1. WELCOME TO THE 2ND ANNUAL NORTH AMERICAN FORUMCCS/CCUS: GLOBAL OPPORTUNITIES AND STRATEGIC DIRECTIONS5 February 2013Washington, D.C.WWW.GLOBALCCSINSTITUTE.COM

2. INTRODUCTION AND OPENINGREMARKSVictor DerGeneral Manager, North AmericaGlobal CCS Institute 2 3. CCS/CCUS: Global Opportunities and StrategicDirections Agenda8:30-8:40Introduction and Opening Remarks8:40-9:00Welcome9:00-9:30Energy and the Environment: Looking Forward9:30-10:00 The Global Status of CCS and the Institutes Future Strategic Direction10:00-10:30Break10:30-11:45Industry Roundtable: Lessons Learned from Early CCS/CCUS Demonstration and Deployment Efforts in North America and Path Forward11:45-1:00 Lunch1:00-2:15Legal and Regulatory Roundtable: Using Legal and Regulatory Frameworks to Advance CCUS Technology Development and Deployment in North America2:15-2:45Break2:45-4:00Technology Roundtable: Bringing Down the Cost of CO2 Capture, ROI in EOR Applications, and Size of Recoverable Resource4:00-5:00International Governments Roundtable on CCS/CCUS: Perspectives in Incentivizing Industry to Move Forward with CCS/CCUS5:00-5:30Wrap-up and Meeting Conclusion5:30-6:45Reception 4. WELCOMESheila RiordonMinister (Political)Embassy of Canada 4 5. WELCOMEGraham FletcherDeputy Chief of Mission to the United StatesEmbassy of Australia 5 6. ENERGY AND THE ENVIRONMENT:LOOKING FORWARDDr. Anthony CuginiDirectorNational Energy Technology Laboratory (NETL)U.S. Department of Energy 6 7. The Path Ahead for CCS 8. Meeting the Presidents Energy GoalsThis country needs an all-out,all-of-the-above strategy that develops everyavailable source of American energy. A strategy thats cleaner, cheaper, and full ofnew jobs. President Barack Obama State of the Union AddressJanuary 24, 2012 Photo courtesy of the White House, Pete Souza 9. Fossil Energys Role in All-of-the-AboveStrategy Fossil Energy represents a key component of thisstrategy To maintain the relevancy of fossil energy, specificallycoal, in future energy scenarios, carbon capture andstorage must be technically viable and costcompetitive Shale gas and unconventional gas and oil must be safeand environmentally friendly and utilized in the mostefficient manner possible Future sources of fossil energy, including natural gashydrates represent potential options to secure ourenergy future and continue our movement towardenergy security 10. Energy Demand 2010 Energy Demand 2035 98 QBtu / Year 107 QBtu / Year83% Fossil Energy77% Fossil Energy CoalGasCoalGas 21% 25% + 9% 20% 26%Nuclear United StatesOil Oil Nuclear9%8% 37% 32%RenewablesRenewables8% 14% 5,634 mmt CO25,758 mmt CO2505 QBtu / Year 741 QBtu / Year81% Fossil Energy80% Fossil EnergyCoal Gas+ 47%Coal Gas27%22%Nuclear30%23%6% World Nuclear 6% OilOil32% Renewables 27% 13% Renewables14% 30,190 mmt CO2 44,090 mmt CO2 Sources: U.S. data from EIA, Annual Energy Outlook 2012: World data from IEA, World Energy Outlook 2012 11. Pathways to CO2 Emission Reduction Energy efficiency (14 GtCO2e/yr)1 Vehicles, Buildings, industrial equipment Low-carbon energy supply (12 GtCO2e/yr) Wind, Nuclear, Solar Energy Biofuels for transportation Carbon Capture and Storage Terrestrial carbon (12 GtCO2e/yr) Reforesting, halting deforestation CO2 sequestration in soils through changing agricultural practices Behavioral change (~4 GtCO2e/yr) 1. CO2 Reduction opportunities by 2030 from Pathways to a Low-Carbon Economy, McKinsey & Company, 2009. 