Guest post by David Middleton
THE 240MWE FACILITY IS THE LARGEST POST-COMBUSTION CARBON CAPTURE PROJECT IN THE WORLD
WASHINGTON, D.C. — Secretary of Energy Rick Perry took part in a ribbon-cutting ceremony today to mark the opening of Petra Nova, the world’s largest post-combustion carbon capture project, which was completed on-schedule and on-budget. The large-scale demonstration project, located at the W.A. Parish power plant in Thompsons, Texas, is a joint venture between NRG Energy (NRG) and JX Nippon Oil & Gas Exploration Corporation (JX).
“I commend all those who contributed to this major achievement,” said Secretary Perry. “While the Petra Nova project will certainly benefit Texas, it also demonstrates that clean coal technologies can have a meaningful and positive impact on the Nation’s energy security and economic growth.”
Funded in part by the U.S. Department of Energy (DOE) and originally conceived as a 60-megawatt electric (MWe) capture project, the project sponsors expanded the design to capture emissions from 240 MWe of generation at the Houston-area power plant, quadrupling the size of the capture project without additional federal investment. During performance testing, the system demonstrated a carbon capture rate of more than 90 percent.
At its current level of operation, Petra Nova will capture more than 5,000 tons of carbon dioxide (CO2) per day, which will be used for enhanced oil recovery (EOR) at the West Ranch Oil Field. The project is expected to boost production at West Ranch from 500 barrels per day to approximately 15,000 barrels per day. It is estimated that the field holds 60 million barrels of oil recoverable from EOR operations.
The successful commencement of Petra Nova operations also represents an important step in advancing the commercialization of technologies that capture CO2 from the flue gas of existing power plants. Its success could become the model for future coal-fired power generation facilities. The addition of CO2 capture capability to the existing fleet of power plants could support CO2 pipeline infrastructure development and drive domestic EOR opportunities.
The Petra Nova carbon capture system was installed in the W.A. Parish generation station. This is the largest and cleanest fossil fuel generaton station in the United States:
W.A. Parish Electric Generation Station, Thompson, Texas
Owner/operator: Texas Genco Holdings Inc.
Texas Genco has invested heavily in upgrading its W.A. Parish coal- and gas-fired plant southwest of Houston. Although this nine-unit, 3,653-MW plant is the largest fossil-fueled plant in America, its NOx emissions have been reduced to microscopic levels. Based on those levels, W.A. Parish could rightly claim that it is among the cleanest coal plants in the U.S.
Texas Genco’s W.A. Parish Electric Generation Station (WAP) is the largest coal- and gas-fired power facility in the U.S. based on total net generating capacity. It and its owner, Texas Genco Holdings Inc., operate in the Electric Reliability Council of Texas (ERCOT), one of the largest electric power markets in the nation. Over the past few years, the majority-owned subsidiary of Houston-based CenterPoint Energy Inc. has met the challenge of adding emissions control equipment to these baseload units while maintaining the availability and reliability required by ERCOT’s competitive market.
In the process, Texas Genco has emerged as an industry leader at reducing emissions and demonstrating new NOx-control technologies. The company’s fleet of plants operates at one of the lowest NOx emission rates in the country, and WAP likely emits less NOx on a lb/MMBtu basis than any coal-fired plant of any size in the U.S. Cleanliness is costly; the company has spent more than $700 million on new emission controls since 1999.
With the commissioning of another round of emissions-control equipment this year, NOx emissions from Texas Genco’s Houston-area power plants—including WAP—will be 88% lower than 1998 levels. These actions play a major role in the Houston/Galveston Area Ozone State Implementation Plan and are helping to clean the air in the greater Houston area. To honor the accomplishment, the W.A. Parish plant was recently given the Facility Award by the Power Industry Division of the Instrumentation, Systems, and Automation Society (Research Triangle Park, N.C.) for installing equipment to reduce emissions and improve reliability while minimizing operational costs.
