March 2023

Carbon Capture Commercial Considerations

Development Issues in today’s Carbon Capture Utilization Storage (“CCUS”) marketplace
Presented byDavid Greeson
Proven Project Development GroupDavid@davidgreeson.com
281.220.7623

David Greeson
David Greeson is a consultant to the carbon capture and power
generation industries. Until his retirement in 2018, David was the Vice
President of Development for NRG Energy where he led NRG’s Gulf Coastbusiness development group and the company’s carbon capture program.
He was the developer of the $1 billion Petra Nova project near Houston, TX
from inception through commissioning and is now consulting with companies
planning development of CO2 capture projects.
David began his career in the power industry 43 years ago at Houston Lighting& Power. Over the years, he has developed five major power projects here in
the US which represent over $3 billion of investment.
2

Overview of Carbon Capture
Clean
Flue Gas(less than 1% CO2)
Flue Gas
10.8% CO2
Unit 1

Unit 2

Post
Combustion
CarbonCapture99.9%
Pure CO2
SecureGeologic Storage

Carbon-Free
Power** Remainder of station MWs are at normal coal-fired carbon intensity3

State Policy Should Focus on
Deployment – Not More Research• DOE is shouldering the burden on research• Congress has enacted incentives for first movers• States should focus on filling the gaps to deployment• Policies and local incentives that make sense4

Alaska in perspective

5

Cost of capture varies greatly

180
160

US Tax Credit forWind Power

140

Source:1.

Costs from National Petroleum Council report“Meeting the Dual Challenge” 2019

NPC Study – Total Estimated Capture Costby Facility Type1($/tonne)
US Tax Credit for
CCUS

120
100
80
60
40
20
0

Nat. Gas
Processing

Ethanol

Ammonia

Hydrogen

CementHigh

Refinery FCC
Low

Steel/Iron

Power - Coal

Industrial
Furnace

Power - GasMid
6

Large difference ineconomics

Relative Costs of Typical Carbon Capture System
Ethanol vs. Power1($/tonne)
120

104
100

44

80

60

40

20

Source:1.

Costs from National Petroleum Council report“Meeting the Dual Challenge” 2019

0

30

30
8
11

30

11

Ethanol CCS Costs
Energy Costs

Power Plant CCS Cost (Avg.)
O&M

Capital7

NPC Study Estimated Cost of CCS
Range

Value
AssumedTransport

2 - 3827

Storage

7 - 11

8

Power & Steam

9 - 31

16

O&M

6 - 126

15

Capital

6 - 155

44

CCS Component($/tonne)($/tonne)

Capture

Total

110

Source:1.

Costs from National Petroleum Council report“Meeting the Dual Challenge” 20198

CapEx as a Functionof CO2 Concentration

Cost per tonne ofof flue gas
processed per dayis ~ $9,000 in all
cases

CapEx per daily tonne of CO2 Capture(11,000 tonnes of CO2 per day)

$250,000

Illustrative purposes only

$200,000$150,000$100,000$50,000$0

NGCC - 3%Nat. Gas Boiler - 8%

Coal - 11%

Cement - 16%

H2 - SMR - 22%
9

CCS is Expensive –There is Reason for Hope

• Solar technology
was not evenclose toeconomic just 10
years ago
• Today, costs areclose to thevalue ofintermittent
power
Source: Solar Energy Cost Trends
Over Time by Ryan Austin
https://earthtechling.com/solarenergy-costs-trends/
10Policies Developers
Look For• Primacy on Class VI permitting• Public lands opportunity for storage solves a lot of problems for CCUS
developers• One creditworthy landowner• Storage cost certainty• Consistent with other public interest missions of the state• Long-term liability for stored CO2

11Thank you!

