## March 2013 

# Q U A L I T Y G U I D E L I N E S

F O R E N E R G Y S Y S T E M S T U D I E S



# C a r b o n D i o x i d e T r a n s p o r t a n d

S t o r a g e C o s t s i n N E T L S t u d i e s

DOE/NETL

- 2010/???? 2013/1614National Energy Technology Laboratory Office of Program Planning and Analysis

2 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## Disclaimer

This report was prepared as an account of work sponsored by an agency of the United States

Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference therein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed there in do not necessarily state or reflect those of the United States Government or any agency thereof.National Energy Technology Laboratory Office of Program Planning and Analysis

3 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## Carbon Dioxide Transport and Storage Costs
in NETL Studies

DOE/NETL

- 2013 / 1614

Final Report

March 14, 2013

NETL Contact:

Tim Grant Physical Scientist Office of Program Planning and Analysis, Benefits Division

National Energy Technology Laboratory www.netl.doe.govNational Energy Technology Laboratory Office of Program Planning and Analysis

4 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



### Prepared by:

Tim Grant National Energy Technology Laboratory

David Morgan National Energy Technology Laboratory

Kristin Gerdes National Energy Technology LaboratoryNational Energy Technology Laboratory Office of Program Planning and Analysis

5 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## Acknowledgments

This report was prepared by the United States Department of Energy (DOE), National Energy Technology Laboratory (NETL)

.

The authors wish to acknowledge the excellent contributions and cooperation by members of the Energy Sector Planning and Analysis staff, particularly:

Jason Valenstein
, Booz Allen Hamilton

Richard Lawrence, A dvanced R esources I nternational

Andrea Poe, Booz Allen Hamilton

Marta Milan, Bo oz Allen HamiltonNational Energy Technology Laboratory Office of Program Planning and Analysis

6 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

This page intentionally left blank.National Energy Technology Laboratory Office of Program Planning and Analysis

7 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## Table of Contents

1 Objective

................................ ................................ ................................ ................................ 10

2 Approach

................................ ................................ ................................ ................................ 10

2.1 Transport Costs

................................ ................................ ................................ ....................... 11

2.2 Storage and Monitoring Costs

................................ ................................ ................................ 13

3 Results

................................ ................................ ................................ ................................ .... 16

3.1 Transport Costs

................................ ................................ ................................ ....................... 16 3.2 Storage and Monitoring Costs

................................ ................................ ............................... 17 3.3 Combining T ransport and Storage

................................ ................................ ......................... 20

4 References

................................ ................................ ................................ .............................. 21National Energy Technology Laboratory Office of Program Planning and Analysis

8 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## Exhibits

Exhibit 1 Timelines for Construction and Operations of Plant, Transport and Storage

............... 10

Exhibit 2 Pipeline Cost Breakdown (2011 Dollars) [1, 2, 3]

................................ ........................ 12

Exhibit 3 Summary of Cost Escalation Methodology

................................ ................................ .. 13

Exhibit 4 Location of Four Basins Selected for this St udy

................................ ........................... 14

Exhibit 5 Sensitivity of Transport Costs to Plant and Distance Assumptions

.............................. 16

Exhibit 6 Kinder

- Morgan Pipeline Cost Metrics [8]

................................ ................................ ... 17

Exhibit 7 CO 2 Storage Cost Supply Curves

................................ ................................ .................. 18

Exhibit 8 Storage Resource Potential for Four Basins

................................ ................................ .. 19

Exhibit 9 Total Transport and Storage Costs for Use in NETL System S tudies

.......................... 20National Energy Technology Laboratory Office of Program Planning and Analysis

9 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## Acronyms and Abbreviations

AoR Area of Review

BLS Bureau of Labor Statistics

CEPI Chemical Engineering Plant cost
Index

CO 2 Carbon dioxide

DOE Department of Energy

EIA Energy Information Administration

EPA Environmental Protection Agency

GDP Gross domestic product

HWI Handy

- Whitman Index IRROE Internal rate of return on equity

Mt Million tonnes

NETL National Energy Technology Laboratory

O&GJ Oil and Gas Journal

O&M Operation and maintenance

PPI Producer Price Indices

ROW Right

- of

- way
T&S Transport and storageNational Energy Technology Laboratory Office of Program Planning and Analysis