[…]
The W.A. Parrish Generation Station has a generating capacity of about 3,660 MW (2,740 MW of coal and 1,190 MW of natural gas capacity). Its total capacity is approximately the same as the ten largest solar PV plants in the U.S. combined (3,713 MW). From 2002-2009, W.A. Parrish operated at 85% of capacity. The war on coal gradually reduced its operations to 57% of capacity in 2016.
The Petra Nova carbon capture system will enable the plant to capture about 90% of the CO2 from 240 MW of its coal capacity. It is expected to capture about 1.6 million tons of CO2 per year. The cost of the carbon capture system was approximately $1 billion, with the taxpayers picking up 19% of the tab. Normally, I would call this a pointless waste of money. It won’t have any effect on atmospheric CO2 or the weather. However, this carbon capture system actually serves a useful purpose:
The Captured CO2 will employ Enhanced Oil Recovery to enhance production at the West Ranch oil field, which is operated by Hilcorp Energy Company. It is expected that oil production will be boosted from around 300 barrels per day today to up to 15,000 barrels per day while also sequestering CO2 underground. This field is currently estimated to hold approximately 60 million barrels of oil recoverable from EOR operations
How Carbon Capture Works
The West Ranch oil field has produced about 390 million barrels of oil since 1938. CO2 injection will boost the production from 300 to as much as 15,000 barrels of oil per day. The EOR could lead to the recovery of 60 million barrels of oil that would otherwise be “left in the ground.” Irony is such a beautiful thing!
And the really cool thing about this project: It makes money!
FiscalNotes
NRG’s Petra Nova Plant Captures Carbon, Boosts Bottom Line
An interview with David Greeson, Vice President of Development, NRG Energy Inc.
by Brian Wellborn
NRG Energy Inc. (NRG) and JX Nippon Oil & Gas Exploration jointly operate the Petra Nova Carbon Capture project, the world’s largest retrofit post-combustion carbon capture system, at the W.A. Parish Generating Station southwest of Houston.
Fiscal Notes recently spoke with NRG Vice President of Development David Greeson to discuss the Petra Nova project and learn what makes its capture system unique, environmentally sound and profitable.
Fiscal Notes: What are Petra Nova’s broad environmental goals?
David Greeson: The goal of the Petra Nova project is to capture more than 90 percent of the carbon dioxide (CO2) in the exhaust flue gas from an existing coal-fired unit at the W.A. Parish power plant. We want to prove it’s feasible to build a carbon capture system on schedule and on budget. Demonstrating the system working at full commercial scale will provide a path forward to address CO2 emissions from existing coal-fired plants, both in the U.S. and around the world.
In addition, we’re looking to create a commercial structure that couples power generation with oil recovery for potential long-term viability — not only to pay for the carbon capture and storage system but also to provide an economic return for investors.
[…]
Fiscal Notes: How economically viable is Petra Nova’s carbon capture process?
Greeson: As long as oil is priced at around $50 per barrel or above, sales of the oil from the West Ranch field will pay for the Petra Nova project.
[…]
The price of CO2 for EOR projects is generally pegged to the price of oil. At >$50/bbl, the sale of the CO2 to Hilcorp will pay for the carbon capture system. Projects like this do not need subsidies.
This will enable the coal-fired plants to operate at a higher capacity and prevent 60 million barrels of oil from becoming “stranded assets.” I just love irony!
Addendum
4/19/2017
DOE estimates that CO2 EOR could recover about 85 billion barrels of oil from existing U.S. oil fields:
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Another consideration is the huge quantity of CO2 produced by a medium sized coal fired power plant. A 500 MW plant burning an eastern bituminous coal with a 80% capacity factor will produce approximately 880,000 lb/hr of CO2. That is 3,850,000 tons per year. A typical coal fired plant is designed to operate for 25 years, however most operate for 35 years plus. That will take a big user of CO2 or a big storage area for a long period of time. Again it would not be broadly feasible for coal fired plants.
