CCS in the U.S.Presentation to the Sixth Annual Zero Emission Conference, Oslo

International Environmental NGO Network on CCSChris Smith, network coordinator

22 November 2011

Our ViewpointInternational ENGO Network on CCS

Some of the world’s most prominent environmental NGOs represented

EDF, NRDC, WWF, ZERO, WRI, CATF, Bellona, Climate Institute, Green Alliance, Pembina Institute

On CCS: CCS is not the sole nor the preferred climate mitigation tool

(truly sustainable options should be preferred) Nonetheless essential given the scale and rate of effort

needed Ready to begin deployment today Primary barrier is economic Must be regulated appropriately to be safe and effective

Why CCS?CCS considered crucial in global efforts to reduce

CO2 emissions. According to the IEA:Broad deployment of low‐carbon energy technologies

could reduce projected 2050 emissions to half 2005 levels

CCS could contribute about one‐fifth of those reductions in a least‐cost emissions reduction portfolio

Reaching that goal, however, would require around 100 CCS projects to be implemented by 2020 and more than 3000 by 2050

Source: IEA 2011 CCS Legal and Regulatory Review

U.S. Regulatory Framework

Recent ProgressThe EPA finalized two federal rules related

to geological storage:

1. A new class of injection wells (Class VI) under the Underground Injection Control Program for injection of CO2 for sequestration (Safe Drinking Water Act); and

2. A subpart to the Greenhouse Gas Reporting Rule (Clean Air Act).

…Recent ProgressClass VI

Aims to safeguard groundwater during CO2 injection. The Class VI rule requires operators to submit, update and implement a comprehensive series of site-specific plans:

An Area of Review and Corrective Action Plan; A Monitoring and Testing Plan; An Injection Well Plugging Plan; A Post-Injection Site Care and Site Closure plan; and An Emergency and Remedial Response Plan.

…Recent ProgressGHG Reporting

Data gathering to help with the implementation of the Clean Air Act. Under Subpart RR, the following quantities must be reported:

Mass of CO2 received, Mass of CO2 injected into the subsurface, Mass of CO2 produced

Mass of CO2 emitted by surface leakage, Mass of CO2 equipment leakage and vented CO2 emissions from surface equipment located between the injection/production flow meter and the injection/production wellhead(s)

Mass of CO2 sequestered in subsurface geologic formations and Cumulative mass of CO2 reported as sequestered in subsurface geologic

formations in all years since facility became subject to reporting requirements

Data is reported annually, but some information needs to be collected on a quarterly basis. A Monitoring, Reporting and Verification (MRV) plan is required to be submitted by the owner/operator that includes:

Identification of CO2 leakage pathways in MMA, incl. likelihood, magnitude and timing, and Delineation of the monitoring area

A strategy for detecting and quantifying any surface leakage of CO2 A strategy for establishing expected baselines for monitoring CO2 surface

leakage

…Recent ProgressStates

The Department of Energy reports that developments continue at a state level:

Six states already have enacted comprehensive legislation on regulation of geologic storage

Kansas, Louisiana, Montana, North Dakota, Oklahoma, Texas

Source: EPA, IEA 2011 CCS Legal and Regulatory Review

Task ForcePresident Barack Obama created the Interagency Task Force on Carbon

Capture and Storage in 2010. Co-chaired by EPA and DOE, the task force delivered a series of recommendations for CCS development in the next 10 years. Main findings and recommendations include:

CCS is Viable

A Carbon Price is Critical

Federal Coordination should be Strengthened

Recommendations on Liability: Open-ended federal indemnification is not a viable alternative but four approaches merit further consideration: relying on existing frameworks, limits on claims, a trust fund, and transfer of liability to the federal government (with contingencies).

U.S. Projects

Weyburn(Great Plains Synfuel Plant and Weyburn-Midale Project)

Cenovus Energy and Apache Canada Saskatchewan, Canada (with CO2 transported from North

Dakota, USA) 18 million tonnes CO2 stored as of 2010; projected 40

million tonnes CO2 to be stored over life of EOR operations

For final phase of project, DOE is providing $3 million in funding and the Government of Canada has committed $2.2 million.

Pioneering research includes study of mile-deep seals securely containing the CO2 reservoir, predicting the CO2 plume movement, and monitoring permanent storage.

