Lowest-cost CO2 technology still too pricey

IEA says CSS is essential technology in reducing greenhouse gas emissions

BY ALAN BAILEY & KAY CASHMAN

Widely blamed for an acceleration in global warming, man-made carbon dioxide has become something of a symbol for human-induced environmental degradation. And in the debate about how to minimize future volumes of this greenhouse gas in the Earth’s atmosphere and oceans from the burning of fossil fuels, many people are pinning their hopes on somehow capturing and storing the gas deep in the earth, in underground places where it can do no harm.

(Start the conversation. See comments section at bottom of page.)

In fact, this type of long-term storage, a technique referred to as carbon capture and sequestration, or carbon capture and storage, underpins most strategies for minimizing future levels of atmospheric carbon dioxide, including those of the world’s foremost energy research group, the International Energy Agency, or IEA.

But, how close is the possibility of the widespread use of CCS, given there are only a handful of CCS applications in commercial operation? And what are the issues involved in the most commonly considered CCS approach, that of taking the carbon dioxide out of fuel or exhaust gas streams, and then pumping it deep underground?

Several countries, including Canada, European Union countries and Australia, have initiated and partly funded major CCS research and development projects while, in the United States, the Department of Energy is sponsoring a major CCS research program involving partnerships between DOE, state agencies, universities and private companies.

The DOE program is transitioning from a phase involving small-scale field tests of CCS technologies into the start of some large-scale tests of prototype storage facilities in various parts of the country: The idea is to test different techniques for carbon dioxide storage; to determine infrastructure requirements; and to work out what type of regulations might be required for a commercial storage operation.

100 CCS plants must be built this decade

IEA has been developing a set of international technology roadmaps for widespread deployment to reduce greenhouse gas emissions to 2005 levels by 2050.

The roadmaps, IEA said on Dec. 14, “provide solid analytical footing” that would enable the international community to move forward on specific technologies.

“Each roadmap,” the Paris-based agency said, “develops a growth path for a particular technology from today to 2050, and identifies technology, financing, policy and public engagement milestones that need to be achieved to realize the technology’s full potential.”

The first of these roadmaps, “Technology Roadmap, Carbon capture and storage,” released Dec. 14, calls for trillions of dollars to be spent by governments and industry to make commercial applications of CCS possible.

IEA said 100 large-scale CCS plants must be built around the world in the next decade, and 3,400 will be necessary by 2050.

“CO2 capture technology is commercially available today, but the associated costs need to be lowered and the technology still needs to be demonstrated at commercial scale,” IEA said in its key findings, calling for additional research and development.

Four commercial applications

But although worldwide there is a long list of planned CCS projects, there are in practice only four CCS applications in commercial operation today, the rest are pilot or demonstration plants, IEA said. Those applications are the Weyburn-Midale and Rangely projects in North America; Statoil’s Sleipner field in Europe; and the In Salah project in Africa, jointly operated by Statoil, BP and Sonatrach.

The Weyburn-Midale system, operating since 2000, involves piping carbon dioxide about 200 miles from a coal gasification plant in North Dakota for enhanced oil recovery in the Weyburn, Saskatchewan oil field (there are many projects that sequester produced carbon dioxide as part of enhanced oil recovery programs, but these projects do not typically capture carbon dioxide from industrial processes, the most expensive part of the CCS process).

The Rangely project uses carbon dioxide from natural gas processing at a plant in Wyoming, using the CO2 for enhanced oil recovery, or EOR, at the Rangely field in Colorado.

EOR is typically the last of three phases of development of an oil field and involves techniques such as the injection of various fluids through the field reservoir, to flush out as much oil as possible.

The challenge of EOR is that the remaining oil often is located in regions of the reservoir that are difficult to access, and the oil is held in the pores by capillary pressure.

Using EOR, 30-60 percent, or more, of the reservoir's original oil may be extracted compared with 20-40 percent using primary and secondary recovery.

At Sleipner and In Salah carbon dioxide, removed from produced natural gas as part of purification prior to gas export, is simply injected back into an underground reservoir for sequestration.

A fifth CCS commercial operation in Denmark was recently postponed by Vattenfall until “the technology becomes commercial.” The company said it would instead focus its resources on the CCS demonstration plant in Germany, in hopes that it can take advantage of the “foreseen fast development of capture technologies” that will come from the plant in Germany and other CCS sites around the world.

