?

Pollutant Massachusetts v. EPA (2007) Commodity Waste Mineral Leasing Act (for Enhanced Oil Recovery / Enhanced Gas Recovery purposes) Resource Conservation and Recovery Act (RCRA) , Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)

Underground Storage

Potential leakage into the atmosphere Ensure safety and security of stored CO2 – Groundwater sources protection – Pore space ownership

Siting (1-10 years)

Long term liability

Life cycle of geological sequestration: Operation/CO2 Injection (10-30 years) Closure and Abandonment (10-30 years) Post-closure (100+ years) Who monitors? For how long? Who is financially responsible for potential damages?

Conclusions

Regulatory framework is needed in order to encourage the development of CCS.

CCS is expensive. Cooperation between government & private industry is needed.

CCS has the potential to be part of the energy mix in climate change mitigation in the United States.

Recommendations

Implement a national strategy that regulates GHG emissions.

– Cap-and-trade or carbon tax – Emissions performance standards for stationary sources instead of renewable portfolio standards

Build large-scale demonstrations that integrate all CCS components.

– Continue R & D support for capture technologies and sequestration – Proper project financing for early movers through loan guarantees and federal sequestration tax credits

Recommendations

Develop environmental regulations that specifically address captured CO2.

– Address issues that fall under EPA’s authority.

– State participation will be key in developing regulations and oversight programs.

Create indemnification program for long-term liability issues related to CCS.

– Create a CCS trust fund.

– Address transfer of responsibility regulations.

Questions?

Thank you!

Acknowledgements Melissa Carl Robert Rains Dan Deckler Erica Wissolik ASME Staff Fellow WISE Interns