Two Imminent Energy Trainswrecks And a Proposal to Help Avoid Both

Transcription

1 Two Imminent Energy Trainswrecks And a Proposal to Help Avoid Both Robert H. Williams Carbon Capture Group Presentation at CMI Annual Meeting 20 February 2008

2 Acknowledgments This presentation is based in part on R. Williams, S. Consonni, G. Fiorese, and E. Larson, Synthetic Gasoline and Diesel from Coal and Mixed Prairie Grasses for a Carbon-Constrained World, Sixth Annual Conference on Carbon Capture & Sequestration, 7-10 May 2007 and forthcoming paper on same. Research supported by: CMI Hewlett Foundation NetJets [new corporate sponsor for Next Generation Aircraft Fuel Project (Fred Dryer, Yiguang Ju, Robert Williams, Eric Larson)]

3 Outline of Presentation Brief discussion of two imminent energy train wrecks Biofuels train wreck Electric generation train wreck Proposed strategy to help avoid both train wrecks: build coal/biomass to low-c synfuels + electricity plants with CCS using mixed prairie grasses grown on current cropland for biofuels Brief discussion of how proposal might help avoid train wrecks Major alternative transport fuel technologies Discussion of technology/energy & carbon balances/prospective costs for proposed plants and their competitors Status of key technologies Thought experiment based on proposed strategy C-debt implications of proposed technology if additional cropland is committed to biofuels

4 Is a Biofuels Train Wreck Imminent in US? Prospective Three-body collision: Ambitious biofuels production goals for 2022 of Energy Independence and Security Act of 2007 (EI & SA of 2007): 15 billion gallons/y of corn ethanol 16 billion gallons/y of cellulosic ethanol 5 billion gallons/y of other advanced biofuels C debt concerns about goal of rapid corn ethanol expansion Prospect that cellulosic ethanol goal might not be met Producing cellulosic ethanol is clearly more difficult than we thought in the 1990s. Dan Reicher, former DOE Asst. Secretary for EE/RE (NYT, 17 April 2007) Would allowing low-c synfuels produced thermochemically from coal/biomass with CCS to compete on a level playing field with EthOH help avoid this train wreck?

5 Is a Power Generation Train Wreck Imminent in US? IGCC deployment (petcoke/coal) has been viewed as early opportunity for launching CCS in market: CO 2 capture technology is commercially ready for gasification energy IGCC plants are candidates for early megascale CO 2 storage demo projects IGCC plants might be first commercially deployed coal power plants with CCS But there has been widespread cancellation of coal power expansions plans (for both IGCC and PC plants) because of: Construction cost escalation Investment risks from carbon policy uncertainties Challenges posed by new interest in resurrecting NGCC for meeting power growth needs: North American NG supplies will be flat at best LNG infrastructure expansion uncertainties (e.g., siting regasification facilities) Would NGCC expansion drive up NG prices further? Would making low-c synfuels + electricity from coal/biomass with CCS help avoid power generation train wreck along with programs to promote more efficient electricity use?

6 How Proposed Strategy Might Help Avoid Electricity Generation Train Wreck High oil prices strong synfuels interest despite construction cost escalations Polygeneration (synfuels + electricity) often cost-effective approach to synfuels under C policy constraint Early path to CCS Low CO 2 capture costs Strong candidate technology for exploiting CO 2 EOR opportunities Early route to low-c liquid fuels + electricity: With near-term technology With incentives that could become available with changes in existing laws that leave underlying goals intact

7 How Proposed Strategy Might Help Avoid Biofuels Train Wreck Carbon debt concerns avoid rapid cropland expansion for biofuels Shifting from food biomass to lignocellulosic biomass (LCB) makes it feasible to avoid rapid cropland expansion for bioenergy: Large potential biomass supplies from agriculture/forest industry residues LCB feedstocks [switchgrass, mixed prairie grasses (MPGs), short-rotation woody crops] can be grown on lands not well suited for food crops Why shift food biomass MPGs on current croplands for biofuels? Using MPGs grown on these lands in CBTL polygeneration systems w/ccs Opportunity to make early transition to LCB using near-commercial technologies Greatly increased low C fuels production/ghg mitigation relative to present without exacerbating C debt Experience base for buying down current high biomass logistics costs Adequate incentives could be provided to realize near-zero GHG emission rates for fuels & electricity via such CBTL polygeneration systems in near term via changes in existing laws that leave underlying goals intact: Make Renewable Fuel Standard of EI and SA of 2007 technology blind Convert 51 a gallon EthOH subsidy to GHG mitigation equivalent incentive that leaves cellulosic EthOH indifferent might wean farmer from corn MPGs Buys time to sort out C debt issues