IEA: requires additional investment of over US$3 trillion

The biggest impediment to a commercial CCS development is the high cost of building and operating the various components of a CCS system, Diane Shellenbaum, a petroleum geophysicist with Alaska’s Division of Oil and Gas and a member of a state team investigating options for reducing carbon dioxide emissions from Alaska, told Greening of Oil in mid-January.

At Weyburn and Rangely, the value gained from carbon dioxide enhanced oil recovery pays for the CCS costs; at Sleipner, where carbon dioxide has to be removed from produced gas regardless of whether the gas is sequestered or vented to the atmosphere, the cost of storage is presumably offset by savings in Norwegian carbon emissions taxes.

An operational CCS system at a power plant, for example, will significantly increase the cost of power—according to a 2005 report by the Intergovernmental Panel on Climate Change, CCS may increase the cost of electricity by anywhere from 21 to 91 percent, depending on the type of power generation technology involved. Consequently, there’s no real way of making CCS technology that is available today financially viable without some form of carbon tax, carbon cap-and-trade system or enhanced oil recovery application to offset the costs, Shellenbaum said.

Nobuno Tanaka, head of IEA, says without CCS, CO2 emissions cannot be substantially reduced.

And although IEA calls CCS the lowest-cost technology to reduce CO2 emissions, the agency’s key findings said its CO2 roadmap “requires an additional investment of over US$2.5 trillion-3 trillion from 2010 to 2050. … Governments in the Organisation of Economic Co-operation and Development, whose 30 member countries are listed in an editor’s note at the bottom of this article, will need to increase funding for CCS demonstration projects to an average annual level of US$3.5 billion-4 billion from 2010 to 2020. In addition, mechanisms need to be established to incentivize commercialisation beyond 2020 in the form of mandates, GHG reduction incentives, tax rebates or other financing mechanisms.”

An executive vice president at Norway’s Statoil, operator of the Sleipner and In Salah CCS plants, said he sees no alternative to CCS technology.

“CCS has to be part of the climate battle. What is the alternative?” Executive Vice President Jon Arnt Jacobsen told reporters in May on a visit to an experimental CO2 capture project at Statoil’s biggest oil refinery at Mongstad on Norway's North Sea coast.

And although the developed world must lead the CCS effort in the next decade, IEA said CCS technology “must also spread rapidly to the developing world. This growth will require expanded international collaboration and financing for CCS demonstration in developing countries at an average annual level of US$1.5 to 2.5 billion from 2010 to 2020. To provide this funding, CCS needs to be approved in the (Kyoto Protocol’s) Clean Development Mechanism or an alternative financing mechanism.”

Four components to CCS

In general, a CCS implementation involves four distinct components: capturing the carbon dioxide; dehydrating and transporting the carbon dioxide to the sequestration, or storage, site; compressing and injecting the carbon dioxide into storage; and monitoring what happens to the sequestered carbon dioxide, Shellenbaum said.

Because produced gas can naturally contain some carbon dioxide, an initial step in carbon dioxide capture, the first of the CCS components, may be fuel gas treatment, as at Sleipner in the North Sea and In Salah in Algeria. Then, in a situation where carbon dioxide is captured from a power plant, one option is to process the fossil fuel into hydrogen, to use as fuel for the plant, and carbon dioxide for sequestration. Alternatively, carbon dioxide can be scrubbed from the flue gas after combustion using a chemical fluid such as amine. Another possibility in a power station is to use oxygen rather than air in the fuel combustion process, thus producing an exhaust containing carbon dioxide and water, from which the water can be condensed to leave a carbon dioxide-rich gas stream. 

Stored as liquid

If the carbon capture site is far away from the carbon sequestration site, the carbon dioxide must be shipped by pipeline or road tanker between the two sites. Then, for storage, the carbon dioxide would be compressed for injection down a well into a suitable rock formation to a depth in excess of perhaps 2,500 to 3,000 feet, where pressures and temperatures would cause the carbon dioxide to remain stable as a liquid, Shellenbaum said.

Storing the carbon dioxide as a liquid rather than as a gas greatly reduces the volume of rock required for storage while also reducing the likelihood of the sequestered material escaping from the reservoir, Shellenbaum explained. And, like oil, liquid carbon dioxide tends to float above water in a reservoir, she said.

