Sandia National Laboratories, Albuquerque, NM, 87185-0735. Sandia National Laboratories is a multi-program laboratory managed and operated by Sandia Corporation, a wholly owned subsidiary of Lockheed Martin Corporation, for the U.S. Department of Energy's National

Nuclear Security Administration under contract DE-AC04-94AL85000. Working Results. SAND2012-7235C. 31st USAEE/IAEE North American Conference, Austin, TX, November 4-7, 2012.

Abstract Capturing and storing carbon dioxide (CO2) in geological saline water-bearing formations may represent an important option for managing CO2 emissions. Fossil fuel-based power plants accounted for approximately 40% of all CO2 emissions from the United States in 2008 and therefore represent an important factor to address atmospheric CO2 emissions. Once captured, CO2 storage in geologic formations represents a potential scale-appropriate solution. Depleted oil and gas reservoirs, un-mineable coal seams, and deep (>2,500 feet) saline formations are being explored as targets for large scale geologic storage of CO2. Of these, deep saline formations may represent the largest potential sink. The national-scale version of the Water, Energy and Carbon Sequestration Simulation Model (WECSsim©) presents the engineering and cost uncertainties involved with scaling up CO2 capture and storage (CCS) at the national level while accounting for the substantial uncertainty with specific geological parameters. This paper presents the ranges of costs for CCS due to variations in plant type, capture technology, and geological storage formation uncertainties. Several national-level CO2 storage supply curves were developed to illustrate how sensitive both storage costs and storage volumes are to engineering, economic and geologic performance assumptions. Initial results indicate the avoided cost of CO2 for the U.S. range from 82 to 136 $/tonne for 1 gigatonne (Gt) of CO2. These costs correspond to cumulative annual emissions reductions of 1.5 to 0.6 Gt of CO2 per year at $100 / tonne. Competition for storage space between power plants, limiting the distance power plants can send their CO2 to alternate saline formation for storage, and whether to extract H2O from saline formations to alleviate pressure build up from the CO2 all affect the supply of storage space, and therefore the overall systems’ costs. Methods The WECSsim model builds upon a national database of saline water-bearing formations developed by the National Energy Technology Laboratory, and a power plants database by the Environmental Protection Agency (NatCarb, 2008; EPA, 2007). WECSsim modules include a Power Plant Module, a CO2 Capture Module, a CO2 Storage Module, an Extracted Water Module, and a Power Costs Module that interact with one other. WECSsim uses default or user specified inputs to all five modules to calculate energy, water, and economic costs associated with the selected CCS scenario.1

1 In cases where a value-added product can be developed from storing or using CO2, this may be referred to CO2 Capture, Use and Storage (CCUS) such as in the case of Enhanced Oil Recovery (EOR) and other related applications.

The model can be used to evaluate a single hypothetical plant of model user specification, a single existing power plant, or the entire existing U.S. fleet of coal and gas fired power plants. The data adapted from the EPA (2007) database includes the name, location, fuel type, capacity factor, plant rating and water use information

A CO2 STORAGE SUPPLY CURVE FOR THE UNITED STATES: ADDRESSING COST, SCALE UP AND GEOLOGIC UNCERTAINTIES.

Peter H. Kobos, Sandia National Laboratories, phkobos@sandia.gov Jesse D. Roach, Sandia National Laboratories, jdroach@sandia.gov Jason E. Heath, Sandia National Laboratories, jeheath@sandia.gov

Geoffrey T. Klise, Sandia National Laboratories, gklise@sandia.gov

specific to each plant. WECSsim then calculates the total mass of CO2 to be stored, selects storage formation with the least cost, and calculates the unit cost of carbon storage and avoided emissions. These cost-mass CO2 pairs are then sorted by costs for all power plants and the mass of CO2 values to develop a national supply curve for CO2 storage or avoided emissions for the coal and natural gas-powered power plant fleet. Figure 1 illustrates the overall structure of WECSsim.