10 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## 1 Objective

The purpose of this guideline is to estimate the cost of CO 2 transport and storage ( T&S ) in a deep

s aline aquifer for the plant locations used in the energy system studies sponsored by the National Energy Technology Laboratory ( NETL )

. Due to the variances in the geologic formations that make up saline aquifers across the Unite d States ( U.S. ) , the cost to store CO 2 can vary greatly depending on location. To account for the se variances, region

- specific results from NETL’s CO 2 Saline Storage Cost Model are utilized to represent costs for the following plant locations used in NETL studies :

**•** Midwest

**•** Texas

**•** North Dakota

**•** Montana

Transport costs are calculated based on a generic 100 km (62 mi) dedicated pipeline for all regions. Storage and monitoring costs represent significant storage po tential (up to 25 billion

tonnes of CO 2 ) in local sedimentary basins.



## 2 Approach

T&S costs are reported as first

- year costs in $/tonne of CO 2 , increasing at a nominal rate of 3
percent per year, which is consistent with the assumed general inflation rate. From the perspective of the CO 2 source (e.g., a power plant or other energy conversion facility), these costs are treated as a disposal cost for each tonne of CO 2 captured during the assumed 30

- year operational period. From the pipeline and storage site’s perspective, th e cost s of T&S represe nt the minimum price that these operators must charge so that they receive the revenue needed
across the 30

- year operational period to cover all their costs and provide the ir required internal rate of return on equity (IRROE). All costs are reported in 20 11 dollars.

Exhibit 1 Timelines for construction and operations of plant, transport

, and storage

Source: NETLNational Energy Technology Laboratory Office of Program Planning and Analysis

11 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

T&S costs are based on the CO 2 flow rate of one example plant: 10,900 tonne/day (12,000 ton/day) or 3.2 million tonnes per year assuming an 80 percent capacity factor. Variability of
storage costs based on flow rate and capacity factor can be determined using the CO 2 Saline Storage Co st Model , but is not considered here for use in the NETL system studies.



### 2.1 Transport Costs

High

- pressure (2,200 psig) CO 2 is provided by the power plant or energy conversion facility

, and the cost and energy requirements of compression are assumed by that entity. CO 2 is in a dense phase liquid state at this pressure

, which is desirable for transportation and storage purposes.

CO 2 exits the pipeline terminus at a pressure of 1,200 psig, and the pipeline diameter was sized
for this to be achieved without t he need for recompression stages along the pipeline length of 100 km (62 mi). This exit pressure specification: (1) ensures that CO 2 remains in a dense phase liquid state throughout the length of the pipeline regardless of potential pressure drops due to pipeline elevation change; and ( 2 ) minimizes the pipeline diameter required and

, in turn, transport capital cost. Costs for additional compression that may be required for injection in a particular formation are included as part of storage costs.

The requ ired pipeline diameter was calculated iteratively by determining the diameter required to achieve a 1,000 psig pressure drop (2,200 psig inlet, 1,200 psig outlet) over the specified pipeline
distance of 100 km (62 mi) and rounding up to the nearest even

- si zed pipe diameter. The pipeline was sized based on the CO 2 output produced by the power plant when it is operating at full capacity (100 percent utilization factor) rather than at average capacity.

CO 2 transport costs are broken down into three categories: pipeline capital costs, related capital expenditures, and operation and maintenance ( O&M ) costs.

