Making Sense of the Cents: Assessing the Costs and Future of Carbon Capture

When I was first introduced to the idea of carbon capture, it seemed to me a moonshot technology, the sort of thing that sounded too good to be true. A lot of people have that first impression, I have found, and it is not helped by skepticism within the activist community on account of carbon capture’s considerable support from oil and gas companies. Nonetheless, as the Intergovernmental Panel on Climate Change (IPCC) has made abundantly clear¹, net negative emission technologies will be necessary if we wish to limit global warming to 1.5^o C by the end of the century. In particular, the widespread deployment of bio-energy with carbon capture and storage (BECCS) and use of captured carbon dioxide in industries without a clear alternative, such as cement manufacture, will be essential to the fight against climate change. How quickly carbon capture technologies will develop is therefore hugely important.

This question is met with dramatically different responses from supporters and skeptics, however. Royal Dutch Shell’s Sky Scenario suggests that 1 gigaton of carbon dioxide could be captured and stored annually by the early 2030s, incentivized by carbon taxes in most industrialized countries². Companies such as Climeworks, which aims to capture 1% of annual global carbon dioxide emissions by 2025³, showcase the ambition that would make Shell’s targets feasible. Whether that ambition is well-founded is a separate concern, though.

When it comes to eliminating carbon dioxide emissions at fossil fuel-powered energy plants, the data are not encouraging. Large-scale carbon capture and storage (CCS) retrofits tasked with eliminating carbon dioxide in coal and gas-fired power plants’ flue gases have thus far been limited in scope and excessive in cost. One of two major operational facilities, SaskPower’s Boundary Dam project in Saskatchewan, Canada, aimed to capture 90% of carbon dioxide emitted in the flue gas of its Unit 3, but has failed to reach that mark⁴. It achieved only 40% capture in its first year of operation and, in its first three years of activities, plant operational hours were limited to just 50% of possible time online. Meanwhile, CCS doubled the cost of power generation at Unit 3, leading SaskPower to conclude that closing the remainder of the Boundary Dam facility was preferable to retrofitting for CCS⁴.

NRG Energy’s Petra Nova facility in Texas has run into similar problems. Though it has met goals of capturing roughly one third of the W.A. Parish Coal Plant’s carbon dioxide emissions, it has done so at a cost of $60 per megawatt hour⁴. Furthermore, the CCS system requires enough energy to operate that a natural-gas generator was installed in the W.A. Parish facility with the explicit purpose of providing electricity to carbon capture machinery. The emissions from the new generator totaled 450,000 tons in 2017 and 2018⁴, seriously denting the already rose-tinted⁴ figure of over one million tons of carbon dioxide captured in 10 months that NRG cites⁵.

Unfortunately, these two projects are the most successful large-scale CCS retrofits. Both operate using post-combustion carbon capture, meaning that flue gas consisting of 5-15% carbon dioxide is passed through solvent, sorbent, and/or membrane systems for separation (mainly into nitrogen and carbon dioxide)⁶. Pre-combustion capture, wherein oxidized fuel is gasified to create a synthesis gas (syngas) that can be transformed into primarily hydrogen and carbon dioxide via the water gas shift reaction, should theoretically be more efficient because of the higher concentration of carbon dioxide in syngas relative to flue gas⁷. Nonetheless, installation of pre-combustion capture technology comes at a steep cost. An attempt by Southern Co. to deploy pre-combustion CCS at a coal-fired plant in Kemper, Mississippi cost triple its $2.4 billion projection before being abandoned^4,8. Just retrofitting for gasification at Duke Energy’s Edwardsport, Illinois coal-fired power plant cost over $3.5 billion on a projected budget of roughly $2 billion, and performance and cost issues have prevented installation of CCS components⁴.

Furthermore, transportation costs have prevented the economical shipping of captured carbon dioxide thus far. Both the Boundary Dam and Petra Nova projects have been enabled by the presence of nearby oil drilling, employing captured carbon dioxide for enhanced oil recovery (EOR) operations at nearby wells^4,8. Inadequate infrastructure for carbon dioxide transport has limited the geographic scope of potential CCS operations. Additionally, once a sufficient quantity of oil is removed from a well by EOR, there is potential for carbon dioxide that had been pumped into the well to be re-released⁴. Particularly in the case of the Petra Nova facility, this concern has led to skepticism about whether captured carbon from the W.A. Parish Plant will simply see delayed release.

Exceeding budgetary restrictions with limited success achieving target performance is not uncommon during implementation of new technology on an industrial scale. It is concerning for the future of CCS, though, that the cost competitiveness of coal-fired plants has dramatically decreased in the past decade⁴. Rather than using CCS technology to retrofit existing plants and eliminate coal emissions, in the event of a carbon tax it may be more economical for electricity providers to pursue cheaper renewable energy sources such as solar. It is not difficult to imagine the overhead costs of CCS retrofitting delaying research in the technology and, therefore, deployment in the bio-energy plants that both the IPCC¹ and Shell² cite as essential net-negative emission energy providers.