Source: U.S. DOE, Global CCS Institute

FutureGenFutureGen Alliance, US Department of Energy, State of

Illinois, Ameren Energy Resources, Babcock&Wilcox, American Air Liquide

Meredosia, Illinois 200 MW oxy-combustion plant, 90% CO2 capture$1.3 billion plant (with $1 billion U.S. DOE ARRA

funds)1.3 million tonnes CO2 per annum to be capturedGeologic storage in deep saline formation Construction to begin early 2012, operational 2015

Source: FutureGen Alliance, Global CCS Institute

Kemper County (formerly Plant Ratcliffe)

Southern CompanyKemper County, Mississippi582 MW IGCC plant$2.4 billion plant (with $270 million U.S. DOE

grant)3.5 million tonnes CO2 per annum to be capturedOnshore EOR a driver for developmentConstruction began June 2010, operational 2014

Source: Southern Co, Global CCS Institute

Texas Clean Energy Project

Summit Power Penwell, Texas 400 MW IGCC plant, 90% capture CO2 $2.4 billion plant (with $450 million U.S. DOE grant) 2.7 million tonnes CO2 per annum to be captured EOR a driver for development (Permian Basin oilfields) Has all necessary permits, including air quality Water (either Midland sewage or Capitan Reef brackish

water); considering desalination plant Construction to begin first quarter 2012, operational

2015

Source: Summit Power, Global CCS Institute

CONCLUSIONS: CCS Status PROGRESS: Failure to enact climate legislation slowed momentum, but key

projects are making solid progress and will enhance the U.S. and world CCS fleet.

SUCCESS: For now seems to depend on combining multiple incentives (state and federal), and utilizing EOR, revenues from other useful products and cheap capture opportunities.

SECURITY: CO2-EOR Can Promote Enhanced Energy Security and Lower CO2 Emissions (DOE/NETL).

ECONOMICS: Next generation CO2-EOR can provide 135 billion barrels of technically recoverable oil in the U.S. (with half economically recoverable given oil at $85/barrel).

REGULATORY: Framework mostly in place and enabling safe and effective GS. Some nuances and modalities still need to be clarified.

However nationally, without a climate policy or other incentives for CCS and/or EOR, broader CCS development will be fairly slow.

Source: U.S. Department of Energy/National Energy Technology Laboratory June 2011

Recent U.S. News

Issued on:  November 16, 2011

Midwest Has Potential to Store Hundreds of Years of CO2 EmissionsRegional Partnership's Phase II Field Tests Validate Earlier Research ResultsWashington, D.C. — Geologic capacity exists to permanently store hundreds of years of regional carbon dioxide (CO2) emissions in nine states stretching from Indiana to New Jersey, according to injection field tests conducted by the Midwest Regional Carbon Sequestration Partnership (MRCSP).

MRCSP’s just-released Phase II final report indicates the region has likely total storage of 245.5 billion metric tons of CO2, mostly in deep saline rock formations, a large capacity compared to present day emissions. While distributed sources such as agriculture, transportation, and home heating account for a significant amount of CO2 emissions in the MRCSP area, over half of the emissions come from large, stationary sources such as power and industrial plants. These units account for nearly 700 million metric tons annually.

MRCSP is one of seven Regional Carbon Sequestration Partnerships (RCSPs) established by the U.S. Department of Energy’s (DOE) Office of Fossil Energy (FE) to determine the best geologic and terrestrial storage approaches and apply technologies to safely and permanently store CO2 for each partnership’s specific region. Establishing the safe, permanent and environmentally sound storage of CO2 is a key element in moving toward the commercial deployment of carbon capture, utilization and storage (CCUS) technology, which many experts view as a crucial option in helping meet the climate change challenge.

MRCSP’s Phase II small-scale geologic field tests used less than 60,000 metric tons of CO2 injection into selected deep saline formations to validate data from earlier Phase I, or characterization, research. Deep saline formation injection is a storage type that represents the most significant geologic storage potential for the United States. These latest results turn earlier information into practical, real-world knowledge for the most promising carbon storage technologies.