Pipeline costs are derived from data published in the Oil and Gas Journal’s (O&GJ) annual Pipeline Eco nomics Report for existing natural gas, oil, and petroleum pipeline project costs from 1991 to 2003. These costs are expected to be analogous to the cost of building a CO 2 pipeline, as noted in various studies

. [ 1, 2, 3 ] The University of California perfor med a regression analysis to generate the following cost curves from the O&GJ data: (1) Pipeline

Ma terials, (2) Direct Labor, (3) Miscellaneous Costs

, 1

Related capital expenditures were based on the findings of a previous study funded by the Department of Energy ( DOE ) /NETL, Carbon Dioxide Sequestration in Saline Formations

– Engineering and Economic Assessment

. [ 2 ] This study utilized a similar basis for pipeline costs ( Oil and Gas Journal ’s p ipeline cost data up to the year 2000) but added a CO 2 surge tank and pipeline cont rol system to the project. These costs are shown in Exhibit 2 as Other Capital Costs. and (4) Right

- of

- way acquisition, with each represented as a function of pipeline length and diameter. [ 3] These cost categories are reported individually as a function of pipeline diameter (in inches) and length (in miles) in
Exhibit 2.

1 Miscellaneous costs are inclusive of surveying, engineering, supervision, contingencies, allowances for funds used during construction, administration and overheads, and regulatory filing fees.National Energy Technology Laboratory Office of Program Planning and Analysis

12 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

Pipeline O&M costs , shown in Exhibit 2 as a function of pipeline length per year, were assessed using metrics published in a second DOE/NETL sponsored report entitled Eco nomic Evaluation of CO 2 Storage and Sink Enhancement Options

. [ 1 ] This study was chosen due to the reporting of O&M costs in terms of pipeline length, whereas the other studies mentioned above either ( 1 ) do not report operating costs, or ( 2 ) report them in absolute terms for one pipeline, as opposed to as a length

- or diameter

- based metric.

Exhibit 2 Pipeline cost breakdown (2011 dollars ) [ 1, 2, 3 ]

Cost Type Units Cost

Pipeline Capital Costs

Materials Diameter (inches),
Length (miles) 26,960) D 686.7 2 D (330.5 L $2.01 $70,350 **+ ×**  **+ ×**  **× ×**  **+**

Labor Diameter (inches),
Length (miles) 170,013) D 2,074 2 D (343.2 L $2.01 $371,850 **+ ×**  **+ ×**  **× ×**  **+**

Miscellaneous Diameter (inches),
Length (miles) 7,234) D (8,417 L $1.55 $147,250 **+ ×**  **× ×**  **+**

Right of Way Diameter (inches),
Length (miles) 29,788) D (577 L $1.28 $51,200 **+ ×**  **× ×**  **+**

Other Capital Costs

CO 2 Surge Tank $ $1 ,244,724

Pipeline
Control System $ $ 111,907

Pipeline O&M Costs

Fixed O&M $/mile/year $8, 454

Four different cost escalation indices were utilized to escalate costs from the year

- dollars they were originally reported in to June 2011

- year dollars. These are the Chemical Engineering Plant Cost Index (CEPI), U.S. Bureau of Labor Statistics (BLS) Prod ucer Price Indices (PPI), Handy

Whitman Index (HWI) of Public Utility Costs, and the Gross Domestic Product (GDP) Chain

type Price Index

. [4, 5, 6]

Exhibit 3 details which price index was used to escalate each cost metric, as well as the year

dollars in wh ich the cost was originally reported. Note that this reporting year is likely to be
different tha n the year that the cost estimate is from.National Energy Technology Laboratory Office of Program Planning and Analysis

13 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

Exhibit 3 Summary of cost escalation methodology

Cost Metric Year

- $ Index Utilized

Transport Costs

Pipeline Materials 2000 HWI: Steel Distribution Pipe

Direct Labor (Pipeline) 2000 HWI: Steel Distribution Pipe

Miscellaneous Costs (Pipeline) 2000 BLS: Support Activities for Oil & Gas Operations

Right

- of

- Way (Pipeline) 2000 GDP: Chain

- type Price Index

CO 2 Surge Tank 2000 CEPI: Heat Exchangers & Tanks

Pipeline Control System 2000 CEPI: Process Instruments

Pipeline O&M (Fixed) 1999 BLS: Support Activities for Oil & Gas Operations

The minimum price the CO 2 pipeline operator needs to charge to cover all costs and provide the required IRROE was calculated in $/tonne of CO 2 assuming the following