Figure 1. The Water, Energy and Carbon Sequestration (WECSsim) has a modular structure to allow for energy technology, water treatment and geologic parameter assessment to develop plant-specific and national-level CO2 management scenarios. Extracting brine from the target storage formation may be an important strategy to manage pressure build up in the reservoir, and make more efficient use of pore space. Brine extraction scenarios are developed for a volume of brine equal to the volume of CO2 stored. Extraction wells are interspersed with injection wells in an ‘inverted five-spot’ pattern. Extraction is designed to avoid breakthrough for the lifetime of the project and achieve a relatively high efficiency factor (i.e., volume of injected CO2 normalized by the reservoir volume). Brine extraction adds cost to the overall system, but reduces the risk of overestimating geologic sink size and quality. This benefit depends on improved storage efficiency associated with combined injection-extraction reservoir management. Current work to more fully quantify this effect in TOUGH2-ECO2N6 (Pruess, 2005) is ongoing and additional work will look to address the role of spatial heterogeneity on this reservoir management strategy beyond that seen in Heath et al., 2012 and related works. Scenario Analysis Results Previous analyses have shown that CO2 capture costs represent the dominant cost in a CCS cost breakdown, but that estimates of financial, engineering and geologic parameters can create substantial cost variability (Rubin, 2012; Versteeg and Rubin, 2011; Roach et al., 2012; Kobos et al., 2011a, b; Heath

et al., 2012). Additionally, the ability to scale up CO2 capture, transportation and storage infrastructure may be challenging in the near term due to both technical (engineering, geology) and non-technical (permitting, energy market uncertainties) barriers (Herzog, 2010; Michael et al., 2010; Nicot and Duncan, 2008). Building off these previous, site-specific analyses, the scenarios developed here address the following questions:

• Will long transport distances between the power plants and saline formation sinks affect the costs and scale of the available storage resource?

• Will competition for the storage resource affect the costs and scale of the resource available to power plants? If so, within what timeframe?

• Will extracting H2O from saline formations, to alleviate pressure and space constraints, increase the usable size of the storage resource? How will extracting water affect the system’s costs?

Figure 2 illustrates a base case and three scenarios to address these questions. Cumulative rates of mass stored (blue lines), or mass not emitted to the atmosphere (red lines) are plotted as a function of ascending cost for all four scenarios.

Base Case (S1) S2

S3 S4 Figure 2. WECSsim Scenario results for the Base Case, Scenario 1 (S1); Scenario 2 (S2), introducing a 50 mile limit between power plants and saline formation sinks for CO2; Scenario 3 (S3), introducing no competition for sinks within the initial 30 years; Scenario 4 (S4), introducing no extraction for saline waters, rather, only injecting CO2 at the saline formations.2

2 Scenarios with 30 year sink rights:

Base Case & Scenario 1 (BC, S1): No distance limit; Competition for Sinks; Extract H2O; 30 Year well lifetime & sink rights. Scenario 2 (S2): 50 mile distance limit; Competition for Sinks; Extract H2O; 30 Year well lifetime & sink rights. Scenario 3 (S3): No distance limit; No Competition for Sinks; Extract H2O; 30 Year well lifetime & sink rights. Scenario 4 (S4): No distance limit; Competition for Sinks; Do not Extract H2O; 30 Year well lifetime & sink rights.

The base case scenario (S1) evaluates power plants that are not constrained by any distance limit to potential storage sinks, they compete with the rest of the power plant fleet for CO2 storage space for an initial 30 year period, and they extract H2O while injecting CO2. Scenario 2 (S2), limits the power plants to use of sinks within 50 miles. Scenario 2 was developed to account for potential legal issues with the assumption that the water extracted from saline formations is to be piped back to the original power plant. Factors not modeled explicitly such as the ability to move water legally across state lines and other rights considerations may limit the ability to move water back from a power plant’s chosen CO2 saline formation sink. Scenario 3 (S3) presents a case where there is no direct competition between power plants for space in the saline formations to store CO2. Scenario 4 (S4) compares a situation where no saline water is extracted while power plants are injecting CO2 into saline formations. Comparing Scenarios 1 and 2, the costs dramatically increase for the avoided (and stored) cost for CO2 when changing from an unconstrained distance between the plants and sinks (S1), and a 50 mile maximum distance between the plants and sinks (S2). Another key point between S1 and S2 is to note the Avoided Costs of 1 Gtonne/yr emissions (Table 1) are just shy of double when restricting the sinks to within 50 miles of the plants, and the total potential reduced CO2 emissions are reduced by half (Figure 2, S2). This speaks to the point that allowing the model the freedom to calculate the most economical solution by not imposing an arbitrary source to sink distance constraint will result in more avoided emissions per dollar invested. Relaxing another constraint, to now avoid competition between power plants for a given sink, we compare S1 and S3. The supply curves are virtually identical because brine extraction results in very efficient use of pore space such that the storage resource is not limited even by fleet wide competition. This is due to the fact that the affects of the distance constraint seen when comparing S1 and S2 far exceeds the influence of power plants competing for sink space within an initial 30 year time period. Another option is to not extract the saline waters while injecting CO2 at the saline formations. By not doing this, the costs fall modestly across the sink options as seen by comparing S1 and S4. Overall costs are lower because brine is no longer being extracted and desalinated for use, however these costs are not as low as they would be in the absence of competition (see Appendix A). Forgoing brine extraction reduces costs, but increases the effect of competition because of a large decrease in efficiency of use of pore space. In S4, there are sufficient storage volumes available for 30 years of storage that even with fleet competition for the storage resource, the cost savings outweigh the less efficient use of storage volume resulting from not extracting H2O. However, this balance is sensitive to the assumed wellfield lifetime. Figure 3 illustrates both the avoided costs and storage costs corresponding to Scenarios 1 through 4 to give a sense of the variability in costs up to $200 / tonne CO2, and beyond.