12. CCS Meets National and International Climate Goals President Obama: By 2050, 83% reduction in GHG emissions from 2005levels IEA: application of CCS represents potentially the most important newtechnology option for reducing direct emissions in industry.Source: IEA. Energy Technology Perspectives 2010 13. Advanced Clean Coal R&DFuture PlantsExisting Coal Plants CCS Plus..CCSNet Efficiencies > 45%Improve efficienciesNear-zero greenhouse gasesMinimize criteria pollutantsNear-zero criteria pollutantsMinimize water usageNear-zero water usageMinimize greenhouse gasesPolygeneration (Power +1,000 years Estimate capacity in reservoirs Improve storage efficiency Validation of Formation Classes Supporting Activities Core R&D Projects Infrastructure Development International R&D Collaboration at Field Projects 21. U.S. 2012 Carbon Storage Atlas Hundreds of Years of Potential Storage Unmineable Coal Saline Formations 56 114 billion metric 2,102 20,043 billiontons CO2 storagemetric tonsCO2 storageOil and Gas Reservoirs 226 billion metric tonsCO2 storageSource: United States 2012 Carbon Utilization 22. Major U.S. DemonstrationsUsing Existing Infrastructure, Creating New MarketsCCPI Archer Daniels MidlandFutureGen 2.0 CO2 Capture from Ethanol PlantLarge-Scale Testing of Oxy-Combustion w/ CO2 CaptureICCS Area 1CO2 Stored in Saline Reservoir & Sequestration in Saline Formation FutureGen 2.0$208M Total; $141M DOE ~$1.3B Total; ~$1.0B DOE Learning by doing scaling up first-generation SALINE ~1 M TPY 2013 start SALINE 1.3M TPY 2016 start technologies Evidence of CCS w/EOR opportunities viable business caseSummit TX Clean Energy Validate CCS MVA best practices Commercial Demo of AdvancedIGCC w/ Full Carbon Capture However . . . ~$1.7B Total; $450M DOEEOR 3M TPY 2014 start First-generation capture technologies energy penalty~30% and > $100 / tonne CO2 capturedSouthern CompanyKemper County IGCC ProjectHydrogen Energy Requires government subsidies $$$ + polygenerationIGCC-Transport Gasifierw/Carbon Capture California (power + chemicals) + EOR ~$2.67B Total; $270M DOECommercial Demo of AdvancedEOR 3 M TPY 2014 start IGCC w/ Full Carbon Capture ~$4B Total; $408M DOE EOR 3M TPY 2018 startNRGAir Products and Chemicals, Inc.Leucadia Energy W.A. Parish Generating StationCO2 Capture from Methanol Plant Post Combustion CO2 CaptureCO2 Capture from Steam Methane ReformersEOR in Eastern TX Oilfields EOR in Eastern TX Oilfields $339M Total; $167M DOE $431M Total, $284M DOE$436M - Total, $261M DOEEOR 1.4M TPY 2014 start EOR 1M TPY 2013 startEOR 4.5 M TPY 2015 start 23. Utilization Could be a Key Driver For CCS CCS is an essential part of the long-term global solution to climate change, but itrequires an accelerated effort CCS has no market driver to catalyze an industry Regulations that place a value on CO2 emissions are unlikely anytime soon First-generation technologies are too costly: >$100 / tonne CO2 captured and hCOE by >80 percent Very challenging to incentivize CCS demos and jumpstart CCS industry U.S. Department of Energy / Office of Fossil Energy research will greatly reduce CCScost, but incentives are required for deployment Absent CO2 emission value, cost per tonne CO2 will approach levels that catalyze EOR Focusing more closely on EOR will drive technology development tocommercialization EOR is a high-value, high-volume use of CO2 EOR could potentially utilize CO2 from 60 GW of power plants EOR will catalyze CCS technologies while providing economic drivers for commercial projects 24. CO2 Conversion for Utilization CO2Industrial Waste Heat H2CatalystSolar-ThermalH2OWind-ElectricFormic Acid FormaldehydeMethanolMethane High Throughput First Ever UnprecedentedOutperforms ComputationVisible Light Electro-CatalyticCommercialAccelerates DesignCO2 Catalysts EfficiencyCatalystsCuGaxFe1-xO2 CdSe/TiO2 & Au/ZnO Au25 ClustersNano-Cu/ZnODelafossites Heterostructures 25. Natural Gas Hydrates Program & Research at NETL Climate, Energy, and Safety - R&D for the Future Natural gas hydrate is an enormous global storehouse of organic carbon Estimates of carbon trapped in NGH exceeds that of known coal, oil and gas resources combinedPredict natural gas hydrateIgnik Sikumi Hydrate behavior in porous media BP-DOE-MallikGlobal Gas Hydrate R&DUSGS 07Well Test of CO2Evaluate