, which match the low

risk business scenario for an i nvestor

- o wned u tility [7] :

**•** 3

- year capital expenditure period distributed by year as 10%, 60%, 30%

**•** Escalation of all costs at a rate of 3% per year

**•** Debt to equity ratio of 50%/50%

**•** Interest rate of 4.5%/year

**•** IRROE of 12%

**•** 30

- year operational period



### 2.2 Storage and Monitoring Costs

Storage and monitoring costs were estimated using NETL ’s CO 2 Saline Storage Cost Model

. This model is a spreadsheet

- based tool that estimates the break

- even required revenue for storing

CO 2 in a deep saline aquifer from the perspective of the owner of a CO 2 stora ge site. The CO 2 Saline Storage Cost Model includes the cost of complying with key regulations. In order to inject CO 2 into the subsurface for the purpose of storing CO 2 in a saline aquifer, the site owner must comply with the U

. S . Environmental Protecti on Agency ( EPA ) regulations for Class VI injection wells under EPA ’s Underground Injection Control Program, which is authorized under the Safe Drinking Water Act. The site owner must also comply with monitoring and reporting requirements under Subpart RR o f the Greenhouse Gas Reporting Rule, which is authorized
under the Clean Air Act.

Results from the CO 2 Saline Storage Cost Model for storage and monitoring costs were aligned with the NETL system studies by taking the four generic plant locations and over laying them with possible storage basins from the cost model. This pairs generic system study plant locations of Midwest, Texas, North Dakota, and Montana with the Illinois, East Texas, Williston, and
Powder River Basins

, respectively

, as shown in Exhibit 4

.National Energy Technology Laboratory Office of Program Planning and Analysis

14 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

Exhibit 4 Location of four basins selected for this study

Source: NETL

Inputs to the CO 2 Saline Storage Cost Model that have a significant influence on cost include financial parameters, timelines for the various stages of storage

, and important activities in
stages.

The financial parameters match the high

- risk business scenario for an Investor Owned Utility [7]
and include:

**•** Debt to equity ratio of 45%/55%

**•** Interest rate on debt of 5.5%/year

**•** IRROE of 12%

**•** Escalation rate of 3%

**•** Financial responsibility is met by funding a modified trust fund over the period of injection operations

**•** Project contingency factor of 15%

, and process contingency factor o f 20%National Energy Technology Laboratory Office of Program Planning and Analysis

15 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

In the CO 2 Saline Storage Cost Model , the s torage process is divided into six stages. The timelines and important activities impacting costs for these stages are:

**•** Regional evaluation and initial site selection: 1 year

**•** Site characterization: 3 years

o Four sites simultaneously undergo characterization, each having a 2

- D seismic survey and one strat

- well drilled to collect relevant reservoir data.

o One of these four sites is selected as the eventual storage site and has an
additional strat

- well drilled plus a 3

- D seismic survey covering the Area of Review (AoR ); pore

- space rights and property access are also purchased.

**•** Permitting: 2 years

o Includes submittal of required reports for Class VI injection well permit, permission to drill injection wells, drilling and completion of injection wells, incorporation of ne w data from injection wells into reports, resubmission of
reports, and final permission to inject captured CO 2

.

**•** Operations: 30 years

o Injection of 3.2 million tonnes of CO 2 per year for 30 years.

o Installation of buildings, surface equipment, monitoring wel ls

, and other monitoring equipment per submitted testing and monitoring plan.

o AoR review occurs every five years with 3

- D seismic every five years as part of
the AoR review

.

o Plugging injection wells at conclusion of injection operations

.

o Fund

- modified trus t fund to cover financial responsibility requirements for corrective action, injection well plugging and post

- injection site care

, and site
closure . Emergency and Remedial Response covered by insurance.

**•** Post

- injection site care and site closure: 50 years

o Monitoring continues per submitted testing and monitoring plan.

o Monitoring wells are plugged and other monitoring equipment removed at the conclusion of post

- injection site care

.

o Costs during this period are covered by the storage site operator’s trust fun d

.

