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The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast with pure CO2-EOR flood

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The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast with pure CO2-EOR flood
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Abstract
This letter compares several bounding cases for understanding the economic viability of capturing large quantities of anthropogenic CO2 from coal-fired power generators within the Electric Reliability Council of Texas electric grid and using it for pure CO2 enhanced oil recovery (EOR) in the onshore coastal region of Texas along the Gulf of Mexico. All captured CO2 in excess of that needed for EOR is sequestered in saline formations at the same geographic locations as the oil reservoirs but at a different depth. We analyze the extraction of oil from the same set of ten reservoirs within 20- and five-year time frames to describe how the scale of the carbon dioxide capture, utilization, and storage (CCUS) network changes to meet the rate of CO2 demand for oil recovery. Our analysis shows that there is a negative system-wide net present value (NPV) for all modeled scenarios. The system comes close to breakeven economics when capturing CO2 from three coal-fired power plants to produce oil via CO2-EOR over 20 years and assuming no CO2 emissions penalty. The NPV drops when we consider a larger network to produce oil more quickly (21 coal-fired generators with CO2 capture to produce 80% of the oil within five years). Upon applying a CO2 emissions penalty of 60$2009/tCO2 to fossil fuel emissions to ensure that coal-fired power plants with CO2 capture remain in baseload operation, the system economics drop significantly. We show near profitability for the cash flow of the EOR operations only; however, this situation requires relatively cheap electricity prices during operation.
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Transkript: Englisch(automatisch erzeugt)
This abstract describes a paper entitled the system-wide economics of a carbon dioxide capture utilization and storage network in the context of the Texas Gulf Coast. First, what is carbon capture utilization and storage or CCUS? The CC refers to capturing CO2 emissions from the combustion process.
In our case, this is capturing CO2 from coal-fired power plants in Texas. U refers to utilization. In our case, this is utilization of the captured CO2 for enhanced oil recovery or EOR. S refers to storage. Any captured CO2 that is not used for enhanced oil recovery is assumed stored in saline reservoirs.
The analysis is framed by using four different scenarios defined by two parameters, the rate of oil field development and an emissions penalty or price on CO2 emissions. I'll describe first the two different rates of oil field development. This graph shows the amount of CO2 delivery needed per year at each oil field for the slow scenarios.
The top line in the chart shows the total amount of CO2 needed for delivery to all 10 oil fields. The scenario is defined by the near constant delivery of CO2 between 10 and 12 million tons of CO2 per year. To create this constant demand of CO2, the oil production is phased over the course of the 20-year analysis.
The slow scenario is meant to approximate an ideal situation for a coal-fired power plant operator that invests in CO2 capture technology and wants to assure that there is demand for all of the captured CO2 each year. The fast scenarios are meant to be an extreme case where the oil is produced as fast as possible instead of in a sequence of phases.
The vast majority of the CO2 needs occur in the first five years of operation with over 50 million tons of CO2 needed in years one and two. After year five, less than 15 million tons per year are needed for delivery to EOR fields. The second parameter that characterizes the scenarios is whether or not there is an economic penalty on CO2 emissions from coal and natural gas used for electricity generation as well as the oil that is eventually burned as transportation fuels.
Scenarios two and four assume an emissions penalty on CO2. Scenarios one and three assume no emissions penalty. We set the CO2 emissions penalty price at $60 per ton of CO2 to assure that coal-fired power plants are dispatched as baseload in the ERCOT or Texas electric market.
Because we assume what we call a pure CO2 flood for enhanced oil recovery, there is a net quantity of CO2 injected into the subsurface relative to CO2 emissions from the set of power plants with CO2 capture and produced oil. The pure CO2 flood uses more CO2 than most EOR operations that alternate periods of injecting water and CO2.
Over the course of 20 years, the slow scenarios store a net of 66 million tons of CO2 in the subsurface at a cost of $7 to $25 per ton, while the fast scenarios store over 1,000 million tons of CO2 at a cost of $7 to $18 per ton. In all scenarios, the net present value, or NPV, is negative, meaning that the system overall does not
make enough money for electricity and oil sales to offset the cost of installing and operating the CO2 infrastructure. Electricity needs are significant for EOR and saline storage operations, thus we calculate the NPV while assuming a low, medium, and high electricity price for operating pumps and compression systems during EOR and CO2 storage.
The slow scenario economics are relatively close to break even, the fast scenarios are significantly less economic even without a CO2 emissions penalty because of the much larger capital investment. Even though we constructed four main scenarios, six lines are shown as we calculate the net present value of the emissions penalty scenarios considering emissions from EOR oil production as included or excluded from the imposed $60 per ton price.
Including penalties on oil emissions lowers the net present value by $2.5 billion for the slow scenarios and $5 billion for the fast scenarios. We thank the sponsor for this research, Dr. Susan Hovorka and the Gulf Coast Carbon Center at the University of Texas at Austin, Bureau of Economic Geology.