Base Case (S1) S2

S3 S4 Figure 3. WECSsim scenarios 1 through 4 illustrating the base case, option to limit source-to-sink distances to 50 miles or less (S2), option to introduce competition between power plants for sink storage space for 30 years, and the option to not extract H2O while also injecting CO2. To address the somewhat underwhelming changes to the results shown in Scenario 4 in the face of competition for storage space, an additional set of scenarios were developed with a longer timeframe for the power plants to lay claim to storage space in the face of competition for low-cost saline formation storage options. Scenarios 5 through 8 illustrate a similar set of constraints regarding a 50 mile limit, competition for storage space, and exercising the option to extract H2O or not, while giving power plants up to 60 years of ‘claim’ for space they may need to store CO2.

Avoided CO2

Stored CO2

S5 S6

S7 S8 Figure 4. WECSsim Scenario results for Scenario 5 (S5) which introduces a 60 year claim to storage space per power plant for scenarios 5 through 8 under the competition option; Scenario 6 (S6), introducing a 50 mile limit between power plants and saline formation sinks for CO2; Scenario 7 (S7), introducing no competition for sinks within the initial 60 years; Scenario 8 (S8), introducing no extraction for saline waters, rather, only injecting CO2 at the saline formations.3

Figure 5 illustrates the storage and cost (avoided and storage) details corresponding to Figure 4.

3 Scenarios with 60 year sink rights: Scenario 5 (S5): No distance limit; Competition for Sinks; Extract H2O; 60 Year well lifetime & sink rights. Scenario 6 (S6): 50 mile limit; Competition for Sinks; Extract H2O; 60 Year well lifetime & sink rights. Scenario 7 (S7): No distance limit; No Competition for Sinks; Extract H2O; 60 Year well lifetime & sink rights. Scenario 8 (S6): No distance limit; Competition for Sinks; Do Not Extract H2O; 60 Year well lifetime & sink rights.

S5 S6

S7 S8 Figure 5. WECSsim scenarios 1 through 4 illustrating the base case, option to limit source-to-sink distances to 50 miles or less (S2), option to introduce competition between power plants for sink storage space for 30 years, and the option to not extract H2O while also injecting CO2. To address what may happen in a longer time frame, the analysis developed a second set of analogous scenarios but changes the access power plants have to the sink from 30 to 60 years. Scenario 5 (S5) is similar to S1 with only this timeline change. The results for costs (avoided and storage) and storage space are virtually the same between S1 and S5 because of the very efficient use of pore space associated with brine extraction. The comparison between S2 and S6 and S3 and S7 also show virtually identical results indicating the 50 mile limit has a stronger affect on the costs and storage capacities despite plants now requiring the storage resource for 60 years and when limiting competition, respectively. An important result is borne out of comparing S4 and S8. By securing 60 years’ worth of rights to storage space while also including competition and unrestricted distance between the sources and sinks, a shortage of lower-cost storage appears. To put it another way, when competition becomes an issue for sink space, and the lease/rights lifetime of the favorable sinks becomes an issue of scarcity, the cost to store CO2 will rise unless water extraction allows for more space to store CO2 within the favorable sinks.

Avoided CO2

Stored CO2

Table 1. WECSsim model results by altering the distance to sink assumption, competition between power plants for sink space, extracting saline waters or not, and adjusting how long a power plant may have rights to sink space. Scenarios4 Scenarios 1, 2, 3, & 4 Scenarios 5, 6, 7, & 8 Avoided Cost [Storage Cost] for 1 Gt/yr ($/tonne)

85.05 [61.38] BC, S1 136.39 [82.35] S2 85.05 [61.38] S3 82.09 [58.89] S4

85.05 [61.38] S5 136.39 [82.35] S6

85.05 [61.38] S7

99.24 [63.38] S8

Reduced [Stored] CO2 @ $100 / tonne (Gt/yr)