Phase I projects characterized large point sources of CO2 and potential geological and terrestrial storage options for the region, which comprises Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, and West Virginia. In all, seven small-scale field validation tests were conducted in Phase II:

- Three geologic injection tests, one in each of the three major geologic provinces of the region: the Michigan Basin, Appalachian Basin, and Cincinnati Arch, and hosted by major power companies in the region.

- Four terrestrial field tests in land types characteristic of the region’s diversity: croplands,

reclaimed minelands, reclaimed marshlands, and forested wetlands.

Phase II terrestrial field tests showed that the MRCSP region can potentially store about 15 percent of the region’s annual CO2 emissions from large point sources, such as power plants. In particular, Phase II confirmed that no-till agriculture is a valuable carbon storage strategy with the added benefit of improved soil quality and agronomic productivity.

MRCSP Phase II field tests also determined that oil-and-gas fields have a high potential for enhanced oil and gas production associated with CO2 storage. In addition, using CO2 for enhanced coalbed methane recovery also shows potential for storing CO2. The MRCSP estimates that by utilizing CO2 for EOR, approximately 1.2 billion barrels of oil could be recovered from existing oil fields in their region helping to offset the cost of deploying carbon capture and storage technologies.

Managed by FE’s National Energy Technology Laboratory, the seven RCSPs, which includes the MRCSP, focus on CCS opportunities within their specific regions, while collectively building an effective and robust nationwide initiative. Through this process, each RCSP has developed a regional carbon management plan to identify the most suitable storage strategies and technologies, aid in regulatory development, and propose appropriate infrastructure for CCS commercialization within their respective regions.

The MRCSP project, led by Battelle, included a public-private collaboration with nearly 40 members from government, industry, state geological surveys, and universities across the nine member states.

Coal Project Hits Snag as a Partner Backs Off by Matthew Wald | November 10, 2011

WASHINGTON — The leading American effort to capture carbon dioxide from coal plants has hit a stumbling block that could imperil the project and set back a promising technology for addressing global warming, people involved in the venture said.

Ameren, the Midwestern power company that was to be the host for the project, has told its partners that because of its financial situation, it cannot take part as promised, although it has not told them exactly what it will do. The company had agreed to supply an old oil-fired power plant in Meredosia, Ill., that would be converted to demonstrate the carbon-capture technology on a commercial scale.

Participants in the venture, known as FutureGen 2.0., are to meet next week to work out how they might get access to the old plant, which Ameren recently said it would shut down by the end of the year, and how it might be maintained until the remaining partners are ready to take it over. The people who talked about the project asked not to be identified because FutureGen’s directors had not yet met.

While the other major partners, Babcock & Wilcox and Air Liquide, could seek to buy the plant and convert it without Ameren, time is short. The federal government promised the project $1 billion, or roughly 80 percent of its costs, on the condition that the money be spent by the end of 2015. That’s a tight time frame for developing a technology that has never been used on a commercial scale, the participants said.

A spokesman for Ameren declined to comment on whether it would play any role in the project. In announcing last month that it was closing the plant by the end of the year, the company had said that this did not preclude using it for FutureGen.

It is the latest setback for the program, which was long seen as the nation’s best hope for taking a worldwide lead in developing ways to capture and bury carbon dioxide from coal burning. Globally, coal burning now accounts for roughly 20 percent of global greenhouse gas emissions, and rising energy demand is only expected to drive up coal consumption, especially in nations with large reserves like China and India.

The project’s first incarnation, announced in 2003 by President George W. Bush, envisaged building a plant that would turn coal into a hydrocarbon gas, filter out the carbon dioxide and burn the hydrogen for power. Bids were solicited, and the venture settled on a site in Mattoon, Ill. But the administration shifted course and killed the program in 2008, citing concerns about the costs.

Last year the Obama administration resuscitated the project with $1 billion in Recovery Act money but settled on a different technology: burning coal in oxygen instead of ordinary air to produce nearly pure carbon dioxide as an exhaust gas that would then be piped underground for disposal.

Word that this effort, too, could be set back frustrated experts in the field, given a general industry consensus that the federal government should be underwriting demonstrations of technologies to limit carbon dioxide emissions so the market can judge which are most practical.

