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Challenges to the Development and Commercialization of CCS

Challenges to the Development and Commercialization of CCS. Cheyenne A. Alabanzas 2009 ASME Intern University of Alaska – Anchorage. Overview. Premise What is CCS? Current projects Challenges Conclusion Recommendations Questions. Importance of Coal in the US. Cheap

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Challenges to the Development and Commercialization of CCS

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  1. Challenges to the Development and Commercialization of CCS Cheyenne A. Alabanzas 2009 ASME Intern University of Alaska – Anchorage

  2. Overview • Premise • What is CCS? • Current projects • Challenges • Conclusion • Recommendations • Questions

  3. Importance of Coal in the US • Cheap Price per kWh, as of April 2009: • Abundant • US has recoverable reserves of 262 billion short tons • At current rate of consumption, coal will be an energy source for the next 250 years. Derived from EIA website, http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

  4. Importance of Coal in the US • Coal provides about 50% of the nation’s electricity. Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through April, 2009 Source: Energy Information Administration, http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

  5. The need for CCS • Coal is a dirty fuel. • 80% of US greenhouse gas emissions come from coal and petroleum fuels. • US recognizes the need to cut carbon emissions by mid-century.

  6. What is CCS? • Carbon Capture and Storage (or Sequestration) is a broad term for technologies involving three main steps: • capturing the CO2 from the combustion of fossil fuels at stationary sources • transporting it to the storage site and, • storing it underground in geological formations. 

  7. Source: Japan Exploration Company, Ltd., http://www.japex.co.jp/english/images/technology/gainen.jpg

  8. Current commercial projects • Sleipner (Norway) • Started in 1996 after Norway implemented carbon taxes • ~12 million metric tons of CO2 injected • No leakage detected • Snohvit, Weyburn, In Shalah • Small pilot demonstration projects around the world Source: World Coal Institute, http://www.worldcoal.org/carbon-capture-storage/

  9. Status of CCS • Congress has recognized the need for more CCS R & D in the US. • The technologies to capture, transport and store CO2 exist.

  10. What’s next? • Why isn’t there a large-scale demonstration project that integrates all of these? • Scale of CCS is at the gigaton.

  11. Challenges to CCS deployment • No national strategy to regulate GHG emissions • High cost for installing CCS technology • Uncertainty in how to address CO2 under existing statutes • Ensuring safety and security of CO2 storage • Long-term liability and monitoring

  12. Regulating GHG Emissions • No cap-and-trade or carbon tax for GHG emissions • Some portfolio standards are technology restrictive.

  13. High cost of CCS • Estimated cost of one large-scale project is $1 billion per year. • Capture is the most expensive component due to the energy penalty. • Increases cost of electricity by 2 – 7 cents per kWh. Current average cost for US: 9.7 cents per kWh • No price on carbon + high cost of CCS = companies reluctant to invest in an “unproven” technology

  14. CO2: Pollutant, Waste or Commodity?

  15. Underground Storage • Potential leakage into the atmosphere • Ensure safety and security of stored CO2 • Groundwater sources protection • Pore space ownership

  16. Long term liability Life cycle of geological sequestration: Who monitors? For how long? Who is financially responsible for potential damages?

  17. Conclusions • Regulatory framework is needed in order to encourage the development of CCS. • CCS is expensive. Cooperation between government & private industry is needed. • CCS has the potential to be part of the energy mix in climate change mitigation in the United States.

  18. Recommendations • Implement a national strategy that regulates GHG emissions. • Cap-and-trade or carbon tax • Emissions performance standards for stationary sources instead of renewable portfolio standards • Build large-scale demonstrations that integrate all CCS components. • Continue R & D support for capture technologies and sequestration • Proper project financing for early movers through loan guarantees and federal sequestration tax credits

  19. Recommendations • Develop environmental regulations that specifically address captured CO2. • Address issues that fall under EPA’s authority. • State participation will be key in developing regulations and oversight programs. • Create indemnification program for long-term liability issues related to CCS. • Create a CCS trust fund. • Address transfer of responsibility regulations.

  20. Questions?

  21. Thank you! Acknowledgements Melissa Carl Robert Rains Dan Deckler Erica Wissolik ASME Staff Fellow WISE Interns

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