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Difference between revisions of "Technology, economics and politics of Carbon Capture and Storage"

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Revision as of 05:23, 27 April 2011


Through the imagination of mankind and advances in science and technology, the world has drastically transformed over the past 150 years. The industrial revolution forever changed our capacity to produce goods. Machines helped to automate production lines and improve the efficiency of our manufacturing and farming processes. These changes have significantly improved our ability to support rising population levels, which increased by 1.5 billion between 1850 and 1950. Global population levels continued to rise exponentially as they increased by another 4 billion from 1950 to 2008[1].

In order to sustain our current level of economic growth, it is important to understand the relationship between energy consumption and standard of living. The World Resource Institute conducted a global survey which reported that the GDP level per capita rises as the annual energy consumption per capita is increased. Alongside the exceptional growth occurring in both China and India, the remaining third world nations are also attempting to achieve sustained economic growth. The primary factor relevant to these growth rates is the energy supply. Currently, over 80 percent of the world’s energy is provided by fossil fuels. In the United States and Canada, our energy requirement is provided 85 and 67 percent respectively by fossil fuels[2].

It is now widely accepted in the scientific community that greenhouse gas (GHG) emissions, as a result of human activity, is in largely responsible for the climate warming occurring on a global scale. The most significant of these GHG’s is carbon dioxide. Initial analysis of the problem provides a simple solution: use alternative sources of energy with low or no carbon dioxide emissions to drive economic growth. However, upon closer examination the technological limitations and cost of alternatives reveal the complexity of the issue. As it currently stands, renewable sources of energy are substantially more expensive than traditional fossil fuel sources. Additionally, renewable sources of energy require extensive land use to produce energy at levels comparable to those available from fossil fuel production facilities. Renewable energy is also unable to supply energy on demand. Without a means of storage, the energy produced when the demand is not present is effectively unusable. It will no doubt require a mix of new technologies and ideas, along with scientific innovations to improve the performance of traditional means of energy production, in order to the achieve a sufficient and reliable energy supply while minimizing carbon dioxide emissions to curb global warming.

Carbon dioxide capture and storage (CCS) is a technology that represents a viable approach to reducing CO2 emissions and is currently in a relatively early phase of development. The general concept is to prevent the release of carbon dioxide into the atmosphere which is generated from the burning of fossil fuels. This is done by capturing the carbon dioxide from the emissions stream and proceeding to store it below the surface of the earth or within the oceans. There are several questions remaining about this technology, specifically related to costs, long term effectiveness and the politics behind a practical means of deployment. This article will discuss the technology behind CCS and present their associated costs. Political issues related to the implementation of this technology will also be reviewed.

The Technology and a glance at the Costs and Politics of CCS

Carbon dioxide capture and storage technology is targeted towards large stationary sources of carbon dioxide (CO2), such as coal or natural gas-fired plants. The process aims to capture approximately 90% of the CO2 emissions from these sources, preventing them from entering the atmosphere. CCS is accomplished in three main steps: capture and compression; transportation; and storage[3].

Capture and Compression

The exhaust gas generated through the traditional combustion process produces water and carbon dioxide along with NOx and SOx components. In order to be stored, CO2 must be extracted from this process. There are three principal methods of capture: pre-combustion, post-combustion and oxy-fuel combustion.

In the pre-combustion method, fuel is pretreated prior to combustion into a mix of CO2 and hydrogen gas. The CO2 is then removed from the mixture and the hydrogen is used to fuel the combustion process. Post-combustion utilizes selective solvents to absorb CO2 from the exhaust stream that is produced through traditional combustion chemistry. The third approach, oxy-fuel combustion, combusts the fuel using oxygen rather than air. This produces a pure stream of CO2 and water vapour from which the carbon dioxide can be easily extracted.

At current levels of development, the total capture cost for a large scale plant does not significantly change with the choice of technology even though the sub-costs associated with fuel, initial capital, operation and maintenance of the capture systems vary considerably. With additional research into these processes and potentially new methods of capture, it is expected that an in depth technical and economic analysis could be conducted to determine which approach is optimal in different scenarios[4].