While the future of CCS implementation at conventional hydrocarbon-fueled power stations is unclear, captured-carbon-to-fuel pathways present an avenue for turning carbon dioxide into a profitable commodity. Carbon Engineering, headquartered in British Columbia, focuses on direct air capture (DAC), sending air through a capture solution that isolates carbon dioxide, and aims to turn that carbon dioxide into synthetic, carbon-neutral fuels. The company can currently remove carbon dioxide from the atmosphere at a cost of $100 per ton and use it to produce synthetic fuels at a market price of $4 per gallon⁹. These promising developments have attracted major investments from Bill Gates, as well as oil companies such as Occidental Petroleum and Chevron¹⁰. They also offer a pathway by which military vehicles that could not easily transition away from liquid fuels might be able to eliminate their emissions⁹.

Other DAC companies, such as Climeworks, based out of Switzerland, have found niche markets for carbon dioxide. Though their carbon footprint is far from the scale of the energy or concrete industry’s, beverage companies and greenhouses have proven willing to use carbon dioxide removed from the atmosphere in their production chains, since there exists a set of consumers willing to buy carbon-neutral beverages and produce even at a slightly elevated price³. Climeworks’ sorbent-based technology allows it to build small-scale DAC units that can remove carbon dioxide from the air for a cost in the neighborhood of $500 per ton, though the company believes it can reduce this price to $200 per ton in the next few years³. If it can succeed in turning captured carbon into fuels or plastics, the scaling-up that would be necessary to remove 1% of annual emissions from the air by 2025 might be possible, if still unlikely.

While DAC technologies have shown promise, both their currently small scope and, in many cases, their support from oil interests have led to significant skepticism in the activist community¹¹. Carbon capture at emissions sources suffers from the same predicament. The Sunrise Movement, for instance, proposed in January of 2019 that any Green New Deal avoid investments in carbon capture technologies¹², despite the fact that the IPCC and the United Nations (UN) are in agreement on the necessity of carbon capture development for reaching 1.5o C (and probably 2o C) maximal warming goals set forth in the Paris Agreement¹. While a number of democratic presidential contenders have included carbon capture in their climate proposals, Senator Bernie Sanders has insisted that it is not a true solution to climate change¹¹.

Denial of the scientific consensus has generally been the platform of oil companies, not of activists, and for my two cents we would behoove ourselves as environmentalists to heed the IPCC’s advice. Conventional utilities companies support carbon capture because it gives them an avenue by which to remain relevant in a world where carbon taxes seem imminent in most developed countries. This interest aligns with the IPCC and UN’s recommended climate policy, so it does not seem sensible to resist it for the sake of a moral victory. Rather, we would be better served addressing specific issues relevant to net-negative emissions, such as land-use considerations in the growing of feedstocks for BECCS systems. Companies and initiatives aiming to turn captured carbon dioxide into fuel or materials, or that use it to make concrete^13,14, will only become more profitable and more scalable as time goes on, and that is a good thing for the climate.

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References:

1. Metz, B, Davidson, O, de Coninck, H, Loos, M, Meyer, L, eds. IPCC Special Report on Carbon Dioxide Capture and Storage. Cambridge University Press: New York, 2018.
2. Sky: Meeting the Goals of the Paris Agreement [online]. https://www.shell.com/promos/business-customers-promos/download-latest-scenario-sky/_jcr_content.stream/1530643931055/eca19f7fc0d20adbe830d3b0b27bcc9ef72198f5/shell-scenario-sky.pdf
3. Gertner, J. The Tiny Swiss Company that Thinks it Can Help Stop Climate Change. New York Times (February 2019).
4. Schlissel, D, dir. Wamsted, D, ed. Holy Grail of Carbon Capture Continues to Elude Coal Industry. Institute for Energy Economics and Financial Analysis, 2018.
5. Petra Nova: Carbon Capture and the Future of Coal Power [online]. https://www.nrg.com/case-studies/petra-nova.html
6. Post-Combustion CO2 Capture [online]. https://www.netl.doe.gov/coal/carbon-capture/post-combustion
7. Pre-Combustion Carbon Capture Research [online]. https://www.energy.gov/fe/science-innovation/carbon-capture-and-storage-research/carbon-capture-rd/pre-combustion-carbon
8. Dubin, K. Petra Nova is One of Two Carbon Capture and Sequestration Plants in the World. EIA, 2018.
9. Conca, J. Carbon Engineering – Taking CO₂ Right Out of the Air to Make Gasoline. Forbes (October 2019).
10. Brigham, K. Bill Gates and Big Oil Back This Company That’s Trying to Solve Climate Change by Sucking CO2 Out of the Air. CNBC (June 2019).
11. Mosley, T, Hagan, A. The Future of Carbon Capture: An Old Idea to Fight Climate Change Gets New Look. WBUR (October 2019)..
12. Meyer, R. The Green New Deal Hits Its First Major Snag. The Atlantic (January 2019).
13. Carbon Capture Process [online]. https://www.co2concrete.com/carbon-capture-process/
14. Harvey, C. Cement Producers are Developing a Plan to Reduce CO₂ Scientific American (July 2018).