8 Challenges/Options For Transportation Fuels Challenges: climate change/high oil prices/oil supply insecurity Alternative options: H 2 economy at best a long-term option Ethanol (EthOH) Sugar cane EthOH attractive option for tropical regions with adequate rainfall Grain EthOH main concern is C debt implications Cellulosic EthOH good C mitigation benefits if C debt issues can be circumvented but technology evolving slowly Coal to liquids (CTL) Advantages: Commercially proven based on coal gasification + F-T synthesis Cost-competitive at high crude oil prices Ultra-low air pollutant emissions at CTL plants with modern gasifiers F-T liquids would have ultra-low sulfur, aromatics contents F-T liquids can be used in existing transport fuel infrastructures Carbon mitigation issues: GHG emission rate ~ 1.8 X rate for crude oil-derived products with CO 2 vented GHG emission rate ~ 1 X rate for crude oil-derived products with CCS

9 Alternative Options for Making F-T Liquids Using Biomass F-T liquids from biomass (BTL) with CO 2 vented F-T liquids from biomass with CCS (BTL with CCS) F-T process generates pure CO 2 stream accounting for ~ ½ C in feedstock Low incremental cost for CCS Transforms biomass from C-neutral C-negative via photosynthetic CO 2 storage expanded role for biomass in carbon mitigation Coal has no significant future w/o CCS in C-constrained world If CCS works for coal, it should also be considered for biomass F-T liquids from biomass + coal with CCS (CBTL with CCS) offers same benefits as BTL with CCS and in addition: Opportunity to exploit scale economies of coal energy conversion Average feedstock cost would be much less than for BTL Opportunity to exploit coal for making liquid fuels in climate-friendly manner Much less biomass needed to realize zero net GHG emissions than with conventional biofuels Higher market price for biomass provider than with conventional biofuels Henceforth focus here on CBTL with CCS technologies

10 Alternative CBTL Plant Configurations Coal Biomass Pressurized Gasification Gas cooling & cleaning Water Gas Shift H 2 S, CO 2 removal Syngas Conversion or FTL oxygen Air separation unit air CO 2 Underground Storage FTL + ELECTRICITY Coal Pressurized Gasification Gas cooling & cleaning Water Gas Shift H 2 S, CO 2 removal Syngas Conversion or FTL oxygen CO 2 Air separation unit oxygen air Underground Storage FTL + ELECTRICITY Biomass Pressurized Gasification Gas cooling & cleaning Biomass Coal Pressurized Gasification Pressurized Gasification Gas cooling & cleaning Water Gas Shift H 2 S, CO 2 removal Syngas Conversion or FTL oxygen Air separation unit air Underground Storage CO 2 FTL + ELECTRICITY

11 CBTL With CCS Using Separate Parallel Gasifiers Coal Biomass Pressurized Gasification oxygen Air separation unit oxygen Pressurized Gasification air Gas cooling & cleaning Gas cooling & cleaning Water Gas Shift 2 Stage Water Gas Shift H 2 S, CO 2 removal H 2 S + CO 2 Underground Storage F T Synthesis unconverted + recovered gas process electricity Upgrading, Refining GTCC Power Island air F-T FUELS EXPORT ELECTRICITY In this configuration, hydrogen (H 2 ) is made from biomass via gasification to compensate for the H 2 deficit in coal-derived synthesis gas used to make FTL. Photosynthetic CO 2 coproduct is stored along with coal-derived CO 2 in deep geological formations.

