The long ‘bridge’ of carbon capture and storage technology

by Dr. Carole Nakhle*

most of the worlds CCS projects are located in the US
Today, most of the world’s CCS projects are located in the U.S. (source: macpixxel for GIS)


  • CCS is one of the solutions necessary for reaching global climate goals
  • The technology can make fossil fuel extraction cleaner and more efficient
  • Costs are high, while varying market conditions create uncertainty
  • Reaching the necessary capacity to help reduce climate change looks unlikely

There is no single magic bullet for turning global energy consumption patterns toward a cleaner future. Greening energy is not just about developing alternative sources of energy or ending the fossil-fuel era. Any technology that aims to reduce the environmental footprint of the fossil fuels industry also falls under this category. One such technology is carbon capture and storage (CCS) which captures carbon dioxide (CO2) emissions, the main culprit behind planetary warming, before they make it into the atmosphere.

Fossil fuels – oil, coal and natural gas – will continue to provide the lion’s share of global energy needs for the foreseeable future. In light of growing energy demand, it is therefore not surprising to hear Dr. Fatih Birol, the head of the International Energy Agency (IEA), stating that without carbon capture technology, “reaching our international climate goals is practically impossible.”

The technology also provides a precious lifeline for the fossil fuels industry, decarbonizing its activities. No wonder the industry-led Oil and Gas Climate Initiative (OGCI) has established a fund of more than $1 billion to accelerate the development of innovative low-emission technologies. Half of that sum is allocated to CCS.

The importance of CCS became widely recognized following the publication of a special report on the technology in 2005 by the Intergovernmental Panel on Climate Change (IPCC). However, to reach the desired targets, the world would need to capture, store or use around 850 million tons per annum (mtpa) of CO2, argues the OGCI. That would correspond to a more than 25-fold increase in global CCS capacity from the current 30 mtpa. Such a large increase is unlikely under existing conditions.

Rationale

To have a reasonable chance of keeping global average temperature increases from exceeding preindustrial levels by more than 1.5 degrees Celsius, the IPCC argues that worldwide CO2 emissions must be reduced by about 45 percent from 2010 levels (of around 31 billion tons) by 2030, reaching “net zero” by 2050, whereby any remaining emissions would need to be balanced by removing CO2 from the air. But global emissions continue to rise. In 2017, world CO2 emissions exceeded a staggering 33 billion tons.

Since energy supply, including electric power generation, and heavy industry (especially cement, iron and steel) account for nearly half of the carbon emissions in the world, targeting emissions from these two sectors would make a major contribution to the IPCC’s target. According to the IEA, CCS remains the only technology solution capable of delivering significant emissions reductions from the use of fossil fuels in these sectors.

Often described as a “bridging technology,” CCS is not a new practice. It has been around for decades and is widely used by the oil industry, primarily to boost production from a reservoir as part of the “enhanced oil recovery” (EOR) technique. Once all the commercial oil has been squeezed out, the CO2 remains buried in the depleted field. The use of CCS for EOR remains the most dominant application around the world, especially in the United States.

The first large-scale dedicated CCS initiative, the Sleipner project off the Norwegian coast, came on stream in 1996, taking CO2 from a natural gas production facility and injecting nearly 1 mtpa of it (about 3 percent of Norway’s total emissions) some 800-1,100 meters beneath the seabed.

Simple concept

CCS involves three processes: the capture, transport and permanent storage of CO2. Carbon Capture, Utilization and Storage (CCUS) is one variation of CCS, whereby the CO2 is used in the production of commercial products such as chemicals. Hence the description of this technique as “recycling” CO2.

CSS Process

The capture of CO2 can be done from fuel combustion or industrial processes. Around 90 percent of the CO2 produced from these processes can be captured. The compressed CO2 is then transported – typically via ship or pipeline – and either used in other production processes or injected deep underground in geological formations, such as depleted oil and gas fields, for permanent storage. This prevents it from getting into the atmosphere and minimizing the harmful effects of climate change.

CCS technology buries carbon dioxide deep underground. Some estimates have found that by 2040, Earth could store up to 5 billion tons of CO2 per year (source: macpixxel for GIS)
CCS technology buries carbon dioxide deep underground. Some estimates have found that by 2040, Earth could store up to 5 billion tons of CO2 per year (source: macpixxel for GIS)
In this respect, the potential is substantial. By 2040, according to French oil and gas giant Total, the planet could store up to 5 billion tons of carbon dioxide per year, equivalent to the emissions of more than 3 billion cars.

