Response to Daniel Ziskin's Essay on Carbon Capture & Sequestration

Peter FairleyArticles, Climate, Energy, Original

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No single solution or technology will solve climate change. The problem looms so large that we should think not twice, but three or four times, before we take any solutions off the table. Yet this is exactly what Daniel Ziskin seems to advocate in his essay, Carbon Capture & Sequestration: How Hopeful Should We Be?
Ziskin’s analysis of carbon capture and storage (CCS) is not particularly hopeful. He suggests that CCS represents, at best, a missed opportunity to reduce carbon dioxide emissions via less expensive means. This pessimism stems from two key misperceptions, the notion that CCS is something new, and the idea that it is untested, plus an incomplete view of coal-fired power’s economics.Right now dozens of industrial operations on at least three continents sequester post-industrial anthropogenic CO2 today. And at all of sites studied to date, it is proving effective in keeping that CO2 out of the atmosphere. There is every reason to believe that CCS can prove just as effective a response to anthropogenic climate change on a massive scale. Given the dirt-cheap price of coal, it might even prove an economic winner.


Here Today: From Dakota Gasification to Blue SourceImage of a CO2 Pipeline

CCS is not science fiction. It has been a fact on the ground (or rather underground) for several decades. Only recently, however, has news of it surfaced from the arcane world of oil and gas ‘production’. Millions of tons of anthropogenic carbon are being stored today in active oil wells and saline aquifers. The CCS story begins in West Texas oilfields in the early 1960s when Shell Oil began testing a new method for stimulating production from maturing wells. Pumping water into the wells showed declining returns, so Shell engineers and geologists tried pumping in high-pressure CO2 gas instead to both maintain well pressure and simultaneously reduce the oil’s viscosity. Positive results from Shell’s pilot projects inspired a larger experiment in the 1970s, a joint venture project that was, at the time, among the largest in the history of the petroleum industry. The project captured CO2 from a natural gas processing plant and piped it 175 miles for injection into Chevron’s aging Kelly-Snyder oilfield. The payoff was swift and large: after 18 months of CO2 injection the field’s production had more than tripled, from 30,000 barrels of oil per day to over 100,000 barrels per day (see Landmark CO2 injection project paying off at SACROC, Petroleum Engineering 1974). When CO2-enhanced oil recovery or EOR went mainstream in the 1980s most operators shifted from anthropogenic CO2 to a cheaper, readier source of CO2: natural domes of pure CO2 in the Four Corners region with names such as Bravo Dome, McElmo Dome and Alkali Gulch. By 2005, 2,400 kilometers of CO2 pipelines crisscrossed the southwest’s major oil and gas formation, the Permian Basin, supplying roughly 70 oilfields; in sum the Basin had absorbed 380 MM metric tons of CO2, of which about 30 MM tons was anthropogenic (see Development of Enhanced Oil Recovery: The U.S. Permian Basin, Westminster Energy Forum 2005).While EOR’s primary goal is bringing more oil up rather than keeping CO2 down, the cost of capturing and transporting CO2 provides strong incentive for oil producers to keep track of it. When CO2 comes up with oil it is typically stripped off and re-injected. (We’ll come back to whether EOR equals effective storage of CO2.) Another form of CCS in operation today is sequestration of CO2 from natural gas production in saline aquifers. The largest example is Norwegian oil and gas producer Statoil’s Sleipner offshore gas operation in the North Sea. Statoil incorporated CCS into its design for Sleipner after Norway instituted a $55/m.t. tax on CO2 emissions in the early 1990s. Since 1996, when the equipment started up, Statoil has injected 1 million m.t. of CO2 per year into a saline aquifer one kilometer below the sea bed. Image of tanks inside a carbon storage area.
Concern over releases of sour-gas, a mix of sulphurous gases and CO2 from natural gas wells, has since prompted gas producers in North America to create similar but much smaller CCS projects pumping CO2 into saline aquifers. Acid gas has been injected at no less than 45 sites in Western Canada alone since 1990. On average 60% of this sour-gas is CO2, according to Canadian energy economist and energy systems modeler Mark Jaccard (See Jaccard’s Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy, Cambridge University Press 2005, p. 201).CCS Works I agree with Ziskin that there is a need for further research to demonstrate definitively that CO2 injected into oil wells and saline aquifers will stay put. CO2 escaping from CCS sites could cause not only backsliding on CO2 emissions reductions but also, if rapid and large enough, threaten populations near the leak with asphyxiation. We need to look as well for the unanticipated consequences that all too often accompany technological innovation as it is pushed to large scale. Yet scientific due diligence is well underway and has yet to turn up any show-stoppers for CCS. Ziskin notes that most of the CCS studies “have begun only in the last year or two” but ignores evidence from longer term projects such as Sleipner. Since 1999 the International Energy Agency has financed studies of an equally large U.S./Canadian EOR project using anthropogenic CO2, whereby oilfields around