The shear volume of CO2 and the economics are definitely obstacles for CCS.
..No wonder the green plants are so happy !!
David, I guess I used old terminology when using caverns. I looked back at notes and early in the development of the CCS by DOE the word cavern was used. I may have been stuck using old terminology. There was an early design to freeze the liquid compressed CO2 in a large missile shaped device with a heavy tip. Ship the container by rail to be loaded on to barges to be dropped into the ocean. The high pressures and low temperatures of the deep ocean would not allow the CO2 to escape. I guess that is where my concern for dumping things in the ocean or pumping something into the ground that is not my naturally there. Unintended consequences.
That’s not “old terminology.” Caverns are large underground caves. No one would ever even think of trying to store gas in a cavern, with the exception of salt domes.
CCS has always entailed drilling injection wells into porous and permeable rocks that are sealed off with an impermeable overburden. Porous and permeable rocks have never been called caverns.
David,
When I read the discussion I kind of recalled mention of Salt Caverns for natural gas storage in NJ.
I am not a geologist nor do I have anywhere the wealth of knowledge you have about the subject but googled the subject and found the following FYI which may not be relevant to the discussion.
Thanks for sharing your knowledge via WUWT.
htps://www.eia.gov/naturalgas/storage/basics/
“Natural gas–a colorless, odorless, gaseous hydrocarbon–may be stored in a number of different ways. It is most commonly held in inventory underground under pressure in three types of facilities. These underground facilities are depleted reservoirs in oil and/or natural gas fields, aquifers, and salt cavern formations. Natural gas is also stored in liquid or gaseous form in above–ground tanks.
Each storage type has its own physical characteristics (porosity, permeability, retention capability) and economics (site preparation and maintenance costs, deliverability rates, and cycling capability), which govern its suitability for particular applications. Two important characteristics of an underground storage reservoir are its capacity to hold natural gas for future use and the rate at which gas inventory can be withdrawn–called its its deliverability rate (see Storage Measures, below, for definitions).”
That’s why I posted this:
Natural gas is stored salt domes or tabular salt. Depleted reservoirs and brine aquifers are also used. Salt is very impermeable and has a high deliverability rate. There was a study back in the 1970’s looking into storing nuclear waste in East Texas salt domes.
Sorry, my error.
No error.
LBL.gov has a whole group working on ways to try and cram CO2 under ground or at least make it seem like such is happening.
David, you’re doing a yeoman’s job with the geology oriented pieces, so thank you.
I had the opportunity to work up a prospect in a very old field (now operated by Danbury) where in short order I discovered it was an old CO2 flood project. Apparently the CO2 flood was stopped in 1980 after some early breakthrough due to “complex fault geology” which I always thought was a dubious claim, but I wasn’t operating so they *have* to be correct. 🙂 (and yes, there’s a prospect in middle of this large unitized previously CO2 flooded oil field under the developed area known as NASA-Clear Lake. Shh, don’t tell anybody)
Pipelines that receive product can be picky about their CO2 content. Gas pipelines definitely are. Lower your CO2 content or else. (corrosion risk?) Amine units were discussed up thread, but in the vein of coming up with the CO2 for the project, not removing it if/after it starts leaking through to the producing wells ( hopefully some long time after initial injection). A lot of fields have CO2 naturally, so producers are used to dealing with it. Oil producers don’t like it, because it adds to the cost of production, because amine scrubbers are never cheap to operate on a per well basis. But if you’re operating any kind of secondary recovery (water/CO2/other) breaks through early, your economics are tossed in the trash can. In other words, any project like this will look great at the beginning, but there’s a risk of the economics changing as time passes. All miscible flood projects are that way. That’s the risk everyone (Hilcorp) is taking here.
That said, there are several large fields in Texas that are begging for good secondary recovery projects, CO2 or other.