Applications

Currently, there are 20 large-scale CCS/CCUS projects in operation. These are mostly located in developed countries, primarily the U.S. Three are under construction – two in China and one in Australia. In addition, there are more than 100 smaller-scale projects.

Out of the nine facilities operating in the U.S., the Petra Nova project in Thompsons, Texas, which began functioning in 2017, stands out. With its CCUS configuration, it is the world’s largest and one of only two operating carbon capture units in the world attached to a coal-fired power plant – the WA Parish plant, itself one of the largest dual-fired (coal and gas) power plants in the U.S. The other similar project is the Boundary Dam plant in Saskatchewan, Canada, with a capture capacity of 1 mtpa of CO2. The Petra Nova project uses post-combustion carbon capture technology, and the captured CO2 is used to enhance oil production from the West Ranch Oil Field, about 132 kilometers away. The project is a partnership between American power company NRG Energy and Japan’s JX Nippon. Petra Nova has an annual capture capacity of 1.4 million tons of CO2, equivalent to the emissions produced by more than 350,000 cars.

Carbon capture and storage facts

In 2017, CO2 emissions rose after three flat years. According to initial IEA estimates, emissions rose again in 2018, reaching record highs
Globally, more than 30 million tons of CO2 are captured by large-scale CCUS facilities for use or storage. More than 70 percent of this occurs in North America (IEA, 2018)
The total public funding directed to CCUS project deployment over the past 10 years amounts to just 3% of that spent on subsidies for renewable power generation in 2016 alone (IEA, 2018)
The In Salah project in Algeria is the first to use geological storage of CO2 in a producing gas reservoir
Launched in 2014, the OGCI’s members include: BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental Petroleum, Pemex, Petrobras, Repsol, Saudi Aramco, Shell and Total
Governments are keen to expand the technology’s application. In 2018, the U.S. government introduced significant fiscal incentives for CCUS investment. According to the IEA, these could trigger the largest surge in carbon capture investment of any policy instrument to date, on the magnitude of $1 billion over the next six years. That investment could create between 10 million and 30 million tons of additional CO2 capture capacity and enhance oil production through EOR by 50,000 to 100,000 barrels per day. At the same time, it would increase total global carbon capture by around two thirds.

Europe is showing equal dedication, especially with the North Sea’s favorable geology for storing CO2. Several offshore oil and gas fields will soon reach the end of their commercial life and would thereafter be available to use for CO2 storage. In October 2017, the UK government announced its goal to become a global technology leader for CCUS as part of its Clean Growth Strategy.

Recently, the Norwegian government awarded its national oil company, Equinor, the right to develop the world’s first offshore CO2 storage site. The CO2 would be sent to the facility from several onshore industrial sources. Those sources would capture the CO2 and send it to a receiving plant. There, it would be pumped to the offshore facility and buried 2,000 meters below the seabed. If the project works out, it could become the world’s first international CCS facility, since it could take CO2 from neighboring countries. Apart from support through direct funding, the Norwegian government has put a price on carbon emissions and is imposing a carbon tax, thereby encouraging companies to explore CO2 reduction alternatives.

Difficult pursuit

Equinor argues that while it may sound simple in principle, CCS requires completely new, bespoke technology throughout the process from the power station to offshore and into the ground. It describes the technology as “one of the greatest energy infrastructure challenges in the world today.”

Cost is a major handicap, with huge upfront investment and long-term exposure to risk and further expenses. The Petra Nova project comes with a price tag of $1 billion. The Kemper project, also in the U.S., ran into serious delays and cost overruns – construction costs exceeded $7.5 billion, compared to an initial estimate of $2.4 billion. The project was subsequently abandoned. The UK government’s new CCUS strategy is subject to “costs coming down sufficiently.”

There is also a wide variation in expenses, partly depending on location. Estimates put costs in Europe at up to 60 percent higher than in the U.S. Reservoir conditions, how the reservoir is developed, utilization, financing, and prevailing market and regulatory conditions are some of the reasons for the cost variations. According to a study for the UK government, costs can range from GBP 20 per ton of CO2 to more than GBP 500 per ton.

Project economics are highly sensitive to oil prices and the cost of alternative technologies, including investment in renewable energy, government policies and state finances, among others. According to a 2016 IEA report, policy on CCUS has fluctuated sharply, with government support gaining momentum through the first decade of the century but waning post-2009, after the failure of the Copenhagen meeting on climate change to reach a deal and following the global financial crisis and the collapse in oil prices. As a result, “more than 20 advanced large-scale CCS projects were canceled between 2010 and 2016 and the announced funding commitments were either scaled back or withdrawn across Europe, the United States and Australia,” the agency found. The IPCC 2005 report on CCS also highlights the importance of policies (including financial incentives for deployment), as well as technical aspects such as whether the risks of storage can be successfully managed.