12 Major Findings of Tilman Group s Research on MPGs Grown on Carbon-Depleted Soils Sustainable grass yield increases monotonically with # of species Soil/root C build-up increases monotonically with # of species Soil C build-up continues for ~ century or more Over 30 y, soil/root C buildup rate can average ~ 0.6 tc per tc in harvested biomass with 16 species Once mixed prairie grasses (MPGs) have been established, only modest additional inputs (e.g., gasifier ash) are needed with annual harvesting Local biodiversity gain vs. net biodiversity loss for monocultures Source: D. Tilman et al., Science, 314: , 8 December 2006

13 CBTL for Coal + MPGs & Two C-Storage Mechanisms Coal Pressurized gasification Gas cooling & cleaning Water gas shift H 2 S, CO 2 removal F T synthesis Upgrading, refining F-T FUELS Mixed prairie grasses farms biomass oxygen Air separation unit oxygen Pressurized gasification air Gas cooling & cleaning 2 stage water gas shift H 2 S + CO 2 Underground storage unconverted + recovered gas process electricity GTCC power island air EXPORT ELECTRICITY carbon Soil and root C storage Here photosynthetic carbon storage is increased relative to previous option by complementing storage of photosynthetic CO 2 + coal-derived CO 2 in deep underground formations (85% of feedstock C not in F-T liquids is stored underground as CO 2 ) with soil + root C storage from growing 16 MPGs on good cropland with C-depleted soils (assuming 0.6 tc of soil/root C storage per tc in harvested biomass). Zero GHG emission rate for F-T liquids is realizable with 22.6% MPGs (HHV) for system making 17,000 B/D (1032 MW) of F-T liquids MW e of electricity (when electricity coproduct assigned GHG emission rate for coal IGCC with CCS)

14 C equiv BALANCES TO ATMOSPHERE FOR FTL IN MAKING FTL + ELECTRICITY FROM COAL + MPGS WITH CCS OUT = 2,852 t c /day : photosynthesis (MPGs, soil & root C), electricity credit IN = 2,852 t c /day: upstream emissions, vented at plant, fuels burned in vehicles prairie grasses upstream emissions 83 t C /day 1,607 t C /day photosynthesis fuel for transportation 1,810 t C /day prairie grasses 1,607 t C /day 668 MW LHV 1,032 MW LHV carbon vented 735 t C /day credit for e.e. 223 t C /day electricity production 452 MW ee coal 5,328 t C /day 2,449 MW LHV coal upstream emissions 225 t C /day accumulation in soil and root 1,022 t C /day arrows width proportional to C fluxes polygeneration plant char 53 t C /day carbon storage 4,337 t C /day

15 GHG Emission Rates for Fuel Production & Use Kg C equiv per GJ (LHV) Gasoline Gasoline Diesel CTL w/co 2 vented [FTL + electricity] CTL w/ccs [FTL + electricity`] CBTL w/ccs [FTL + electricity], 77.4% coal, 22.6% MPGs w/o SRCS credit CBTL w/ccs [FTL + electricity], 77.4% coal, 22.6% MPGs with SRCS credit Bottom option is for system making FTL + electricity from coal + MPGs (16 grasses) with CCS and with just enough MPGs (22.6% of input energy, HHV basis) to realize zero net GHG emissions. For penultimate option, zero credit for soil + root carbon storage (SRCS) is assumed.

16 Possible Southern Illinois CBTL Plant Site Assume MPGs are grown on land currently planted in corn, conventional tillage MPGs logistics analysis 10 6 dt/y of MPGs needed at CBTL plant Estimated MPG yield = 10.4 dt/ha/y a Assuming MPGs are grown on 15% of land around CBTL plant Ave transport distance for MPGs = 43 km a Clarence Lehman, U. of Minnesota (private communication, April 2007), estimates that, for a given county, MPG yield on average cropland would typically be ~ 1.5 X hay yield on lower-grade land growing hay in same county (based on correlation of actual hay yields & general productivity model estimates) here assumed MPG yield = 1.5 X hay yield.

