Boundary Dam CCS 2016 / An economic perspective on CCS

 Last week, I stated that the Boundary Dam CCS project captured 400,000 tonnes of CO2 in the year to September 2015, less than half its target of 1 million tonnes of CO2.

 In the last few weeks Saskpower released their figures for 2016. These figures shows a stark increase in the CO2 captured to 800,000 tonnes, a vast improvement.

 Personally, I still think the finances surrounding the project are unethical and morally questionable. The project does however highlight the viability of CO2 capture technologies.

Economics & CCS

 This paper by Koehlbl, B., et al. is due to be published on December 1st. The study models the impacts of a CCS dominated economy versus a status quo economy in the Netherlands. GDP and import dependency are effectively the same in the two scenarios, but unemployment is found to be slightly higher in a CCS economy.

 Looking at studies such as this and examples like the Boundary Dam CCS project, the economics of CCS really don't strike me as being viable. Figure 2 in my last blog epitomises this - why bother with CCS when you can go renewable?

Boundary Dam CCS Project: A critical review

 Last week I introduced the Boundary Dam CCS project. This post will explore some of the issues the pilot project has faced.

Cost - taxpayers subsidising private oil interests?

 Everything discussed in this section is taken from this financial report and analysis of Boundary Dam CCS, from Saskwind. The figure below summarises the findings of the report.

Figure 1: Financial analysis of the Boundary Dam CCS project.

 The report, summarised here in this excellent article by David Roberts, finds:

• The $1.2 billion project budget eventually overran to $1.47 billion.
• $240 million of this was payed for by the Canadian federal government, the other $1.23 billion by Saskpower's electricity customers (via their bills).
• Over the plant's 30 year lifetime:
• The plant will earn $713 million from the sale of CO2 and $391 million from electricity sold.
• If the construction and upkeep costs of the CCS facility are subtracted from this profit, the CCS facility will make a $1,042 million loss overall.
• The total loss for Saskpower's customers equals -$651 million.

 In the meantime, Cenovous Energy, the oil company using the captured CO2 to extract oil from the Weyburn oil field, will net a $1,823 million profit from oil sales. Of this, an estimated $1,000 million will be oil sales made possible by EOR using CO2 from Boundary Dam.

 The upshot? Saskatchewan tax payers subsidise Cenovous Energy's $1 billion profits to the tune of $650 million. I don't know about you, but that doesn't sound like a flagship environmental project to me.

 The alternative? According to this figure from the US Energy Information Administration's 2016 outlook, the cost of Hydro, Wind, Solar PV and Biomass renewable energy sources are all significantly lower than the cost of new CCS coal fired power stations.

Figure 2: Cost of different electricity sources.

 Saskwind's report states that wind power (Saskatchewan is Canada's windiest province) could provide an equivalent amount of electricity over 30 years for just $450 million. That's a whole $1 billion less than the Boundary Dam CCS project.

Environmental Concerns

Probably the most fundamental component of a CCS facility is that it does what it says on the tin: captures carbon. Upon construction, Saskpower hailed that the Boundary Dam CCS project would capture 1 million tonnes of CO2 per year. However, in this September 2015 press release Saskpower stated that Boundary Dam had captured just 400,000 tonnes of CO2 in its first year of operation, less than half their target.

 Stephan Melzer noted in his 2012 report on CO2 EOR that NUMBYISM (not under my backyard) was one of the major barriers to CCS development. He cited concerns about industrial subsurface storage, general mistrust of large industry and pollution. So how does Boundary Dam CCS compare to a 'normal' power station?

 In this 2016 paper by Koiwanit, J., et al the effect of CCS upon atmospheric NOx and SO2 pollutants was studied. Reductions in NOx and SO2 emissions were observed at CCS sites. It was found that reductions in SO2 and NOx pollutants contribute to reductions in acute respiratory problems such as asthma. However, the post-combustion CO2 capture technique used at Boundary Dam was found to be much less effective at reducing atmospheric contaminants than oxy-fuel capture technologies.