potential future CH498, 02, 07, 08 UBGH1 07Sequestration & CH4production & CO2 storageMajor field programs last 15 yearsUBGH2 11 ProductionCP-DOE-USGS 11 MITI 99, 04, 08, 10 ODP Leg 204Qinghai02 IODP ProvinceX311 0510 GM CO2:CH4 exchangeGOM JIP: Chevron-DOE Leg I 05GS1 GOM JIP: Chevron-DOE Leg 2 09 07 Shell(Malaysia) 05 DGH (India)-USGSNGHP-01 06 Characterize, predict, ide ntify, and understand areas with significant gas Microbiology hydrate occurrences P.C. J. Geology Presley P.C. W.Geochemistry HongCH4 is >25xs more potent a GHG than CO2 Volume of clean, natural gas trapped in NGH could offer significant energy resource 26. For More InformationAnthony Cugini412-386-6023 or 304-285-4684 anthony.cugini@netl.doe.govOffice of Fossil Energywww.fe.doe.gov National Energy Technology LaboratoryNETLwww.netl.doe.gov@NETL_News 27. CCS/CCUS: GLOBAL OPPORTUNITIESAND STRATEGIC DIRECTIONSBrad PageChief Executive OfficerGlobal CCS Institute 27 28. CCS/CCUS:GLOBAL OPPORTUNITIES AND STRATEGIC DIRECTIONSBRAD PAGE CEOSecond Annual North American Forum, Washington, DC5 February 2013 29. GLOBALLY CONNECTED MEMBERSHIP72 13475 3 572 29 30. KEYMESSAGEACTION IS NEEDED NOW TO ENSURE CCS CAN PLAY A VITAL [1[ ROLE IN TACKLING CLIMATE CHANGE Energy-related CO2 emission reductions by technologySOURCE: IEANOTE: Percentagesrepresent share ofcumulative emissionsreductions to 2050.Percentages in bracketsrepresent share ofemissions reductions in theyear 2050.30 31. KEYMESSAGECCS IS ALREADY CONTRIBUTING, [2[ BUT PROGRESS MUST BE ACCELERATED Volume of CO2 potentially stored by large-scale integrated projects 31 32. KEYMESSAGECCS IS ALREADY CONTRIBUTING, [2[ BUT PROGRESS MUST BE ACCELERATED Volume of CO2 potentially stored by large-scale integrated projects 32 33. KEYMESSAGECCS IS ALREADY CONTRIBUTING, [2[ BUT PROGRESS MUST BE ACCELERATED Volume of CO2 potentially stored by projects is decreasing33 34. KEYMESSAGESTEADY PROGRESS BUT [3[ IMPORTANT DEVELOPMENTS Large-scale integrated projects by asset lifecycle and year 34 35. KEYMESSAGESTEADY PROGRESS BUT [3[ IMPORTANT DEVELOPMENTS North America large-scale integrated projects by asset lifecycle and year 35 36. KEYMESSAGESTEADY PROGRESS BUT [3[ IMPORTANT DEVELOPMENTS Volume of CO2 potentially stored by primary storage type and regionNote: Data reflects January 2013LSIP update 36 37. CCUS BENEFITS Enables CCS technology improvement and costreduction. Improves business case for demonstration and earlymover projects through CO2 revenue. Helps gain public and policymaker acceptance. Builds and sustains a skilled CCS workforce. Supports CO2 transportation network developmentwhere EOR is an option. 38. CCUS CHALLENGES CO2-EOR is geographically and capacity limited. CO2 revenue alone will not bridge gap for high capturecost scenarios. Gaps exists between geologic storage permitting andCO2-EOR regimes. 39. KEYMESSAGEENCOURAGING POLICY SUPPORT [4[ BUT MORE REQUIRED Historically strong support for CCS research and demonstration in North America. GHG performance standards that recognize CCS importance. Provincial and state programs to facilitate and incentivise CCS New initiatives?39 40. KEYMESSAGEBARRIERS MUST BE OVERCOME [5[ TO REALIZE THE BENEFITS OF CCS Costs of CO2 avoided40 41. KEYMESSAGE REDUCING THE COST OF TECHNOLOGY THROUGH [6 [ DEMONSTRATION PROJECTS IS VITALBoundary Dam,CanadaQuest, Canada TCM, Norway41Plant Barry, US 42. RECOMMENDATIONS FOR DECISION MAKERS Climate change legislation must not be delayed. In order to achieve emission reductions in the mostefficient and effective way, CCS must not bedisadvantaged. Funding for CCS demonstration projects should beaccelerated and incentives increased. Expertise and learning must be shared.42 43. THE GLOBAL STATUS OF CCS: 2012 Released 10 October 2012. Comprehensive coverage on the state ofCCS projects and technologies. Progress outlined since 2011. Challenges and recommendations formoving forward. Status of CCS Projects now revised inJanuary 2013 update. 