12

Carbon Capture, Use, and Storage (CCUS)

Alaska CCUS Workgroup and a Roadmap to
Commercial Deployment

•
•
•
•
•

Frank Paskvan, University of Alaska Fairbanks—Institute of Northern Engineering (UAF-INE),
International Reservoir Technologies, Inc.
Haley Paine, Alaska DNR-DOG
Christine Resler, Esther Tempel, ASRC Energy Services (AES), LLC
Brent Sheets, UAF-INE
Thomas McGuire, Kevin Connors, Energy and Environment Research Center, University of North Dakota
SPE 213051 is accepted in pre-print to be published on OnePetro for the SPE Western Regional Meeting, 22—25 May 2023, Anchorage, Alaska.
Disclaimer: Opinions and views expressed are solely those of the authors and do not reflect the organizations with which they are affiliated.

Alaska CCUS Workgroup Focus
The CCUS workgroup mission is to accelerate commercial
carbon capture projects in Alaska.
Why?
• To attract new investments and• To create options to decarbonize activities vital to the State’s economy
including power generation, refineries, and oil and gas production.

Develop a Statelegal andregulatory
framework

Track and respondto funding
opportunities

Perform public
education andoutreach

Develop a
Roadmap toacceleratecommercial CCUS

2

Alaska CCUS Workgroup

 Kicked off July 2022, continuation of group working
Alaska’s DOE RFI response

CCUS Workgroup
Federal,NGO, &
Public14%

 110 attending meetings
 30—50 members meet up to 4 times a month Diverse representation on the Workgroup
 University of Alaska Fairbanks has lead role

Corporate
51%

University
12%
State
23%

 Leadership represents Academia, Industry, and State
Government
 DOE funds support the UAF-led Workgroup via PCOR,a Regional Carbon Sequestration Partnership3

CCUS Impact on Emissions
World faces dual challenge ofincreasing energy demand andrisks of climate change
Carbon (CO2) Capture andStorage (CCS) also removes
other pollutants
Adding CO2 Use (CCUS) like
agriculture, electricity can be
net zero emissions and support
local food and energy security
Cost for clean energy security
more than doubles without
CCUS [IPCC]
4

The CCUS Process Stationary point
source Capture Direct Air Capture(DAC)

CCUS Steps:
1. Capture CO2
2. Transport
3. Store (or Use)
5

Foundational Elements

Slide with permission from AK DNR

Geologic Storage
Potential
Stakeholder Engagement& Community Outreach
Regulatory Framework

6US Department of Energy Perspective
Assistant Secretary of Energy Brad Crabtree
on 21Feb2023 at the Alaska CCUS Workshop at APU:
 US has a leading role in CCUS globally– BIL (Bipartisan Infrastructure Law)
• Addresses all elements of CCUS
• $12 billion for carbon management– IRA (Inflation Reduction Act)• $300 billion in clean energy including 45Q credits• Co-investment government & industry• Early project funding 80% Feds & 20% Industry; Later Stages 50/50 plus loan guarantees
 Cook Inlet – World Class Storage Alaska grid unique in USA, Potential for Decarbonization
 Impressed Alaskans are agents of opportunity
7

Funding Opportunity Examples$820 Million for 10 projects$1.7 Billion for 6 projects

Funding Opportunity Announcement(FOA) late Feb 2023

FOA late Feb 2023

Industry, University Developers, State eligible

Industry, University Developers, State eligible

Carbon Capture Large-Scale Pilot Programs

Carbon Capture Demonstration Projects Programs• Designed to establish a carbon capture technology program for thedevelopment of transformational technologies that will significantly
improve the efficiency, effectiveness, costs, emissions reductions, andenvironmental performance of coal and natural gas use, including in
manufacturing and industrial facilities.
• FOA is seeking projects that
• Represent the scale of technology development beyond laboratory
development and bench scale testing, but not yet advanced to thepoint of being tested under real operational conditions at commercial
scale;• Represent the scale of technology necessary to gain the operational
data needed to understand the technical and performance risks of thetechnology before the application of that technology at commercial
scale or in commercial-scale demonstration; and• Are large enough to validate scaling factors and to demonstrate theinteraction between major components so that control philosophies
for a new process can be developed and enable the technology toadvance from pilot to commercial-scale demonstration/application• Description: To establish and carry out a carbon dioxidetransportation infrastructure finance and innovation program.
• Eligibility: Of the demonstration projects carried out (i) 2 shallbe designed to capture carbon dioxide from a natural gas
electric generation facility; (ii) 2 shall be designed to capture
carbon dioxide from a coal electric generation facility; and (iii) 2
shall be designed to capture carbon dioxide from an industrial
facility not purposed for electric generation.
• The program will focus on integrated carbon capture, transport,
and storage technologies and infrastructure that can be readily
replicated and deployed at fossil energy power plants andmajor industrial sources of CO2, such as cement, pulp andpaper, iron and steel, and certain types of chemical production
facilities.
8

