Blog: Capturing CO2 from industrial sources for use in EOR is happening now, but more needs to be done

by NEORI on July 23, 2013

In announcing his climate action plan, President Obama highlighted a vital technology for reducing emissions: carbon capture and storage. I recently had the opportunity to tour a first-of-its-kind CCS operation at an Air Products plant in Port Arthur, Texas.

Air Products has integrated state-of-the-art CO2 capture technology into an existing hydrogen plant. Despite being the most abundant element in the universe, hydrogen must be separated from other compounds, and CO2 is a byproduct of the separation process. On our tour of the Port Arthur project, we viewed the capture equipment that separates CO2 from a gas stream before compressing it for transportation via pipeline. Each year, about one million tons of CO2 will be captured and transported for underground storage, rather than being released into the atmosphere.

The project is a milestone for several reasons.

First, it’s the world’s first commercial-scale CCS project involving hydrogen production. CCS is often thought of as an option only for reducing power plant emissions, but CO2 can be captured from many types of large industrial facilities as well.

Second, the Port Arthur project is an example of successful public-private collaboration to advance clean energy, with funding from the Department of Energy and the American Recovery and Reinvestment Act of 2009 covering up to $284 million of the project’s $430 million cost.

And third, the captured CO2 will be used in enhanced oil recovery (EOR), a longtime practice of injecting carbon dioxide into declining oil wells to increase production. The COwill be transported by pipeline and injected into East Texas oil wells to produce an estimated 1.6 million to 3.1 million barrels of domestic oil a year.

Selling captured CO2 for use in EOR provides a vital revenue stream for a capture project, helping offset high investment costs. In fact, most existing or planned CO2 capture projects in the world today are taking advantage of CO2-EOR. In the process, they are helping to advance the technology and demonstrate its broader potential in curbing carbon emissions,

As Judi Greenwald of C2ES explained in recent House testimony, CCS can capture up to 90 percent of emissions from stationary sources, such as power plants and industrial facilities, while allowing coal and natural gas to remain part of our energy mix. The International Energy Agency estimates that CCS could account for one-sixth of the global emission reductions needed by 2050.

Although approximately 60 commercial-scale CCS projects are now in development around the world, we are not nearly on track to achieving the potential forecast by IEA. Adopting CCS remains relatively expensive. To bring costs down, we need to learn from the deployment of numerous commercial-scale projects and do more research and development for CCS component technologies.

In the United States, future federal support for CCS is uncertain. DOE has yet to award funding to support the development of more commercial-scale CCS projects, though DOE recently announced its intention to provide up to $8 billion in new loan guarantees to CCS and other clean energy projects. The National Enhanced Oil Recovery Initiative (NEORI) is calling for Congress to adopt legislation to expand and modify the existing Section 45Q Tax Credit for Carbon Sequestration.

Overall, we need to see more CCS projects like the Air Products project and CCS deployment in other industries. The United States and countries around the world need to act faster on CCS by offering incentives for commercial-scale projects and putting more effort into CCS research and development.

By Patrick Falwell, Center for Climate and Energy Solutions (C2ES)

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