If fossil CO2 storage is credited at $50/tonne CO2, while use in EOR is
credited at $35/tonne CO2, this implies that the benefit of CCS-EOR is
100x(50-35)/50 = 30% less than straight sequestration. I believe this is a
significant overestimate of the benefit of CCS-EOR given estimates I've seen of
only 40% effective net CO2 reduction, so I need to learn how that $35/tonne was
arrived at (aside from behind closed doors).
It's also interesting (perverse) that the industry most responsible for the CO2
problem must be the first one to benefit from a CO2 credit: CO2 management
technology cannot proceed without first benefiting (tithing) the fossil fuel
industry, irrespective of potentially cheaper and higher capacity options. That
technology developed here will translate to solving the bigger problem seems a
very large gamble, namely that making concentrated CO2 will be the best (only)
way to to manage//remove CO2.
Greg
----- Forwarded Message -----
From: "Hawkins, David" <dhawk...@nrdc.org>
To: geoengineering <geoengineering@googlegroups.com>; "len2...@gmail.com"
<len2...@gmail.com>
Sent: Thursday, February 15, 2018 6:52 AM
Subject: Re: [geo] Re: Federal Budget Bill Includes Massive Tax Credits for
Carbon Capture
#yiv3426215623 #yiv3426215623 -- P
{margin-top:0;margin-bottom:0;}#yiv3426215623 Let me clarify that my posts on
this list are my personal views, not necessarily NRDC's position.
As to the substance, you are confusing the carbon intensity of a barrel of oil
from EOR with the net impacts on total GHG emissions from all oil production
and use due to production of an incremental barrel of oil from EOR.My statement
related to the effective carbon intensity of a barrel of oil produced as a
result of the capture tax credit.The paper you cite does not contradict my
statement; when the emissions avoided by capturing CO2 are accounted for, the
carbon intensity of the EOR barrel is less than other oil. (This does not hold
for EOR barrels produced by using "natural" CO2 mined from geologic formations.
As discussed below, the tax credit bill can shift some EOR from using to
natural CO2 to using captured CO2, resulting in additional avoided emissions.)
The system impact of producing an incremental barrel of oil from EOR depends on
what fraction of a barrel of an alternative source of oil is displaced by the
incremental EOR barrel. That fraction is somewhere between zero and one, with a
wide range of estimates. In a glut oil market, the displacement factor is
estimated to lie in the higher end of the range but no one knows for certain
what the displacement will be in the real world. What we can say is that oil
consumption is the product of a large number of factors, with incremental
supply being only one of them.
To be clear, my view is that producing an incremental barrel of any oil is bad
for the climate and that we need a more serious program to reduce oil
consumption much more rapidly. So any incremental production induced by this
tax credit is a cost to the climate. But there is an asymmetry of costs and
benefits with this tax credits. If there is some induced oil consumption, it
will be a tiny fraction of global oil consumption. On the other hand, if the
credit induces only 5-10 carbon capture projects in key industrial sectors,
that will be a several-fold increase in experience for a number of industry
categories. While that does not guarantee cost reductions through learning, it
improves our chances compared to the status quo. Another likely benefit of the
credit is to shift the EOR market away from using natural CO2 to using captured
CO2. Even without the tax credit provision, EIA projects an increase in EOR,
with most of that increase choosing natural CO2. With the tax credit, captured
CO2 will be less costly to purchase than natural CO2 and it is reasonable to
expect a shift to captured CO2 for new projects and perhaps for some existing
projects that have contract flexibility.
Both the emissions costs and benefits of this bill are not hard values.
Assessing them requires exercising some judgment about the quality of the
estimates. You can decide whether the benefits likely outweigh the costs.
Regarding a requirement to retrofit older plants, I think you missed my point.
Adopting a policy that requires an existing unit to clean up or shutdown by a
certain age (or a certain calendar date) may or may not result in the
installation of CC on a particular unit. But it will achieve a substantial
emission reduction, either through the use of CC or from shutdown of the unit.
The political likelihood of adopting such a policy depends on a number of
factors, among them the costs of CC and the emergence of norms of good
practices in operating high carbon intensity sources. A capture tax credit
provision is directionally correct on both of these counts.