Ernest J. Moniz, a professor of physics at M.I.T. and former under secretary of energy who wrote a pivotal 2007 report calling for the prompt demonstration of carbon capture technologies, said: “It’s only more true four years later — we can’t get one going, but we actually need more than one.”

Another expert, Nick Welch, a consultant on carbon capture projects, said, “If you were really serious about getting on with this stuff, even in the complex democracy that we live in, you might find a way of getting through all this.”

If the project needed a deadline extension from Congress to hold on to the $1 billion in federal aid, many note, it is not clear that it could get one in this fiscally weak environment. And experts on coal-fired emissions say that without government help, it is unlikely that the private sector will risk the money necessary for a first-of-a-kind engineering project.

When the Bush administration unveiled its FutureGen project in 2003, the expectation was that carbon dioxide limits were likely to be imposed by Congress. That never happened, but the Obama administration said recently that it intended to complete a carbon dioxide rule for new power plants by next May.

At the same time, the Obama administration has faced consistent obstacles from Republican critics in pursuing tighter regulatory limits on air pollution.

Energy Department to stress funding for carbon capture, use and storage absent climate legislation, official says Posted on October 26, 2011 at 2:49 pm

by Puneet Kollipara

  ARLINGTON, Va. – The Department of Energy will emphasize funding for carbon capture, sequestration and utilization research and projects as a way to “move the needle” on climate change in the coming decade in the absence of climate legislation, a top official said today.

Chuck McConnell, chief operating officer of the DOE’s Office of Fossil Energy, said at a conference today there’s nobody in his office “who’s going to wait around for climate legislation and be paralyzed in the meantime.”

The likelihood of climate legislation clearing both chambers of Congress has fallen substantially since Senate Republicans filibustered a cap-and-trade bill in 2010. With fossil fuels not going away anytime soon, McConnell said his agency would continue funding research into technologies for capturing and using carbon emissions.

“We’re going to take a business and industrial approach to it and put together market plans and business plans that industry can get behind and want to invest, not be forced to invest,” McConnell said.

DOE has touted using captured carbon dioxide in enhanced oil recovery, which industry has increasingly turned to for extracting oil that first-line and second-line methods can’t access.

McConnell said funding the research is especially important because companies are running out of carbon dioxide for use in EOR, “Yet we’re venting it like there’s nobody’s business.” One EOR method involves injecting carbon dioxide into wells to make crude in deep rock formations less viscous and easier to extract.

The DOE says the U.S. has more than a trillion barrels of undeveloped oil resources still in the ground. About 430 billion barrels of that is recoverable using today’s technology, including EOR methods, according to the U.S. Energy Department.

EOR is most common right now in the Permian Basin region of Texas and New Mexico. Some companies in Texas, including ExxonMobil Corp., have started shifting toward EOR to access harder-to-reach oil as first- and second-line methods extract less and less oil.

Using EOR methods could add as many as 2.5 million jobs and reduce oil imports by 30

to 40 percent in the next 20 years, McConnell said. The Texas Bureau of Economic Geology has suggested that extracting even 10 percent of the crude that EOR methods can reach in the state could add over $200 billion to the Texas economy and create 1.5 million jobs in the state.

Carbon capture, sequestration and utilization projects are occurring right now in the absence of congressional action on climate, because they make sense economically to industry.”

He added that government subsidies have helped the cause. The DOE in late September finalized $450 million in previously announced funding for the Texas Clean Energy Project near Odessa, Texas, a 400-megawatt power plant that will capture 90 percent of emitted carbon for later EOR use.

Billions of dollars in similar projects are underway nationwide with DOE funding, he said, including FutureGen 2.0, a project for retrofitting St. Louis-based Ameren Corp.’s 200-megawatt coal plant in Meredosia, Ill.

“That’s what we’re supposed to be doing at Fossil Energy, catalyzing industries that are going to have a long-term future in this country,” he said.

Enhanced oil recovery is one facet of the DOE’s fossil-fuel portfolio that also includes research and development into shale gas technologies, as well as technologies for capturing, sequestering and utilizing carbon emissions from coal combustion.

But with Congress looking for ways to reduce the federal deficit, McConnell said he felt certain the DOE’s budget would face cuts in the coming years.

“We have to figure out how to do more with less,” he said. “Sounds trite, but it’s absolutely true.”