For many sectors, capture and compression is a particularly difficult challenge. In the oil and natural gas sectors, for example, plants may include a number of facilities that would each have several emission sources with varying concentrations of CO2. Additionally, lower concentrations of CO2 in the emissions stream results in a higher cost per tonne of CO2 captured[5]. The plant would also have to generate considerably more energy to successfully operate the capture system: natural gas plants requiring an additional 11 to 22% energy production, coal plants requiring between 24 and 40% more energy and integrated gasification combined cycle plants requiring 14 to 25% more energy[6].

The capture and compression process in an integrated CCS project would typically account for 70 to 90 percent of total cost . This represents a huge barrier in the development of such integrated systems since such a high portion of the cost would have to be invested at the actual facility. Herein complications arise in assigning responsibility to this cost. Even in a scenario where a government body had invested significant funds into transportation pipelines and storage facilities, the cost of capture would still greatly outweigh this as an incentive for a plant owner to purchase capture technologies.


In order to transport large volumes of carbon dioxide from capture facilities to storage sites, a network of pipelines needs to be developed. The safe handling of large quantities of CO2 is well established and has been developed over a number of years through other industrial processes that utilize the gas. As a result, transportation pipelines represent the smallest cost component of a CCS system. Generally two pipeline routing options can be investigated: offshore routing and onshore routing. In both cases, the cost is a function of the inlet pressure, pipe diameter and the terrain properties or water depth.

The required inlet pressure is dictated by the pressure at the storage reservoir, and is typically designed to be 9 to 18 percent higher than this value. In some cases, a pressure booster station may be required in order to maintain this pressure along the entire pipeline, thereby increasing the initial capital investment. Depending on the volumetric flow rate required over specific sections of pipe, the diameter may also vary along the pipeline. For example, a CO2 flow rate ranging between 59 and 83 m3/s, typical of a 500MW coal fired plant, would require a 14 to 16in diameter pipeline[7].

Offshore pipelines are expected to incur higher costs than similar networks developed onshore, potentially up to three times more expensive. In a number of jurisdictions however, an onshore plan would prove to be an impractical approach. Populated areas would require extensive legal processing to gain rights to lay down such pipelines. Additionally, public response is difficult to predict due to the lack of exposure and education in CCS technology.


Long term storage of CO2 can be achieved through oceanic absorption or in geological formations, such as depleted oil and gas reserves, deep saline aquifers and deep unmineable coal formations. In oceanic storage, it is expected that 15 to 20 percent of the injected CO2 would escape over a period of hundreds of years, while the remaining volume would remain in the ocean indefinitely. Geological reservoirs, on the other hand are expected to trap CO2 in the range of thousands of years[8]. In order to effectively store CO2 in geological formations or in oceanic bodies, injection wells are required to release the CO2 at sufficient pressures and flow rates to overcome the reservoir pressure. A generally accepted injection capacity per well is 0.68 x 106 m3/day. Using the previous example of the 500MW coal fired plant, storage using deep saline aquifers, would require 10 such injection wells[9].

For storage in geological formations, the total cost of storage is highly dependent on site location, that is, offshore versus onshore. This is due to the necessary increase in equipment, exploration, setup and closure costs in offshore cases. Saline aquifer storage is also approximately 15% more expensive than storage in depleted oil and gas reserves. An important driver of the cost is the actual size of the storage site. Since site exploration and characterization costs are relatively independent of size, larger sites are more economical, driving down the cost of storage per tonne of CO2. Larger sites can also potentially be utilized simultaneously by multiple generating plants[10].

Variations in the Cost of CCS Systems

The cost of a CCS system is significantly affected by its application. Implementation of the technology in new construction versus retrofitting of existing power plants can derive considerably different costs. Additionally, the technology can be applied to industrial applications which are CO2 intensive, such as steel and cement production, resulting again in a different capital profile.