**•** Long

- term stewardship : This stage is not explicitly included in the model. The possible financial implication of long

- term stewardship is included in the model as a state

sponsored trust fund that the storage operator pays into during operations.National Energy Technology Laboratory Office of Program Planning and Analysis

16 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## 3 Re sults

3.1 Transport Costs

Transport of 10,900 tonne/day of CO 2 a distance of 100 km (62 mi) with 1,000 psi pressure drop requires a 16

- inch pipe diameter and has estimated capital costs of $106 million and O& M costs of $0.53 million per year. Based on the assumptions outlined in Section 2.1 above and a capacity

factor of 80 percent , the resulting required first

- year cost for transport is $3.65/tonne of CO 2 in
2011 dollars.

This value will be used in NETL Sy stem Studies as a reasonable approximation for CO 2 transport costs for all plants regardless of the capacity factor and CO 2 capture rates. Exhibit 5 shows the sensitivity of this cost to capacity factor and CO 2 capture rate. In addition, costs are
shown for 150 km (93 mi).

Exhibit 5 Sensitivity of transport costs to plant and distance assumptions

Source: NETL

Cost Comparisons

The capital cost metrics used in this study result in a pipeline cost (in 2011 dollars) ranging from $ 7 0 ,000 to $ 84 ,000/inch

- Diameter/mile for pipeline lengths of 250 and 10 miles

, and 3 to 4
million metric tonnes of CO 2 sequestered per year , respectively . When project and process contingencies of 30 percent and 20 percent (respectively) are taken into account, this range increases to $104,000 to $126 ,000/inch

- Diameter/mile. These costs were compared to contemporary pipeline costs quoted by industry experts

, such as Kinder

- Morgan and Denbury
Resources f or verification purp oses. Exhibit 6 details typical rule

- of

- thumb costs for various terrains and scenarios as quoted by a representative of Kinder

- Morgan at the Spring Coal Fleet $3.65/tonne

0 1 2 3 4 5 6 7 8 9 10

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000Transport Cost, $/tonne CO2

CO 2 Capture Rate, tonne/day 150 km; 80% CF

150 km, 85% CF

100 km, 80% CF

100 km, 85% CFNational Energy Technology Laboratory Office of Program Planning and Analysis

17 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

Meeting in 2009. [8] As shown, the base NETL cost metric falls midway between the costs quoted for “Flat, Dry” terrain ($50,000/inch

- Diameter/mile) and “High Population” or “Marsh, Wetland” terrain ($100,000/inch

- Diameter/mile), although the metric is closer to the “High Population” or “Marsh, Wetland” when contingencies are taken into account

. [ 8 ] These costs were stated to be inclusive of right

- of

- way (ROW) costs.

Ronald T. Evans

, formerly of Denbury Resources, Inc.

, provided a similar outlook, citing pipeline costs as ranging from $55,000/inch

- Diameter/mile for a project completed in 2007, $80,00 0/inch

- Diameter/mile for a recently completed pipeline in the Gulf Region (no wetlands or swamps), and $100,000/inch

- Diameter/mile for a currently planned pipeline, with route obstacles and terrain issues cited as the reason for the inflated cost of that p ipeline

. [ 9, 10 ] Mr. Evans qualified these figures as escalated due to spikes in construction and material costs, quoting pipeline project costs of $30,000/inch

- Diameter

- mile as recent ly as 2006

. [9 , 10 ]

A second pipeline capital cost comparison was mad e with metrics published within the 2008 IEA report entitled CO 2 Capture and Storage: A key carbon abatement option . This report cites pipeline costs ranging from $22,000/inch

- Diameter/mile to $49,000/inch

- Diameter/mile (once
escalated to June

- 2011 dollar s), between 30 percent and 6 9 percent less than the lowest NETL metric of $ 70 ,000/inch

- Diameter/mile

. [ 11 ]

Exhibit 6 Kinder

- Morgan pipeline cost metrics [8 ]

Terrain Capital Cost
($/inch

- Diameter/mile)

