Activity aimed at catalyzing early CCS action in the US has focused on CO2 enhanced oil recovery (EOR) opportunities in Texas and Williams’ Congressional testimony laying out a strategy for speeding the adoption of CCS as a routine activity for coal energy conversion systems.
The gasification energy/CO2 EOR nexus for Texas
In 2006, when TXU made proposals to build many new conventional power plants fueled with low-rank coals in Texas, Bob Williams started a study that ultimately showed that the surge in demand for new coal power presents an opportunity for early CCS action by recovering CO2 at new power plants for enhanced oil recovery (EOR). In the meantime, public opposition to the planned new coal capacity led on 26 February 2007 to an announcement of a buyout of TXU by the Texas Pacific Group (TPG) and Kohlberg Kravis Roberts to be accompanied by cancellation of plans for all but 3 of the originally planned TXU plants. The ensuing controversy about the remaining 3 plants led David Bonderman (TPG head) to call for a meeting on 5 March 2007 with Dallas Mayor Laura Miller and the members of her committee of Texas mayors that opposed the construction of the remaining three plants to discuss their differences. Williams’ draft analysis was already being circulated in Texas, and, as a result, Mayor Laura Miller invited Williams to attend the meeting with Bonderman as one of her two technical advisors for the meeting. At the meeting Williams had the opportunity to discuss briefly the “gasification energy/CO2 EOR nexus for Texas.” However, the controversy about the remaining planned TXU plants continues.
After the meeting Tom Kreutz joined Williams in continuing the analysis of IGCC power with CO2 capture and use for EOR. A challenge posed by coal power in Texas is that the least costly gasifiers on the market cannot economically be used with the low-rank coals that would be used in Texas [Texas lignite or Powder River Basin (PRB) sub-bituminous coal]. So Williams and Kreutz set out to model IGCC power plants that would be fired with a blend of low-rank coal and petcoke (which is abundantly available in Texas) designed to “look like” (from the gasifier’s perspective) the high-rank (bituminous) coal that these low-cost gasifiers are designed to use. They found that a blend of 43% PRB coal and 57% petcoke would be well suited for use with the least costly gasifiers. And for these plants they carried out an economic analysis suggesting favorable economics for IGCC plants sited near CO2 EOR opportunities—to the extent that the power generation cost for such plants with CCS would be no higher than for coal steam-electric plants fired with PRB coals but with CO2 vented. These results were presented at the 6th Annual USDOE Conference on Carbon Capture and Sequestration (May 2007); a paper is being prepared for presenting these results in a journal.
The “gasification energy/EOR nexus for Texas” idea seems to be catching on. In late spring of 2007, Goldman Sachs announced plans to built 1200 MWe of petcoke IGCC capacity at Lockwood, Texas, with CO2 capture and use for EOR—the first 600 MWe unit is expected to come on line in 2011 and the second 600 MWe unit in 2013.
Testimony to the Select Committee on Energy Independence and Global Warming
Williams was invited in September 2007 to submit written testimony to the Select Committee on Energy Independence and Global Warming of the US House of Representatives in conjunction with its Hearing on the Future of Coal under Carbon Cap and Trade. Committee Chairman Edward Markey asked Williams to address, as one part of his testimony, a set of questions as to what Congress might do to speed up the widespread deployment of CCS technologies for coal energy conversion systems.
Williams pointed out that, although no energy conversion plant with CCS has been built, there are no technical barriers to carrying out CCS projects for gasification-based energy conversion systems—because all the technological components are proven. He indicated that the only significant barriers are (i) the need for a valuation of CO2 emissions of at least $30 per tonne of CO2 in order to make CCS investments profitable and (ii) institutional issues relating to CO2 storage (access to underground pore space, liability concerns, etc.)—reflecting the fact that a regulatory framework is not yet in place for CO2 storage. He described a strategy for getting started with CCS as early as 2013 for all new coal energy conversion facilities. Two key elements of his (seven-part) proposal are a low-carbon obligation for coal power (that would spread over all coal power generation via a trading mechanism the incremental cost of CCS for the growing number of plants that would be decarbonized over time) and establishment of a quasi-public corporation to assume responsibility (including liability) for CO2 storage in federally certified storage media for the very first plants—plants that would be built before the needed regulatory framework for CO2 storage is put into place (hopefully, by ~ 2015).