1.5 [2.2] BC 0.6 [1.3] S2 1.5 [2.2] S3 1.5 [2.1] S4

1.5 [2.2] S5 0.6 [1.3] S6

1.5 [2.2] S7 1 [1.8] S8

Scenarios with 30 year sink rights: BC, S1 Base Case & Scenario 1: No distance limit; Competition for Sinks; Extract H2O; 30 Year well lifetime & sink rights. S2 Scenario 2: 50 mile limit; Competition for Sinks; Extract H2O; 30 Year well lifetime & sink rights. S3 Scenario 3: No distance limit; No Competition for Sinks; Extract H2O; 30 Year well lifetime & sink rights. S4 Scenario 4: No distance limit; Competition for Sinks; Do not Extract H2O; 30 Year well lifetime & sink rights. Scenarios with 60 year sink rights: S5 Scenario 5: No distance limit; Competition for Sinks; Extract H2O; 60 Year well lifetime & sink rights. S6 Scenario 6: 50 mile limit; Competition for Sinks; Extract H2O; 60 Year well lifetime & sink rights. S7 Scenario 7: No distance limit; No Competition for Sinks; Extract H2O; 60 Year well lifetime & sink rights. S8 Scenario 8: No distance limit; Competition for Sinks; Do Not Extract H2O; 60 Year well lifetime & sink rights. Two model constraints drive the majority of the modeling results: whether or not to restrict power plants from using saline formation sinks beyond 50 miles from the plant, and whether or not to extract water when the plants are competing with one another for sink space. Discussions & Conclusions The scenarios presented in this analysis represent an estimate of potential costs to implement CCS across the fleet of coal and gas fired power plants in the U.S. before any substantial CCUS effort is underway nationally. The no-competition supply curves (S3, S7) show little sensitivity to changes in storage resource or extraction of brine. This is because CCS, if considered using only one plant at a time, is not constrained by current estimates of geologic quality and quantity. The supply curves including sink competition thus represent a more realistic analysis of what costs might look like if large scale CCS were implemented in the U.S. With many large sources competing for geologic pore space, the sinks are more limited. In the base case, the available storage resource is sufficient such that brine extraction is not necessary from a reservoir management perspective. Under this scenario, saline water extraction is a very important tool in managing the available CO2 sinks. Thus, for large scale CCUS, active reservoir management using brine extraction should be considered not only in areas with water scarcity issues, but in all sinks as a hedge against overestimates of the overall geologic resource. The two largest factors affecting the CO2 storage scenarios run in WECSsim are the required distance between the power plants and their potential sinks, and in the face of competition the ability to extract saline water from the formations to alleviate space and pressure constraints. The most likely of the scenarios is S5 that includes competition between power plants for space, does not have a distance constraint between power plants and sinks, extracts saline water from the formations, and has a long sink rights lifetime of approximate 60 years, commensurate to the physical lifetime of coal-fired power plants

4 Unless otherwise specified: well field lifetime = 30 years; financial lifetime assumption on plants and capital equipment = 20 years; both CO2 is injected and H2O is extracted from the saline formations; power plants must be within 50 miles of the potential saline formation sink to be considered and water is to be returned to the power plant from the extraction. Competition for sink space is based on the ranked order of powerplant to sink systems in order from least to most costly. See Roach et al., 2012 and Kobos et al., 2011a,b for additional information.