Flat, Dry $50,000

Mountainous $85,000

Marsh, Wetland $100,000

River $300,000

High Population $100,000

Offshore (150’

- 200’ depth) $700,000



### 3 .2 Storage and Monitoring Costs

C ost supply curves are plotted in Exhibit 7 for the East Texas, Illinois, Powder River and Williston basins. This figure presents the mass of CO 2 that can be stored theoretically in each basin at a given price of CO 2 . The price is the break

- even price of CO 2 for a storage project in
each basin (i. e., the price of CO 2 where the net present value for the project is zero). Each basin includes two or more storage formations. The curves in Exhibit 7 represent the storage resource potential for the Paluxy and Woodbine formations in the East Texas Basin ; the Mt. Simon

, and
St. Peter formations in the Illinois Basin ; the Red River and Mission Canyon formations in the
Williston Basin ; and the Minnelusa, Muddy

, and Madison formations in the Powder River Basin. Also plotted in Exhibit 7 is a projection, based on data from the Energy Information Administration ( EIA ) ( 14 ), of the cumulative mass of CO 2 emissions from the electric power and industrial sectors that can be captured over the next century, assuming 90 percent of all CO 2 emissio ns are captured.National Energy Technology Laboratory Office of Program Planning and Analysis

18 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

Exhibit 7 CO 2 storage cost supply curves

Source: NETL

The storage potential for each formation depends upon the storage coefficient, which is the percentage of the formation’s brine

- filled pore volume that may be occupied by CO 2 . The storage coefficient depend s on the depositional environment and the structural setting

. ( 15 ) The storage resource potential for each formation in the basins shown previously in Exhibit 4 is partitioned into five structural settings : dome, anticline, ten

- degree regional dip, five

- degree regional dip

, and flat structural setting. The depositional environments for the various formations

are eolian (Minnelusa), shallow shelf (Muddy, Madison, Mission Canyon), peritidal (St. Peter), strand plain (Mt. Simon), fluvial (Woodbine)

, and delta (Paluxy).

The storage resource potential for any particular formation reflects the areal extent of the formation as well as its thickness, porosity

, and stor age coefficient. In the CO 2 Saline Storage Cost Model, over the total area of any formation, only 2.5 percent of the area is assigned to
structural closure or 1.25 percent each for dome and anticline structures

. ( 16 ) The remaining area is split evenly bet ween the ten

- and five

- degree regional dip and flat structural settings (32.5
percent each). Dome and anticline structures have higher storage coefficients, but ten

- and five

degree regional dip and flat structural setting s have much higher storage potent ial due to their larger areal extent. CO 2 storage potential modeled here is a resource that has yet to be proven. This process begins with site characterization for a specific storage project. 2000 2020 2040 2060 2080 2100 2120

$1 $10 $100 $1,000

- 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000YearFirst Year Break-Even Cost-$/Tonne CO2(2011)

Cumulative Storage Potential

- Million Tonnes 

### CO 2 

### Storage Cost Curves for Four Basins

Cumulative Elec & Ind Sector Captured CO 2 Emissions

East Texas Illinois Powder River Williston Cum Elec+Ind CO2 CapturedNational Energy Technology Laboratory Office of Program Planning and Analysis

19 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

Each formation in each basin has a maximum theoretical capaci ty to store CO 2 , and this capacity significantly exceeds the mass of CO 2 being stored by a single storage project. In constructing the cost supply curves, it is assumed that multiple storage projects can be implemented in each
formation until the total mas s of CO 2 injected from all the projects approaches 40 percent of the maximum theoretical storage capacity for each formation. It is assumed that institutional issues (such as obtaining property rights to store CO 2 , restrictions on storage in urban areas ) a nd pressure interferences from multiple storage sites will prevent more than 40 percent of the theoretical storage capacity from being used.

