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Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

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  • Oct 11, 2021
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DOE/NETL has recognized Carbon Capture & Storage (CCS) as one the key pathways to Net-zero.

Developing a successful CCS project is a multidisciplinary effort; similar to oil & gas capital projects. The resource classification and maturation of 'Prospective Storage Resources' from regional/basin level to a specific 'Qualified ' sites is a first step towards success.

Key Insights 
  1. DOE/NETL best practices suggest resource classification of CO2 storage resources
  2. The anticipation is there will be many CCS projects and development effort is similar to oil & gas capital projects
  3. The CO2 Storage Resource management borrows substantially from Petroleum Resource Management System
  4. The process emphasizes maturation focus on early 'Prospective Storage resources'; from 'Regional/Basin' level to specific 'Qualified' storage sites.
  5. The geological and regulatory uncertainties and risks are higher at early stage; therefore a robust maturation process help reduce risk and manage uncertainties
Bottomline/Forward View

DOE/NETL best practices maintain a forward view on CCS. They anticipate growth of CCS projects and recommends robust process to mange CO2 storage maturation similar to oil & gas capital projects.

 

 

 

 

 

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    Bob Meinetz's picture
    Bob Meinetz on Oct 11, 2021

    Tariq, assuming a successful storage project is one that, for a fossil fuel producer, permanently sequesters a significant percentage of the greenhouse gases its products emit.

    Does one even exist? I know there is a facility in Illinois that claims it has permanently stored 1 million tonnes of CO2 underground, over the course of several years, at great expense. To reach net-zero one of those facilities would need to be built each year for 37,000 years (assuming carbon emissions don't increase over the next 37 millennia).

     No, in a best-case scenario "Carbon Capture and Storage" is a wildly aspirational idea, a last-ditch attempt to lessen the impact of the 37 billion metric tonnes of CO2 the world emits annually. In a worst-case scenario, it's a cynical attempt by fossil-fuel companies to mislead the public into believing continued reliance on fossil fuel isn't a problem, that the disastrous impact their products are causing can be corrected by stuffing CO2 back into the ground - "toothpaste back into the tube", as it were.

    What am I missing?

    Tariq Siddiqui's picture
    Tariq Siddiqui on Oct 11, 2021
    1. Does Project exists?
      1. The Sleipner (Norway) dedicated CO2 project i.e. injection CO2 in a Saline Aquifer is in operation since 1996.  To date it has injected close to 100 MT of CO2. The reason it is possible in Norway,because the y have Carbon Tax.
      2. In the absence of Carbon tax and/or Cap & Trade, there is a little inceptive to do the CO2 commercially. The only way to do profitably is to store CO2 in EOR project; here to like in USA 45Q helps but alone cannot make it up for the cost.
    2. The `40 billion tonnes that is  emitted annually requires multiple pathways.
      1. Primarily the first step is to totally AVOID fossil fuels (use Wind, Solar, Geothermal etc.)
      2. Second is to REDUCE existing emission (stop; flaring, methane leaks, increase emission efficiency)
      3. Finally 'what cannot be Avoided' or Reduced must be REMOVED to achieve 'Net-Zero' ( these are industries like cement or steel); either through
        1. Biological sequestration (Afforestation, Reforestation etc.)
        2. Technological Sequestration (Direct Air Capture or DAC; or CCS). 
    3. So what is Missing?
      1. EU has well established Emission Trading System (EU-ETS); Non-EU OECD countries have other mechanisms like Carbon Tax (Ex: Norway). This has significantly incentivized the emission curtailment. This has been borrowed from USA that had SO2 & other emission program from 1970's to 1990's.
      2. In USA, except North East where 13 or so states have Cap & Trade, rest of the US does not have much regulatory framework. California and few other states around it are exception. The oil producing region has no framework
      3. EU is abetter example, that shows that Legislative binding alone does not help emissions unless followed through the with robust framework for emitters to plan well into future.
      4. The profitable CO2-EOR storage cannot be upscaled to the size of emission problem. That requires CO2-Storage in saline aquifer (not profitable, not even with with 45Q). This is further complicated by the fact biggest emission footprint is from Coal-powered plants, this is a lean CO2, very costly to capture.
      5. Therefore, without framework fossil fuel companies are on their own
        1.  In EU the Supermajors have significantly different strategy; they are investing in Solar, Wind, Hydrogen and CCS. Remember they also have smaller hydrocarbon reserves, therefore less at stakes. Hence they are focusing first and foremost on Avoiding & Reducing then on Removing
        2. In USA, ExxonMobil & Chevron do not believe there is any margin left in Wind and/or Solar. They also have significantly larger hydrocarbon reserves, and hence more at stake. Therefore in the absence of any regulatory framework, they taken path of CCS. Arguably, they have a point that it is one of the pathway (if not exactly the silver bullet), this one requires public and private partnership to develop infrastructure or Hub type CCS projects (Example: Huston CCS Hub). Focus is more on removing.

    SORRY - Long but my view.

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