H.S. Kheshgi, SPE, N.A. Bhore, R.B. Hirsch, M.E. Parker, G.F. Teletzke, SPE,
H. Thomann, ExxonMobil
SPE International Conference on CO2 Capture, Storage, and Utilization,
10-12 November 2010,
New Orleans, Louisiana, USA
Focus on Carbon Capture and Storage (CCS) has grown over the past decade
with recognition of CCS’s potential to make deep CO2 emission reductions and
that fossil fuels will continue to be needed to supply much of the world's
energy demands for decades to come. How CCS will compare to other options in
the future depends critically on the cost of CCS (the focus of this paper) and
resolution of barriers to CCS deployment, as well as costs and barriers for
other emission reduction options.
This paper provides a comparison of the cost of electricity of five power
generation options – coal and gas Combined Cycle Gas Turbine (CCGT,) with and
without CCS and nuclear – and shows regions of carbon price and fuel prices
where each can be economically viable.
Current cost estimates for coal CCS for Nth-of-a-kind power generation plant
are in the 60-100 $/ton of CO2 avoided – higher than some of the earlier CCS
estimates, and higher than the generally accepted range of expected carbon
prices in the next two decades. The high cost of coal CCS suggests that:
• Gas based power generation is much more economical than coal CCS at
carbon prices below 60-100 $/ton CO2.
• Even after carbon prices reach 60-100 $/ton CO2, gas CCS produces lower
cost electricity than coal CCS as long as natural gas prices remain below 9
• Nuclear has a lower cost of electricity than coal CCS.
Although Coal or Gas CCS is unlikely to be economical in power generation over
the next two decades, subsidized demonstrations of CCS are likely to occur. In
addition, components of CCS technologies will continue to be economically
practiced in early use segments such as natural gas processing and Enhanced Oil
Recovery (EOR) operations. In this paper, we share ExxonMobil’s experience at
LaBarge in using CO2 from a natural gas facility for EOR use – the single
largest CO2 capture site for sub-surface injection in the world today. In the
natural gas processing industry, CO2 separation cost is a fraction of the cost
of CO2 capture in power generation due to its higher gas pressure, and the CO2
separation is typically necessary to monetize the natural gas resource.
In contrast, CCS for most refinery and industrial emissions is expected to be
significantly more costly than power generation because the CO2 streams are
typically smaller scale and more distributed than those from large power
Realistic estimates of cost for CCS, as well as for other greenhouse gas (GHG)
mitigation options, are an important input for focusing research, development
and demonstration (RD&D) addressing barriers to applications that show the
greatest promise, and development of sound policy.
CCS has the potential to provide significant reductions in CO2 emissions
from large stationary sources, particularly in electricity generation. How and
when CCS will compete with other GHG mitigation options depends on a clear
understanding of CCS costs and drivers, as well as resolution of barriers to
The cost of CCS is influenced by the size of the CO2 source, CO2 concentration,
CO2 pressure, the maturity of technology, and the proximity and quality of
storage (CERA 2010). Furthermore, added costs may be incurred by the resolution
of issues associated with impurities, permitting, and long-term responsibility
for stored CO2.
The capture step dominates CCS cost from electricity generation. CCS cost
estimates are primarily derived from consideration of equipment requirements
and operating costs. However, issues associated with impurities, permitting,
and long-term responsibility for CO2 storage are not fully resolved. Resolution
of these issues may require changes in design and operation that could entail
additional costs. Construction costs for the capture step are likely to be
higher than common basis assumptions, especially for a first-of-a-kind