CARBON SEQUESTRATION: CHALLENGES AND

UNANSWERED QUESTIONS By

Theresa PughDirector, Environmental Services

American Public Power Association

Presented to:CEO Climate Change Task Force Meeting

January 30, 2007

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WHAT IS APPA?• 2000 Municipal, State Utilities Which Are

Community Owned• Payment In Lieu Of Taxes Returned To

General City Revenue For Fire, Police, Library, Schools

• Money Must Be Spent Wisely: Low Risk Tolerance For Failure

• Results Must Satisfy Mayors, City Council And Utility General Managers

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APPA: PERSPECTIVE ON CO2 CONTROL

• APPA Supports Voluntary CO2-Mitigating Steps

• Signatory on the President’s Climate Vision Memorandum of Understanding to Reduce– GHG emissions intensity by 18% by 2018– Power sector GHG by 3-5% below ’02-’03 baseline

• APPA Tree PowerTM Program: – Provide shade, improve photosynthesis, reduce CO2

– Golden Tree Award: one tree per customer served

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APPA MEMBERS ACTIVE IN IGCC• At Least Two New Public Power IGCC Plants In

Progress– Orlando Utilities Commission/Southern Company– Energy Northwest– NYPA?

• Key Concern: Will Scheduled Outages Be More Frequent?– Many public power communities small– 6 weeks per year problematic & costly to buy on

market– Energy Northwest: target 92-96% w/spare gasifier

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APPA RECOGNIZES IGCC OFFERS ENVIRONMENTAL ADVANTAGES

• Control of Criteria Pollutants– SO2: to 99% – NOx: to < 0.05 lbs/MBtu– Particulate Matter: < 0.010 lbs/MBtu

• Thermal Efficiency– Present capability: 38-40%– Future potential: to >50%

• Combustion Byproducts: 1/100th of Conventional by Volume

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IGCC vs. ADVANCED PC: COST1

• Basis: Cost of Generating Electricity (Amortized Capital and Production)– CO2 Control NOT REQUIRED: IGCC > Advanced PC by up to 20%– CO2 Control REQUIRED: IGCC < Advanced PC by 10-20%

• Alternative: What is $/MWh Premium for CO2 Control?– Advanced PC: CO2 control: 70% premium

– IGCC: CO2 control: 25-35% premium– Includes conveyance cost of 2800 psig pipeline

1. Source: “Coal-Fired Generation: At The Crossroads”, EPRI Journal, Summer, 2005

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IGCC: GENERALIZATION• IGCC Must Be Applicable to All Coals

– Current demo mix limited to narrow range– Multi-fuel designs being explored (Energy Northwest)

• EPRI: Matrix of Gasifier Designs Required– 3 types of entrained-flow– 2-3 transport-flow– 8 SOA Designs Needed (Coalfleet For Tomorrow)

• APPA Members Have Experienced Limited Coal Choices in Recent Years– Transportation, costs, labor, force majeur, other– Will IGCC make captive rail better or worse for

utilities?

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IGCC: RELIABILITY• Most Reliable Demo – Wabash River – 79% • Do Public Power Towns Have To Build Two-

Gasifier Designs, Or Two Separate Units?• Provisions of the National Energy Policy Act of

2005 Testify to Evolving Technology Status:– $1.8 B Clean Coal Power Initiative: 70% to IGCC– APPA supports DOE funding for R&D and pilots– $800 M investment tax credits for IGCC but not

eligible for APPA members since not tradable

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SEQUESTRATION UNKNOWNS

• Carbon Dioxide Capture and Storage1 (Battelle)– “…..CO2 injection can be considered an established

technology….”– “….large-scale deployment of CCS systems…….requires the

continued development and field demonstration of more advanced drilling and CO2 injection schemes….”

• IPCC Report2 (2005)– “…there must be hundreds, and perhaps thousands, of large –

scale geologic storage projects…..”– thirteen key questions (page 204) discussed and addressed

1. Carbon Dioxide Capture and Geologic Storage, Global Energy Technology Strategy Program Phase 2, April, 2006.

2. Carbon Dioxide Capture and Storage, Intergovernmental Panel On Climate Change, Final Report, Cambridge University Press, 2005.

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SEQUESTRATION: WHAT’S INVOLVED?• Reference: 1 GW Generates 30,000 tons CO2/d• Inject as “Supercritical” Fluid (Acts Like Both a

Liquid and Gas)• To 1/2 Mile or Deeper to Minimize Volume• CO2 Once Injected is:

– less dense than encased fluids, and under pressure – Will migrate both laterally and up– Can diffuse, adsorb, mineralize, and solubilize– Can we predict the ultimate fate?