Weyburn, Saskatchewan sequester CO2 from a North Dakota plant producing natural gas from coal. So far so good: the CO2 is behaving as expected. The IPCC examined these two long-term projects and also the broader experience with EOR and concluded in a 2005 special report that CCS at large-scale can be as reliable and safe as EOR and sour gas disposal:“With appropriate site selection based on available subsurface information, a monitoring programme to detect problems, a regulatory system and the appropriate use of remediation methods to stop or control CO2 releases if they arise, the local health, safety and environment risks of geological storage would be comparable to the risks of current activities such as natural gas storage, EOR and deep underground disposal of acid gas.”The IPCC’s bottom line on the effectiveness of CCS as a long term repository is equally positive: “If CO2 is injected into suitable saline formations or oil or gas fields, at depths below 800m, various physical and geochemical trapping mechanisms would prevent it from migrating to the surface.” As with climate change and evolution, continued expert debate should not be misperceived as a questioning of the fundamental premise of CCS. For example, MIT’s The Future of Coal report, issued in March, says a higher level of modeling, monitoring and verification at large-scale CCS projects worldwide would be prudent to validate CCS across the full range of geologies likely to be used. Nevertheless the report’s authors express a high degree of confidence in CCS. “What we need these demonstrations for is so that we can move up in scale,” explains Howard Herzog, Research Engineer with MIT’s Laboratory for Energy and the Environment. “There is no doubt we can sequester CO2 at the megaton scale today. What we really want to do is to get to the gigaton scale. That’s the whole thrust of our report. If you want to do hundreds of these projects you maybe want to have a little more basis in how to write the regulations.”Quote 2Worth The Risk and Cost?CCS may be technically feasible, but is it worth the trouble? Ziskin concludes that it may be a distraction from potentially cheaper solutions such as greater energy efficiency and renewable energy. I draw a different conclusion based, in part on a broader definition of CCS and in part on a more pragmatic view of economics.Ziskin notes that CCS could “legitimately” encompass a variety of carbon management methods, but explicitly chooses to, “define the term narrowly to mean capturing the emissions from burning coal at power generation plants and preventing their release into the atmosphere.” As many of the existing CCS projects show, this definition is too narrow. In 2005, natural gas processing plants released 21,736,000 tons of CO2 (see INVENTORY OF U.S. GREENHOUSE GAS EMISSIONS AND SINKS: 1990-2005, EPA 2007). More is on the way as high natural gas prices push producers to develop less methane-rich deposits of natural gas. “I think people are about to be stunned by the amount of CO2 produced from natural gas treating,” says Bill Townsend, CEO of Blue Source, the leading U.S. supplier of carbon credits; Blue Source is already verifying and selling offsets from EOR-based CCS using CO2 from natural gas processing. Other major point sources releasing similarly-concentrated CO2 (and thus equally low-hanging fruit for CCS) include fertilizer plants, cement facilities and refineries. Coal power plants are the largest and one of the toughest point-sources for CCS because, as currently operated, they burn coal in air and thus produce a flue-gas in which CO2 is diluted by nitrogen gas. This increases the cost of carbon-capture equipment and their operation. Ziskin writes that “The cost of electricity with CCS applied is estimated to be about 50% higher than conventional power generation (where emissions are “dumped” into the air).” He may be right, but it will take more than that to wipe out coal. Image of livestock in front of wind farms.According to a recent analysis by the National Environmental Technology Labs, for example, building and operating the equipment needed for CCS on a new coal-fired generator would add about 44% to the cost of the electricity delivered, increasing the estimated cost of power from a new coal generator from 4.98 cents/kilowatt-hour to 7.2 cents/kWh. That includes the cost of building and operating Integrated Gasification Combined Cycle power plants that produce concentrated, capture-ready CO2; transporting CO2 to a storage site; and monitoring the si
for 100 years. For context, consider that the average price of electricity in the U.S. is about 10 cents/kWh in the U.S., leaving plenty of room for profit for these ultraclean coal plants. There’s even more headroom in places like California and New England where average power costs exceed 14 cents/kWh.MIT’s study provides similar context. It estimates that coal with CCS will be cost-competitive with conventional coal power when emitting a ton of carbon costs $30 or more through carbon cap-and-trade programs or if a carbon tax is implemented. European carbon markets are currently paying on the order of €20 ($29) per ton of carbon.

That is a hopeful sign for coal, and in a pragmatic view that means it is a hopeful sign for action on climate change. The coal-fired utilities that provide 50% of U.S. electricity, and the coal companies and miners that supply them, are presently a force against climate change action in the U.S. Give them a place in the energy system of the future, and they might just get on the right side of the fight.