Then, over time, the carbon dioxide may dissolve in the water, to form a relatively heavy liquid that sinks.

“Ideally that’s what you’d like for long-term storage,” Shellenbaum said. Or, better still, the carbon may react chemically with material in the reservoir to become a solid mineral, she said.

However, a key to successful underground sequestration is the location of a suitable impervious rock that will seal the carbon dioxide into an underlying reservoir rock—for successful carbon storage, carbon dioxide needs to remain trapped underground for perhaps thousands of years, thus rendering a storage reservoir with even quite slow leakage somewhat worthless.

Depleted oil and gas field first choice for storage

Given the importance of having an effective seal rock in a situation that can form a fluid trap, the usual first choice for carbon dioxide storage is a depleted oil or gas field, thanks to the fact that the properties of the field reservoir and seal rocks will already be well established.

Shellenbaum said that trying to develop a storage facility at some new site would require an exploration project, involving the determination of underground structures and rock properties—this type of investigation is one of the impediments to the commercialization of its postponed Denmark plant, Vattenfall said.

“Geological investigations are required before a formation could be opened up for CO2 storage—especially safety criteria have to be proven. We hope to re-start the geological investigations in 2011-2012,” said Erland Christensen, head of Vattenfall’s business unit Heat Nordic.

Where a power plant is located far from existing oil and gas fields, as is the situation for some coal-fired power plants in the Lower 48, Shellenbaum said it will be necessary to explore for a suitable carbon dioxide reservoir or build a carbon dioxide pipeline.

In this type of situation deep, well-sealed reservoirs containing brine are likely candidates, in part because this type of reservoir will avoid contamination of potable water that might be tapped by water wells. Other possibilities being investigated include fractured volcanic rocks, where the carbon dioxide may react with the rock material to form solid minerals.

Once a CCS system starts operating it will probably be necessary to use techniques such as seismic or gravity surveys to monitor what happens to the carbon dioxide in the underground reservoir, both to verify that the reservoir is not leaking and to track the migration of the carbon dioxide within the reservoir.

Tracking the migration of the carbon dioxide will be important because of the possibility of the material migrating from the originally intended reservoir location into a new reservoir site, perhaps subject to some different subsurface land ownership rights, Shellenbaum explained.

Lack of regulation makes for risky commercial investment

And the various complications that will be inherent in any CCS arrangement will require government regulations, regulations that do not currently exist in the United States but which the Environmental Protection Agency is currently developing, Shellenbaum said, noting that EPA’s proposed rule for underground injection regulations has been released for public comment (see link near the end of this article).

Lack of regulations would impede the development of a commercial CCS project, in part because of the risk of environmental lawsuits, she said.

“There are still a lot of unknowns,” Shellenbaum said. “I wouldn’t think anyone (companies) would take the risk.”

Statoil agrees.

“We don't know what the regulatory environment will be going forward—that is why nobody (in industry) is doing CCS on their own. Governments have to take the lead to get this going and get a framework to make CCS realistic over time,” Statoil’s Jacobsen said.

In its key findings IEA acknowledged “a need to develop near-term regulatory approaches to facilitate CCS demonstration efforts, while working at the same time to develop comprehensive approaches for the large-scale commercial deployment of CCS.”

In the current regulatory and fiscal environment “commercial power plants and industrial facilities will not invest in CCS because it reduces efficiency, adds cost and lowers energy output,” IEA said in its first roadmap. “While some regions have enacted carbon regulations that create a price for CO2, the benefits of reducing emissions are not yet sufficient to outweigh the costs of deploying CCS. As a result, there is a need to fund near-term demonstration projects and to also provide additional financial incentives for CCS in the medium- to long-term.”

Governments are already addressing the demonstration funding gap, the agency said, “as indicated by a strong increase in announcements of funding for such projects in the past year.”

Links of interest

IEA’s Dec. 14, 2009 press release

IEA’s “Technology Roadmap, Carbon capture and storage”

Organisation of Economic Co-operation and Development

Kyoto Protocol’s Clean Development Mechanism

EPA’s proposed rule for underground injection regulations

Editor’s note: The 30 member countries of OECD are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

Contact Alan Bailey and Kay Cashman at publisher@greeningofoil.com