Can the US afford to spend billions of dollars to invest in this risky business of carbon capture and storage (CCS) projects?
So far, the US Department of Energy’s CCS investment is moving along as 3 companies — Air Products & Chemicals, Archer Daniels Midland (ADM) and Leucadia Energy — are now on their phase II activities. DOE announced last week that the three companies will receive up to $612 million from the American Recovery and Reinvestment Act – matched by $368 million in private funding.
The projects – located in Texas, Illinois, and Louisiana – were initially selected in October 2009 for phase one research and development grants. The projects are expected to capture and store 6.5 million tons of CO2 per year, and increase domestic production of oil by more than 10 million barrels per year by the end of the demonstration period in September 2015.
The Leucadia project is expected to capture and sequester 4.5m tons/year of CO2 from a new methanol plant in Lake Charles, LA. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield.
Air Products will capture and sequester one million tons/year of CO2 from existing steam-methane reformers in Port Arthur, Texas, starting in November 2012. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield.
ADM’s project will capture and sequester one million tons/year of CO2 from an existing ethanol plant in Illinois, starting in August 2012. The CO2 will be sequestered in the Mt. Simon Sandstone, a well-characterized saline reservoir located about one mile from the plant.
A lot of chemical companies are actually looking into developing technologies for this potential profitable market. Pike Research estimates global revenues for CCS systems could reach $128 billion by 2030. If the forecast scenario includes more aggressive assumptions for global climate policy and industry adoption, Pike Research anticipates that the worldwide CCS market could reach as high as $221 billion in the same time frame.
Shell explains in this video the challenges and potential of CCS as well as current CCS projects that they’re doing:
More previous news and updates on carbon capture here:
Air Products and DOE Sign Agreement for Carbon Capture and Storage Project