Effects of California's Climate Policy in Facilitating CCUS

Abstract California is at the forefront of addressing the challenges involved in redesigning its energy infrastructure to meet 2050 GHG eduction goals, but CCUS commercialization lags in California as it does elsewhere. It is unclear why this is the case given the state's forefront position in aggressive climate change policy. The intent of this paper is to examine the factors that may explain why CCUS has not advanced as rapidly as other GHG emissions mitigation technologies in California and identify ways by which CCUS commercialization may be advanced in the context of California's future energy infrastructure. CCUS has application to reduce GHG emissions from the power, industrial and transportation sectors in the state. Efficiency, use of renewable energy or nuclear generation to replace fossil fuels, use of lower or no-net-carbon feedstocks (such as biomass), and use of CCUS on fossil fuel generation are the main options, but California has fewer options for making the deep cuts in CO 2 emissions within the electricity sector to meet 2050 goals. California is already the most efficient of all 50 states as measured by electricity use per capita, and, while further efficiency measures can reduce per capita consumption, increasing population is still driving electricity demand upwards. A 1976 law prevents building any new nuclear plants until a federal high-level nuclear waste repository is approved. Most all in-state electricity generation already comes from natural gas; although California does plan to eliminate electricity imports from out-of-state coal-fired generation. Thus, the two options with greatest potential to reduce in-state power sector CO 2 emissions are replacing fossil with renewable generation or employing CCUS on natural gas power plants. Although some scenarios call on California to transition its electricity sector to 100 percent renewables, it is unclear how practical this approach is given the intermittency of renewable generation, mismatches between peak generation times and demand times, and the rate of progress in developing technologies for large-scale power storage. Vehicles must be electrified or move to biofuels or zero-carbon fuels in order to decarbonize the transportation sector. These options transfer the carbon footprint of transportation to other sectors: the power sector in the case of electric vehicles and the industrial and agricultural sectors in the case of biofuels or zero-carbon fuels. Thus, the underlying presumption to achieve overall carbon reductions is that the electricity used by vehicles does not raise the carbon emissions of the power sector: biofuel feedstock growth, harvest, and processing uses low carbon energy or production of fuels from fossil feedstocks employs CCUS. This results in future transportation sector energy derived solely from renewables, biomass, or fossil fuel point sources utilizing CCUS. In the industrial sector, the largest contributors to GHG emissions are transportation fuel refineries and cement plants. Emissions from refineries come from on-site power generation and hydrogen plants; while fuel mixes can be changed to reduce the GHG emissions from processing and renewable sources can be used to generate power, total decarbonization requires use of CCUS. Similarly, for cement plants, power generation may use carbon-free feedstocks instead of fossil fuels, but CO 2 emissions associated with the manufacture of cement products must be dealt with through CCUS. Of course, another option for these facilities is the purchase of offsets to create a zero-emissions plant. In spite of the conclusion that CCUS is vital to decarbonization of three of the state's key economic sectors, incorporating CCUS technology into California's energy future has significant challenges. A diverse set of questions must be addressed before state planners, policymakers, and regulators will be able to justify pursuing CCUS as a part of the solution to meet 2050 goals: • In what sector applications does CCUS have the most potential to assist the state in reducing its CO 2 emissions? • Do policies to facilitate CCUS enable continued use of fossil fuels even where there may be other viable options for energy • generation? • Are CCUS technologies, specifically subsurface storage elements, safe and effective over the long term? • How can California agencies and lawmakers assure that CCUS projects are appropriately permitted, regulated, monitored, and verified? • Can the state's industrial and energy infrastructure accommodate the changes necessary to integrate CCUS? • In state planning for future energy infrastructure, should CCUS be included as a component? What is the risk in not doing so? • If CCUS is to be relied on to reduce significant fractions of California's future emissions, at what rate should CCUS projects be coming on line, and what pathways to commercialization can accommodate this rate? CCUS projects worldwide and analog projects provide some data and experience to answer these questions. Worldwide experience, for example, supports the assertion that CO 2 can be stored safely in the subsurface; these projects have tested a number of tools, including monitoring technologies, simulations, well completion methods and well and cap rock integrity testing to give regulators confidence that risks are measureable and verifiable. For California, areas of particular concern are assuring safety of groundwater resources from contamination and seismic hazards. California has plentiful geologic storage resource to accommodate captured emissions, according to studies by WESTCARB and the California Geological Survey. Infrastructure requirements include capture facilities at CO 2 emission sources, pipelines, and injection and monitoring wells at storage sites. It is a policy decision as to whether these costs should be passed on to consumers or taxpayers. California will require substantial investment in pipeline infrastructure in order for CCUS to become widespread. Because a readily available supply of low cost CO 2 would benefit California's oil industry, that industry and federal subsidies for oil production may be sources of capital for pipeline development. California's CCUS project developers may be able to repurpose or co-utilize some existing infrastructure at California's numerous oil and natural gas fields if storage is done in conjunction with CO 2 -EOR or by conversion of depleted reservoirs to storage sites. Storage in saline formations will require new infrastructure and development to assure safe and effective long term storage. Rates of CCUS technology adoption must be sufficient to create a declining trend in GHG emissions with the right slope to intersect 80 MT or less total emissions by 2050. It is an oversimplification to assume that technology adoptions between now and 2050 will result in a linear reduction of emissions with time, but it serves to give a first-order approximation of the size of the task. With every year of delay in implementation of GHG reduction technologies, the slope becomes steeper. If the 2020 cap on new emissions is maintained after 2020, about 10 Mt per year must still be removed every year to reach the 2050 goal. This is equivalent to removing several of California's largest point sources from the emissions inventory every year.