Dr. S. Julio Friedmann

Deputy Assistant Secretary Office of Clean Coal and Carbon Management

The Age of Deployment: Commercial CCS for EOR

CO2 conference (20th anniversary) Dec. 11th, 2014, Midland, TX

This is a time of fossil energy abundance

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Once in a generation opportunity to build

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US Energy Picture: Abundant Coal, Gas, and Oil

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Coal Use Growing Overall and Important in Many Economies

EIA Energy Outlook 2013

Continued recent growth •China •Europe •India, Japan

Increased trade and exports

Increased CO2 emissions

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Nuclear 8% Power generation efficiency 3% Renewables 21% End-use fuel switching 12% CCS 14% End-use fuel & elec. efficiency 42%

CCS

“All of the above” required

Because of abundant fossil energy, clean coal technology remains a critical option

CCS/CCUS is the key technology for this era of fossil energy abundance

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Large Scale Integrated Projects World Wide

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Num

ber o

f Pro

ject

s Volum

e CO

2 (mtpa)

Data from Global CCS Institute

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Boundary Dam, : 1.1M tons/y CO2 Saskpower, Saskatchewan

Operational last week

DOE’s top CCS priorities

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Success of US eight commercial demonstration projects • Bring into operation 2013-2019 • A deep and rich set of public learning

Reimagining the coal and CCS RD&D portfolio

International Partnerships • China • Japan • Other key partnerships

A $6B climate mitigation program at DOEx

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DOE CCUS Demonstration Projects

CCPI

FutureGen

ICCS (Area I)

Hydrogen Energy California IGCC with EOR

$408 Million - DOE $4.0 Billion - Total

Summit Texas Clean Energy IGCC with EOR

$450 Million - DOE $1.7 Billion - Total

NRG Energy Post Combustion with CO2

Capture with EOR $167 Million – DOE $339 Million - Total

Air Products CO2 Capture from Steam

Methane Reformers with EOR $284 Million - DOE $431 Million - Total

Leucadia CO2 Capture from Methanol

with EOR $261 Million - DOE $436 Million - Total

Archer Daniels Midland CO2 Capture from Ethanol w/ saline storage

$141 Million - DOE $208 Million - Total

FutureGen 2.0 Oxy-combustion with CO2 capture

and saline storage $1.0 Billion - DOE

$1.3 Billion - Total

Southern Company Services IGCC-Transport Gasifier w/CO2 pipeline

$270 Million - DOE $2.67 Billion - Total

Projects are sources of innovation: Technology, business, and policy

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Kemper County, MS Southern Co., 2010

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Kemper County, MS Southern Co., 2013

(Anticipated start late 2014 or early 2015)

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Port Arthur, TX Air Products, 2013

VSA Vessels VSA Vessels

Co-Gen Unit

Blowers

CO2 Compressor &

TEG Unit CO2 Surge

Tanks

Existing SMR

One million tons injected as of April, 2014

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W.A. Parrish, TX NRG/PetraNova project

Broke Ground Last Week!!

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Decatur, IL ADM 2013

300,000 tons/y today; Over 900,000 tons to date

1 M tons/y shortly

CO2 Pipe to Injection Well

Final class VI permit

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Skyonic “Skymine” project, San Antonio, TX Operational !!

75,000 tons/y CO2 captured - >200,000 tons avoided

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Clean Coal deployment: most urgent and important

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Not just about cost • Costs are higher than uncontrolled coal plants • Costs are lower than many clean energy alternatives

Not just about technology • Many technologies are well demonstrated • Improvement potential is very large

Could finance many ways • Rate recovery; feed-in tariffs; direct grants • Clean energy portfolios; tax-free debt financing; others

Financing is the priority action

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Cost, policy, and parity

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EOR: Critical to CCUS deployment

• Many 10’s of billions bbls US • 100’s of billions bbls worldwide • Provide revenues: break even for

capital retrofit costs in 7-8 years!

>25B tons CO2 storage potential with EOR = ½ the US coal fleet for ~20 years

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New study shows huge potential for ROZ

Partition 1

Partition 2

Partition 3

Partition 5

Central Basin Platform

Seminole W. Seminole

Adair TLOC

Cedar Lake

GMK & GMK So.

Robertson

Hanford ODC Russell So.

Havemeyer

N

Seminole E

S

Carm-Ann

Jenkins

Black Watch

Homann

Lower San Andres Shelf Margin

Partition 4

• 121 wells in 4 counties

• 109 Billion OOIP (!)

• 20-30% est. recovery

• 60-100B t CO2 storage potential

NEW WORK! “Establishing the CO2 Storage Potential and Oil Recovery Potential of the Permian Basin's Residual Oil Zone Fairways”

-- Booz-Allen Hamilton and ARI

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Advanced CO2 capture technologies Many pathways to success

Novel Solvents New concepts

Solid sorbents Advanced membranes

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Must go farther and faster

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International partnerships required Many platforms (APEC; G7; Boao; UNFCCC; WEC) CSLF: Multinational platform

– 22 countries + E.C. – 11 years in practice – Productive technical and policy

working groups Partnerships in Commerce

– Joint ventures – International investment – “Showcase” projects

Accelerated deployment – Data sharing – International Science Projects

11th CSLF Ministerial Nov. 2013

Minister’s visit to Kemper project Nov. 2013

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Changing International Landscape US-China Accord

– Includes large CCS project – Includes enhanced water

recovery projects

New EU accord – Policy Parity for CCUS and

nuclear (UNECE) – Innovation funds

Surprise stars – UK: White Rose + – KSA and UAE: EOR + coal – Mexico: growing interest

China is the main event: for technology testing and project development

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• Coal use immense – 67.5% of primary energy – near 4B tons/y today – ~6B tons CO2 from coal use – Continued growth

• Substantial govt. interest – Pollution helps drive outcomes – Chiefly interested in CO2 utilization – Active under CCWG – New investment in CCS & EOR

• Going for the gold – On technology, finance, construction

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Counterfacing projects under CCWG/S&ED

Projects involve UKY, WVU, UWYO Other recent developments:

• New projects: Sinopec, CNPC, & Yanchang • Pending CO2 pipeline deals

• Central govt. invitations to US independents

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Opportunities for partnership are large and varied

Companies • Private and state-owned • Technology & investment

Provinces • State joint efforts • Projects and companies

Investors • Shanghai-Pudong • Private/equity • Banks and companies

Universities and Institutes • Enormous role in policy • Openers and enablers

Clean Energy Workshop 2014 Shanxi-West Virginia

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Key unit of innovation – global engines of discovery

White Rose Peterhead (UK)

Uthmaniyah (KSA)

Lula (BRA)

Quest (CAN)

ESI (UAE) Gorgon (AUS)

GreenGen (PRC) Shenli

Yanchang

The next decade of projects = policy infrastructure

Technology leads and informs policy

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Must build and deploy large projects • Learning opportunity in CCS and clean fossil • Information sharing: partnership as product • Financing is the key challenge; many paths to success

Must develop 2nd and 3rd generation technology

Must partner with many • Friends in the US • Friends around the world

Once in a generation opportunity to build