17 Possible Storage Site Mt. Simon Aquifer Suggested region for aquifer CO 2 storage near proposed CBTL plant offered by Hannes Leetaru, and map of Mt Simon Sandstone features provided by Chris Korose both of the Illinois State Geological Survey, private communication April 2007

18 Logistics Costs for MPGs Road Transport 25% Preprocessing 14% Storage 6% Logistic costs - square bales Harvesting 24% Field Transport 31% Logistics costs ($/dt) gross yield = 10.4 dt/ha/y Establishment Harvesting In-Field Transport Storage (tarping) Road Transport Preprocessing (grinding) Total Income to farmer = Synfuel producer s WTP (Logistics costs) Dry matter loss with tarping is 7% (Duffy, 2003)

19 CBTL Plant Economics Assume: FTL/electricity prices = least-costly CTL option prices determines WTP for MPGs Minemouth CBTL plant High-S bituminous coal price = $1.2/GJ (HHV) CO 2 transported 53 km & stored 2.3 km underground in Mt. Simon aquifer MPG income farmer needs to break-even with growing $3.5/bu = $62/dt WTP/farmer income depend sensitively on GHG emissions value & SRCS credit: GHG emissions value, $ per tonne CO SRCS credit? Yes No Yes No Yes No Breakeven crude oil price, $ per barrel FTL price, $ per gallon gasoline equivalent Electricity price, $ per MWh WTP, $ per dry tonne Income to farmer, $ per dry tonne For $32/t CO 2 case (minimum price needed to induce CCS for new coal plants) WTP for MPG energy content = 5 X price for coal energy content

20 Liquid Fuel Yields for Alternative Options for Reducing GHG Emissions biomass yield net of 7% losses 4.31 tons/acre/year Gallons of gasoline equivalent per acre per yea tonnes/y (gross) of 16 MPGs, $32/tonne CO zero GHG emission rate oil oil oil The oil element for 3 BTL cases represents crude oil-derived gasoline whose GHG emissions are exactly offset by negative CO 2 emissions from photosynthetic carbon storage. 0 CBTL BTL BTL BTL BTL Cellulosic EthOH Polygeneration, CCS + SRCS, MPGs are 22.6% of energy input (HHV), $2.1/gge CCS + SRCS, $3.1/gge CCS but no SRCS, $3.6/gge SRCS but no CCS, $3.3.gge No CCS 91.2 gallons/ton or SRCS, of switchgrass, GHG emission GHG emission rate is 90% < rate is 94% crude products, < gasoline s $3.8/gge BTL cost estimates are preliminary Corn EthOH Sugar Cane EthOH gallons/ ton 64.4 gallons/ton of of corn, 3.39 cane, 10.5 tons/ tons/acre/year, acre/year, GHG GHG emission emission rate is 97% rate is 13% < gasoline s < gasoline s

21 Status of Technologies Coal gasification technology is commercial FTL technology is commercial CO 2 capture technologies are commercially ready for FTL systems CO 2 EOR technology is commercial CO 2 storage in deep saline formations ready for megascale projects megascale projects (alternative geologies) needed worldwide to prove gigascale viability of CO 2 storage need to get projects underway ASAP CTL/CBTL projects good candidates (low CO 2 capture cost) Technology status for biomass gasification Large O 2 -blown gasifiers are not yet commercial Could become commercial by ~ 2015 But co-gasification variant of CBTL option is commercially ready for dry-fed gasifiers at Buggenum in The Netherlands a commercial coal IGCC plant has been fired routinely with 30% biomass (weight basis) since 2006

22 Baard Energy s Ohio CBTL Project CBTL plant planned at Wellsville, Ohio, producing 50,000 B/D of F- T liquids MW e targeted start-up for first stage: Builds on Buggenum experience: 30% biomass co-feed (dry weight basis 25% by energy, HHV basis) planned CCS planned CO 2 for EOR (nearby oil field) or stored in saline formation One variant of plant design that would capture 71% of C not in F-T liquids and store it as CO 2 underground would have fuel-cycle-wide GHG emission rate for F-T liquids that is 30% less than for crude oil-derived HC fuels displaced if electricity coproduct is allocated GHG emission rate equal to that for NGCC How real is project? Ongoing $50 x 10 6 FEED study targeted completion 4 th Qtr 2008 Some long-term biomass supply contracts already secured Seeking federal incentives but intent is to proceed even without Ohio Air Quality Development Authority has authorized raising state taxexempt bonds for debt financing