Conclusions

 Teething problems can be expected, but the suspect financial setup and poor CO2 capture record of Boundary Dam borders on the ridiculous. In terms of atmospheric pollutant reduction, Boundary Dam has been successful, but it is a small battle won in a very large war. To the residents of Saskatchewan, the Boundary Dam CCS project appears something of a white elephant. To Cenovous Energy? A piggy bank.

Boundary Dam Carbon Capture Project: A working CCS case study

Background

 Having divulged my thoughts on the geological viability of CCS and how to market CCS to the public over the last few weeks, I thought that this week I would present to you an in depth case study of CCS in action.

The Carbon Brief, though a little dated, provides a good overview of current CCS projects around the globe.

Figure 1: CCS projects around the globe. Just 3 of the 22 projects (in 2014) under construction or operational were working power stations.

Boundary Dam CCS Project

 The first example I encountered was the Boundary Dam CCS project in Canada, marketed by its owner, Saskpower, as "The world's first post combustion CO2 capture coal fired power station".

 The project, described in depth here constitutes:

• The regeneration of an ageing coal fired power unit into a more efficient, reliable generator of 115 megawatts of electricity per year.
• The capture of up to 90% of CO2 produced by the unit, reducing CO2 emissions by up to one million tonnes per year (the equivalent of 250,000 cars).
• Capture of other byproducts, such as SO2 and NOx, which are then sold to industry.

For further information, see this Department for energy and climate change blog here, and this rather self-indulgent and technical scientific paper by Karl Stephenne here. This (dry and corporate) youtube video from Saskpower also outlines the scheme well:

So far so good - coal is a cheap source of reliable electricity. With a 90% reduction in CO2 emissions, coal becomes a reliable, cheap and environmentally friendly source of electricity. However, there are caveats.

Destination of captured CO2

 The clue is in the name, carbon capture AND storage; Boundary Dam CCS project does the capturing well, but the storage? Not so much.

 "Most" of the captured CO2 is "transported by pipeline to nearby oilfields where it will be used for enhanced oil recovery (EOR)". 

So this project isn't CCS at all! It is merely a source of CO2 to fuel an oil extraction method that has existed for generations. 

Figure 2: Oil recovery at the nearby Weyburn oil field increased by ~250% when EOR methods were employed in the mid 2000's.

 Little data (probably purposefully) is available based on net CO2 emissions from CCS taking into account CO2 produced by extra crude production. So I thought i'd try for myself*:

• According to the US Energy Information Administration, ~170kg of CO2 is created from a barrel of oil (if converted into petrol and combusted).
• An extra ~15,000 barrels of oil a day was produced each day due to EOR at Weyburn oil field (at injection rates of 1,800,00 tonnes of CO2 per year).
• This equates to 475,000 extra barrels of oil produced a year based on 365 days a year production. 
• Post-combustion, this equates to 930,750,000kg of CO2 per year, or 930,750 tonnes, based on the US EIA's figure.
• The Boundary Dam project captures ~1,000,000 tonnes of CO2 per year. Assuming 'most' means ~90% then 900,000 tonnes of this is used for EOR. 
• ~1,800,000 tonnes of CO2 a year was injected at the Weyburn oil field. Boundary dam will contribute approximately half this amount (~900,000 tonnes) to EOR a year. 
• Based on this assumption, approximately 465,375 (930,750 / 2) tonnes of CO2 will be created per year from the combustion of oil produced from CO2 captured at Boundary Dam. 

 In short, this means that the Boundary Dam CCS project produces 115 Megawatts of electricity per year, with minimal (<10% of the norm) CO2 emissions. However, the project then effectively releases ~465,000 tonnes of CO2 per year from oil combustion.

Conclusions

 There are many assumptions in this rudimentary back of the envelope calculation, but what is clear is that there are distinct environmental benefits to CCS-EOR. Negative, or net zero emissions, are not attainable via this method. For this, highly efficient storage within geological formations would be required.

