One way to decrease the costs and development time for carbon capture projects is to eliminate the need for long distance CO2 transportation. By locating a utilization or storage site near a capture facility, project developers can avoid building lengthy CO2 pipeline infrastructure that could ultimately increase project costs and lead to potential regulatory headaches associated with pipeline siting and construction. In this Energy Market Insight, we explore potential locations for carbon capture and storage (CCS) projects that could take advantage of proximate emissions and geologic storage sites to reduce CO2 transportation needs.
Regional geologic CO2 storage sites exist throughout the U.S., with the largest onshore storage capacities located in Alaska and along the Gulf Coast. Projects that aim to capture the 45Q tax credit via EOR or geologic sequestration are already taking place at sites in Wyoming, North Dakota, New Mexico, Texas, Oklahoma, Illinois, and Michigan; and pending Class VI well permits, if approved, could bring CO2 storage projects to an additional seven states. While there are various factors that make certain storage sites more advantageous than others, e.g., existing well infrastructure or favorable geology, having nearby emissions sources to provide captured CO2 is an important consideration for potential storage sites. Of all the regional geologic storage sites, the U.S. Gulf Coast has far and away the largest volume of emissions, with nearly 545 Mt of CO2e in 2021. Most of the emissions in this region, or 316 Mt/y, come from a diverse mix of industrial sources, including refineries, petroleum and natural gas systems, and the chemicals industry. This variety of emissions sources allows for different capture techniques and technologies to be deployed across various sectors, including some applications which may be especially economic. Favorable emissions sources, along with existing CO2 pipeline infrastructure, helps to explain why this region recently became the focus of numerous CCS projects. In total, the U.S. Gulf Coast region has 41 projects under development, creating a combined capture capacity of 101 Mt/y. The largest portion of this is attached to industrial facilities.
Other regions that have sizeable emissions volumes but have received less attention are the Appalachian, Illinois, Michigan, and South Florida Basins. Although the Appalachian Basin has the second highest emissions volume of the regional storage sites, it currently has only one CCS project in development and one pending Class VI well permit. Unlike the Gulf Coast, power plants in the Appalachian Basin contribute the majority of emissions in the region, with industry only emitting 69 Mt/y CO2e. Industry emissions are even smaller in the Illinois, Michigan, and South Florida Basins, where they account for a combined 64 Mt/y CO2e. Generally, CCUS projects at coal and natural gas power plants are considered more costly than some industrial applications of carbon capture because power plant flue gas has a relatively low pressure and CO2 concentration. Carbon capture capacity under development in the U.S. leans towards industrial sources rather than power plants, due in part to this economic advantage. In fact, capacity under development at industrial sites is more than double that under development at power plants in the U.S., with industrial corridors along the Gulf Coast being the site of many of these projects.
Despite the advantages of locating capture facilities near storage sites, some developers have opted to pursue projects that do involve long-distance CO2 transportation. Most notably, Summit Carbon Solutions, Navigator CO2, and Wolf Carbon Solutions have proposed projects that involve capturing CO2 at numerous ethanol plants in the Midwest and transporting it to designated storage sites via hundreds of miles of new pipelines. Projects of this kind benefit from having low-cost CO2 capture sites and aggregating large CO2 quantities that can lead to economies of scale. This development model suggests that while carbon capture projects located within geologic storage sites inherently yield lower CO2 transportation costs, there are opportunities for projects that exist outside of storage areas if they can successfully pool CO2 into pipeline corridors and centralized hubs.
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