David, Thanks for the education about enhanced oil recovery. It has been informative and has helped me better understand something that I already knew something about. I mainly worked on the equipment that would remove the CO2 and then compress it to inject it into the ground. Seeing the huge capital and operating costs to remove CO2 jaded my view of sequestration. It has been discouraging to see government agencies and private companies claim that they have THE solution. Obviously the first question concerns CO2 and manmade climate change. That verdict is still out. The second issue is if the answer to the above is CO2 does impact climate change, what is the best way to reduce the CO2.
There is not a one size fits all solution and that, IMHO was what DOE was trying to accomplish. Trying to shoehorn the industry into THE solution.
I think I will retreat into my cavern. 🙂
David, I get the gist of your post, but as an engineer I certainly think there are less expensive means of achieving enhanced oil-recovery than the enormous capital & operating/maintenance costs of carbon-capture equipment on coal plants.
The W.A. Parrish Generation Station has a generating capacity of about 3,660 MW (2,740 MW of coal and 1,190 MW of natural gas capacity). Its total capacity is approximately the same as the ten largest solar PV plants in the U.S. combined (3,713 MW). From 2002-2009, W.A. Parrish operated at 85% of capacity. The war on coal gradually reduced its operations to 57% of capacity in 2016.
The Petra Nova carbon capture system will enable the plant to capture about 90% of the CO2 from 240 MW of its coal capacity.
So why are they only doing Carbon Capture on 240 MW instead of the whole 2,740 MW? Most of the CO2 is going into the atmosphere, and this is Americas prize Carbon Capture Sequestration project?
Were they restricted by the 1 Billion dollar investment amount? Times 10 would be $10 Billion. That is worser than Kemper County that is still not complete.
Carbon Capture Utilization costs a fraction of these CCS systems. They don’t enhance EOR but they do produce other useful-saleable products. It creates a multitude of full time jobs in many sectors.
The most expensive systems are often not the most efficient systems. In this case it is NOT “you get what you pay for”. For 1 Billion more I think the rest of the CO2 would be removed from going into the atmosphere.
The “investment” was limited to $1 billion because that was all that was required for the West Ranch oil field EOR project.
The CO2 injection will increase production to 15,000 bbl of oil per day from the current 300-500 bbl/d. This will enable the recovery of 60 million barrels of oil that would otherwise be left in the ground.
But if you pump the c02 into the ground that will make the earth lighter and we will tip over!
So if Texas and the W.A. Parrish Generating Station want to remove the rest of the CO2 from the combusted coal exhaust the might have to invest 1 billion more into a Carbon Capture Utilization System. Then 95% of all the CO2 would be eliminated from going into the atmosphere. The coal side of this facility could be putting into the atmosphere less CO2 than the natural gas side.
Neither Texas nor the W.A. Parrish Generating Station “invested” any money in this project.
The W.A. Parrish Generating Station is operated by Genco, a subsidiary of NRG. The “investment” is a joint venture of NRG and Japanese oil company, Nippon. The US Department of Energy provided a $190 million grant because it is a CCS project.
NRG initiated this project primarily to provide CO2 for EOR at the West Ranch oil field. In exchange for their investment, NRG received a 50% interest in the West Ranch oil field from its operator, Hilcorp.
Their is no financial reason to spend any more money on CCS at the W.A. Parrish Generating Station.
So $1 billion in capital cost to capture 6% of the CO2 emissions of this plant at peak capacity. You acknowledge it has no impact on climate, so the question is how does this investment of $1 billion compare in return to alternative spending of that money on other investments. Pretty sure I could get 5,000 lb/day of CO2 to the oil field for less. Thinking there are also better places to invest $1 billion. Yes, there is some irony and a bit of a silver lining to this cloud, but it does not alter the overarching fact that CO2 capture is an economic folly so large, it has moral dimensions.
5,000 ton/day
The CCS aspect got them $190 million from the DOE for the project.