Sovereign Legislation Survey

Slide with permission from AK DNRStates with Comprehensive Legislation
Other Sovereigns:
NorwayUK
Australia
CanadaStates with Class VI Primacy

9Regulatory Framework

Slide with permission from AK DNR• Provides for the use of public lands for CCUS
• Accounts for the amalgamation of property
interests and protection of correlative rights• Outlines relationship between other commercial
minerals and reservoirs to be used for storage• Allows for CO2 transportation pipelines• Defines ownership of carbon dioxide andascription of liability• Addresses authority for USDW Class VI well
primacy• Accounts for state tax structure on projects

10Alaska CCUS Public Engagement
Develop a
State legal andregulatory
framework

Community Outreach Inclusion andeducation
 Engagement at eachphase of project
development
 Process of achievingsocial license

Track and
respond to
funding
opportunities

Perform public
education andoutreach– ACEP Stakeholder mapping Public polling Workshop
development &implementation
 Continued stakeholder
engagement

Develop a
Roadmap toacceleratecommercial
CCUS

National Elementary throughHighschool classroom
outreach Curriculum
development

 Following CCUS
projects andengagement worldwide
 Documenting bestpractices Plan to utilize API’s
recommended practice1185 on effective
engagement withenvironmental justiceSlide with permission from ASRC 11

Benefits of CCUS in Alaska

North Slope natural gas
can fuel CCUS, reducing
emissions(DAC and natural gas)

CCUS reduces project
carbon intensity,
entices funding, eases
permitting, meetscompany ESG goals

Hydrogenproduction with
CO2 capture

CCUS makes CO2 foragriculture use,enhancing local foodsecurity

Low cost, low emission
power from coal with
CCS benefits Railbelt andwhole State via Power
Cost Equalization

Alaska has high carbon
sequestration potential,
including mineralization
and utilization

Easy access for CO2
import at Southcentral
ports

Aging Oil and Gas Fields
with world class storage

12

Alaska CCUS Opportunity Roadmap
North Slope
Advantaged by
low-cost natural gas

Interior
Existing coal plant infrastructure

Natural gas-fired capture
Direct Air Capture (DAC)

Coal-fired capture

Major Gas Sales 2015 LNG plansequestered CO2 back in reservoir

Proximity to Port,potential for import
Capture not attractive at natural
gas plants or refineries due togas supply shortage & high priceCoal or Hydrogen power with CCS
can address natural gas shortage,
food security, lower emissions

Subsurface data integration &site-specific data gathering needed
40 year track record of successful
CO2 sequestration & use, ~15 TCF

Southcentral

Imported CO2 storage(US West Coast or Asia-Pacific)
Basic regional subsurface
data gathering needed

Subsurface data integration &site-specific data gathering needed
13

Alaska CCUS Workgroup Focus
The CCUS workgroup mission is to accelerate commercial
carbon capture projects in Alaska.
Why?
• To attract new investments and• To create options to decarbonize activities vital to the State’s economy
including power generation, refineries, and oil and gas production.

Develop a Statelegal andregulatory
framework

Track and respondto funding
opportunities

Perform public
education andoutreach

Develop a
Roadmap toacceleratecommercial CCUS

14

Thank you Questions?

