Abstract Process Economics Report 237 CO 2. EMISSIONS REDUCTION (November 2000)

Transcription

1 Abstract Process Economics Report 237 CO 2 EMISSIONS REDUCTION (November 2000) CO 2 emissions from the combustion of fossil fuels are intimately involved with economic activity and development, since 90% of the world s energy needs are derived from fossil fuels. Concern about the potential consequences of rising levels of CO 2 and other greenhouse gases in the atmosphere is the driving force behind the Kyoto Protocol to the UN Framework Convention on Climate Change. The Protocol was approved by delegates in December 1997, but has not yet been ratified because it is highly controversial. It requires 38 industrialized nations to accept legally binding limits reducing a basket of six greenhouse gas emissions (of which CO 2 accounts for by far the major share) to an average of 5.2% below their 1990 emission levels by Regardless of the Protocol status, many companies have changed their focus in recent years from whether global warming is real, to how CO 2 and other greenhouse gas emissions can be reduced and how much it will cost. The issue will have a major impact on chemical and energy industry business strategies and investments, including energy efficiency improvements, support for renewable energy, development of carbon trading systems, and finding new methods to capture and dispose of CO 2. The industry is beginning to adopt those strategies with the best economic return which also reduce emissions. This report surveys and evaluates a wide range of CO 2 business practices and mitigation technologies, since some approaches may be adapted by a unique industry, while other measures could be used across industries. PEP 99 EJC/SML

2 CONTENTS GLOSSARY... xvii 1 INTRODUCTION SUMMARY DRIVING FORCES TO REDUCE CO 2 EMISSIONS Greenhouse Effect Global Climate Change Policies The Kyoto Protocol Taxes and Incentives CO 2 EMISSIONS MITIGATION STRATEGIES Business Strategies Best Practices Emissions Trading CO 2 EMISSIONS MITIGATION TECHNOLOGIES CO 2 Capture and Disposal CO 2 Capture CO 2 Disposal Economics of CO 2 Capture and Disposal Combined Heat and Power (CHP) CHP Technology CHP Application in the Chemical Industry Process Efficiency Improvements Cracking Furnace Separation Process Control/Operation & Maintenance Alternate Production Processes Steam System Improvements iii

3 CONTENTS (Continued) 3 GLOBAL CARBON DIOXIDE EMISSIONS GREENHOUSE EFFECT Impact on Global Temperature Kyoto Protocol GLOBAL WARMING POTENTIALS GREENHOUSE GAS EMISSIONS World Carbon Emissions Regional Emissions Emissions by Sector CO 2 /GDP Trends CO 2 /Population Trends U.S. Greenhouse Gas Emissions EU Greenhouse Gas Emissions FUTURE CO 2 EMISSIONS OUTLOOK GLOBAL CLIMATE CHANGE POLICY DEVELOPMENT INTERNATIONAL CLIMATE NEGOTIATIONS KYOTO PROTOCOL Implementation Status Participation of Developing Countries Emissions Trading and Supplementarity Compliance and Enforcement Methods Contribution of Forests and Soil Management Implementation Outlook Impact of Kyoto Protocol Emissions Impact Economic Impact iv

4 CONTENTS (Continued) 4 GLOBAL CLIMATE CHANGE POLICY DEVELOPMENT (Concluded) TAXES, REGULATIONS, AND INCENTIVES Carbon Taxes Regulations Incentives BUSINESS STRATEGIES VOLUNTARY COMMITMENTS BEST PRACTICES EMISSIONS TRADING Emissions Trading Precedents Benefits of Emissions Trading Impact of Unused Credits in the Former Soviet Union Market Size and Credit Value Implementation Issues Prototype Carbon Trading Systems World Bank Trading System BP Amoco Internal Trading Royal Dutch/Shell Internal Trading Government Trading Systems Service Firms Credits from Land Use Forests Agriculture COMBINED HEAT AND POWER CHP BACKGROUND Utility Industry Regulations CHP Status v

5 CONTENTS (Continued) 6 COMBINED HEAT AND POWER (Concluded) CHP TECHNOLOGY Thermal Efficiency CHP Cycles Bottoming Cycle Topping/Combined Cycle Conventional Steam Turbine Systems Conventional Gas Combustion Turbine Systems Combined Cycle Gas Turbine Systems Reciprocating Engines Microturbines Fuel Cells CHP Status CHP Technology Usage CHP IN THE CHEMICAL AND REFINING INDUSTRY CHP APPLICATIONS IN CAUSTIC/CHLORINE PRODUCTION Chlorine Industry Background Chlorine Technology Energy Consumption and Carbon Emissions Energy Saving Measures Process Modifications On-Site Heat and Power Generation CHP APPLICATIONS IN PETROLEUM REFINING CHP POTENTIAL CO 2 CAPTURE AND DISPOSAL SOURCES OF CO Fossil Fuel vi