43 44. GLOBALCCSINSTITUTE.COM 45. NORTH AMERICAN INDUSTRYROUNDTABLELessons Learned from Early CCS/CCUS Demonstration andDeployment Efforts in North America and Paths Forward45 46. Discussion Topics What are the top two lessons you learned from the early deployment efforts in CCS/CCUS that youcan take forward to subsequent projects? How has the landscape for CCS/CCUS in North America changed since the start of the earlydemonstrations? Given the current landscape, how would you approach a CCS/CCUS projectdevelopment todayif at all? What in your view have been and continue to be the principal barriers impeding industryinvestment in and deployment of CCS/CCUS along the value chain? How do you see the availability of low cost natural gas in North America impacting CCS andCCUS, especially for CO2-EOR projects? What do you see going forward would be needed for making the CCS/CCUS business case in NorthAmerica? During this past year some in the U.S. Congress have suggested using a carbon tax as mechanismfor putting a price on carbon and reducing CO2 emissions. Others in the U.S. Congress have beenvery opposed to a carbon tax but have been supportive of a carbon cap and trade approach. Whatare your thoughts on this subject? 47. LEGAL AND REGULATORYROUNDTABLE:Using Legal and Regulatory Frameworks to Advance CCUSTechnology Development and Deployment in North America 47 48. Discussion Topics It has been suggested that for CO2-EOR toqualify as storage, it should be subject toregulatory standards for MMV and long-termstorage equivalent to those applicable toother types of CO2 storage. Do you agree ordisagree, and why? If you agree, how would you define equivalent? If you disagree, what might be an appropriateapproach for CO2-EOR? 49. Discussion Topics CO2-EOR operations may differ from a dedicatedsource to sink storage model in a number of waysincluding: Common pipelines where co-mingled streams of A-CO2 and N-CO2 lose their identity CO2 recycling and reuse The potential use of geologic reservoirs as buffers forEOR demand.How can a legal and regulatory frameworkaccommodate these differences? 50. Discussion Topics What additional legal and regulatory policiesand/or incentives can be pursued to helpmore demonstration and early mover projectsget underway in the near-term and ultimatelylead to large scale CCS deployment? 51. Discussion Topics Under the European Emission Trading SystemDirective, each component of the CCS chain(capture, transport and storage) is separatelypermitted and an obligation to surrenderallowances does not arise for emissions verifiedas captured and transported for permanentstorage to a facility permitted in accordance withthe CCS Directive. How should CCS and emissioncompliance requirements be handled in Canadaand the United States? 52. Contact Information http://www.rrc.state.tx.us/david.hill@rrc.state.tx.us 512 463 3011 53. Sources of CO2 and Users WW & PERMIAN BASIN CO2 EOR PRODUCTION* 1986 - 2010300Permian BasinWorldwide CO2 EOR PRODUCTION -250200kbopd15010050 019861990199419982002 20062010* Ref: O&GJ Biennial EOR Editions & UTPBPetr Industry AllianceYEAR 54. CO2 EOR Sources 55. SACROC Eastern Edge of Permian Basin Scurry Area Canyon Reef Operators Committee (SACROC) unitized oil field Ongoing CO2 injection since 1972 Combined enhanced oil recovery(EOR) with CO2 sequestration Depth to Pennsylvanian- Permianreservoir ~6,500 ft Approximately 3900 miles of CO2pipelines (Dooley et al) 56. SACROC AREA WATER QUALITY36 of 60 wells completed in both Ogallala and Dockum Santa Rosa water-bearing units; 17 wells inside and 19 wells outside SACROC; highest data 57. Facilities and Water Wells Year Drilling Active Injection Water WellPermitsWellsWells Complaints* 2002 11,434246,000 30,50069 2003 14,654238,000 30,70042 2004 16,912242,000 30,90044 2005 19,548246,000 31,30038 2006 22,328249,000 30,60061 2007 23,916250,000 30,60042 2008 28,786263,000 30,60048 2009 15,917274,000 30,80047 2010 22,535281,000 31,40043 2011 28,300281,000 31,50083* The majority of these complaints are drought related. Many others involve onetime sampling events for oil and gas constituents, where lab data show no impact.About two wells per year are confirmed to be attributable to Oil & Gas activities. 