in the U.S. today. Scenarios 1 − 8 have an avoided cost range from 82 − 136 $/tonne CO2. The avoided cost ranges for the scenarios, compare favourably with those presented in the literature. Versteeg and Rubin (2011), for example, explain that for coal-fired power plants using ammonia-based post-combustion CO2 capture technology a range of $60 − $127 / tonne CO2. Ongoing work will address the volumes of water extracted for representative scenarios, similar to the CO2 supply curve scenarios discussed earlier. Many factors will affect the ability to extract, treat and utilize extracted waters from saline formations. These include the cost of the combined wellfields to inject CO2 and extract water, the type of technology used to treat the saline waters, and the distances involved to move the water back to the power plant or use for other purposes. Additionally, future work will look to incorporate a rigorous Monte Carlo approach with statistical distributions of the input parameters of interest to refine these estimates. Competition for sinks changes the costs very little if the working estimates of geologic resource size and quality are reasonable, however, if current estimates are overly optimistic, competition for sinks becomes very important and brine extraction becomes economically compelling for large scale CCS as a strategy to manage CO2 emissions. Acknowledgements Thanks go to the National Energy Technology Laboratory (NETL) for supporting this work, and to Andrea McNemar in particular for her guidance. Thanks also go to Sean McKenna, Tom Dewers, Karen Gutierrez and Dave Borns of Sandia National Laboratories for their insights and assistance. References Environmental Protection Agency (EPA), 2007, Emissions & Generation Resource Integrated Database (eGRID), Version 1.0. Heath, J.E., Kobos, P.H., Roach, J.D., Dewers, T.A. and S.A. McKenna, 2012, Geologic Heterogeneity and Economic Uncertainty of Subsurface Carbon Dioxide Storage, SPE Economics & Management Journal, January 32-41. Herzog, H., 2010, Scaling up carbon dioxide capture and storage: From megatons to gigatons. Energy Economics. doi: 10.1016/j.eneco.2010.11.004. Kobos, P.H., Cappelle, M.A., Krumhansl, J.L., Dewers, T.A., McNeamar, A. and D.J. Borns, 2011a, Combining power plant water needs and carbon dioxide storage using saline formations: Implications for carbon dioxide and water management policies, International Journal of Greenhouse Gas Control, 5, 899-910. Kobos, P.H., Roach, J.D., Klise, G.T., Krumhansl, J.L., Dewers, T.A., Heath, J., Dwyer, B.P., Borns, D.J. and A. McNemar, 2011b, Study of the Use of Saline Formations for Combined Thermoelectricy Power Plant Water Needs and Carbon Sequstration at a Regional Scale: Phase III Report, SAND2011-5776P, August 2011 updates Michael, K., Golab, A., Shulakova, V., Ennis-King, J., Allinson, G., Sharma, S. and T. Aiken, 2010, Geologic storage of CO2 in saline aquifers − A review of the experience from existing storage operations, International Journal of Greenhouse Gas Control, 4, pp. 659 − 667. NATCARB, 2008, Carbon Sequestration Atlas of the United States and Canada – 2nd Edition, National Energy Technology Laboratory http://www.netl.doe.gov/technologies/carbon_seq/refshelf/atlasII/index.html accessed 12/3/2010 and http://geoportal.kgs.ku.edu/natcarb/atlas08/gsinks.cfm accessed 12/3/2010

National Energy Technology Laboratory (NETL), 2007b, Carbon Dioxide Capture from Existing Coal- Fired Power Plants. DOE/NETL-401-110907. (Final Report (Original Issue Date, December 2006)), Revision Date, November 2007 Nicot, J.-P. and I.J. Duncan, 2008, Science-based permitting of geological sequestration of CO2 in brine reservoirs in the U.S., Environmental Science & Policy, 11, pp. 14 − 24. Tidwell, V.C., P.H. Kobos, L. Malczynski, G. Klise and W. Hart, Decision Support for Integrated Water- Energy Planning, SAND Report SAND2009-6521, Sandia National Laboratories, Albuquerque, NM, 2009. Pruess, K., 2005, ECO2N: a TOUGH2 fluid property module for mixtures of water, NaCl, and CO2, Lawrence Berkeley National Laboratory, LBNL-57952, p. 66. Roach, J.D., Kobos, P.H., Heath, J.H., Klise, G.T., Dewers, T.A., McKenna, S.A., Gutierrez, K., Borns, D.J. and A. McNemar, Building a National Carbon Dioxide Storage Supply Curve: A Systems Approach Incorporating Geologic Uncertainty, The Eleventh Annual Carbon Capture, Utilization & Sequestration Conference, May 1, 2012, Pittsburgh, PA. Roach, J.D., Kobos, P., Klise, G.T., Krumhansl, J.L. and A. McNemar, New Demands, New Supplies: A National Look at the Water Balance of Carbon Dioxide Capture and Sequestration, American Geophysical Union, Poster SAND2010-8624C, December 13 – 16, 2010, San Francisco, CA. Rubin, E.S., 2012, Understanding the pitfalls of CCS cost estimates, International Journal of Greenhouse Gas Control, pp. 181 – 190. Versteeg, P., and E.S. Rubin, 2011, A technical and economic assessment of ammonia-based post- combustion CO2 capture at coal-fired power plants, International Journal of Greenhouse Gas Control, pp. 1596 – 1605. Appendix A

Figure A1: The effects of competition (S4, reference) compared to no competition (solid line). The notable change is that with competition, the costs increase for a given Gt/yr. (Note: The cost of avoided emissions ($/tonne) and storage costs for the no competition scenario presented here (solid line) are $80.70 and $58.62for 1 Gt/yr, respectively; the avoided and stored CO2 at $100/tonne are 1.5 and 2.1 Gt CO2, respectively.)

Avoided CO2

Stored CO2