Retrofitting power plants compared to new development

The costs associated with retrofitting an existing power plant are highly dependent on the specific site characteristics, which include but are not limited to the type of generation, plant capacity and remaining economic life. Typically higher costs would be associated with retrofitting projects mainly because a retrofit installation would retain a shorter lifespan. For example, a plant that has already been in operation for fifty percent of its expected life represents inefficiency to the initial investment required to adopt CCS. In addition, this initial capital requirement is higher for retrofitting projects due to the space constraints in the configuration of existing plants which were not designed for significant structural and operational changes. Finally, the plant would have been taken out of operation for a given period to install and test the retrofitted equipment, creating an opportunity cost due to lost generating time[11].

Plants that were built within the last three to five years as “capture ready” could potentially represent lower overall costs than new systems. Another exception could exist for plants that have surpassed their intended life cycle and are due for extensive upgrades. Cases like this would likely be comparable in cost to a new system, with the advantage of an already existing and publicly accepted site.

In either case, for retrofitting or newly built plants, coal plants demonstrate the greatest efficiency for the application of CCS. Small scale production, such as biomass power plants are impractical applications for CCS due to the high costs and relatively low impact (actual volume of CO2 capture). In the case of natural gas power plants, the higher costs arise due to the generally cleaner production of electricity. The total volume of emissions from these plants is much higher, while on average the CO2 concentration remains 25 to 30 percent lower than in coal fired plants. This leads to the requirement of larger CCS installations characterized with lower CO2 removal potential. The price of natural gas is also highly volatile, leading to variable operational costs which are already higher than coal fired plants since the price of coal is between two to four times less expensive than natural gas[12].

Storage Issues and Enhanced Oil and Gas Recovery Potential

Storage of carbon dioxide in depleted oil and gas fields is a seemingly attractive approach since these geological formations are well understood. A number of these sites however, were abandoned or depleted before countries began to impose standards for documentation. Such sites exist worldwide, where reports on the status of cement plugging and their original design parameters are either outdated or non-existent. The strength of cement plugging is often unknown and moreover, the quality of the cement used may have severely degraded over time. An in depth analysis would therefore have to be carried out on such storage potentials[13].

Based on conditions present in 2002, CCS systems were estimated to increase electricity generation costs by $0.01 to $0.05 per kWh. Theoretically, this cost can be substantially reduced by the implementation of Enhanced Oil Recovery (EOR) or Enhance Gas Recovery (EGR) strategies at the storage site. This approach injects CO2 into an oil or gas field in order to increase the well pressure, thereby increasing the amount of oil or gas that can be economically recovered[14]. This is a proven technology that is already in use. In 1998, approximately 60 million m3 of CO2 per day were injected at 67 commercial EOR projects in the United States. The US Department of Energy estimates that, used for enhanced oil recovery, CO2 is valued between $25 and $35 per tonne. This translates to a reduction of $0.01 to $0.02 per kWh in the CCS electricity generation cost[15]. The suitability for EOR or EGR however, is highly dependent on the characteristics of the specific site. Due to the limited number of potential sites and the significant cost savings, EOR and EGR projects should be particularly considered for early development and implementation of CCS. This would create a more economical forum to test the technology on full scale projects as well as demonstrate its feasibility to the public.

Other factors

Cooperation between generating stations and coordinated efforts with governmental bodies could significantly benefit the cost of transport by developing intricate pipeline networks. In this cooperative approach, emission sources could be arranged in clusters such that major pipelines and storage sites would be shared. As a result, fewer large-scale pipelines would have to be constructed. An arrangement of this kind would also avoid extensive public debate for storage sites since regions with existing public support for CCS could be utilized. Furthermore, heavily industrialized areas which often represent large emission sources are already effectively arranged in clusters[16].

The introduction of a carbon market or carbon pricing can increase the incentive to adopt the CCS technology. Depending on the penalties associated with CO2 emissions or the value of selling emission stocks, a CCS system could reduce the overall cost of operation, potentially creating a self-sustaining system and in some cases result in a new revenue stream.

In the long run, if CCS systems are deployed in large numbers, a reduction in price can be expected due to economies of scale. Additionally, data retrieved from initial installations and experience from the design and installation of these systems can be expected to bring about technological improvements and reduce costs as installation and design procedures are standardized. It is important to note that such improvements should also be expected in renewable generation technologies. A continuous analysis of the spectrum of methodologies and technologies available and suitable for a given jurisdiction should always be reviewed before selecting an investment.