6 CONTENTS (Continued) 7 CO 2 CAPTURE AND DISPOSAL (Concluded) Industrial By-Product Hydrogen Ethanol Substitute Natural Gas Ethylene Oxide Other Sources Natural Sources CO 2 CONSUMPTION CO 2 CAPTURE CO 2 Capture Technology Absorption Cryogenic (Refrigeration) Membranes Adsorption CO 2 Capture Economics CO 2 DISPOSAL CO 2 Disposal Options Underground Gas Storage (UGS) Aquifer Disposal Direct Ocean Disposal Forestry and Soil Management CO 2 Disposal Economics Environmental Concerns with Disposal ECONOMICS OF CO 2 CAPTURE AND DISPOSAL DIRECT CO 2 UTILIZATION TECHNOLOGY OPTIONS ETHYLENE PLANT EFFICIENCY IMPROVEMENTS ETHYLENE INDUSTRY STATUS vii

7 CONTENTS (Continued) 8 ETHYLENE PLANT EFFICIENCY IMPROVEMENTS (Concluded) ETHYLENE TECHNOLOGY Feedstock Choices ETHYLENE PRODUCTION ECONOMICS Investment Requirements ENERGY INTENSITY ENERGY EFFICIENCY IMPROVEMENT OPTIONS FOR ETHYLENE PRODUCTION Cracking Furnace Separation Metal Packings Dephlegmator Heat Pump Hybrid Membrane Distillation Membrane Distillation Process Control/Operation & Maintenance ALTERNATIVE FEEDSTOCKS FOR ETHYLENE PRODUCTION STEAM SYSTEM EFFICIENCY STEAM SYSTEM STATUS STEAM SYSTEM OVERVIEW Steam Boiler Technology ENERGY SAVINGS Boilers Improve Process Control Reduce Flue Gas Quantities Reduce Excess Air Improve Insulation Maintain Boilers viii

8 CONTENTS (Concluded) 9 STEAM SYSTEM EFFICIENCY (Concluded) Recover Heat from Flue Gas Recover Steam from Blowdown Fuel Switching Heat Distribution Improve Insulation Maintain Insulation Improve Steam Traps Maintain Steam Traps Automatic Monitoring of Steam Traps Repair Leaks Recover Flash Steam Return Condensate Heat Integration APPENDIX A: CITED REFERENCES... A-1 APPENDIX B: TEXT OF THE KYOTO PROTOCOL... B-1 APPENDIX C: OPPORTUNITIES TO REDUCE CO 2 EMISSIONS... C-1 ix

9 ILLUSTRATIONS 2.1 Changes in Global Mean Temperature, Historical World CO 2 Concentrations Share of National Electricity Produced by CHP Non-Traditional Ethylene Cash Production Costs The Earth s Radiation and Energy Balance Historical World CO 2 Concentrations The Global Carbon Cycle Changes in Global Mean Temperature, Projection of 21 st Century Mean Temperature Increase Top Carbon Emitters, World Carbon Emissions from Fossil Fuels, World Carbon Emissions, CO 2 Emissions/GDP by Region, CO 2 Emissions Per Capita by Region, Total U.S. Energy-Related Carbon Emissions from Manufacturing, World Carbon Emissions, Marginal Cost of U.S. Carbon Emissions Reductions in 2010 with No Emissions Trading Under Kyoto Scenarios Revenues from Environmentally Related Tax Bases in 21 OECD Member Countries in Comparative Marginal Costs of Emissions Control Share of National Electricity Produced by CHP Historical U.S. Industrial CHP Capacity CHP vs. Conventional Power Generation Typical Bottoming Cycle CHP System Typical Topping Cycle CHP System Typical Combined Cycle CHP System Projected Cost of Generating Capacity Steam Turbine Cogeneration Configurations Gas Turbine Schematics x

10 ILLUSTRATIONS (Concluded) 6.10 Gas Turbine Combined Cycle Cogeneration Reciprocating Engine CHP vs. Conventional Heat and Power Generation Microturbine Schematics Microturbine CHP vs. Conventional Heat and Power Generation Acidic Fuel Cell Schematic Fuel Cell CHP vs. Conventional Heat and Power Generation Optimal Power Plant Size Industrial CHP Capacity, U.S. Industrial CHP Capacity Locations, World Chlorine Capacity: Simplified Flow Diagram for Chlorine Production Membrane Electroytic Cell Achievable CHP Potential and Carbon Reductions Simplified CO 2 Separation System EOR Projects & Sources U.S. Saline Aquifers Effect of Ocean Disposal on Atmospheric CO 2 Concentration Ocean Injection Methods CO 2 Capture and Sequestration Costs vs. Other Options Power Plant CO 2 Capture and Sequestration Costs Ethylene Cash Production Costs Non-Traditional Ethylene Cash Production Costs Simplified Steam System Pinch Analysis Diagram xi

