Utility Perspective on CO 2 Sequestration

Transcription

1 Utility Perspective on CO 2 Sequestration Prepared for: Capitol Hill Briefing October 30, 2009 Presented by: Richard A. Esposito, P.G. raesposi@southernco.com Southern Company Generation Research & Technology Controls

2 Equal Balance To All Legs Of CCS Utilities need to balance the impact of all issues in core values to be successful in CCS. Cost of Electricity Lowest cost portfolio all things considered Safe Storage Exposure Environment Utility CCS Environmental Compliance Permitting Allowances Operational Reliability Forced outages Loading Issues

3 Topics A utility perspective on CCS Will regional issues such as geology and renewable availability impact utility CCS? The role of Enhanced Oil Recovery (EOR) Are stimulus dollars and R&D programs advancing CCS to support near-term commercialization and deployment?

4 A Utility Perspective On CCS CCS is the leading option for the continued use of fossil fuels with reduced greenhouse gas emissions. The technology and engineering capability exists today, but not at utility scales. Some operational and cost issues still need to be addressed. The USA has huge storage capacity with good source -sink matching in diverse sinks. Storage safety is already demonstrated: CO 2 -Enhanced Oil Recovery (30 yrs) Natural gas storage (75 yrs) Industrial CO 2 injection operations (10 yrs) Oil, gas, and natural CO 2 deposits (760 million yrs)

5 Renewables cannot replace CCS and regional distribution is in play. Fossil fuel power plant Favorable sequestration geology Unfavorable sequestration geology Emissions data from EPA. Geology (saline, oil, and coal) data from DOE, USGS, and internal Southern Co. research.

6 CO 2 -EOR cannot accommodate all the CO 2 to be captured in commercial deployment of CCS. Currently, 86 CO 2 -EOR projects injecting ~40 million tons of CO 2 per year producing 237,000 bbl/day This 40 million tons represent only 4-6 commercial-scale CCS projects so we must place emphasis on storage R&D in saline reservoirs

7 The Role of CO 2 -EOR in CCS R&D Operational history suggests safe and reliable injection, transportation, and geologic storage Builds critical infrastructure such as pipelines Can help offset early deployment costs of CCS (i.e., Kemper County IGCC in MS) Ownership, property, and access rights are clear and defined (i.e., facilitates early technology development and deployment without a CCS legal and regulatory structure) Will likely meet short-term capacity goals but not long-term greenhouse reduction goals Long-term utility liability limited to fit-for-use as a commodity

8 Challenges And Industry Needs Acquisition of pore space must not be an obstacle. Access to storage is a barrier (to R&D and commercial-scale CCS) and is necessary for cost effective and safe source-sink matching. Senator Barrasso introduced S which addresses ownership of pore space on federal lands. Property is usually a state issue but Congress could pass incentives for states to adopt model legislation (i.e., speed limits). Public acceptance. Public acceptance through outreach education is a national issue and must cross-cut all stakeholders including governmental agencies. No background education is being performed beyond the RCSP projects and full responsibility is with project developers. Public education grants should be considered along with a centralized and responsible governmental agency with outreach experts.

9 Challenges And Industry Needs Risk mitigation options. No mature options currently available such as private insurance, industry mutual, trust fund, risk retention group, and 3rd party. Options such as what is proposed in S. 1462, Title III, Subtitle F (Bingaman proposal for early projects) or S (Casey/Enzi proposal) or private sector alternatives (funding to start industry mutuals) to provide risk mitigation for commercial-scale projects. Comprehensive regulatory structure. CCS must have a reasonable permitting process to acquire injection permits, construct pipelines, and secure carbon allowances/credits. Streamlined UIC, operational, and closure permitting would aid commercialization. Associated permitting and compliance should not be unfunded mandates for states. Funding for commercialization. Continued funding and incentives for R&D projects and commercial -scale demonstrations are needed for commercial deployment. Existing DOE programs are valuable to utilities and should continue into the future.

10 Technology Path To Commercial Storage Goal = Commercial CCS Decision by 2020 Site Characterization, MVA, Risk, (ARRA) Plant Barry, AL 150,000 tpy for 4 years (RCSP) we believe high priority should be given to a program that will demonstrate CO 2 sequestration at a scale of 1 million tons per year The Future of Coal, MIT Size Southeast geology surveys Plant Barry, AL 1,000,000 tpy for 3 years (CCPI -3) Plant Daniel, MS 3,000 t pilot (RCSP) Time

11 Take Away Summary Technical and engineering readiness and physical barriers do not appear to be fatal flaws in CCS, however increasing -scale demonstrations must continue for commercialization. Both a legal framework and a clear regulatory structure that address access to pore space and risk mitigation are needed to deploy commercial CCS. Outreach and education need to be supported on a federal level and managed such that it is not an impediment to CCS project development. Congressional enactments with ongoing funding and DOE deployment programs are advancing CCS. Focus needs to be with fossil fuel utilities, post-combustion capture and storage in saline formations, and the minimization of the cost of CCS electricity.