Carbon Capture and Storage

Presented by Alastair Rennie

The Energy Institute lectures

Energy Institute - London, 13th May 2009

© AMEC 2009
Contents

ƒ AMEC perspective
ƒ Climate Change and CCS
ƒ CCS systems
ƒ Outlook for CCS projects

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Contents

ƒ AMEC perspective
ƒ Climate Change and CCS
ƒ CCS systems
ƒ Outlook for CCS projects

3
AMEC at a glance

Services focused on designing, managing the delivery of, and

maintaining strategic and complex assets

ƒ We have annual revenues of over £2.6 billion in 2008

ƒ We employ 22,000 employees in over 30 countries

ƒ Our shares are traded on the London Stock Exchange where we are listed in the Oil
Equipment and Services sector

ƒ We are a member of the FTSE* 100

ƒ AMEC is listed as one of the world’s top five companies in both the Dow Jones
Sustainability Indexes (DJSI) World and European STOXX Index for 2008/09 in the oil
equipment and services (OIE) sector.

ƒ AMEC is an engineering company doing transportation, flood and dehydration systems,

pipeline design services, EOR Conceptual Design Services, PM and Engineering
Services for capture processes, new and existing pipelines and storage sites.
www.amec.com
*Financial Times Stock Exchange listing
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Contents

ƒ AMEC perspective
ƒ Climate Change and CCS
ƒ CCS systems
ƒ Outlook for CCS projects

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Why do we need Carbon Capture and
Storage (CCS)?

1. Climate change is a real problem - for us and future generations

9th March 2009 The Independent reports that research from the
Met Office's Hadley Centre for Climate Prediction and Research
warns that the best efforts to combat climate change are likely
to offer no more than a 50-50 chance of keeping temperature
rises below dangerous levels

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Man made impact on global CO2

From a presentation 26th February 2009, Platts conference Brussels by Lord Ronald Oxburgh, Past Chairman, Shell
Transport and Trading. President of the Carbon Capture and Storage Association

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Why do we need Carbon Capture and
Storage (CCS)?

1. Climate change is a real problem - for us and future generations

2. More energy is need to improve the lives of billions of people

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Why do we need Carbon Capture and
Storage (CCS)?

1. Climate change is a real problem - for us and future generations

2. More energy is need to improve the lives of billions of people

From a presentation
26th February 2009,
Platts conference
Brussels by Lord
Ronald Oxburgh,
Past Chairman,
Shell Transport and
Trading. President of
the Carbon Capture
and Storage
Association

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Why do we need Carbon Capture and
Storage (CCS)?

1. Climate change is a real problem - for us and future generations

2. More energy is need to improve the lives of billions of people
3. Energy efficiency is not enough by itself, we need renewable and
sustainable energy that does not add to the climate change problem
4. The main future emitters of CO2 have cheap fossil fuel in the form of
coal which they will use because of security of supply and flexibility
5. Without the bridge of CCS we will not reach a future of global low
CO2 emissions

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Why do we need Carbon Capture and
Storage (CCS)?

Source: IEA World Energy Outlook 2008. Blue is the continuation of the 450ppm scenario

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Why do we need Carbon Capture and
Storage (CCS)?

1. Climate change is a real problem - for us and future generations

2. More energy is need to improve the lives of billions of people
3. Energy efficiency is not enough by itself, we need renewable and
sustainable energy that does not add to the climate change problem
4. The main future emitters of CO2 have cheap fossil fuel in the form of
coal which they will use because of security of supply and flexibility
5. Without the bridge of CCS we will not reach a future of global low
CO2 emissions

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 Factors against implement CCS

ƒ Key issue is that it is an additional cost in fuel use;

ƒ Requires valuing an externality
ƒ The primary products related to CCS – useful energy such as heat and
electricity – are embedded into products and services.
ƒ CCS implementations at scale have technical and cost risks
ƒ Additional infrastructure impacts for planning and public acceptance
ƒ Uncertainty of CO2 value recognition causes financial risk costs
ƒ Low cost transport and storage needs high volumes
ƒ It is not yet normal business

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 Factors helping implement CCS

ƒ It converts coal from a problem to an opportunity

ƒ Coal is internationally more evenly distributed and matched to
energy users
ƒ Good potential for re-use of existing power assets
ƒ Swing production of CO2 will offset intermittent renewable
generation
ƒ Low risk storage in depleted gas reservoirs and very large saline
formation storage opportunities
ƒ Governments have accepted that they are best placed to carry long
term liabilities for storage.
ƒ Large scale and few players make it easier to view the market and
secure climate change improvements such as shared infrastructure
with clustering of sources

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Delay is bad

“Indeed, every year that CCS is delayed is a missed opportunity to reduce CO2
emissions. CO2 concentrations are already rising at over 2 ppm a year and it is
estimated that delaying the implementation of CCS by just 6 years would mean CO2
concentrations increasing by around 10 ppm by 2020” (Exhibit 2, European Technology Platform
for Zero Emission Fossil Fuel Power Plants (ZEP) Demonstration Programme Proposal, Nov 2008).