11 TABLES 2.1 World CO 2 Emissions from Fossil Fuels, Summary of World Carbon Emissions, Projected World Carbon Emission Scenarios Chemical Solvent Absorption CO 2 Separation Economics Worldwide Potential CO 2 Storage Capacity CO 2 Reduction Costs Comparison of CHP Technologies CHP vs. Purchased Power in Membrane Cell Process CHP Economics Alternate Ethylene Production Fuel Consumption Steam System Energy Saving Measures World CO 2 Emissions from Fossil Fuels, Global Atmospheric Concentrations of Selected Greenhouse Gases Estimates of Global Warming Potentials Compared With CO Carbon Emission Coefficients at Full Combustion, 1998 (Million Tons of Carbon Per Quadrillion BTU) World CO 2 Emissions from Fossil Fuel Combustion, Summary of World Carbon Emissions, Fossil-Fuel Share in Electricity Generation in Industrialized Countries, U.S. Greenhouse Gas Emissions and Sinks: Trends in U.S. Greenhouse Gas Emission Data, U.S. Energy End-Use Sources of CO 2 Emissions, EU Greenhouse Gas Emissions, EU Emissions Sources by Sector, 1998 (Million Tons of CO 2 Equivalent) EU Sources of CO 2 Emissions from Industry, Kyoto Protocol Main Features Annex I Countries and Emissions Reduction Commitments EU Greenhouse Gas Emission Commitments Kyoto Protocol Ratification Status (as of September 2000) xii

12 TABLES (Continued) 4.5 World Carbon Emissions and the Effect of the Kyoto Protocol Summary of Impacts for U.S. Climate Change Technology Initiatives, 2010 (Proposal for Budget Year 2001) Voluntary Company Commitments to Reduce CO 2 Emissions Potential U.S. CHP Carbon Reduction in Process Industries U.S. CHP Capacity Growth Comparison of CHP Technologies U.S. Electricity Capacity and Generation, Energy Sources for Industrial CHP, CHP Market Segments U.S. CHP Technology Usage, Comparison of U.S. CHP Capacity by Industry, U.S. Chemical and Refining Industry Energy Usage, Carbon Emissions from Combustion of Fossil Fuels in U.S. Refineries, Carbon Emissions from Combustion of Fossil Fuels in U.S. Chemical Industry, U.S. CHP Capacity, Electricity Use in the U.S. Chemical Industry, U.S. Chemical CHP Capacity, U.S. Chemical Industry CHP Capacity by Region, Chlorine Technology Status Chlorine Industry Energy Use and Carbon Emissions, Energy Intensity in Chlorine Production Energy Saving Measures in Chlorine Plant Utilities Consumption for Packaged Boiler and CHP CHP vs. Purchased Power in Membrane Cell Process Process Steam Generation by the Package Boiler Process Base Case: No CHP Process Steam Generation by the Combined Cycle 1 Process Unfired HRSG xiii

13 TABLES (Continued) 6.24 Process Steam Generation by the Combined Cycle 2 Process Partially Fired HRSG Process Steam Generation by the Combined Cycle 3 Process Fully Fired HRSG U.S. CHP Potential Capacity World Carbon Emissions from Fossil Fuels: World Carbon Emissions from Fossil Fuels: Emissions of CO 2 from Major Sources of Fossil Fuels Consumption of CO 2 by Major Region North America CO 2 Consumption Consumption of Liquid CO 2 by Major Region Main Solvents Used in CO 2 Separation Processes Amine Absorption Process Energy Requirements U.S. Producers of CO 2 Membrane Systems Energy Required to Capture CO 2 from Coal-Fired Power Plant Typical Energy Penalty Associated with CO 2 Capture Additional Cost of Power Plant CO 2 Capture Chemical Solvent Absorption CO 2 Separation Economics CO 2 Sequestration Options Worldwide Potential CO 2 Storage Capacity Potential CBM CO 2 Sequestration Estimated Costs for Sequestration of CO 2 in Coal Seams Comparison of Ocean Sequestration Injection Options Potential in 2010 for Net Change in Carbon Stocks Through Land Use Change and Management Activites in Annex I Countries Estimated CO 2 Storage Costs CO 2 Capture and Disposal Costs CO 2 Sequestration Potential U.S. Chemical Industry Energy Supply, World Ethylene Production by Feedstock, xiv

14 TABLES (Concluded) 8.3 World Ethylene Feedstock Requirement, Ethylene Yield Based on Feedstock Comparison of Millisecond and Conventional Cracking Yields for Gaseous Feedstocks Comparison of Millisecond and Conventional Cracking Yields for Liquid Feedstocks Ethylene Cracking Investment Cost Index Cash Margins for Ethylene Production Total Utilities Requirements for Ethylene Plants Typical Specific Energy Consumption for Ethylene Production Energy Consumption Improvements for Ethylene Production Basis: Lummus Steam Cracking Energy Consumption in Ethane Cracking Energy Consumption for U.S. Gas and Liquid Cracker Energy Consumption for Naphtha Cracker and Flexible Cracker Fuel Requirements for Ethylene Production Energy Efficiency Index Comparison Low and High Selectivity Lummus Cracking Coils Alternate Ethylene Production Fuel Consumption U.S. Chemical Industry Energy and Carbon Emissions, U.S. Petroleum Refining Energy and Carbon Emissions, Industrial Boiler Size Distribution Steam System Energy Saving Measures Boiler Energy Saving Measures Heat Distribution Savings Heat Integration Energy Savings xv