The National Coal Council, which is an advisory arm of the U.S. Department of Energy, on Aug. 30 released a draft version of a new report that says there is a growing consensus among industry, the environmental community and governments that future CO2 emission reduction goals cannot be met by renewable energy alone and that carbon capture, utilization and storage will have to be deployed.
The report – “CO2 Building Blocks: Assessing CO2 Utilization Options” – that calls for support for RD&D and adoption of incentives to advanced CO2 utilization technologies. The report was approved by the NCC membership on Aug. 30 and will be finalized with supplemental comments by Sept. 9.
“There is a growing consensus among industry, the environmental community and governments that future CO2 reduction goals cannot be met by renewable energy sources alone,” said NCC Chair Mike Durham, founder of Soap Creek Energy. “CCUS technologies will have to be deployed to achieve climate objectives in the U.S. and globally and to insure a reliable power grid.”
The report assesses various geologic and non-geologic CO2 utilization options in the context of their economic opportunity and potential to incentivize deployment of CCUS technologies. In addition to CO2–EOR, geologic options include utilization of CO2 in natural gas shale formations, enhanced coal bed methane (ECBM), enhanced water recovery (EWR) and geothermal energy storage.
Non-geologic markets include production of inorganic carbonates and bicarbonates; plastics and polymers; organic and specialty chemicals; and agricultural fertilizers. These uses of CO2 are in the early stages of RD&D and represent smaller, more niche-based markets. They do have the potential, however, to “fix” CO2 molecules intact, akin to geologic storage. Utilization of CO2 for transportation fuels represents a significant opportunity in terms of market share and economic incentive.
Current U.S. policy favors geologic-based utilization pathways for Clean Air Act (CAA) compliance. U.S. law recognizes CO2–EOR and other geologic storage technologies as CAA compliance options; non-geologic technologies may be used only if EPA determines they are as effective as geologic storage. U.S. and international greenhouse gas (GHG) reduction objectives and timeframes further dictate the need to employ those CO2 utilization technologies that can be quickly commercialized at significant scale.
Despite the barriers to the near and intermediate-term employment of non-geologic CO2 utilization technologies, NCC recommends that further investments in these applications should be undertaken. On a case-by-case basis, deployment of a CO2 utilization technology may hold promise for turning an uneconomic project into an economic one.
“A broadly deployed mix of CO2 utilization technologies may also help to advance CCUS even incrementally,” said report chair Kipp Coddington, who is with the School of Energy Resources at the University of Wyoming. “CO2 utilization technologies do not need to provide full-scale carbon management solutions – although that would be ideal, of course. They only need to provide sufficient incentive to keep CCUS technologies moving forward.”
The report was requested by U.S. Secretary of Energy Ernest Moniz, following on the council’s recent report offering recommendations to create “policy parity” for CCS to achieve diverse energy policy objectives. The latest “CO2 Building Blocks” report re-emphasizes the council’s support for policies and incentives that commit the U.S. to the rapid deployment of CCUS technologies.
“Nearly every major energy forecast projects that fossil fuels will remain the world’s dominant primary energy source through mid-century and beyond,” said NCC Coal Policy Committee Chair Deck Slone of Arch Coal. “Given that fact, CCUS is an absolutely essential tool for addressing the climate challenge, as well as a means to ensure that the United States can make the most of its remarkable fossil fuel endowment in the future.”
Report breaks down CO2 technology research and deployment needs
“Advancing CCUS is not just about coal, nor is it just about fossil fuels generally,” says the draft report. “Rather, it is a sine qua non for achieving stabilization of greenhouse gas (GHG) concentrations in the atmosphere. Carbon dioxide enhanced oil recovery (CO2-EOR) represents the most immediate, highest value opportunity to utilize the greatest volumes of anthropogenic CO2, thereby incentivizing CCUS. Assuming a price for CO2 of $33/metric ton ($1.75/Mcf) delivered to the oil field at pressure and a $70 per barrel oil price, and using 0.45 metric tons of purchased (net) CO2 per barrel of recovered oil, utilization of CO2 for EOR results in a transfer of $14.90 of the $70 per barrel price to firms involved with capture and transport of CO2.