 Follow-up: Frank.Paskvan@gmail.com
 SPE 213051 is accepted in pre-print to be published on OnePetro for the SPE
Western Regional Meeting, 22—25 May 2023, Anchorage, Alaska
15Electricity Powers Progress Affordable, Reliable
Power Essential to
Human Well Being Electricity costs in Alaska
are high

16

Carbon Capture for the Last Mile

Jason Albritton, Director of Climate & Energy Policy for The Nature Conservancy
https://www.nature.org/en-us/what-we-do/our-insights/perspectives/carbon-capture-utilization-storage-albritton/

17

CO2 Streams  Cost and Feasibility
 Capture cost increases as CO2 concentration & gas pressure decrease– Streams with other contaminants, like from cement, make capture more challenging

CO2
Concentration
Sources:High
PressureHigh Purity

DiluteVery Dilute

Extremely
DiluteVariable40-100%10-25%

3-8%

0.04-1%EthanolAmmonia
Ethylene Oxide 
Hydrogen

Coal
CementCrackers
Steel & Iron Natural
Gas-Fired Furnaces

 Gas processing
 LNG
 Synthesis gas






 Air
 Confined Spaces(spaceships)

Increasing Cost and Decreasing feasibility
Categorization adapted from Howard Herzog, MIT Energy Initiative
Source: CCUS Economics and Costing​ presentation, Alaska CCUS Workgroup,by ​Nick Fulford & Fernando Rolla, GCA, on December 13, 2022

18

Economic Viability of CCS Projects
Cost

Potential
MarketAddressable
Market 45Q is primary CCS
revenue source: $85 tonne,
DAC $180 tonne

RevenueHigh
PressureHigh Purity

DiluteVery Dilute

Extremely
DiluteVariable40-100%10-25%

3-8%

0.04-1%

Source: CCUS Economics and Costing​ presentation, Alaska CCUS Workgroup,by ​Nick Fulford & Fernando Rolla, GCA, on December 13, 2022

 Other value drivers can
include beneficial use,
investment tax credits,
carbon credits, ESG
19

Economic Viability of CCUS Projects• Capture cost increases as
CO2 concentration andgas pressure decrease

Typical CCS cost per tonne CO2 (Lower 48 States Pricing)• 45Q covers much of
capture costs• Other value drivers:
Beneficial Use,investment tax credits,
carbon credits, ESG

45Q• Coal can be attractive• DAC may be attractive• Natural Gas borderline

45Q
Coal

NaturalGas

20
Source: Global CCS Institute, Goldman Sachs Global Investment ResearchState of Technology in CCUS
 Two-thirds of cumulative
CCUS emissions reductions
through 2070 will employ
technology now in prototype
or demonstration stages
 45Q activating Research,
Development, and Projects,
evolving to lower cost andhigher efficiency
 Given deployment time lag,innovation encouraged toenable new, commercially
viable technologies
CCUS technology innovation – CCUS in Clean Energy Transitions – Analysis - IEA

21

CCUS supports Hydrogen Production
 Hydrogen production with CO 2 capture could be a key transition technology moving toward asustainable hydrogen-using society.

Water Gas Shift

Steam

https://www.sciencedirect.com/science/article/abs/pii/S0360319915312659
22

CCUS Technology Maturity
 Two-thirds of the
cumulative emissions
reductions from CCUS
through to 2070 comefrom technologies that are
currently at the prototype
or demonstration stage
 Given time lag, innovationneeds to be stepped-up
now to ensure key
applications arecommercially available

CCUS technology innovation – CCUS in Clean Energy Transitions – Analysis - IEA

23

CCUS Technology

Technology Readiness Level (TRL) Technology evolves tolower cost, higher efficiency
 Two-thirds of emissions
reductions by 2070 will
employ technology now inprototype or demonstration
stages [IEA 2020]
 A project choosing maturetechnology employs:– Amine capture– Pipeline transport– Saline formation storage– Biological or EOR use, optional

Source: NPC Roadmap, 2019, p. 32

24

Alaska CO2 & Storage Potential
 Three potential Carbon Capture and Storage Regions– Based on 2010 Screening. Project-specific work needed to assess CCS applicability.
North Slope

Natural gas fired

Interior

Coal fired

Southcentral

Natural gas fired

CO2 Stationary Sources (red) &Deep Sedimentary Basins (yellow).

