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Putting CCS In Perspective: The Policy Context

Presentation to RECS 2011 Sarah Wade Birmingham, Alabama

Outline
p Broad
n

review of major influences on policy relating to CCS

Climate change science n Climate change as a political issue n Role of CCS in technology portfolio

p CCS
n

specific policy issues

Implications of EOR, saline, other reservoir types n Financial n Regulatory

p p

Long term stewardship Accounting

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The Discovery of Global Warming*

p p p p p p

1784 Benjamin Franklin, "Meteorological Imaginations and Conjectures . Weatherwise. 1861 John Tyndall, "On the Absorption and Radiation of Heat by Gases and Vapours..." Philosophical Magazine 1896 Svante Arrhenius, "On the Influence of Carbonic Acid in the Air Upon the Temperature of the Ground." Philosophical Magazine. 1917 W.H. Dines, "The Heat Balance of the Atmosphere." J. Royal Meteorological Society. 1950 Albert Abarbanel and Thomas McCluskey, "Is the World Getting Warmer?" Saturday Evening Post. 1970 Study of Critical Environmental Problems, Man's Impact on the Global Environment. Assessment and Recommendation for Action. MIT Press. 2007 Intergovernmental Panel on Climate Change, Susan Solomon, et al., Eds. Climate Change 2007: The Physical Basis of Climate Change. Fourth Assessment Report of the IPCC.

*Source: American institute of Physics:www.aip.org/history/climate/bibdate.htm

BAU GHG Scenarios

 Source: IPCC 4th Assessment Report Summary for Policymakers

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Source: IPCC 4th Assessment Report Summary for Policymakers

Stabilization Emissions and Temperatures

Source: IPCC 4th Assessment Report: http://www.ipcc.ch/pdf/presentations/COP15-presentations/sokona_20091208.pdf

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And Yet
Global CO2 Emissions from Fossil-Fuel Burning, Cement Manufacture, and Gas Flaring: 1752-2006

Reference: Carbon Dioxide Information Analysis Center

US Response
1970s: Oil Embargo fuel standards and National Climate Act 1980s: IPCC Created 1990s:US plays key role in Kyoto Protocol; US senate passes Byrd / Hagel Resolution 2001:Knollenberg Amendment; President Bush Recants Campaign Promise On CO2 2005:EPA convenes panel to review CCS 2007:Election slogan: Drill Baby Drill 2000 to 2007: Pew reports # federal climate bills grows from 7 to 106; nearly 40 states had some climate related energy or environment bills

2008:Economy Collapses, Healthcare Passes, Climate does not 2010: Gulf Horizon Spill; Congress turns over climate change 2011: House Acts To Stop US From working Climate Change Here or Abroad; Shale gas Booms, so do some people s faucets

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Potential Role of CCS

Global Initiatives
p p

IPCC
n n n

2005 Special Report on CCS Goal of 20 large scale project by 2010 Launched GCCSI

G-8 CSLF EU Directive (2008)

n n

p p

Requirements to address climate change Allows / promotes CCS through a regulatory and accounting framework International CCS Association CO2 Capture Project Integrated CO2 Network (ICO2N)

International R&D Groups

n n n

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US CCS Initiatives
p Interagency

Taskforce on CCS p US Climate Change Technology Program p US DOE

Carbon Sequestration Program n Regional Partnerships n Clean Coal Technology (FutureGen)
n

p US
n

EPA Sink/Source Mapping

GHG reporting n UIC rulemakings

p USGS

What Role For CCS Now?

1.

EOR:
n

NRDC / ARI study: Potential to use 9-11B tons captured CO2 to mobilize additional 27-35B barrels of domestic oil. Assume conservatively, 3B tons CO2, yields 9B barrels oil, paying roughly $30-40/ton for CO2 from capture and oil price of $100 per barrel, netting $40B to US Treasury and profits of $260B for oil industry

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Perhaps More Importantly

2.

Avoiding the Brick Wall

p

EPRI PRISM modeling

p

Near term response to high CO2price likely dominated by renewables, efficiency and natural gas
Coal retirements offset by new renewables, efficiency Natural gas fills any remaining demand

Wind integration costs significant at high penetration

New balancing resources required (transmission, storage, smart grid, PHEVs) Cycling impacts on thermal fleet !increased O&M

Longer term, nuclear and CCS will be important

Without them, rely on more costly renewables, efficiency

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CCS Specific Policy Issues

p

Storage Formation Type & Objective

n n

EOR market driven, marginal cost focus, requires certainty/ control of CO2 Saline disposal or compliance model, business models developing, potentially requires less control of CO2 but more need for redundancy Significant $ needed for RDD Cost reductions expected by step functions away Long term stewardship Accounting

Financial
n n

Regulatory
n n