Although the capture component of CCS is particularly expensive and energy intensive, the costs and risks will continue for decades: storage sites require continuous monitoring and assessment to ensure safe storage. Then there is the issue of long-term liability. The IPCC report states that “few countries have specifically developed legal or regulatory frameworks for long-term CO2 storage.” More recently, the Global CCS Institute assessed the readiness of over 50 nations for CCS and found that no nation has “yet established the conditions necessary to drive deployment at the rate required to meet ambitious climate targets.”

Back in 2007, the UK government announced that several CCS projects had been proposed by British industry and that the government planned to select one or more of these projects before the end of the following year, with the aim to have them fully operational by 2014. Twelve years later, the UK is yet to build its first CCS facility, with the government still describing the technology as “pre-commercial.” With the existing myriad of challenges, reaching commerciality seems like chasing the end of the rainbow.


*Dr. Carole Nakhle is the founder and CEO of Crystol Energy, an advisory, research and training firm based in London. An energy economist, she specializes in international petroleum contractual arrangements and fiscal regimes; upstream oil and gas regulations; petroleum revenue management and governance; energy policy, security and investment; and world oil and gas market developments.
She has worked with oil and gas companies (NOCs and IOCs), governments and policy makers, international organisations, academic institutions and specialized think tanks on a global scale. She is a regular contributor to Geopolitical Intelligence Services on energy matters, a program advisor to the Washington-based International Tax and Investment Center, a Member of the Executive Sessions on the Political Economy of Extractive Industries at Columbia University and a Participant in the OECD Policy Dialogue on Natural Resource-based Development.

Demography is Diversity

by Alvin Rabushka*

Demography is Diversity.  Diversity is being driven by demography.  The dramatic change in the U.S. population from 88.3% White in 1940 to a projected 42.6% White in 2060 (Whites will cease being a majority sometime around 2042-45) must necessarily change the composition and leadership of nearly every American organization and institution.
I have raised a number of issues with the process of Diversity and Inclusion.
There is considerable arbitrariness in the racial/ethnic classification of Americans, which means that any descriptive statistics on Diversity are not conclusive.

Measurement, an agreed-upon numerical scale and the appropriate level (s) to which it applies in any organization (the degree of granularity), is critical to claims about progress towards Diversity.  To date, measurement has received little consideration.

The current working definition of Diversity and Inclusion is that no all-White entity can exist.  Every group with Whites must include non-Whites.  Any group of non-Whites need not include Whites.  Whites cannot self-segregate and must be Inclusive.  In contrast, minorities must have the right to integrate and self-segregate as they wish.  Minorities can be Inclusive and/or Exclusive.  Women can be Exclusive of men, but not all-White.

There are no simple criteria for deciding who between and within the People of Color should be at the front of the Diversity and Inclusion line.  Those who have been here the longest?  Those who descend from American slavery? …

Continue reading ->

Alvin Rabushka’s Blog “Thoughtful Ideas”


*Alvin Rabushka is an American political scientist. He is a David and Joan Traitel Senior Fellow at the Hoover Institution at Stanford University, and member of the Mont Pelerin Society. He is best known for his work on taxation and transition economies. Together with Robert Hall, he wrote a detailed Flat Tax plan known as the Hall–Rabushka flat tax.

Planning the economy

GIS Statement by Prince Michael of Liechtenstein

An economy is a complex, interactive structure. On one side, it engages suppliers and providers of goods and services; intermediaries such as trading companies, the transport industry and the financial system; and, finally, on the other side, consumers. It is a matrix of collaboration involving millions of agents with differing interests and business models.

Dark clouds gathering global economy

Competition and freedom of choice allow these interactions to find a balance. The shorthand for this system is the market. Markets underpin the interaction between individuals and businesses, and also between countries. This mechanism can only work with free exchange and individual freedom of contracts. It requires some rules to function smoothly – helping markets develop and forming a legal framework and a judicial system to secure the enforcement of contracts. Also, failures must be accepted.

Taken together, these elements provide the foundation of probably the most efficient and sustainable economic system in human history. It was this system, called ordoliberalism, that made possible the German economy’s rapid recovery and modernization (the so-called Wirtschaftswunder) after World War II. The essence of ordoliberalism is to reduce the state’s role to a provider of the economy’s supporting framework. As much as possible, the public authorities abstain from any attempt to intervene in the economy or plan its development …

Read the full article here ->
Planning the economy


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defense, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyze the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyze and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Vernon Smith Prize 2018 – Award Ceremony

Prince Michael of Liechtenstein (left), Paul Künzle, Mateusz Urban, Sebastian Ariel Abella and Prince Philipp of Liechtenstein (right).

