Dr. S. Julio Friedmann

Chief Energy Technologist

Lawrence Livermore National Lab

Prospects and Challenges for CCUSIPIECA Low Emissions Pathways Workshop

March 15-16th, 2016, Houston, TX

2

We’ve never use less of ANY energy

36 G

tC

O2

This is a time of fossil energy abundance

3

Low costs, wider deployment

Climate Scientists: CCUS is essential to deep decarbonization

IPCC 5th Assessment Synthesis Report, Nov. 2014

5

Nuclear 8%

Power generation efficiency 3%

Renewables 21%

End-use fuel switching 12%

CCS 14%

End-use fuel & elec. Efficiency 42%

CCUS

“All of the above” required

Energy economists: CCUS remains a critical option

6

CCUS needed even with substantial efficiency

Financing (cost recovery) is the main issue

US Power Gen: Mixed Scenario US Power Gen: Low-Demand Scenario

7

Technical status: pretty much ready to go

15 years of concerted global research have shown:

• Multiple world-wide large projects and large injections

• No major risks (geochemical, geomechanical, hydrologic)

• Cost reduction, with room for additional large reductions

• Many pathways (sorbents, membranes; modularization; oyx)

Global commitment to date: ~$20B

• (1% of clean energy investment ($2T) 2004-2013)

Work work to be done

• More large-scale saline fm. Injections would help

• More Focus on transformational technology and large pilots

Financing (cost recovery) is the main issue

8

Boundary Dam, : 1.1M tons/y CO2Saskpower, Saskatchewan

Operational Oct. 1st, 2014

9

Port Arthur, TXAir Products, 2013

VSA VesselsVSA Vessels

Co-Gen Unit

Blowers

CO2

Compressor &

TEG UnitCO2 Surge

Tanks

Existing SMR

Approaching 3 million tons CO2 stored: $1.80/GJ H2

10

W.A. Parrish, TXNRG/PetraNova project

Broke Ground Sept. 2014; On time & budget for 2016

$100/ton CO2 costs; next plant 30% less

11

Cost, policy, and parity

Industrial

CCS

Low-cost, rapid deployment options for CCUS could help US and others achieve INDC’s

Saline Formations: ~43 M tons/y

Largest source: 4 M tons/y

High Purity Sources of CO2 within 100 miles of a potential CCUS site

EOR fields: ~32 M tons/y

Largest source: 2 M tons/y

13

10 countries list CCUS as part of their INDC’s

ROAD project

(NED)

Uthmaniyah (KSA)

Lula (BRA)

Quest (CAN)

ESI (UAE)

Gorgon (AUS)

Projects online or under construction worldwide

Yanchang (PRC)

CCUS prospects heavily contingent on policy

14

Incentives needed (carrots)

• Tax credits, feed-in tariffs, contract for differences, trading schemes, etc.

• Direct grants

• State-sponsored “strategic” projects (China’s 5-year plan)

• Access to other clean financing mechanisms (CEPS vs. RPS; LCFS vs. RFS)

Disincentives also work

• Carbon tax (e.g., Norway)

• Regulatory caps (e.g., CPP, California’s SB 1368)

• Carbon tariffs

Policy parity required (IEA, UNECE, CSLF, WEC)

There is no political penalty for rejecting CCS

SILENCE = DEATH

Financing: US policies and proposals

15

Administration

• 48A, 48B, and 45Q tax credits

• ITC and STC tax credit proposals (2016)

• CPP: 111(b) – CCUS as BSER for coal (1400 lbs/MW-hr)

• CCP: 111(d) – CCUS as compliance option for states

Draft legislation

• Conaway: 45Q expansion ($30, uncapped)

• Heitkamp & Manchin: Mix of mechanisms

• Bennett-Portman: Private activity bonds

• Whitehouse-Booker: New proposal for ITC/STC mix

Proposed policies

• Clean energy portfolio standards; feed-in tariff; CO2 utility

• bonus depreciation, other tax measures

State and Regional Activities

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Multi-party initiatives

• Western Govs. Assoc.:

• Southern States Energy Board

• Interstate Oil & Gas Compact commission

• Multi-state working group on EOR

CA

• Low-carbon fuel standard: Capture from industrial sources & potential low-carbon oil production with anthropogenic EOR

Underground injection

• ND: Applied for class VI well primacy

• TX: MVA requirements for CO2 crediting

• IL, TX: Acceptance of liability

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A core technology for negative emissions

Technology development and demonstration required!

WHAT INDUSTRIES HOLD POTENTIAL FOR CARBON

REM OVAL SOLUTIONS?

Forest ry/ Land Agricult ure Energy M anufact uring M ining

Tim ber

Ecosystem

Restorat ion Biochar

Land M anagem ent

Bioenergy + CCS

Direct Air Capture

Carbon Negat ive

M aterials

Enhanced

Weathering

BIOLOGICAL CHEMICAL

WHY DO WE NEED CARBON REM OVAL? (cont .)

