Market Considerations and Opportunities for CCS/CCUS and CO 2 EOR Storage Michael E. Moore VP Energy Commodities and Advisory Services FearnOil Inc. a division of Astrup-Fearnleys Executive Director (2007-2017) North American Carbon Capture Storage Association (NACCSA 2007-2017) 2017 Taiwan-US International CCS Conference Taipei, Taiwan April 18, 2017
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Market Considerations and Opportunities for CCS/CCUS
and CO2 EOR Storage Michael E. Moore
VP Energy Commodities and Advisory ServicesFearnOil Inc. a division of Astrup-Fearnleys
Executive Director (2007-2017)North American Carbon Capture Storage Association (NACCSA 2007-2017)
2017 Taiwan-US International CCS ConferenceTaipei, Taiwan
April 18, 2017
Topics
• Market Considerations
• Fossil Fuels at Risk and Why CCUS/CCS/CCU Matters
• CCUS/CCS/CCU and Geologic Sequestration-How to Manage CCUS Projects
• Feed-stocks: natural gas, natural gas liquids, petrochemicals
• Imports
Considerations
• Keeping value in face of decarbonization• Developing carbon markets via carbon pricing• Future international issues around LCA on resource supply
and added value resources• Shareholder value preservation• Adding “low carbon” oil reserves• Making “low carbon” fossil fuels for the market• Augmenting rate base capacity to pay• Monetization of existing fossil fuels resources,
infrastructure and processes• Funding for future fossil fuels resources, infrastructure and
processes• Policy parity for all clean energy (not just renewables)• Tax credits expansion and Private Activity Bonds
CCUS/CCS/CCU Projects and How to Manage Them
CCUS/CCS/CCU Projects and How to Manage Them
• Different project opportunity areas:– Carbon capture utilization storage (CCUS)
– Carbon capture storage (CCS)
– Carbon capture utilization (CCU)
• CO2-emissions and commodity CO2
– Natural CO2-from formations like natural gas
– Anthropogenic CO2-captured from processes
– Biogenic CO2-from ethanol production
CO2 Capture Projects
Mississippi Power Kemper IGCC Projecthttp://www.mississippipower.com/kemper/docs/Q4_2013KemperProgressReport.pdf
• 582-megawatt integrated gasification combined-cycle (IGCC) power plant in Kemper County uses lignite
• ~98% complete-only commercial scale CCUS power project in the US• CO2 going for EOR and utilization• Visited on January 22nd 2015 the power block was operational and running delivering
power to the grid in Mississippi-• Both gasifiers now running in test mode
NRG/Petra Nova WA Parish Carbon Capture Utilization Project
• Company/Alliance: Petra Nova Holdings: a 50/50 partnership between NRG Energy and JX Nippon Oil & Gas Exploration Corp.
• Location: Unit 8, W.A. Parish plant, Thompsons, 60KM from Houston, Texas, USA
• Feedstock: Coal• Size: 250 MW slip stream from 610 MW unit. • Capture: 1.4 Mt of CO2 / year (90% capture)• Capture Technology: Post-combustion: KM-CDR
amine scrubbing CO2 (MHI and KEPCO)• CO2 Fate: 82 mile pipeline for onshore EOR in West
Ranch Oil Field in Jackson County, Texas • Timing: Project started at the end of 2016 Ribbon
*In June, 2016, Air Products announced that it had successfully captured more than three million metric tons of CO2 at Port Arthur after 3 1/2 years of operation.
• The National Risk Assessment Partnership (NRAP) — an initiative within DOE’s Office of Fossil Energy and led by the National Energy Technology Laboratory—applies DOE’s core competency in science-based prediction for engineered–natural systems to the long-term storage of carbon dioxide (CO2). The science-based prediction of engineered–natural systems is a core competency that cross cuts many of today’s energy challenges. Over decades, DOE has built a unique set of resources for predicting how these complex and heterogeneous systems behave under extreme conditions and over large ranges in time.
• Now into Phase 2https://www.netl.doe.gov/research/coal/crosscutting/national-risk-assessment-partnership
CCUS/CCS/CCU & Geologic Sequestration -How to Manage: Tools
How to Manage: Location NETL’s 2015 Carbon Storage Atlas Shows
Increase in U.S. CO2 Storage Potential
• The U.S. Department of Energy’s (DOE) National Energy Technology Laboratory (NETL) today released the fifth edition of the Carbon Storage Atlas (Atlas V), which shows prospective carbon dioxide (CO2) storage resources of at least 2,600 billion metric tons – an increase over the findings of the 2012 Atlas.