On February 4, the 11th Vernon Smith Prize was awarded in Vaduz, Liechtenstein. The award ceremony took place in the Hofkellerei Vaduz. In their essays, the young contenders dealt with the pros and cons of genetic engineering. The winner was the Argentine Sebastian Ariel Abella.

Students from all over the world wrote essays in the run-up to the 11th Vernon Smith Prize on “Obscured by Fake News: The Politics, Morals, and Limits of Genetic Engineering”. They focussed on the socio-political relevance, the moral importance and the limits of genetic engineering. A panel of experts examined all submitted essays and selected the three best ones. The works were judged on logic, content stringency and scientific depth. In addition, the candidates must not have exceeded the age of 30 …

The Winners of 2018

1st Price: Sebastian Ariel Abella

2nd Price: Mateusz Urban

3rd Price: Paul Künzle

The 11th International Vernon Smith Prize for the advancement of Austrian Economics was an essay competition sponsored and organized by ECAEF – European Center of Austrian Economics Foundation, Vaduz (Principality of Liechtenstein). Topic of 2018:

Obscured by Fake News:
The Politics, Morals, and Limits
of Genetic Engineering

Vernon Smith Prize 2018
Vernon Smith Prize 2018 – Call for Papers

Biotechnological procedures, including genetic modification have been employed successfully in the course of millennia for the making of vital medicines or for selective breeding to generate much of our daily foodstuff. We have used these techniques also in refining plants, in the production of alcoholic beverages, cheeses or for manufacturing garments. And yet, Biotechnology in general and especially Genetic Engineering are subject to controversy, widespread misinformation, and remain shrouded in mystery, characterized by vague apprehensions and common superstitions. Whereas in conventional breeding methods only more or less the same species can be crossed with each other, Genetic Engineering deals with the isolation, characterization, and recombination of genetic material. Although, this new development has endured the extensive rigor of scientific method, together with academic peer-review concluding empirically in support of the new science, the application and commercialization of genetic engineering innovation in the food system from a business perspective are worthy of debate and have policy considerations. For many, Genetic Engineering is a seminal achievement that can be used for life saving drugs, improvements of the environment and GMOs could even help feed the world. Others consider it an untested and dangerous intrusion into nature that needs to be regulated or even outlawed by politics.
We invite papers on this topic addressing not only the socio-political relevance and the moral implications of Genetic Engineering. But also the implications of possible regulations and even limitations of scientific research on the whole.


First Prize: €4,000


Second Prize: €3,000


Third Prize: €2,000


All entries needed to meet the following requirements:
1: Entries to be submitted by individuals of up to 30 years (in 2018).
2: Entries not to exceed 12 pgs.; 1.5 space; left/right margins no less then 1 inch; including a full bibliography and a 1/2 page summary
3: Entries to be submitted in English in electronic form (pdf) including a current CV with DoB.
4: Deadline was November 30, 2018.
5. It was mandatory that all three prizewinners participated in the award ceremony in Vaduz.

Vernon Smith Prize 2018 Preisverleihung

Am 4. Februar wurde in Vaduz der 11. Vernon Smith Prize verliehen. Die jungen Preisträger befassten sich in ihren Essays mit den Chancen und Risiken der Gentechnologie. Sieger wurde der Argentinier Sebastian Ariel Abella.

Prinz Michael von und zu Liechtenstein, der Drittplatzierte Paul Künzle, Mateusz Urban (2.) und Sieger Sebastian Ariel Abella sowie S. D. Prinz Philipp von und zu Liechtenstein (v.l.)

Die Preisverleihung fand in der Vaduzer Hofkellerei statt. Studierende aus aller Welt verfassten im Vorfeld des 11. Vernon Smith Preises Essays zum Thema “Obscured by Fake News: The Politics, Morals, and Limits of Genetic Engineering”. Sie setzen sich darin mit der gesellschaftspolitischen Relevanz, der moralischen Bedeutung und den Grenzen der Gentechnologie auseinander. Eine Fachjury sichtete die eingereichten Essays und wählte schliesslich die drei besten aus. Die Essays wurden nach Logik, inhaltlicher Stringenz und Wissenschaftlichkeit bewertet. Zudem durfte der Kandidat das 30. Lebensjahr nicht überschritten haben …


Lesen sie den gesamten Beitrag hier ->
Gentechnik, Fluch oder Segen?
(Liechtensteiner Vaterland, 5. Feb. 2019; PDF)