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 CO2 is an integration issue, not a yearly
event – there is no time discount to CO2

Tonnes in a
year, the
Impact of commercial Earth’s view of
emissions view of emitting CO2
emitting CO2

Sustainable
level of CO2
Now +50 years- more
than CCS asset life

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Contents

ƒ AMEC perspective
ƒ Climate Change and CCS
ƒ CCS systems
ƒ Outlook for CCS projects

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Sources and sinks for CO2
key criteria- indicative areas:
Oil and Gas sinks
Large CO2 sources
(Adapted from Hydrogen Energy
indicative map)
Prospective larger
saline aquifer basins
(Adapted from SPM6b IPCC
(Courtesy of
Geoscience Australia)
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 CCS commercial demarcations

Each CO2 Common network resources Licensed storage

source
Pumping, Injection,
pipes, meters monitoring

Primary Node
business Capture Dry etc to export Pipeline equipment Sequestered
process
Shipped Revenue
CO2 and liabilities
Commitment Shared port Source may be commercially from CCS-
to CCS facilities, linked to store or may be able stored or
export storage to transfer all liabilities and EOR
and shipping payment to another system
Ship
© AMEC 2008
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 Capture

ƒ Capture technology and

characteristics are driven by site
and plant process details. The CO2
output for high volumes is quite
similar in all cases due to multiple
downstream considerations
ƒ The main processes, post
combustion, oxy fuel and pre
combustion, are well understood
overall and in most details. R&D
may offer important efficiency
improvements but are not essential
to move forward with CCS.
ƒ The main immediate issue is in
proving costs at large power station
scales.

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Transport
Bulk transport has solid, liquid or gaseous options.
ƒ Solid however require energy to cool the CO2, insulation during transport, or
hydrate formation, and liquefaction for geological injection, so the use of the
solid phase is generally discounted. Transport as a gas is good for short
distances and smaller volumes.
ƒ For ambient temperatures liquid CO2 at medium to high pressures is ideal and
proven in North America in both volume and distance.
ƒ Besides simple dedicated lines network studies in the UK and US show viable
systems once volumes are established.

Shipping has specific

options of ambient
temperature and high
pressure, or low
temperature and medium
pressure.

© AMEC 2008
Copyright AMEC 2008 21
 Storage

ƒ Carbonation is useful for smaller

quantities in the right
circumstances.
ƒ Ocean water storage is ruled out
as it is not secure storage without
significant environmental risks
ƒ Storage in geological formations
requires a seal or cap rock
generally at depths greater than
say 800m.
ƒ The storing formation, coal, oil&
gas bearing rock, or saline
aquifer, all require sufficient
injectivity IPCC CCS Figure SPM.4. Overview of geological storage options (based on Figure 5.3)

ƒ
(Courtesy CO2CRC)
Various mechanisms will
gradually immobilise the CO2.

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Carbon, Capture, Transport and Storage

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Locally,… Teesside ~20Mt/y

Internal
study
option
only ©
AMEC
2009

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And Yorkshire,…

AMEC work done for a Yorkshire Forward led study, 2008 for up to 60mt/year
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The idea of CO2 Infrastructure for the
North Sea has also been raised

From 2002 example;

CENS (CO2 for
EOR in the North
Sea) Elsam and
Kinder Morgan CO2
Company –
30mt/year.
To 2007 Report to
the North Sea Basin
Task Force.
Examined phasing
and clustering
benefits in scenario
modelling of CCS.

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Contents

ƒ AMEC perspective
ƒ Climate Change and CCS
ƒ CCS systems
ƒ Outlook for CCS projects

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Developing a market value for CO2 reductions

ƒ Regulation is a way to force a commercial value. How that works

internationally is more complex;
ƒ Plan the ability to trade CO2 between markets – from 2020?
ƒ Designing the next generation CDM mechanism to include CCS
ƒ Do sector agreements for power, industry and transport help??
ƒ Identifying and promoting new efficiency codes for buildings, appliances and
equipment
ƒ Identifying the embedded CO2 equivalent of the green house gases in goods
and services – use of conservative default values unless proven

The UNFCC Copenhagen meeting will be an important in these steps - but

expectations for the outcome are varied

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Alternatives to open markets for CO2
reduction

There is a view that volatility and political trade-offs will soften market
values for CO2 so that the money will not be efficiently directed to CO2
reduction projects, so:
ƒ Should CCS be even linked to markets like ETS or CDMs, or should it
be just a requirement of using fossil fuels or mandated for heat and
power?
ƒ Should there be tax at source on fossil fuels at source (and imported
embedded carbon) to pay for the consequences of digging up the
buried carbon?

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What is next for CCS?

ƒ Institutional processes are developing

ƒ US and Canada may catch up and exceed EU in deployment
ƒ China is capable of quickly tackling this and their potential support for
CO2 caps is encouraging
ƒ EU political will is gradually turning into practical support beyond the
initial R&D interests- EC proposal for €1100m for CCS before 2011,
the 300m EUAs recycled to projects, and member state support
options.
ƒ The April commitment by the UK to 2 to 4 plants, a route to mandating
CCS for coal, and potentially realistic funding is important

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Overall Issues

ƒ Uncertain impact of global “market” value of CO2

ƒ Denser population where systems to be deployed
ƒ Considerable regulatory development is needed in most countries
ƒ Different regulatory principles
ƒ Cross boundary issues to be addressed
ƒ Cost comparisons are confused by existing energy support
mechanisms
ƒ Value from all CCS has to be recognised – e.g. biomass
ƒ The approach to monitoring the reservoir and any remediation
measures before storage will be done.
ƒ Early systems face higher costs and may become stranded assets- so
capex and opex support is needed to gain learning and share the risks

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Project Issues

ƒ Required to ensure public safety and that public perception is

properly informed
ƒ Conservative design will deliver plant
ƒ Safety is well addressed
ƒ Robust storage site
ƒ Monitoring methodologies for the storage site and other infrastructure
ƒ Operation and modelling of storage with response planning
ƒ Measures that may be necessary after the end of the crediting period
may have to be agreed before storage starts

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Thank You

Alastair Rennie
AMEC Power and Process Europe
Renewables Project Director
T: +44 7889 486 827
e: alastair.rennie@amec.com
AMEC House
Yarm Road
Darlington
Co. Durham
DL1 4JN - UK

www.amec.com

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