58. Contact Information http://www.rrc.state.tx.us/david.hill@rrc.state.tx.us 512 463 3011 59. TECHNOLOGY ROUNDTABLE:Bringing Down the Cost of CO2 Capture, ROI in EORApplications, and Size of Recoverable Resource59 60. Discussion Topics What is on the horizon, and how far out is that horizon, for dramatically reducing the cost of CO2capture? To what extent can novel capture systems be used to offset carbon emissions to meetregulations? What other out-of-the-box thinking on reducing capture cost should we be contemplating? Given the costs, benefits, uncertainties and risks, what potential returns on investment for CO2-EOR is conducive to a business case? What would the cost of captured anthropogenic CO2 have tobe for industry to make use of it for CO2-EOR (along with the permanent storage of the CO2) andhow would the cost relate to world oil prices? In terms of risk/reward, what do you see as the potential for recoverable resources in NorthAmerica and the world realistically in the next 5 years? 10 years? To what extent is this potentialsustainable as a path to CCS? What do you see as the key issues and priorities that must be addressed? During this past year, some in the U.S. Congress have suggested using a carbon tax as mechanismfor putting a price on carbon and reducing CO2 emissions. Others in the U.S. Congress have beenvery opposed to a carbon tax but have been supportive of a carbon cap and trade approach. Whatare your thoughts on this subject? 61. Technology and Scale CCS technology is proven and is technologically feasible.Demonstration at commercial scale is critical to definerisks, optimize process and achieve cost reduction to supportcommercial contracting The CCS technology requires both policy direction and financialsupport to be demonstrated at commercial scale CCS could be competitive on a level playing field in a freemarket EOR will help close the gap on financing particularly on earlymove projects. Other products may be helpful depending on markets Stronger Governmental support is required 62. Comparative EconomicsCoE Low Carbon technologies New PP over next 5 yearsUp to 45 / MWh cents/kWh300EUROPE300250 250Reference case200 200150 150 Low caseCSP Tower100 with storage100 86 79 50 (82 for Ref 50CCS Oxy)0 0 Hardcoal w Gas CCPP Nuclear HydroGeo-Wind WindSolar Solar PVCCS Post w CCSthermalOnshoreOffshoreThermal20172017 Source : Alstom analysis 2012. CCS w Post amine 2017 costs, including on shore T&S & CO2 price (Flue Gas Recirculation for CCS Gas CC) CoE do not include externalities of Intermittent power (Back-up cost, balancing cost, grid enhancement if required)Under realistic assumptions and with a conservative variationrange, CCS is already in the mix of low carbon alternatives 63. CO2 Utilization with Enhanced Oil Recovery:What is the Size of the Prize?Prepared for:Second Annual CCS/CCUS Opportunities and Strategic Directions ForumTechnology Roundtable: Bringing Down the Cost of CO2 Capture, ROI in EORApplications, and Size of Recoverable ResourceSponsored by:Global CCS InstitutePrepared By:Vello A. Kuuskraa w/ Steve Melzervkuuskraa@adv-res.comPresidentADVANCED RESOURCES INTERNATIONAL, INC.Arlington, VA USACanadian Embassy Washington D.C. 5 February 2013 64. The Size of the Prize?Large volumes of oil remain stranded in U.S. reservoirs after traditional recovery. 