 But, we live in a world addicted to electricity, addicted to oil. There exists a whole different debate encompassing whether or not we should continue to use fossil fuels in the face of climate change. But, in a world unlikely to go teetotal anytime soon, projects such as this can help to drastically reduce, though not eradicate, CO2 emissions.

 Now, this line of argument ignores the nitty-gritty world of economics, of safety and of politics. My next post will explore these issues in relation to the Boundary Dam CCS project.

Until then...

*calculations based upon Weyburn oil field, an oilfield in the Boundary Dam region which underwent EOR in the mid 2000's. At the the time Weyburn was the largest CCS project in the world. Injection of CO2 into the Weyburn field was 1,800,000 tonnes per year.

Marketing CCS: What is an attractive proposition?

Context

 I have just finished watching "Before the Flood". If you haven't, its essentially 90 minutes of Leonardo Di Caprio indulging in smug environmentalism. Nonetheless, it also contains some accurate, thought-provoking climate science and, regrettably, some scaremongering too. The documentary is available on Youtube, see below.

 After watching, I read the comments from Youtube users who watched the documentary. Many of the comments struck a familiar theme. Despite having spent 90 minutes of their lives watching a documentary about climate change, many didn't want their lifestyles to be influenced in combatting climate change.

Veganism? Eurgh, all those leaves.

Electric cars? But i'm charging my iPad, where do I plug it in?

No beef? What, not even Mcdonalds?

Renewable energy? Oh, but all those ugly windmills! Its all a hoax anyway, DONALD KNOWS!

Marketing Carbon Capture and Storage (CCS)

 Watching and reading I began to think about the role of CCS in combatting climate change. What would be the opinion of the commenters? If CCS was to become a major component of our energy system, how would it go about succeeding where other initiatives have failed - in getting the public on side?

 I came up with a four point plan. If, tomorrow, I was put in front of a politician and told to convince them to implement CCS, this is what i'd say:

• Emphasise that no change in lifestyle is needed on the part of the consumer. CCS essentially allows guilt free use of popular energy intensive products. This is touched upon in this paper (in press) by Kruger, T. Kruger discusses how CCS has become more attractive in the face of the Paris Agreement because of how it supports the continued dominance of a centralised fossil fuel industry.
• Encourage investment and support from big business on the basis of the potential economic benefit from CCS. One such example would be petroleum companies, who would benefit from a policy which doesn't inhibit their profits. Again this is discussed in the Kruger paper. Kruger highlights that the behaviour of consumers can often mirror the opinion of large corporations because of advertising and marketing campaigns.
• Highlight the weaknesses of the rivals. For example, CCS allows continued energy production from reliable sources such as gas and coal. Alternatives, such as renewables, can be unreliable in their supply. However, the success of countries such as Uruguay in implementing renewables may make this pitch difficult.
• Don't alienate people. I can't emphasis the importance of this enough. Don't push people to supporting CCS. In some circles of society, such as the middle-class intelligentsia, refuting environmentalist ideas is viewed as sacrilege. Outside of these circles, resentment can build when such accusations are made, promoting the alternate viewpoint. One such dividing example is the Prius - Toyota's hybrid car. To a person struggling to make ends meet, it represents a clique of well-educated, sandal wearing, vegan environmentalists out of touch with the plight of the average person. See this blog from an angry American. CCS must not be tarnished with this brush.

Conclusions

 Without the support of the Youtube commenters, any future development in CCS is doomed to failure. Only with a broad spectrum of public opinion can such a large undertaking ever work. Only through a targeted marketing campaign is this possible. Perhaps most importantly, it mustn't alienate the very people it hopes to recruit.

Moving on

 In my earlier posts I have explored the geological aspect of CCS. My remaining posts will explore the viability of the above statements - as well as other questions such as: What does CCS mean for energy bills? Is it economically viable? Where is public opinion?

Keep your eyes out!