Sedimentary Basin Sequestration Potential[Shellenbaum and Clough, DNR, 2010]25

Cook Inlet Gas Supply Analysis
Near term (2026—2027) supply shortfall for Southcentral’s main fuel:26

Alaska CCUS Opportunities: Capture Costs
 Alaska Capture Screening– Using typical Lower 48 costs– Fuel price a key cost driver1
 With Lower 48 costs and 45Q– Natural gas capture
prospective on North Slope– Natural gas capture not
attractive for Southcentral– Coal capture looks
prospective Statewide Further work needed forprospective projects

45Q($85/t)Less transport and storage costs

1Cost methodology benchmarked against NETL, U.S. Department of Energy National Energy Technology Laboratory, 2015,(~Southcentral)“Cost and performance baseline for fossil energy plants volume 1a: Bituminous coal (PC) and natural gas to electricity” revision 3. July 6, 2015, DOE/NETL-2015/1723.

27

Alaska’s Interest in CCUS
 Alaskan entities (DNR, AEA, AGDC, AOGCC, AES, CPAI, Hilcorp, ENI, UAF, and Usibelli) supportedby the Governor responded in January 2022 to DOE Request for Information (RFI) “Deployment
and Demonstration Opportunities for Carbon Reduction and Removal Technologies”
 These entities along with others responding to Funding Opportunities (FOAs), notably:– DNR responded to Area of Interest 2 (State Geological Data Gathering, Analysis, Sharing, andEngagement) of DE-FOA-2799, “Regional Initiative to Accelerate CCUS Deployment: Technical
Assistance for Large-Scale Storage Facilities and Regional Carbon Management Hubs”
 Look forward to future opportunities including Pilots, Projects, and Geologic data gathering

28

Alaska CCUS opportunities have:– A robust and competitive carbon intensive industrial base.
– High potential for carbon sequestration, including through mineral carbonization or
utilization.
– Fossil-energy producing region with high levels of coal, oil, or natural gas resources.
– Considerable carbon sequestration scalability.
– Opportunities for skilled training and long-term employment in an economicallydisadvantaged region.
– A geographically diverse location from the contiguous United States.
– Climatic conditions that provide unique commercialization advantages.

29

Observations for Potential CCUS Projects

30

Screening Findings and Recommendations

31

Renewable Power Assessment for Railbelt

Denholm, Paul, Marty Schwarz, Elise DeGeorge, Sherry Stout, and Nathan Wiltse. 2022. Renewable Portfolio Standard Assessment for
Alaska’s Railbelt. Golden, CO: National Renewable Energy Laboratory. NREL/TP-5700-81698. https://www.nrel.gov/docs/fy22osti/81698.pdf.

32

Railbelt Power System Cost Savings via
Power Cost Equalization has Statewide benefits
 Coal is lowest cost fuel– Per MMBtu:$4/MMBtu Coal
$10—15 Nat Gas$20—35 Diesel– Abundant supply– With CCS, Coal emits• ½ to ¼ of natural gas• ½ of wind withnatural gas peakers
 Natural gas price forecast(from AEA) may notreflect price risk for highcost imported LNG
33

Railbelt Power System
 80% renewable energy
power study for
Railbelt showed
little reduction in fossil
thermal power
generation, coal andnatural gas
 Scenarios were nottested for extended or
extreme conditions
 Additional Scenario(s)including CCUS needed34Railbelt Power System
 80% renewables scenarios exist
 All Scenarios require fossil thermalenergy backup, minimum 75% of basecase, for reliable power generation– Maintaining back up power has costs– Fuel savings may pay for renewables
 Scenario costs not performed in thisstudy, NREL working to extend this toincluding costing of scenarios.

35