400 BILLION BARRELS OF OIL 140 BILLION BARRELS OF OIL IN IN MAIN PAY ZONES. RESIDUAL OIL ZONES (ROZs).Original Oil In-Place: 600 B Barrels Oil In-Place: 140 B Barrels*Stranded Oil In-Place: 396 B Barrels ROZ Fairways Target for EOR100 Billion Barrels 396 Billion Barrels 40 Billion Cumulative Production Barrels 182 Billion Barrels Below Oil Fields Proved Reserves 22 Billion Barrels Source: Advanced Resources Intl. (2011); Melzer Consulting (2012)*Within ROZ Fairways of the Permian Basin and below oil fields in 3 U.S. basins 64 65. The Size of the PrizeNext Generation vs. State of the Art CO2-EOR TechnologyEconomic OilDemand for CO2 Resource AreaRecovery (BBbls)* (Billion Metric Tons)SOA Next Gen.SOA Next Gen. More efficient recovery, Lower24 60 7 17 48 oil fields Alaska/Offshore 37 13 Residual Oil Zone - 13- 5 (below oil fields) Residual Oil Zone Fairways - 20- 8 (preliminary) Total27100 8 33 *At $85 per barrel and $40 per metric ton, CO2 market price with 20 % rate of return (before tax). Source: Advanced Resources International, Inc. (2011)65 66. Next Generation CO2 Enhanced Oil RecoveryUse of more efficient CO2-EOR technologies and extension ofthese technologies to new oil resources and settings constitutesnext generation CO2 enhanced oil recovery:1. Scientifically-based advances in CO2-EOR technology,2. Integrating CO2 capture with CO2 utilization by CO2-EOR,3. Application of CO2-EOR to residual oil zones (ROZs), and4. Deployment of CO2-EOR in offshore oil fields.66 67. Permian Basin ROZ FairwaysNMTX Palo Duro BasinMelzer and ARIestimate that up to100 million barrelsof OIP exist in the Theorized U. PermianHydrodynamic FairwaysROZ Fairways ofthe Permian Basin.MidlandBoundary of Northwest BasinNorthwest Shelf San ShelfAndres Platform AreaCarbonate Play Permian Basin Central Basin Platform OutlineSource: Modified from Melzer Consulting (2010) JAF2012_092.PPT 67 68. Next Generation CO2-EOR Technology Two publically available reports, prepared by Advanced Resources Intl and Melzer Consulting for U.S. DOE/NETL, provide the analytical foundation for next generation CO2-EOR technology.68 69. Summary Observations Next generation CO2 enhanced oil recovery deserves to be a major part of a worldwide carbon management strategy: CO2 enhanced oil recovery is a viable, growing enterprise, The oil produced is low carbon energy, The size of the prize is large, and CO2-EOR can provide a market-driven option for accelerating CO2capture.Acknowledgements. The analytic foundation for these findings was sponsored by theU.S. Department of Energy, National Energy Technology Laboratory.69 70. Office Locations Washington, DC 4501 Fairfax Drive, Suite 910 Arlington, VA 22203 Phone: (703) 528-8420 AdvancedFax: (703) 528-0439 Resources Houston, Texas International 11931 Wickchester Ln., Suite 200 Houston, TX 77043-4574 www.adv-res.com Phone: (281) 558-6569 Fax: (281) 558-920270 71. INTERNATIONAL GOVERNMENTSROUNDTABLE:Perspectives in Enabling/Incentivizing Industry to MoveForward with CCS/CCUS71 72. Discussion Topics What global opportunities do you see for the deployment of CCS, especially in locations thatdo not currently have legislative or regulatory requirements to do so?What do you consider to be some of the principal barriers, political and otherwise, impedingthe deployment of CCS? What actions can Governments take to overcome these barriers to sustainable CCSdeployment?What do you see as key priority issues and actions needed to move CCS/CCUS forward sothat it can be part of a sustainable clean energy portfolio? During this past year, some in the U.S. Congress have suggested using a carbon tax asmechanism for putting a price on carbon and reducing CO2 emissions. Others in the U.S.Congress have been very opposed to a carbon tax, but have been supportive of a carbon capand trade approach. What are your thoughts on this subject? 73. www.globalccsinstitute.com