Status of CCUS in the United States. Jarad Daniels. Office of Fossil Energy. Acting Deputy Assistant Secretary for Clean Coal and Carbon Management

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1 Office of Fossil Energy Status of CCUS in the United States June 27, 2017 Jarad Daniels Acting Deputy Assistant Secretary for Clean Coal and Carbon Management 1 Office of Fossil Energy fossil.energy.gov

2 Price of Natural Gas a Key Factor in Projecting Future US Energy Mix High NG prices Low NG prices Source: EIA Annual Energy Outlook

3 Advanced Fossil Technology Systems Existing Major Demonstrations First Generation fossil energy technology systems built to validate first-of-a-kind fully integrated projects at full scale for the power and industrial sectors Advanced Energy Systems Technologies that greatly improve plant efficiencies, reduce costs, increase plant availability, and maintain the highest environmental standards Carbon Capture R&D and scale-up technologies for capturing CO 2 from new and existing industrial and power-producing plants Carbon Storage Safe, cost- effective, and permanent geologic storage of CO 2 in depleted oil and gas fields and other formations Cross Cutting Research Materials, sensors, and advanced computer systems for future power plants and energy systems 3

4 U.S. DOE CCUS Major Demonstration Projects CCPI ICCS Archer Daniels Midland CO 2 Capture from Ethanol Plant CO 2 Stored in Saline Reservoir $208M Total; $141M DOE SALINE ~0.9 MM TPY; Started Operations: April 7, 2017 Petra Nova W.A. Parish Generating Station Post Combustion CO 2 Capture $1B Total; $190M DOE EOR ~1.4 MM TPY; Started Operations: January 10, 2017 Air Products and Chemicals, Inc. CO 2 Capture from Steam Methane Reformers EOR in Eastern TX Oilfields $431M Total; $284M DOE Over 3.5 MMT already stored as of March 2017! Started Operations: March 2013; Southern Company Kemper County IGCC Project Transport Gasifier w/ Carbon Capture ~$7 B Total; $407M DOE EOR ~3.0 MM TPY; In-Service Expected:

5 Petra Nova NRG Energy s W.A. Parish CCPI-3 Advanced Post Combustion CO 2 Capture Project at NRG s W.A. Parish power plant near Houston Texas Retrofit of Existing Coal Plant (Post-Combustion CO 2 capture) to process flue gas from W.A. Parish unit 8 World s largest post-combustion CO 2 capture system Project was completed On-Budget and On-Schedule Delivering and permanently storing around 1.4 million metric tons of CO 2 per year for EOR. 240 MWe slipstream scaled up to improve project economics Fuel: PRB sub-bituminous coal 90% CO 2 capture from supplied flue gas (KM CDR Process ) Technology applicable to retrofit of existing coal power plants EOR at the Hilcorp West Ranch oil field. Total Project Cost: ~$1 billion (DOE Cost Share: $190 MM) 5 NRG Equity - $300 million JX Nippon Equity $300 million JBIC Project Financing - $250 million MHI Technology Provider Key Dates: Project Awarded: May 2010 Air Permit: December 2012 NEPA Record of Decision: May 2013 Financial Close: July 2014 Complete Construction: December 2016 Project Construction Completed On-Budget and On-Schedule. Started Operations: January 10, 2017 Project Ribbon Cutting Ceremony Held April 13, 2017

6 Southern Company Services, Inc. CCPI-2 Kemper County Advanced IGCC with CO 2 Capture Mississippi Power s New Built Coal Plant Located In Kemper County, MS First Base Load Unit Built in 30 years and Located Away from the Coast after Hurricane Katrina Mississippi Power is a PSC Regulated Utility Part of Kemper Costs are Subject to PSC Rate Recovery Generation: 582 MWe (net) with duct firing 2 TRIG TM gasifiers developed by Southern Co. and KBR Fuel: Local Mississippi Lignite 67+% CO 2 capture (Selexol process) ~3,000,000 metric tons CO 2 /year EOR: Denbury Onshore LLC Total estimated project cost: ~$7B DOE Cost Share: $407MM Key Dates: Project Awarded: Jan. 30, 2006 Project moved to MS: Dec. 5, 2008 NEPA Record of Decision: Aug. 19, 2010 Initiate excavation work: Sept. 27, 2010 CC operation on Nat Gas: August 2014 First Syngas production initiated: July 14,

7 Archer Daniels Midland Company ICCS Area 1 CO 2 Capture from Biofuel Plant CCS project built and operated by Archer Daniels Midland (ADM) at their existing biofuel plant located in Decatur, IL CO 2 is a direct by-product from production of fuel-grade ethanol via anaerobic fermentation Up to 90% CO 2 capture (with >99% CO 2 purity), dehydration (via tri-ethylene glycol) & compression ~900,000 tonnes CO 2 /year captured and stored CO2 Sequestration in Mt. Simon Sandstone deep saline formation. Will be the first one to use the new EPA UIC Class VI well permit for CO 2 capture. Total Project Cost: $208 MM. DOE Cost Share: $141 MM (68%) Key Dates: FEED Completed: April 2011 Construction started: May 2011 Two monitoring wells drilled: Nov UIC Class VI Injection Well Permit: Sept. 2014; Injection well drilled and completed: Sept Construction complete Apr Started Commercial Operations: April 7,

