Monday, August 21, 2006

CO2 Capture and Storage doesn't always add up

BP's Frontiers magazine, April 2006, contains an interview with BP Chief Scientist Steve Koonin and a discussion on carbon capture and storage. BP are to develop a 350 MW combined cycle gas turbine to be fueled from hydrogen. A special process will convert natural gas into the clean-burning hydrogen fuel and CO2. BP announced with some environmental enthusiasm that the CO2 will be captured and pumped underneath the North Sea into the Miller field, safely separated from the atmosphere. Unfortunately, while the project is technically impressive, financially responsible and socially valuable for securing our future energy supplies, it is highly doubtful that this development is environmentally positive.

BP tells us that pumping some 1.3 million tonnes each year of CO2 into the old Miller field will have an "added bonus" of increasing the amount of crude oil produced from the reservoir. The additional production will be "up to" 40 million additional barrels of crude. These additional barrels are barrels that would otherwise have been stuck underground.

Perhaps the additional 40 million barrels from Miller will mean that 40 million barrels from elsewhere will not be produced. If so, we can relax and join in BP's environmental enthusiasm. But what if not? What if all other production will continue anyway, and instead BP just added 40 million barrels of oil to the total amount of crude that will ultimately have been produced, most of which to end up as CO2 in the atmosphere?

This second (I feel safe in saying more likely) scenario means that the CO2 cost of the "added bonus" of "up to" 40 million additional barrels must be taken away from the atmospheric benefit of capturing the CO2 in the first place. How does the overall balance look?

Roughly, one barrel of oil, after refining into components and the various parts combusted in air, equates to around 400 kg of CO2. This is a rough figure and depends on the kind of crude, refinery efficiency and fractions, but we're not an order of magnitude out. So up to 40 million additional barrels of crude gives us, roughly, up to 16 million additional tonnes of CO2 .

BP tell us that they expect to pump around 1.3 million tonnes of CO2 each year into Miller. That means for more than the first 12 years of operation, the CO2 capture operation will have put more CO2 into the atmosphere than if it had never been built. It could have vented the CO2 to the atmosphere, saved the cost of the additional equipment and the energy required to run it, and left the extra crude in the ground.

It could be that all the oil comes out after 12 years, or at some complicated rate relative to the CO2. Perhaps so, although the economics are likely to mean that one would engineer the extra oil to come out as quickly as possible to generate revenue (see below). Also, to be fair, BP did say the figure was "up to" 40 million barrels. They could get less, in which case the CO2 payback will be that bit sooner. But how soon? In fact, how long will the plant run? For longer than 12 years one would hope. Surely this depends on the economics - how do they look?

The article inevitably takes the opportunity to importune governments to step in to address the additional costs of sequestration. Somewhat odd, then, that this project is going ahead already and others are in the CO2 CCS pipeline. Perhaps BP's share of the value of 40 million additional barrels of oil, around US$3 billion at today's prices, might help to offset the sequestration costs? That might keep the plant going, at least while the additional production flows. After that, perhaps it would be financially wiser to turn off the plant.

Shame about the atmosphere.


Anonymous said...

Hi Tim,
I just came come across this as I was doing some research for my new book.

The Weyburn Saskatchewan EOR project seems to run the same kind of numbers: their goal is to recover an incremental 130 million barrels of oil through the injection of CO2 under pressure.

130 million barrels at 400 kg of CO2 per barrel = 52 million tonnes of CO2.

Over the course of the project, they intend to inject 20 million tonnes of CO2, so for every tonne of CO2 injected, 2.5 tonnes will be released.

The only "saving" argument is that oil without CO2 injection would release the full 52 MT without the saving grace of the stored 20 MT.

But the project as a whole completely nullifes the CO2 storage.

With the BP project, do you know over how many years they will be pumping the 1.3 millin tonnes of CO2, in order to extract the 40 million barrels of oil?

abdulah said...
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