For each basin plotted in Exhibit 7 , the cost to store at least 25,000 million tonne s (Mt) is shown

in Exhibit 8

. For the East Texas Basin, 25,000 Mt of cumulative storage resource potential is provided by a combination of sedimentary depositional and structural settings in the Woodbine and Paluxy formations, each represented by a point on the cost supply curve. In the East Texas Basin, the low cost point is $4.58 per tonne of CO 2 stored for a dome structure in the Woodbine.
A reservoir with a five

- degree structural setting in the Woodbine provides the storage resource potential at the 25,000 Mt mark at a cost of $ 6.34 per tonne of CO 2 . At this price within this potential reservoir of the Woodbine formation is the potential to store up to 28,860 Mt of captured CO 2 . This storage resource potential represents 7.57 percent of the volume of CO 2 emissions that can be captured from the electric power and industrial sectors over the next century. Similar information for the Illinois, Powder River

, and Williston Basins are also posted

in Exhibit 8

.

Exhibit 8 Storage resour ce potential for four basins

Source: NETL

For these four basins, the storage resource potential at the CO 2 price associated with cumulative storage of 25,000 Mt totals 148,107 Mt. This represents 38.83 percent of the volume of CO 2 emissions that can be captured from the electric power and industrial sectors over the next century. Assuming 6.64 million tonnes of CO 2 captured from a 1 GW power plant ( 30 years of operation, 30 percent plant efficiency, 80 percent capacity factor, and 90 percent capture efficiency), this storage resource potential is equivalent to 743 GW of power generation.

Storage resource potential with respect to electric power generation ranges from 144 GW in the
East Texas Basin to 214 GW in the Powder River Basin. Total s torage resource potential for

BASIN 25,000 Mt Storage Resource Potential 50,000 Mt Storage Resource Potential 75,000 Mt Storage Resource Potential

$/ tonne to 25,000 Mt (2011$) Storage

Resource
Potential at

this $/t % of next 100 yrs captured
emissions GW Storage

Resource
Potential $/tonne to 50,000 Mt (2011$) Storage

Resource
Potential at

this $/t % of next 100 yrs captured
emissions $/tonne to 75,000 Mt

(2011$) Storage

Resource
Potential at

this $/t % of next 100 yrs captured
emissions

Illinois $5.98 36,931 Mt 9.68% 185 GW $6.16 66,961 Mt 17.56% $6.26 95,968 Mt 25.16%

East Texas $6.34 28,860 Mt 7.57% 144 GW $9.36 56,021 Mt 14.69% $10.28 78,991 Mt 20.71%

Williston $11.67 38,649 Mt 10.13% 194 GW $11.67 69,879 Mt 18.32% $11.81 100,308 Mt 26.30%

Powder
River $19.84 43,667 Mt 11.45% 214 GW $20.44 75,910 Mt 19.90% $20.44 75,910 Mt 19.90%

Total 148,107 Mt 38.83% 743 GW 268,771 Mt 70.47% 351,177 Mt 92.08%National Energy Technology Laboratory Office of Program Planning and Analysis

20 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

these four basins, through the CO 2 price associated with cumulative storage of 75,000 Mt, represents 92 percent of the volume of CO 2 emissions that can be captured from the electric power and industrial sectors over the next c entury. The Illinois Basin, with the Mt. Simon Formation, is the low

- cost provider. The Williston Basin, as illustrated in Exhibit 7 , has the largest storage resource potential.



### 3 .3 Combining Transport and Storage

Exhibit 9 reports the storage cost result s from the CO 2 Saline Storage Cost Model for the 25,000 Mt of cumulative storage resource potential and transport cost for the example plant parameters

. The resulting CO 2 T&S values (rounded up to the nearest whole dollar) to be used in NETL systems studi es are shown in the far right column.

