Put It Underground: A Feasible Biden Plan For Fossil Energy Emissions – Except For The Cost.

Originally published on Forbes.com on December 29, 2020

The situation

Climate change afficionados want the oil and gas industry to shut down now. But the industry gurus say that’s unrealistic – the world will need oil-and-gas for decades. Is there a middle ground?

Here’s the reason for the fossil fuel debate: around two-thirds of all greenhouse gases (GHG) is CO2 produced by burning of fossil fuels. Flaring and leakage of methane, the second largest greenhouse gas, pushes this toward 70%. So the oil and gas industry sits right in the cross-hairs of climate change.

The big issue. How quickly can oil and gas companies lower emissions? Daniel Yergin, who knows a thing or two about the oil and gas industry, says it’s an $87 trillion economy and will take decades to changeover. Electricity generation is changing from coal to natural gas, but changing from gas to renewables is another huge step. Electrifying vehicles and engines will have serious delays, especially for semi-trailers, aviation and shipping.

BP’s Energy Outlook 2020 projects an aggressive changeover that will lead to 45% renewables, and 36% oil-and-gas by 2050. Less aggressive BP forecasts imply less than 45% renewables and more than 36% oil and gas. An independent company, DNV-GL, predicts 46% for oil-and-gas energies in 2050. Both predictions leave hefty amounts of oil and gas energy still being used by the year 2050.

The problem.

What’s needed is a “bridge” between current fossil fuel extraction and going totally renewable — and that’s why carbon capture and storage (CCS) needs to be understood.

Net-zero GHG emissions by 2050 is the most popular climate goal of companies, energy utilities, cities, states and countries. CCS is not a far-fetched idea, because it has been used for decades by the oil-and-gas industry, and has been studied extensively by the US Government (NETL). The method is practical, scalable, and can serve as a realistic counterweight to keep GHG at net-zero.

“To achieve net-zero emissions by 2050, it (CCS capacity) must increase more than a hundredfold by 2050. Stronger policy to incentivize rapid CCS investment is overdue,” the Global CCS Institute said.

Source: NETL, DOE.

Figure 1. CO2 storage estimates in North American oil and gas fields.

To put some numbers to support this case: The US emits GHG in the amount of 6 billion tons of CO2-equivalent per year. The NETL part of DOE estimated geological storage in oil and gas fields could be about 138 billion tons across the US (Figure 1), which is enough to bury all of the GHG for 23 years. Or it could bury half that amount over 46 years. Or a quarter of that amount over 92 years. There is plenty of storage capacity in the US to act as a counterweight to reach net-zero emissions by 2050 – and this is just oil and gas reservoirs!

But right now there’s no money to do it! Oil and gas companies, who know exactly how to inject and store the CO2, won’t do it for free. There has to be carbon pricing or tax incentives in the pot to get this program going. Biden has listed CO2 storage in his Climate Plan and maybe 2021 will see a real impetus for the program.

Catch and release — underground.

CO2 scrubbers are devices that remove CO2 from exhaust gases (flue gases) in power plants. The CO2 scrubbers feature some kind of chemical (often an amine compound) to absorb CO2, but it’s an expensive process.

Power plants are not the only emitters of CO2. Streams of CO2 from gas-processing plants, ethanol plants, or fertilizer plants can be captured more easily than power plant smokestacks because the CO2 concentration is higher. Other industries such as steel and cement manufacturing release CO2.   

The captured CO2 is then injected deep underground in shale layers or coal seams or saline aquifers. Ten large-scale CCS operations already exist in the USA.

One risk is that the CO2 leaks out of the storage layer, through faults or fissures in the caprock for example. But faults can be found by seismic processing, and fissures can be evaluated by testing the caprock in situ or on chunks of caprock in the lab. Over time, trapped CO2 will meld with the confining rock into inert chemical compounds.

One offshoot, called CCUS with U standing for utilization, is when CO2 is injected into old oil fields. This has been used for decades by oil-and-gas companies to recover residual oil in depleted reservoirs.

The Petra Nova power plant and carbon capture project was completed in 2017. Source: NRG

Figure 2. The Petra Nova power plant and carbon capture project was completed in 2017. Source: NRG

The rise and fall of Petra Nova.

Virtually all the CO2 was removed from the flue gas in Figure 2 and transported by pipeline to an injection well. The CO2 released more oil from the oil field, which went to market while the CO2 was recycled.

A well-kept secret is that typically 40% of the injected CO2 is permanently locked-in underground. It can dissolve in water down there or be squeezed into narrow gaps or pores inside the rocks, eventually mineralizing into a carbonate.

Petra Nova was a collaborative effort, with funding by DOE, to save coal power plants. The capture system in Figure 2 retained a ton of CO2 every seventeen seconds. That’s 17.5 thousand cubic feet (Mcfd) in 17 seconds or 89 million (MMcfd). That’s a lot — equivalent to natural gas production from nine big shale gas wells each making 10 MMcfd.

The CO2 was injected into a depleted oil reservoir where it softened up the residual oil and improved the flow, in a process called CO2-EOR (enhanced oil recovery). In Petra Nova, oil flow rate went from 300 to 4,000 barrels per day (bpd) — an impressive increase by thirteen times – and made money. But the entire CCUS scheme in Figure 2 could not make a profit when the price of oil dropped below $50/barrel.

$50/barrel is not a magic number. The economy of a CCUS project depends on many factors such as the depth and size of a reservoir, and its pressure and permeability.

Store GHG underground

There are two big advantages: First, North America has plenty of potential storage sites, as explained above. Second, if injected below 2600 ft (800 m), CO2 goes supercritical (i.e. behaves like a liquid) and it can be stored at much higher concentrations.

The CCS process has no associated oil production so its simpler but costlier at roughly $100/ton. Subsidies or tax incentives will have to be levied to make CCS attractive. In the US, tax credits of $50/ton for CCS or $35/ton for CCUS are available through tax code 45Q (but this ends in 2023).  

Robert Balch from New Mexico Tech is an expert on the subject. In the US, he says, more than 100 current CO2-EOR projects are located in the Permian Basin and Gulf Coast, but 96% of compatible sites are not under CO2 flooding because of dubious economics or lack of a CO2 source.  

Meanwhile an Exxon Mobil project in Wyoming injects CO2 from a gas plant into 14 CO2-EOR reservoirs. And six CO2 EOR projects in Oklahoma and north Texas inject CO2 obtained from ethanol, cement and fertilizer plants.

“Mature [oil] fields around the world are the best sites for storing the carbon promised by world leaders and formalized in the Paris Agreement. Approximately 100,000 new CO2 injection patterns are needed to store the required 20 billion metric tons of CO2 that governments are asking for by 2040,” says Balch.

In sum, CCS/CCUS is the most realistic method to get rid of GHG at the scale needed by the Paris Agreement. But the application of CCS/CCUS has been limited by a reliable local source of CO2 and by the economics. It is likely that regulation and carbon pricing on one hand, or subsidies and tax credits on the other hand, will be needed to induce widespread application of CCS/CCUS.

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