Perspectives on CCS Cost and Economics
- Haroon S. Kheshgi (ExxonMobil Research and Engineeing Company) | Nazeer A. Bhore (ExxonMobil Corporation) | Robert Hirsch (ExxonMobil Gas & Power Marketing) | Michael Edward Parker (ExxonMobil Production Co.) | Gary F. Teletzke (ExxonMobil Upstream Research) | Hans Thomann (Exxon Research & Engrg. Co.)
- Document ID
- Society of Petroleum Engineers
- SPE International Conference on CO2 Capture, Storage, and Utilization, 10-12 November, New Orleans, Louisiana, USA
- Publication Date
- Document Type
- Conference Paper
- 2010. Society of Petroleum Engineers
- 5.4 Enhanced Recovery, 4.6 Natural Gas, 4.1.2 Separation and Treating, 4.3.4 Scale, 4.1.5 Processing Equipment, 4.1.4 Gas Processing, 6.5.7 Climate Change, 4.1.6 Compressors, Engines and Turbines, 7.4.3 Market analysis /supply and demand forecasting/pricing, 6.6.2 Environmental and Social Impact Assessments, 6.5.3 Waste Management, 4.2 Pipelines, Flowlines and Risers, 5.4.2 Gas Injection Methods, 6.5.1 Air Emissions
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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 $/MBTU.
• 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 plants.
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 CCS deployment.
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 plant.
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