Exhibit 9 Total transport and storage costs for use in NETL system studies

Plant Location Basin Transport (2011$ per

tonne) Storage (2011$ per

tonne) Total T&S (2011$ per

tonne) T&S Value for System
Studies (2011$ per

tonne)

Midwest Illinois

3.65 5.75 9.40 10

Texas East Texas 6.06 9.71 10

North Dakota Williston 10.96 14.61 15

Montana Powder River 17.86 21.51 22National Energy Technology Laboratory Office of Program Planning and Analysis

21 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013



## 4 References

1. Bock, B., R. Rhudy, H. Herzog, M. Klett , J. Davidson, D G. De La Torre Ugarte, and D. Simbeck. (2003). Economic Evaluation of CO 2 Storage and Sink Enhancement Options, Retrieved on March 13, 2013, from http://sequestration.mit.edu/energylab/uploads/AaKal/40937R04.pdf

2. National Energy Technology Laboratory (NETL) . (2001). E ngineering and Economic

Assessment of Carbon Dioxide Sequestration in Saline Formations . Retrieved on March 13, 2013, from http://www.netl.doe.gov/publications/proceedings/01/carbon_seq/4a3.pdf

3. Parker, N. (2004). Using Natural G as Transmission Pipeline Costs to Estimate Hydrogen Pipeline Costs . Institute of Transportation Studies, University of California, Davis, CA.

4. Handy

- Whitman Index of Public Utility Costs, Gas Transmission and Distribution Pipe
Materials Indexes . ( February 2008 )

.
5. United States Department of Labor. (February 2008). U.S. Bureau of Labor Statistics Producer Price Index, Support activities for oil and gas operations, Series Id:

PCU213112213112.

6. United States Department of Labor. (February 2008). U.S. Bureau of Labor Statistics Producer Price Index, Drilling Oil and Gas Wells, Series Id: PCU213111213111.

7. National Energy Technology Laboratory (NETL) . (2011). Recommended Project Finance Structures for the Economic Analysis of Fossil

- Based Energy Projects. DOE/NETL

2011/1489, Pittsburgh, PA

.
8. Jeffrey Layne . (2009). Operating Experience with CO 2 Pipelines

. Proceedings of the EPRI Coal Fleet for Tomorrow: General Technical Meeting

. Houston, TX, April 21

- 23rd,
2009.

United States Senate Committee on Energy & N atural Resources. (2008). Statement of Ronald T. Evans of Denbury Resources, Inc., before the U.S. Senate Committee on Energy and Natural Resources. Hearing on the Policy Aspects of Carbon Capture, Transportation, and Sequestration and Related Bills, S.232 3 and S.2144 . Re trieved on March 13, 2013, from http://www.gpo.gov/fdsys/pkg/CHRG

- 110shrg41620/pdf/CHRG

110shrg41620.pdf

9. Personal communication with Ronald T. Evans of D enbury Resources, Inc. December 30th, 2009.

10. International Energy Agency (IEA). (2008). CO 2 Capture and Storage: A Key Carbon Abatement Option . Available for purchase at http://www.oecdbookshop.org/oecd/display.asp?lang=EN&sf1=identifiers&st1=5l4cv1l2 p437

11. National Energy Technology Laboratory (NETL) . (2011). FE/NETL CTS

- Saline Cost
Model . Energy Analysis Publications: Details. Retrieved on March 13, 2013, from http://www.netl.doe.gov/energy

analyses/refshelf/PubDetails.aspx?Action=View&PubId=456National Energy Technology Laboratory Office of Program Planning and Analysis

22 Carbon Dioxide Transport and Storage Costs in NETL Studies Quality Guidelines for Energy Systems Studies March 2013

12. Ciferno, J. P. and H. McIlvried (2003). CO 2 Flow Modeling and Pipe Diameter
Determination

. SAIC , McLean, VA

.
13. Energy Information Administration (EIA). (n.d.). Energy

- Related Carbon Dioxide Emissions by Sector and Source, EIA AEO2012 Early Release. Washington, D.C

.
14. International Energy Agency ( IEA ). (2009). IEA Greenhouse Gas R&D Programme (IEA GHG)

. Development of Storage Coefficients for CO 2 Storage in Deep Saline Formations, 2009/13, October 2009.

15. Brennan, S.T., R.C. Burruss, M.D. Merrill, P.A. Freeman, and L.F. R uppert. ( 201 0). A Probabilistic Assessment Methodology for the Evaluation of Geologic Carbon Dioxide Storage. OFR 2010

- 1127. Retrieved on April 1, 2013, from http://pubs.usgs.gov/of/2010/1127/