Tamar Hallerman
GHG Monitor
09/14/12
While some of the Department of Energy’s more high-profile carbon capture and storage demonstration projects like FutureGen 2.0 and Kemper County often dominate headlines when discussing the department’s large-scale portfolio, industrial capture projects located in Illinois and the Gulf Coast are quietly expected to become operational first. Of the Office of Fossil Energy’s eight remaining large-scale CCS projects, three focus on installing capture technology on industrial processes. Splitting a pot of cost-share funding from the American Recovery and Reinvestment Act that totals nearly $700 million, the three projects are rapidly moving ahead, project managers told GHG Monitor this week, and two expect to come online roughly within the next year. “It’s interesting, a lot of people seem to let those three projects slide through and don’t think about them too much,” said DOE Deputy Assistant Secretary for Clean Coal Jim Wood. “But all of those projects are on target.”
Commercializing CO2 capture on industrial operations like steel and cement manufacturing are seen as particularly critical in the eyes of organizations such as the International Energy Agency. While power generators can choose to pursue other lower-carbon options for generating electricity instead of CCS to meet emissions reduction goals, CO2 capture is considered the only path currently available for reducing emissions from industrial operations. IEA estimates that in order to limit the effects of climate change to a manageable level, 82 industrial capture projects must be in operation by 2020. But in its most recent technology report, IEA finds that while that goal is technically feasible, current investment patterns are “woefully off pace.”
The good news is that CO2 capture is considered technically easier and cheaper in many cases for industrial operations than for power generation projects because most of those processes separate out the CO2 anyway in order to properly operate. In the case of the U.S., permitting is also easier for industrial projects in some cases since most already separate the CO2. Nevertheless, Wood argued that more work is needed if the U.S. wants to meet strict emissions reduction goals. “Even though fossil power is the largest single source of CO2, there are lots of industrial sources, among which are things like ethanol plants, refineries and cement plants, that emit CO2. If we’re going to reach the goals that we want to reach, those facilities are going to have to be controlled as well,” he said. “DOE’s goals here are to show that capture technologies are available, economic and can be integrated in a way that allows industrial processes to keep up, while allowing the CO2 to be captured.”
Here are the projects and their progress:
—Air Products and Chemicals’ Port Arthur CCS Project. The furthest along in FE’s major demonstration project portfolio, this project, which plans to apply CCS technology to two steam methane reformers used for large-scale hydrogen production, is expected to be operational by the end of the year. The $430 million project will retrofit CO2 capture technology onto two steam methane reformers used to produce hydrogen at a Valero Energy Corp. refinery in Port Arthur, Texas, and will capture one million tons of CO2 annually for use in enhanced oil recovery operations in Texas oilfields. Gloria Power, director of Business Development for North America Tonnage Gases at Air Products, said in an interview that construction is currently nearing completion and that the startup and commissioning process is expected to begin soon. She said that the project should begin producing CO2 by the end of the year. “This has been a fast-track project, and we’ve been doing parallel activities like commissioning different parts of the project simultaneously,” Power said. “In general, we plan to be on stream capturing CO2 by the end of the calendar year.”
—Archer Daniels Midland’s Decatur CCS Project. Project operators here are in the unique position of being able to use knowledge gained from a nearby sister CO2 injection project (managed through one of DOE’s regional partnerships) that has been in operation since November. Expected to be operational by the second half of next year, this $208 million project will capture one million tons of CO2 annually from ADM’s currently existing ethanol plant in Decatur, Ill., for sequestration in the Mount Simon sandstone formation. ADM Biofuels Development Director Scott McDonald, who is also the company’s project lead, said that ADM is waiting for approval for an underground injection control permit. In the meantime, he said that the project partners began drilling a stratigraphic test well earlier this week that will eventually be converted into a monitoring well. “It’s been pretty busy here,” McDonald said. “As far as surface facilities, we’re about 80 percent complete with the construction of the surface facility, which includes the compressors, the transmission line to the future wellhead, as well as the collection and dehydration system and the associated electrical infrastructure, so we anticipate being mechanically complete in the first quarter of 2013.”
—Leucadia’s Lake Charles CCS Project. The most opaque of the three industrial CCS projects being funded by DOE, Leucadia has kept most details about this project close to the vest. What is publically known is that the $436 million project will construct a greenfield petroleum coke-to-chemicals gasification plant with carbon capture that will produce methanol near Lake Charles, La. The project will then be linked up to Denbury Resource’s existing Green CO2 pipeline, which will transport the more than four million tons of CO2 captured annually to EOR operations in Texas’ West Hastings oil field. Joint development partner for the project Hunter Johnston of the firm Steptoe and Johnson said Leucadia is expecting financial close next year, but would not disclose more specifics. “We’ve made a lot of progress with the project and I think you can look forward to some public announcements coming out in the near future, but that’s all I can tell you at this point,” he said. “The project has made a huge amount of progress.” He would not provide the projected start date for the project, but said that construction is expected to take three years to complete.
This story has been revised to reflect the following correction.