Path to 2°CBillio

n T

on

s C

arb

on

Dio

xid

e

CARBON

REMOVAL

2100

0

100

-20

50

205020252000 2075

“The large majority of scenarios produced

in the literature that reach roughly 450

ppm CO2eq by 2100 are characterized by

concentration overshoot facilitated by the

deployment of carbon dioxide removal

(CDR) technologies.”

IPCC: Fifth Assessment Report on Climate

Change. Chapter 6 from Working Group 3

Models show that carbon removal solutions are not just critical for limiting global tempera-

ture increases to 2°C, but also are relied upon to prevent even higher scenarios of warming.

BAU

Graphic adapted from the Climate Institute Moving Below Zero report

Private and philanthropic actions matter

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Adding value through utilization

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Not crazy (in order of increasing difficulty)• EOR, EOR+, ROZ (potential for negative C oil)

• Mineralization (baking soda, limestone)

• Enhanced water recovery (brine-extraction and storage; BEST)

• CO2-algae (animal feed, nutraceuticals, biomass feed, biofuel)

• CO2 polymers

Crazy• CO2-fuels or chemical

• CO2 splitting

Many utilization pathways are very difficult;we should seek to increase value broadly

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Skyonic “Skymine” project, San Antonio, TXOperational !!

83,000 tons/y CO2 captured -

>250,000 tons avoided

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Residual oil zones: not resources, not reserves

• 2x-3x recovery potential and

storage potential (12-18 Gt in ROZ

vs. 6.4 for main pay zones, PB)

• Possibility for carbon-negative

HC

Main Pay Zone (MPZ)

Transition Zone (TZ)

Residual Oil Zone (ROZ)

Base of Ultimate OWC

Base of Producing OWC

4900

4950

4800

4850

5000

5050

5400

5350

5300

5250

5200

5150

5100

5450

OWC

100 0

Oil Saturation %

“State of the Art” “Next Generation”

(millions) (millions)

CO2 Storage (tonnes) 19 109

Storage Capacity Utilization 13% 76%

Oil Recovery (barrels) 64 180

% Carbon Neutral (“Green Oil”) 80% 160%

ARI, 2008

ARI, 2008

Sources: MIT, 2010; ARI 2007 and 2010; NETL 2008

Residual Oil Zone (“

R OZ”)

• Current “quick look” indicates that over 100 billion barrels of oil may be in-place in the ROZ “Fairway”.

• So far current work in just four counties in Texas indicate 1

00 billion bb ls….

work is required to establish its recoverability, economic feasibility and CO2 requirements. (Study should be out this fall)

• So far ROZ also present in:

Saudi Arabia, North Sea, Wyoming..

• The catch-CO2 is needed to

produce the oil.

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Huge potential for ROZ fairways

Partition 1

Partition 2

Partition 3

Partition 5

Central Basin Platform

SeminoleW. Seminole

Adair

TLOC

Cedar Lake

GMK & GMK So.

Robertson

Hanford

ODCRussell So.

Havemeyer

N

Seminole E

S

Carm-Ann

Jenkins

Black Watch

Homann

Lower San Andres

Shelf Margin

Partition 4

ROZ

“1”

ROZ

“2”

121 wells in 4 counties, Permian Basin

109 Billion OOIP (!) 20-30% est. recovery

60-100B tons CO2 storage potential (ROZ)

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CO2 and Negative C oil

• Conventional EOR uses 6000-7000 scf CO2/barrel

• On molecular and mass-balance basis, this = 82-95% of C

• At roughly 7500-8000 scf/bbl, this is carbon neutral

• Some EOR today uses >9000 scf/bbl: NEGATIVE C

• ROZ production requires 10,000-15,000 scf/bbl: NEGATIVE C

One can claim GHG reductions either from the source

(e.g., power plant) OR from the produced oil. While both

can’t be counted, one must be.

To be a value feedstock for low-carbon fuel standards requires policy efforts

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Many, many more projects required

43 large-scale CCS projects -

combined capture capacity of

80 Mtpa*:

• 22 projects in operation or

construction (40 Mtpa)

• 9 projects in advanced

planning, five nearing FID

(15 Mtpa)

• 12 projects in earlier stages

of planning (25 Mtpa)

OECDNon-OECD

4,000 Mtpa of CO2

captured by CCS by 2040 (IEA 450 Scenario)**

40 Mtpa

Global Status

of CCS: 2015

**Source: IEA, Energy Technology Perspectives (2015).

Requires money, organization, policy support

CCUS prospects heavily contingent on policy

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Incentives needed (carrots)

• Tax credits, feed-in tariffs, contract for differences, trading schemes, etc.

• Direct grants

• State-sponsored “strategic” projects (China’s 5-year plan)

• Access to other clean financing mechanisms (CEPS vs. RPS; LCFS vs. RFS)

Disincentives also work

• Carbon tax (e.g., Norway)

• Regulatory caps (e.g., CPP, California’s SB 1368)

• Carbon tariffs

Financing (cost recovery) is the main issue

There is no political penalty for rejecting CCS

SILENCE = DEATH