Reducing vented emissions from natural gas production Natural Gas Utilisation & Climate Change Extractive Industries Week, World Bank Paul Zakkour, Consultant March 2009 Washington DC
Outline Vented emissions in natural gas production Nature of the issue Scale of the issue Choices for reducing emissions Costs Financing Policy choices Additional information Notes: Analysis presented limited to developing countries & projections to 2020 Based on research carried out for the IEA Greenhouse Gas R&D Programme
Nature of the issue Raw gas feed from field CO 2 vented to atmosphere Composition: 1-4% CH X 96-99% CO 2 GAS PROCESSING PLANT Typical plant with high CO 2 field: 0.5 1+ million tco 2 p.a. Treated gas Composition: 30-98% CH X 2 70% CO 2 Amine or membrane separation to remove CO 2 (Gas sweetening Pipeline 98%+ CH X <2% CO 2 LNG (1 99.8%+ CH X <0.2% CO 2 New natural gas resources: valoration challenges include increasing CO 2 content Notes: (1 Very low CO 2 content required to avoid dry ice formation
Scale of the issue gas production Forecast natural gas production - top 15 developing countries Gas production (mmscf 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Uzbekistan United Arab Emirates Turkmenistan Trinidad and Tobago Thailand Saudi Arabia Qatar Pakistan Oman Nigeria Myanmar Mexico Malaysia Iran Indonesia India Egypt China Bangladesh Argentina Algeria
Scale of the issue CO 2 emissions 350 CO 2 emissions - gas processing MtCO 2 per year 300 250 200 150 100 50 Uzbekistan United Arab Emirates Turkmenistan Thailand Saudi Arabia Qatar Pakistan Myanmar Malaysia Indonesia Egypt China Algeria 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Scale of the issue - summary Table Estimates of global CO 2 emissions from venting in natural gas production IPCC (SRCCS IEA (CCS CDM* IEA GHG (this study* ECN (GHGT9* MtCO 2 /yr Year Assumptions 50 2005 2600 bcm/y; ½ containing 4% CO 2 167 324 219 313 174 (146-222 * Analysis covered developing countries only 2007 2020 2010 2020 2020 (range 98 bcm/y; inc to 324 MtCO 2 /yr by 2020 Bottom-up, as shown here Bottom-up, IHS database Data gaps and uncertainty: field CO 2 content data limited (public domain. Limited Latin America IEA GHG study designed to enhance analysis: technical abatement potential + abatement cost
Choices for reducing emissions Capture CO 2 for use in products Remote from markets and outstrips demand Capture CO 2 for use in EOR Requires proximity to suitable oil fields Capture CO 2 and store in geological formation Expensive No source of revenue Lack of legal framework
Choices In Salah project Amine CO2 Rem oval Cretaceous Sandstones & Mudstones ~900 m etres th ick (R e gio n a l A q u ife r Processing Facilities 4 Gas Production W e lls 3 CO 2 In je c tio n Wells Carboniferous Mudstones ~950 m etres thick Carboniferous Reservoir ~20 m etres thick G a s The CO 2 Storage Schem e at Krechba W ate r Source: Iain Wright, BP
Costs CCS published data Source Yr Capture Trans Storage (saline Total Abate (GtCO 2 ($/tco 2 stored SC Coal PC (new SC coal PC (retro IGCC (new Pipeline Wells etc (onshore Wells etc (onshore Monitor 2030-2050 IPCC SRCCS 2005 29 51 45-73 13-37 0-5 0.2-6.2 0.5-30.2 0.3 14-109 0.1-0.6 IPCC FAR 2008 15 75 22-42 0.7 IEA ETP 2008 40 90 50-109 2-4 EC CCS IA 2007 (6-20 31-50 0.5 McKinsey MACC 2009 46 54 46-54 3.3-4.1 Stern Report 2006 19 49* 19-49 4 MIT (latest 2008 52.2* 52 - Carnegie-Mellon 2007 60.9* 32.4* (3.1 (5 32-61 - * Includes transport and storage $/tco 2 Wide variation in costs Policy-makers struggle to make effective decisions with such uncertainty Not a one size fits all issue Cost discovery only possible through demo GtCO 2
Costs gas processing Gas processing Offshore Onshore Liquefied natural gas (LNG Retrofit New-build Retrofit New-build Deep water Shallow water Deep water Shallow water Variables: Different factors used to determine costs for natural gas processing Data source: UC Davis cost study Method: each field assigned cost factors
Costs natural gas processing 2010 2020 $120 Gas processing MACC - 2010 Abatement potential (MtCO 2 Average cost ($/tco 2 Abatement potential (MtCO 2 Average cost ($/tco 2 $110 $100 LNG 28 $9 72 $7 Offshore deep retro Offshore shallow NB Offshore shallow retro Onshore NB Onshore retro 2 $31 2 $31 76 $23 126 $23 78 $18 68 $16 16 $9 33 $9 19 $15 12 $12 TOTAL 219-313 - Abatement Cost ($/tco 2 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 MtCO 2 0 50 100 150 200 250
Costs all early opportunities (1 2010 2020 $250 Early opportunity MACC - 2010 Abatement potential (MtCO 2 Average cost ($/tco 2 Abatement potential (MtCO 2 Average cost ($/tco 2 $200 NGP 219 $18 313 $14 Ammonia 97 $62 97 $62 Fertliser 97 $92 12 $92 Ethanol 14 $104 14 $103 Refineries 292 $115 292 $115 Hydrogen 6 $115 6 $115 Cement 600 $138 600 $138 Abatement Cost ($/tco 2 $150 $100 Coal power 0 n/a 93 $36 $50 Gas power 0 n/a 28 $48 TOTAL 1,240-1,455 - $0 MtCO 2 0 200 400 600 800 1,000 1,200 1,400 Notes: (1 IPCC define early opportunities as projects that [are likely to] involve CO 2 captured from a high-purity, low-cost source, the transport of CO 2 over distances of less than 50 km, coupled with CO 2 storage in a value-added application such as EOR. Early opportunities here includes longer transport distances and lower purity sources (e.g. cement IEA/CSLF mandated to assess CCS early opportunities by G8 leaders. Reported in 2007
Financing A major challenge: costs for In Salah $100 million (storage capex/opex $30 million (storage monitoring c.$6-7.5 per tco 2 stored Revenue = 0 CDM: project type not yet eligible for UN regulated carbon market Post-2012: a sectoral approach for gas processing?
Policy choices Major technical challenges for CCS twofold: 1. Capture: prove at scale; reduce cost 2. Storage: prove at scale; establish legal frameworks; build public confidence Challenge #1: subject to RD&D funding at present in US, EU, and multi-laterally (NZEC; APP Challenge #2: in part contingent on #1 being resolved. Few projects worldwide Early opportunities: allow #2 to evolve in parallel with #1 short circuit development pathway
Additional information Available at: www.co2captureandstorage.info Paul Zakkour Energy & Climate Change Consultant, London, UK Tel: +44 07834 16 10 16 Email: paul.zakkour@yahoo.co.uk