David
From: geoengineering@googlegroups.com <geoengineering@googlegroups.com> on
behalf of Leon Di Marco <len2...@gmail.com>
Sent: Thursday, February 15, 2018 5:26 AM
To: geoengineering
Subject: [geo] Re: Federal Budget Bill Includes Massive Tax Credits for Carbon
Capture
| me (Leon Di Marco change) | 9:20 AM (1 hour ago) |
NRDC still seem to be pursuing the mantra that-
a barrel of EOR oil incented by this bill will be coupled with a CO2 reduction
from industrial capture and thus have a lower CO2 intensity than any other
barrel of oil.
despite the evidence that oil using EOR is actually a net source of CO2, as
shown by Armstrong and Styring, table 4 - attached
plus the fanciful notion that old fossil plants could ever be re-engineered and
connected to a sequestration pipeline
Better still would be a bill requiring CCS on fossil plants older than X years
LDM
On Wednesday, February 14, 2018 at 10:07:20 PM UTC, Andrew Lockley wrote:
https://www.triplepundit.com/ 2018/02/federal-budget-bill-
includes-tax-credits-carbon- capture/
Federal Budget Bill Includes Massive Tax Credits for Carbon Capture
Friday’s short government shutdown culminated in a potentially huge win for the
climate, business and investors. Among a slew of spending and tax credits
tucked into the budget bill signed by U.S. President Trump, one of them, known
as 45Q, expands tax incentives for carbon capture, including from the air.
With advocates from both sides of the aisle, the act shows bipartisan support
for carbon capture technology. The policy also signals a shift toward greater
development and deployment for something known as carbon dioxide
removal.Broadly speaking, carbon dioxide removal involves two crucial steps:
trapping carbon dioxide (the main greenhouse gas causing climate change) and
reliably storing it. For every qualifying project, 45Q generates a tax credit:
$50 per ton of carbon dioxide (CO2) buried in underground storage, $35 per ton
for either utilization or enhanced oil recovery.With no cap on the available
tax credits and 12 years to claim them, 45Q is poised to do for carbon capture
what similar incentives did for wind and solar power: unleash private sector
investments that catapult the technology into its maturity. Tax credits are the
first step in that direction. The policy makes a stronger business case for
development, which in turn will drive necessary innovations that make it easier
and more attractive to take these technologies to scale.This scaling is vital.
Scientists agree that cleaning up past emissions of carbon dioxide is essential
to meeting safe climate targets. And 45Q is the first federal acknowledgement
of the role that carbon utilization and air capture technologies will play in
getting us there.Money for mechanical trees
Direct air capture (DAC) is a method for literally removing carbon from the
atmosphere. Mechanical trees suck in ambient air and chemically separate out
the carbon dioxide. From there, the captured CO2 is pumped deep underground
into sealed chambers. The end result of direct air capture, in other words, is
permanently stored CO2.The best part? This technology is far from theoretical.
ClimeWorks is one of three startups–along with Global Thermostat and Carbon
Engineering–to pull it off: Their negative emissions plant in Iceland “stores
the air-captured CO2 safely and permanently in basalt, leading us closer to our
efforts to achieve global warming targets.”ClimeWorks’ direct air capture
machine in Switzerland could allow companies to earn up to $50 per ton of CO2,
depending on where it is stored after capture. Thus far, however, all of
ClimeWorks plants have been located outside the U.S and have been highly
subsidized. Direct air capture has a near limitless potential for carbon
removal, making it a critical tool for carbon dioxide removal. But the high
cost of the technology in pilot projects has been a barrier to wide adoption.
45Q takes an important step toward lowering these costs. As the first instance
of explicit federal support, the bill sends a clear signal to DAC investors to
continue funding innovations that further bring down costs.Waste to value
45Q designates a $35 per ton tax credit for the beneficial recycling or
utilization of captured CO2 emissions. Rather than storing emissions
underground, CarbonTech businesses recycle waste carbon dioxide by converting
it into consumer products and materials like plastics, transportation fuels,
and chemicals. That credit is likely to drive a handful of industrial carbon
capture projects, according to a recent study.CarbonCure makes a stronger,
faster-curing cement by injecting waste carbon dioxide into cement mixers.