• Atlas V is a coordinated update of carbon storage resources, activities, and large-scale field projects in the United States. It showcases the progress that NETL scientists and engineers have made with their partners toward wide-scale deployment of carbon storage technologies. It also underscores the importance of the research partnerships and projects that are increasing our understanding of safe, permanent geologic storage of CO2.
• Atlas V highlights potential CO2 storage resources in saline formations, oil and natural gas reservoirs, and unmineable coal seams. This edition also presents a detailed look at the Regional Carbon Sequestration Partnership Initiative’s large-scale field projects. These large-scale field projects are uniquely tailored to address technical and non-technical challenges within their respective regions, an approach which has proved to be highly effective.
• Source: The CO2-EOR Oil Recovery and CO2 Utilization “Prize”. Prepared for: Global Technology Exchange Session: Subsurface and EOR Task Area Challenge• Prepared By: Mr. Vello A. Kuuskraa, President, Advanced Resources International, Inc.• April 2014
CO2-EOR Operations and CO2 Sources (2014)
Residual Oil Zone (“ROZ”) Four Counties >100 billion Bbls Oil in Place
• DOE sponsored four county assessments (Dec 2014, 2016)
• > 100 billion barrels of oil in-place in the ROZ “Fairway”
• Work required to establish recoverability, economic feasibility and CO2requirements.
• Follow on study of additional 10 counties initiated.
• So far ROZ also present in: Saudi Arabia, North Sea, Wyoming.
Next Frontier for CO2-EOR –Shale Oil/Bakken---and Globally?
31Source: EERC presentations 2014
US Shale Plays - Unconventional Oil &Gas
Basins with Assessed Shale Oil and Shale Gas Formations (May 2013)
Source: Technically Re coverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States EIA June 13th 2013
Project Drivers and Supportive Efforts
Six Oil and Gas Majors Call for Carbon Pricing June 1, 2015
• Major oil and gas companies BG Group plc, BP plc, Eni S.p.A., Royal Dutch Shell plc, Statoil ASA and Total SA, today announced their call to governments around the world and to the United Nations Framework Convention on Climate Change (UNFCCC) to introduce carbon pricing systems and create clear, stable, ambitious policy frameworks that could eventually connect national systems. These would reduce uncertainty and encourage the most cost effective ways of reducing carbon emissions widely.
• The six companies set out their position in a joint letter from their chief executives to the UNFCCC Executive Secretary and the President of the COP21. This comes ahead of the UNFCCC’s COP21 climate meetings in Paris this December.
• With this unprecedented joint initiative, the companies recognise both the importance of the climate challenge and the importance of energy to human life and well-being.
• November 7th 2013'Unburnable' carbon fuels investment concerns-Investors group with €7.3tn of assets asks energy giants about their exposure and response to the risk of falling demand for oil and coal. http://www.theguardian.com/sustainable-business/unburnable-carbon-investment-agenda
• June 12th 2013 Obama Quietly Raises 'Carbon Price' as Costs to Climate Increase. The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations. The figure is meant to approximate losses from global warming such as flood damage and diminished crops. http://www.bloomberg.com/news/2013-06-12/tougher-regulations-seen-from-obama-change-in-carbon-cost.html
Norway Confirms $900bn Sovereign Wealth Fund's Major Coal Divestment
May 27th, 2015 • The decision to divest Norway’s $945m fund from coal assets was made on 27 May, when an agreement
between political parties was reached. It was formally passed by a parliamentary vote on Friday. Svein Flaatten, of the governing Conservative party, said coal investments were both a global warming risk and financial risk. A global deal to cut carbon emissions at a crunch UN summit in December could leave some fossil fuel reserves unburnable and worthless.
• Norway’s parliament has formally endorsed the move to sell off coal investments from its $900bn sovereign wealth fund, the world’s biggest.
• It is the largest fossil fuel divestment yet, affecting 122 companies across the world, and marking a new success for the fast-growing and UN-backed climate change campaign.
• A new analysis said the fund would sell off over $8bn (£5bn) of coal-related investments as a result.• The biggest single sell-off from Norway’s fund will be the UK utility SSE, in which the fund holds $956m of
shares. The fund is also set to sell its $49m stake in Drax, which runs the UK’s biggest coal-fired power station.
• Other major energy companies identified in the analysis by German and Norwegian NGOs are Germany’s E.ON ($685m) and RWE ($320m) and the Danish company Dong ($30m), which is often associated with wind energy but has a significant coal business.
• Sweden’s Vattenfall and Italy’s Enel are also set to be affected by the coal ban as are 35 groups in the US, including Duke Energy ($434m). A dozen coal-related companies on China are set to lose their Norwegian investment, as are eight in Japan and five in Australia.