8 Air Products & Chemicals, Inc. ICCS Area 1 Steam Methane Reforming with CO 2 Capture Built and operated by Air Products and Chemicals Inc. and located at Valero Oil Refinery in Port Arthur, TX. CO 2 capture added to 2 existing Steam-Methane Reformers (SMRs) used for Hydrogen Production Project achieves 90+% CO 2 capture sing Vacuum Swing Adsorption (VSA) for CO 2 separation Capturing ~925,000 tonnes CO 2 /year ~30 MWe cogeneration unit makeup steam to SMRs and power to VSA and Compressors CO 2 to Denbury Green pipeline for EOR in Texas at the West Hastings oil field Total Project cost: $431 MM; DOE Share: $284 MM (66%) Project was executed on time and under budget Has operated >100% of design when needed Key Dates: Phase 2 Awarded: June 15, 2010 Construction started: Aug Started Operations: March MM Tons of CO 2 delivered Apr MM Tons of CO 2 delivered May MM Tons of CO 2 delivered May MM Tons of CO 2 delivered March

9 Carbon Capture R&D Pathways 9 9

10 Carbon Capture Small Pilot Projects up to 1.5 MWe Decrease capital and energy costs 2 nd Generation Technologies 10 post combustion systems Low degradation rates High permeance/reaction/flux ~$40/tonne Transformational Systems Membrane Systems for post combustion Solvent and Sorbent Systems for pre-combustion ~$30/tonne Technologies ready for large scale testing 10 to 25MWe $60M for greenfield units hours of testing for commercial viability 10

11 Post Combustion Capture National Carbon Capture Center - Benefits to Program Operated by Southern Co Services Hosted at Plant Gaston, AL DOE funds 80% of operations Over 91,000 test hours Technologies from U.S. and six other countries since 2008 founding of NCCC More than 40 carbon capture technologies tested 20+ Post combustion 20+ Pre-combustion Dedicated staff of plant engineers Standard design guidelines Small and Large Solvent Test Units 90+% of US developers opt for NCCC 11

12 Example of CO 2 Capture Development Timeline Membrane Technology - Historical 12

13 Accelerating the Rate of RD&D - Transformational Partnership between national labs, academia, and industry Transformational Technology Development Accelerate deployment by 50% in TRL 2-5 range Parallel paths for materials discovery synthesis process design Leverage advanced computing Robotics for rapid synthesis and analytical capabilities 13

14 Developing Advanced Materials The Problem New high temperature structural alloy development and commercialization is time consuming and expensive: >10 years and multi-million dollars for a single alloy The Vision Reduce cycle time, cost and failure rate of advanced FE materials development by at least a factor of 2X by: o o Integrated High Performance Computational materials design and long term predictive behavior tools coupled with smarter, more efficient experimental techniques and Data analytics to leverage existing data and knowledge to its maximum possible extent. Friction stir welding of ¼ thick dispersion strengthened Sandvik APMT plate Advanced FE systems - Extreme environments - Long service life (>100,000 h) - Large components Opportunity - New Phase Stable Alloys - Manufacturing of Alloys, Materials Systems & Components - Build upon DOE-FE successes with Integrated Computational Materials Engineering (ICME) environments 14

15 Transformative R&D: Supercritical Carbon Dioxide (sco 2 ) Supercritical CO 2 : A highly efficient working fluid COAL SOLAR WASTE MFG. HEAT NUCLEAR NATURAL GAS Diverse fuel/ heat sources Higher thermal efficiencies, smaller physical footprint, and lower capital costs (than conventional steam-based power generation) Cleaner, more affordable electricity 15

16 Industrial Capture 16

17 Storage Infrastructure Small Scale to Large Scale RCSP Development Phase Large-Scale Field Projects Over 10 million metric tonnes stored RCSP Validation Phase Field Projects Completed 18 injection projects (1.35 million metric tonnes injected 17

18 Storage Infrastructure Addressing Large Scale Challenges Regional Carbon Sequestration Partnerships Brine Extraction Storage Tests (BEST) Unconventional EOR Offshore Storage Carbon SAFE 18

19 Advanced Storage R&D Risk Assessment, MVAA, Well Integrity & Mitigation, Predicting Plume & Pressure Impacts Advanced simulation tools for coupled processes Flow, mechanical deformation/failure, geochemistry in complex, fractured reservoirs and caprock Measurement tools to ensure reservoir conformance Measuring and modeling geomechanical properties and coupled processes in reservoir, caprock and faults Reduce risk of induced seismic events monitoring and forecasting capabilities Monitoring and mitigating wellbore leakage: biomineralization, phtriggered polymers, nanocomposites, mesoporous nanoparticles 19

20 CO 2 Infrastructure Opportunities CCUS is capital intensive, faces policy and market uncertainties, and requires a long-term commitment, all of which present a financial burden and risk for CCUS project developers. Regulatory, policy and financial certainty essential for industry EOR operations in the United States represent a commercially demonstrated and Federallyrecognized form of geologic storage that could provide a market pull for the deployment of CCUS technology. The United States will need to expand the existing CO 2 pipeline network to realize the full potential for domestic oil production using CO 2 -EOR. A regional CO 2 pipeline network will require collaboration between private companies, the investment community, State agencies, Federal regulators, and other interested stakeholders. CO 2 pipeline network showing oil and gas fields. Pipeline data from Energy Velocity, saline reservoir and oil and gas field data from NATCARB. Source: NETL Source: Siting and Regulating Carbon Capture, Utilization and Storage Infrastructure WORKSHOP REPORT 20

21 Integrated System Approach 21

22 The Big Questions Opportunity to make existing fleet more efficient and competitive? What technologies? Added Revenue (REEs extraction, CO2 Utilization, EOR) High Performance Computing (advanced modeling and subsurface characterization) How fast can they be developed? What market/regulatory dynamics? What would it take for a U.S. new-build plant? Impact of Renewables and Natural Gas How much gas is there? Impact of LNG exports on pricing Expected growth curves for solar and wind Project Funding Finance-ability (debt) for large Long-term projects New funding models? Policy support? 22

23 Office of Fossil Energy Questions? 23