CarbonCure’s technology repurposes greenhouse gas emissions, injecting them
into concrete to yield a superior and greener product. Positively, the
extension of 45Q will incentivize more companies to reuse CO2 in novel and
creative ways by making the processes and technologies more investable and
affordable. In turn, this can help build early markets and broader political
will for carbon removal.Public money unlocks private dollars
Even before the extension of 45Q, innovative investors, corporations, and
startups were already working to build an industry around recycling carbon
emissions. More than $2 billion dollars in private capital gathered at Center
for Carbon Removal’s CarbonTech Investor Roundtable last week to explore
investment opportunities. They asked for more CarbonTech businesses. They also
said policy support is critical to creating large markets for CarbonTech, in
turn increasing revenue and mitigating climate change.It’s like the bipartisan
authors of 45Q were in the room. With federal support for carbon recycling,
building a business or investing in the carbon recycling space is less risky
and potentially more profitable than ever before.Strange bedfellows
45Q gathered diverse backers, ranging from fossil fuel companies to unions and
environmentalists. While these stakeholders touted different benefits for the
economy and the environment, they generally agreed on the importance of federal
incentives for carbon capture and utilization. Enhanced oil recovery (EOR), an
important pathway to geologic carbon dioxide sequestration, will likely receive
many of the 45Q tax credits.But even EOR projects would help carbon capture
companies reduce their costs and get to scale.With these learnings from EOR
projects under their belt, carbon capture companies could more easily
transition to storing CO2 underground without EOR when carbon prices increase
to make such standalone sequestration economically viableCementing the victory
Here at Center for Carbon Removal, we work to grow nascent carbon removal
activities into large-scale climate solutions. Technological, commercial, and
policy barriers must be overcome in order to do so. 45Q starts to tackle all
three of these obstacles by reducing the risks and increasing the profitability
of carbon removal. This is why CCR, as part of a diverse coalition, has
advocated for this policy for years. This victory calls for even more
tenacious work on carbon removal. Center for Carbon Removal invite you to join
us in pioneering the future of carbon removal. We need your intellect, passion
and expertise. Here is how you can get involved:
- Subscribe This Week in Carbon Removal to keep abreast of the latest carbon
removal news, events, job postings, and journal articles.
- Join Center for Carbon Removal Investor Network for exclusive connections
to other investors and the hottest startups.
- Got a good CarbonTech business idea? Sign up to compete in Carbon Removal
Labsbusiness accelerator.
Rory Jacobson is a Policy Analyst at the Center for Carbon Removal where he
researches policies with the potential to support carbon removal
solutions.Elizabeth Reali is a Communications Intern at the Center for Carbon
Removal, where they work to build out educational materials, design digital
assets, and communicate with stakeholders about carbon removal.
--
You received this message because you are subscribed to the Google Groups
"geoengineering" group.
To unsubscribe from this group and stop receiving emails from it, send an email
togeoengineering+unsubscr...@googlegroups.com.
To post to this group, send email to geoengineering@googlegroups.com.
Visit this group at https://groups.google.com/group/geoengineering.
For more options, visit https://groups.google.com/d/optout.
--
You received this message because you are subscribed to the Google Groups
"geoengineering" group.
To unsubscribe from this group and stop receiving emails from it, send an email
to geoengineering+unsubscr...@googlegroups.com.
To post to this group, send email to geoengineering@googlegroups.com.
Visit this group at https://groups.google.com/group/geoengineering.
For more options, visit https://groups.google.com/d/optout.
--
You received this message because you are subscribed to the Google Groups
"geoengineering" group.
To unsubscribe from this group and stop receiving emails from it, send an email
to geoengineering+unsubscr...@googlegroups.com.
To post to this group, send email to geoengineering@googlegroups.com.
Visit this group at https://groups.google.com/group/geoengineering.
For more options, visit https://groups.google.com/d/optout.