“The economic value is sensitive to the price of oil, of course, and will vary in response to oil market conditions. Policymakers should continue to focus on advancing geological storage options through support for research, development and demonstration (RD&D) and adoption of incentives. As part of Mission Innovation, the U.S. Department of Energy (DOE) should reinvigorate its RD&D program on advanced (‘next generation’) CO2-EOR technologies. Deployment of these advanced technologies could more than double the market for CO2 – from 11 billion MT with today’s technologies to 24 billion MT with next generation technologies.
“DOE should sponsor a full evaluation of the technically recoverable and economically viable domestic residual oil zone (ROZ) resource to more completely understand the market for CO2 from EOR. Regulatory impediments to the expansion of CO2-EOR should be reduced.
“Aside from CO2-EOR and other geologic pathways, research is underway on two general CO2 utilization pathways – breaking down the CO2 molecule by cleaving C=O bond(s) and incorporating the entire CO2 molecule into other chemical structures. The latter pathway holds relatively more promise as it requires less energy and tends to ‘fix’ the CO2 in a manner akin to geologic storage.
“Utilizing CO2 in non-geologic applications faces hurdles, including yet-to-be resolved issues associated with thermodynamics and kinetics involved in the successful reduction of CO2 to carbon products. Still, these technologies are worthy of continuing evaluation and many hold long-term potential in specific applications.
“There is benefit to establishing a technology review process that is as objective as possible to assess the benefits and challenges of different CO2 utilization technologies and products. Evaluation criteria fall into three broad categories: (1) environmental considerations; (2) technology/product status; and (3) market considerations. Collecting data on these evaluation criteria should be undertaken. Using the criteria, a technology ranking system which can then be used to prioritize candidates for RD&D and product investment should be developed.
“The extent to which CO2 utilization technologies may incentivize CCUS deployment is dependent on numerous policy and market factors. U.S. law recognizes CO2-EOR and other geologic storage technologies as compliance options; non-geologic technologies may be used only if EPA determines they are as effective as geologic storage.
“U.S. and international GHG reduction objectives and timeframes (2050) further dictate the need to employ CO2 utilization technologies that can be quickly commercialized at significant scale. CO2 utilization markets may not be well aligned with the regulatory or investment requirements of the power and industrial sectors. For example, a technology developer offering a utilization opportunity would likely require a return on investment in less than 10 years, while the plant owner would require a CO2 control technology that will allow the plant to operate for the remainder of its useful life – which may be another 40 years or more for a power plant.
“Additionally, an owner of a CO2-emitting facility must consider whether a CO2 user may discontinue the project due to bankruptcy, market changes or other reasons, leaving the facility owner without a viable regulatory compliance strategy. The array of potential bases for misalignment of needs highlights the fact that even if a CCU project is deemed economically viable, access to geological storage may be necessary to advance the project. In this way, CCU may be helpful to the deployment of a broader CCUS infrastructure by providing some revenue and also encouraging characterization and well permitting activities for geological CO2 storage.
“In sum, monetary, regulatory and policy investments in CO2 utilization technologies should be roughly prioritized from geologic to non-geologic, with exceptions made for any non-geologic technologies that are found to be as effective as geologic storage. To identify the most expeditious and impactful technology options, NCC suggests applying a reasonable market potential threshold of 35 MTPY, which is roughly equivalent to the annual CO2 emissions from about 6 GWe or a dozen 500 MWe coal-based power plants. Full GHG lifecycle assessments of CO2 utilization technologies should also be conducted with the assessments taking into account the incumbent products’ GHG emissions that the new technologies displace.”
Key recommendations from the study include:
- An expanded coalition of fossil fuel users and producers should collaborate to help develop and commercially deploy CCUS technologies on an accelerated time schedule.
- Efforts should be undertaken to build on the expanding consensus among industry, the environmental community and governments in support of deployment of CCUS technologies.
- Federal CCUS policy should continue to focus on encouraging geologic utilization and storage pathways, including but not limited to CO2-EOR.
- Some non-geologic CO2 utilization pathways nonetheless hold promise as niche opportunities, and research into them should be encouraged. Polymers with the potential to make use of the entire intact CO2 molecule are an example.
- CO2 utilization pathways that are both economic and that “fix” the CO2 in a manner akin to geologic storage should be prioritized from research and policy perspectives.
- Evaluation criteria should be used to gather information about and compare various CO2 utilization technologies.
- Collecting data on evaluation criteria – including environmental considerations, technology/product status, and market considerations – should be undertaken.
- Using the evaluation criteria, a technology ranking system which can then be used to prioritize candidates for RD&D and product investment should be developed.