• 1 GW Plume: Spreads to 100 km2 (100 m Thick)

Source: Batelle CCS Report, p. 17 11

CANDIDATE CO2 RESERVOIRSReservoir Features Trapping Global/US

Capacity,GT

Deep Saline Formations

Sandstone, carbonate w/voids

Hyrodynamic, dissolution, mineralization

9,500/

3,630

Depleted natural gas

Similar to above

“ 700/35

Depleted oil Pores from extracted oil

“ 120/12

Deep unmineable coal seams

CH4 attached to coal

Chemisorption displacing CH4

140/30

Deep saline-filled basalt formations

Porous zones rich in Fe

Hyrodynamic, dissolution, mineralization

Unknown/240

Source: IPCC Report, Fig. 5-25 12

Source: Wilson and de Figueiredo, 2006 13

RISKS FROM GEOLOGIC CARBON SEQUESTRATION

CO2 in Atmosphere or

Shallow Subsurface-suffocation of humans or animals -ecosystem impacts (tree roots, burrowing animals)

CO2 Dissolved in

Subsurfaces-mobilization of metals, other contaminants -Contamination of potable water-Interference with deep -subsurface ecosystems

Quantity-Based-ground heave induced seismicity -Contamination of drinking water by displaced brines-Damage to hydrocarbon production

Local

CO2 RISKSGlobal

Release of CO2

to the atmosphere

Source: Wilson and de Figueiredo, 2006 14

CARBON SEQUESTRATION: SEND IN THE LAWYERS

Proposal Summary

FutureGen Final Request for Proposal (3/2006)

“The offerer agrees to take title to the injected CO2 and indemnify the FutureGen Industrial Alliance and its members from any potential liability associated with CO2”. Adequate indemnification?

Texas House Bill 149 (5/2006)

“Texas Railroad Commission “shall acquire title to CO2 captured” by a FutureGen project. Does this cover utilities and property damage claims?

[Failed] Costello amendment to HR 5656 (6/2006)

U.S. Department of Energy indemnifies FutureGen consortium and companies for “any legal liability arising out of, or resulting from, the storage, or intentional release, of sequestered emissions”, up to $500 M per incident. Citizen suits?

Source: Wilson and de Figueiredo, 2006 15

LIABILITIES: SITING

Issue Responsibility Precedent

Create large, legal single “units” or fields

State legislature, courts; state oil and gas offices

TX: All parties must agree to unitization.

Characterize geophysics of field

State oil and gas office TX: Rich precedent from which to draw.

CA: None.

Long-term risks Unsure TX, CA: Uncertainty in determining responsible party.

Source: Wilson and de Figueiredo, 2006 16

LIABILITIES: OPERATIONAL“THINK HOOKER CHEMICAL’S LOVE CANAL”

Issue Responsibility Precedent

Damage to human health, environment

OSHA, EPA state underground injection controls

TX, CA: Strong precedent for consumer, health protection.

Damage to groundwater

EPA, state underground injection controls

TX, CA: Responsibilities unclear.

Geologic hazards

OSHA, EPA state underground injection controls

TX, CA: Have regulated injection pressures; no defining case law.

Damage to hydrocarbons

State oil and gas office Mineral owners compensated in CA but not TX.

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LEARN FROM THE PAST?• Per Battelle1 and IPCC2, Catastrophic Failure and

Damages “Unlikely”; However:• Lake Nyos, Nigeria: Fatal Release of CO2 Resulting in

1,700 Deaths (1987)• Mammoth Mountain CO2 Leaks of 1200 Tons/d Varied

with Seismic Activity (1990-1995), Damaged Trees• Other Unintended Consequences: Underground

Storage Tanks, MTBE• DOD Injections Of Wastes In Colorado In 1970s And

Seismic Activities1. Carbon Dioxide Capture and Geologic Storage, Global Energy Technology Strategy Program Phase 2, April, 2006.2. Carbon Dioxide Capture and Storage, Intergovernmental Panel On Climate Change, Final Report, Cambridge University Press, 2005.

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SUMMARY• APPA Supports Demo of IGCC, Sequestration:

Broad Technology Array Required• Taxpayers Money: Always Requires Caution• Geologic Sequestration at EOR Site Not Same

As Utility• Geologic Sequestration at Utility Sites is Highly

Uncertain: Caution Should Be Exercised– Unknown consequences severe?– Long time constants: advise slow and steady

• Learn From The Past: CERCLA• APPA Supports IGCC Where Units Provide

Collateral Environmental, Economic Benefits