There aren’t any natural CO2 sources anywhere near the West Ranch oil field or any existing CO2 pipelines.
https://www.netl.doe.gov/file%20library/research/oil-gas/small_CO2_EOR_Primer.pdf
NRG & Nippon are spending the ~$1 billion to install the CCS and build an 82-mile pipeline from the power plant to West Ranch oil field in Jackson County.
Rather than selling CO2 to Hilcorp, the field operator, they took a 50% working interest in the field.
Spending $1 billion to recover 60 million barrels of oil works out to $16.67 per barrel. This is highly competitive with the F&D costs in the Permian Basin ($23.80/bbl) or Bakken ($22.96/bbl).
CO2 capture is an economic folly. Passing up on recovering 60 million barrels of oil for less than $25/bbl would be just plain stupid… particularly when you can get the taxpayers to foot 19% of the bill.
Can you just compare F&D to tertiary recovery capital costs like that? Do you not need to add the actual FOM & VOM costs to properly calculate a cost per barrel? Compressing and injecting CO2 cannot be cheap, and the water flooding costs of secondary recovery are still in play as well. I’m seeing industry price projections for bulk CO2 of zero $ / ton through 2020, so it appears that it is widely accepted that tertiary recovery is not competitive with fracking at this time. I live very near $7 billion in stranded investment in a lignite coal gasification and carbon capture facility that has no hope of being competitive for decades. I am not opposed to tertiary recovery, I am opposed to taxpayer subsidized and ill-timed investments that come at high opportunity cost and yield low ROI.
The production wells have already been drilled, the field has already undergone water flood secondary recovery. I’m sure that they’ll have to drill a few new injector wells for the CO2. I don’t know if that’s included in the $1 billion (which covers CCS, the pipeline and the compression & injection “plumbing.”)
This is a cost-forward project. Less than $20/bbl is very competitive with any other oil play.
CO2 for EOR projects is generally pegged to the price of oil. Rather than take a risk on CO2 prices, NRG & Nippon worked out a deal to take a 50% interest in the field from Hilcorp. It’s a good trade for all parties. The DOE even gets to say, “Look what we did!” The $190 million from DOE was based on a 60 MW CCS facility. So, DOE got 4x the CCS they paid for.
I’m opposed to subsidies too. But, when the government is offering them up, corporations have a fiduciary responsibility to take them… unless there are unacceptable strings attached.
If NRG, Nippon and Hilcorp viewed it as a high opportunity cost and low ROI, they wouldn’t be doing it. At $50/bbl, 60 million bbl is worth $3 billion. The EOR will quickly increase the production rate from 300-500 bbl/d to about 15,000 bbl/d. This will payout in less than 4 years at $50/bbl.
Btw – I really liked your paper on bio-fuels.
It is callous but accurate to say that competitive enterprises have a duty to their shareholders to snap up subsidies; bad policy is not their fault, and to ignore free money would put them at a disadvantage. I believe the economics of this project were more favorable when the partners decided to act and now it represents sunk costs that they feel obligated to chase. If they had their cash back today, would they still spend it here and now? Bet they would try something else in the oil patch.
I wish nothing but success to everyone involved in the heavy-lifting of bringing real energy to American citizens. But I hope that those who listened to the siren songs of population bombs and global cooling and peak oil and global warming and got suckered will learn to distinguish ideological propaganda and self-serving political activism from actual science and reality. Unfortunately, EPA and DOE and DOD are still stuck on fantasies like carbon capture and biofuels, despite the fiscal, social, environmental, and security costs they inflict on us all.
The West Ranch oil field has produced about 390 million barrels of oil since 1938. Its currently producing 300-500 bbl/d. The “sunk costs” paid for that.
The go-forward costs will boost production to 15,000 bbl/d and recover another 60 million bbl for less than $20/bbl. From an oil business perspective, it’s a no-brainer. It would even be a no-brainer without the subsidy.
I agree with you on the general merits of subsidies and the futility in CCS without an EOR angle.
Unfortunately, we live in the world as it is, not as we would like it to be.