Abby L. Harvey
GHG Monitor
9/12/2014
Speaking at the groundbreaking of the NRG Energy W.A. Parish Petra Nova carbon capture and storage project late last week, NRG CEO David Crane said the company may develop future projects employing the technology. "I think the success of the project will be demonstrated very quickly and enable us to move on to subsequent projects," he said. Using captured carbon for enhanced oil recovery, as the Petra Nova project will allow, will be an important factor to the eventual commercialization of the technology, Crane said in an NRG press release. “Fossil fuels are essential to energizing modern civilization today and for many decades to come. The best way for us to avoid the harmful consequences of emitting carbon into the atmosphere is to turn it into a productive asset here on Earth … by piping captured carbon exhaust into domestic oil fields, we both protect the environment and enhance domestic oil production benefitting our national energy security.”
Located at the W.A. Parish power plant near Houston, Texas, the project will capture approximately 1.6 million tons of CO2 annually from an approximately 240 megawatt (MW) slipstream of flue gas from W.A. Parish Unit 8, according to an NRG release. This equates to a 90 percent capture rate. The project stands to be the world’s largest post-combustion carbon capture facility installed on an existing coal plant. The CO2 captured will be transported roughly 80 miles via pipeline to the West Ranch oil field, which NRG has purchased a stake in. There it is expected that the CO2, which will be used for enhanced oil recovery, will enable the procurement of approximately 60 million barrels of oil. “The Project is pioneering in that it not only utilizes CO2 emissions from a coal-fired power plant, but also boosts the oil production, and ultimately reduces CO2 released into the air. Put simply, it addresses a global environmental issue,” Shunsaku Miyake, President and CEO of JX Nippon Oil & Gas Exploration Corporation said in the release. JX Nippon is a Japanese-based company and part-owner of the West Ranch oil field.
DOE Officials Praise Business Model
The unique business model employed by the Petra Nova project was lauded by Department of Energy officials following the groundbreaking. NRG’s purchase of stake in the West Ranch oil field will result in an additional revenue stream for the project. “What is happening here today has global implications from an economic perspective, energy security perspective, and environmental stewardship perspective, and that’s why it is so important to take the global lead on this post-combustion CCS technology,” Daniel Poneman, Deputy Secretary of Energy, said in the press release. Funding for the project comes, in part, from a Department of Energy grant of $167 million, awarded through the Clean Coal Power Initiative Program in 2010. The total cost of the project is estimated at approximately $1 billion.
Over the weekend, acting Assistant Energy Secretary for Fossil Energy Christopher Smith, commented on the project’s business model during an interview on Platts Energy Week, suggesting that DOE is keen to invest on future projects with an EOR or other utilization variable. “Our focus is going to be on those areas where you do have CO2 uses, utilization for the CO2, simply because if you can get some value out of the CO2 instead of simply storing it over long periods of time, then it helps you to pay for the investment that it takes to capture the CO2. That’s going to actually teach us a lot more about future business models,” Smith said. “For now the business model of using CO2 for enhanced oil recovery is really important for pushing the technology, demonstrating it, getting projects going, creating partnerships.”
