Challenges to the Development Challenges to the Development and Commercialization of CCSand Commercialization of CCS

Cheyenne A. AlabanzasCheyenne A. Alabanzas

2009 ASME Intern2009 ASME Intern

University of Alaska – AnchorageUniversity of Alaska – Anchorage

OverviewOverview

PremisePremise

What is CCS?What is CCS?

Current projectsCurrent projects

ChallengesChallenges

ConclusionConclusion

RecommendationsRecommendations

QuestionsQuestions

Importance of Coal in the USImportance of Coal in the USCheapCheap

Price per kWh, as of April 2009:Price per kWh, as of April 2009:

AbundantAbundant– US has recoverable reserves of 262 billion short tonsUS has recoverable reserves of 262 billion short tons– At current rate of consumption, coal will be an energy source for At current rate of consumption, coal will be an energy source for

the next 250 years.the next 250 years.

CoalCoal $0.76$0.76

Petroleum LiquidsPetroleum Liquids $3.12$3.12

Natural GasNatural Gas $1.50$1.50Derived from EIA website, http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

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

Importance of Coal in the US

Source: Energy Information Administration, http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.htm

l

Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through April, 2009

The need for CCSThe need for CCS

Coal is a dirty fuel.Coal is a dirty fuel.

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

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

What is CCS?What is CCS?

Carbon Capture and Storage (or Carbon Capture and Storage (or Sequestration) is a broad term for Sequestration) is a broad term for technologies involving three main steps:technologies involving three main steps:1)1) capturing the CO2 from the combustion of capturing the CO2 from the combustion of

fossil fuels at stationary sources fossil fuels at stationary sources

2)2) transporting it to the storage site and, transporting it to the storage site and,

3)3) storing it underground in geological storing it underground in geological formations.  formations. 

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

Current commercial projectsCurrent commercial projectsSleipner (Norway)Sleipner (Norway)– Started in 1996 after Norway Started in 1996 after Norway

implemented carbon taxesimplemented carbon taxes

– ~12 million metric tons of ~12 million metric tons of CO2 injectedCO2 injected

– No leakage detectedNo leakage detected

Snohvit, Weyburn, In ShalahSnohvit, Weyburn, In Shalah

Small pilot demonstration Small pilot demonstration projects around the worldprojects around the world

Source: World Coal Institute, http://www.worldcoal.org/carbon-capture-storage/

Status of CCSStatus of CCS

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

The technologies to capture, transport and The technologies to capture, transport and store CO2 exist.store CO2 exist.

What’s next?What’s next?

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

Scale of CCS is at the gigaton.Scale of CCS is at the gigaton.

Challenges to CCS deploymentChallenges to CCS deployment

No national strategy to regulate GHG No national strategy to regulate GHG emissionsemissions

High cost for installing CCS technologyHigh cost for installing CCS technology

Uncertainty in how to address CO2 under Uncertainty in how to address CO2 under existing statutesexisting statutes

Ensuring safety and security of CO2 Ensuring safety and security of CO2 storagestorage

Long-term liability and monitoringLong-term liability and monitoring

Regulating GHG EmissionsRegulating GHG Emissions

No cap-and-trade or carbon tax for GHG No cap-and-trade or carbon tax for GHG emissionsemissions

Some portfolio standards are technology Some portfolio standards are technology restrictive.restrictive.

High cost of CCSHigh cost of CCSEstimated cost of one large-scale project Estimated cost of one large-scale project is $1 billion per year. is $1 billion per year. – Capture is the most expensive component Capture is the most expensive component

due to the energy penalty.due to the energy penalty.– Increases cost of electricity by 2 – 7 cents per Increases cost of electricity by 2 – 7 cents per

kWh. Current average cost for US: 9.7 cents kWh. Current average cost for US: 9.7 cents per kWhper kWh

– No price on carbon + high cost of CCS = No price on carbon + high cost of CCS = companies reluctant to invest in an companies reluctant to invest in an “unproven” technology“unproven” technology

CO2: Pollutant, Waste or CO2: Pollutant, Waste or Commodity?Commodity?

PollutantPollutant Massachusetts v. EPA (2007)Massachusetts v. EPA (2007)

CommodityCommodity Mineral Leasing Act (for Enhanced Oil Mineral Leasing Act (for Enhanced Oil Recovery / Enhanced Gas Recovery Recovery / Enhanced Gas Recovery purposes)purposes)

WasteWaste Resource Conservation and Recovery Resource Conservation and Recovery Act (RCRA) , Comprehensive Act (RCRA) , Comprehensive Environmental Response, Environmental Response, Compensation and Liability Act Compensation and Liability Act (CERCLA)(CERCLA)

Underground StorageUnderground Storage

Potential leakage into the atmospherePotential leakage into the atmosphere

Ensure safety and security of stored CO2Ensure safety and security of stored CO2– Groundwater sources protectionGroundwater sources protection– Pore space ownershipPore space ownership

Long term liabilityLong term liability

Who monitors? For how long? Who is financially responsible for potential damages?

Life cycle of geological sequestration:

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

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

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

RecommendationsRecommendationsImplement a national strategy that regulates Implement a national strategy that regulates GHG emissions. GHG emissions. – Cap-and-trade or carbon taxCap-and-trade or carbon tax– Emissions performance standards for stationary Emissions performance standards for stationary

sources instead of renewable portfolio standardssources instead of renewable portfolio standards

Build large-scale demonstrations that Build large-scale demonstrations that integrate all CCS components.integrate all CCS components.– Continue R & D support for capture technologies and Continue R & D support for capture technologies and

sequestrationsequestration– Proper project financing for early movers through Proper project financing for early movers through

loan guarantees and federal sequestration tax creditsloan guarantees and federal sequestration tax credits

RecommendationsRecommendationsDevelop environmental regulations that Develop environmental regulations that specifically address captured CO2.specifically address captured CO2.– Address issues that fall under EPA’s authority.Address issues that fall under EPA’s authority.– State participation will be key in developing State participation will be key in developing

regulations and oversight programs.regulations and oversight programs.

Create indemnification program for Create indemnification program for long-term liability issues related to long-term liability issues related to CCS.CCS.– Create a CCS trust fund.Create a CCS trust fund.– Address transfer of responsibility regulations.Address transfer of responsibility regulations.

Questions?Questions?

Thank you!Thank you!

AcknowledgementsAcknowledgements

Melissa CarlMelissa Carl

Robert RainsRobert Rains

Dan DecklerDan Deckler

Erica WissolikErica Wissolik

ASME StaffASME Staff

Fellow WISE InternsFellow WISE Interns