23 Thought Experiment: Can Low-C Fuel Goal of EI & SA of 2007 Be Met with CBTL Using Only Corn-Growing Lands Already Harvested for EthOH? 6.4 billion gallons of EthOH was produced in 2007 from corn on 19 million acres CBTL produced with CCS & derived from coal + 16 MPGs could provide 22.5 billion gallons of EthOH-equivalent FTL on 19 million acres in ~ 75 CBTL plants Renewable Fuel Standard of EI & SA of 2007 requires that 36 billion gallons of biofuels be provided with an average GHG emission rate that is at least 42% less than for crude-oil products displaced A blend of zero GHG-emitting CBTL & additional domestic crude-oil products in total amount 22.5/0.42 = 53.5 billion gallons of EthOH-equivalent or 35.6 billion gallons of gasoline-equivalent (or 1.4 gallons of crude oil product per per gallon of CBTL produced) would meet the 2022 EI & SA of 2007 goal for low-c fuels Estimated US economic potential for CO 2 EOR (ARI, 2006) ~ 2000 billion gallons with state of the art CO 2 EOR technology (requiring 0.2 t CO 2 per incremental barrel, on average) if adequate low-cost CO 2 supplies are available With state-of-the-art CO 2 EOR technology, each gallon of CBTL produced at a CBTL + electricity plant could, in principle, support > 4 gallons of incremental crude oil production with CO 2 provided at low cost

24 Proposed Public Policy Shifts Modify EI & SA of 2007: Maintain 2022 goal of producing 36 billion gallons of domestic fuel with average GHG emission rate < 42% of that for crude oil products displaced Eliminate technology specification (let market pick technology mix) Convert 51 a gallon EthOH subsidy to GHG emissions mitigation equivalent in a way that leaves cellulosic EthOH indifferent: The C-mitigation value = $72.5 per tonne of CO 2 equivalent With shift, subsidy for corn EthOH would become 7 a gallon on average With shift, subsidy for CBTL would become 84 a gallon of F-T liquids Assuming: (i) these policy shifts, and (ii) zero GHG emissions value: The MPG farmer s income could be the same as at present for growing corn, FTL price = $1.7/gallon (4% less than for CTL with CO 2 $0/t CO 2 ) Electricity price = $61/MWh (same as for IGCC with CO 2 vented $0/t CO 2 )

25 Implications of Policy Shifts/Thought Experiment Proposed policy shifts can plausibly make decarbonization financially attractive for F-T liquids & electricity via CBTL. Implications of actualization of Thought Experiment: 25% of US LDV fuel use in 2022 would be provided with new domestic fuels at an average GHG emission rate 42% less than for crude oil products. The average GHG emission rate (in kg CO 2 -equivalent per GJ) for all LDVs in 2022 would be 10% less than from crude oil products, assuming no other low-c fuels other than CBTL are deployed. The decarbonized generating capacity of the electricity coproduct would be 34 GW e, ~ 4/5 of EIA (2008) forecast of new coal capacity additions, Main uncertainties: Can CCS become a routine commercial C-mitigation option in this period? Is it feasible to store by 2022 ~ 350 x 10 6 t CO 2 /y by 2022 (for 75 CBTL plants)? Can assumed SRCS rate of 0.6 tc per tc in harvested biomass be realized? Is it practically feasible to build required ~ 75 CBTL plants by 2022? Other biomass supplies (residues, energy crops grown on low-grade lands) how much can be provided sustainably?

26 What C-Debt Would Be Incurred If US Land Grown in Corn for Food (not EthOH!) Were Shifted to CBTL with CCS & SRCS? Land converted to cropland CO 2 released on conversion to cropland, tonnes/ha* C debt payback time via CBTL, years Assumptions: CBTL with CCS and SRCS as described earlier. Forest Grassland High Low High Low For each hectare of land grown in corn for food in US that is shifted to producing MPGs for CBTL, 1.27 hectares of new land must be planted in corn or equivalent elsewhere, on average.* *Source: T. Searchinger, R. Heimlich, R.A. Houghton, F. Dong, A. Elobeid, J. Fabioso, S. Tokgoz, D. Hayes, and T.-H. Yu, Use of US cropland for biofuels increases greenhouse gases from land use change, Sciencexpress Report, 7 February 2008.