Political Considerations

The politics associated with CCS revolve around the high levels of uncertainty in the actual cost, lack of legal frameworks, no clear assignment for various responsibilities and environmental and safety considerations for implementation.

Environmental impacts of CCS are particularly a concern for oceanic storage. Absorption of CO2 into oceanic bodies of water is a naturally occurring process. However, the direct and continuous injection of CO2 at a single point results in ecological consequences. Non-swimming organisms at depths of 1000m and below are affected by the resulting drop in local pH levels. Fortunately, injection strategies and infrastructure can be designed to minimize these impacts by cycling multiple injection points. Nevertheless, further analysis is still required at before oceanic storage options can be considered[17].

Geological formations do not represent significant environmental concerns. Rather, in these cases the safety of the surrounding population needs to be carefully investigated. Leaks that may occur through a faulted zone would render the storage site ineffective and pose a public safety hazard. A large release of CO2 into the local atmosphere can result in suffocation if present at high enough concentrations[18].

Storage of CO2 is necessarily designed with an extremely long term perspective. This raises issues of liability for the storage, particularly in the case that leaks that may occur in the future. In order to detect a leak in the storage or pipelines, a monitoring and regulatory body would need to be developed to assume responsibility of these roles. Funding required for these sorts of organizations need to be acquired, raising additional concerns over who should pay, that is, owners of generating stations, the government or an independent company that would charge a fee to emitters? Considering that the actual storage duration remains far longer than the typical lifetime of a company, it would be ideal for governments to take on the aforementioned responsibilities[19].

Concerns have also been noted by some authorities that CO2 could be classified as waste, depending on the purity of the CO2 stream. A high purity requirement would greatly increase the cost of CCS. If legally classified as waste product, major obstacles would arise in developing transport and storage capacity for CO2.

For scenarios where carbon pricing or a carbon market is in place, there exists a lack of guidelines to estimate the CO2 emission savings associated with CCS. This makes it difficult to approximate the true value of CCS technologies. CO2 may also be captured in one country, province or state and stored in another with differing commitments to CO2 abatement and accounting practices. Rules and methods may need to be adjusted to ensure fair credit is assigned to each player in the CCS chain[20].

Carbon dioxide capture and storage is politically attractive in the sense that it reduces emissions from reliable, demand-following energy supplies such as coal or natural gas-fired generating stations. This allows for progress in CO2 emissions reduction, without significant implications to the power grid available to a specific jurisdiction. For CCS to be successful, government support is vital in order to provide funding and education to the general population. Early full scale and demonstration projects should be anticipated to carry high cost inefficiencies, as they will be focused on testing and improving the technology rather than being designed for optimal commercial operations[21]. It is recommended that such initiatives be operated as experimental pilot projects with extensive public exposure. This would form a basis to move forward with research into legal strategies which would ease the implementation of future systems. The long term cost of CCS is expected to decrease due to the learning effect from earlier projects, its economies of scale, carbon pricing, increased public support and development of clusters with common interests.


CCS technology is able to remove, on average, 90 percent of the carbon dioxide emissions associated with burning fossil fuels. This in turn means that globally there exists the enormous opportunity to capture more than 16 giga-tonnes of CO2 per year[22]. While many of the component technologies of CCS are relatively mature, the development of fully integrated, commercial-scale systems is still in its infancy resulting in extremely high costs for adaptation. Furthermore, CCS remains foreign to the public, creating barriers for the implementation of pipelines and storage. In most countries, there also exists no legal framework directed towards the safety, environmental assessment and liability of these systems.

In order to maintain the standard of living in developed nations and sustain economic growth for third world countries, fossil fuel generation cannot be abandoned quickly. While developed nations can implement strategies to slowly move away from carbon based fuels through progressive changes in their energy generation portfolio's; highly active developing nations (such as India and China) on the other hand are heavily reliant on carbon based fuels to fulfill their economic agendas. Carbon dioxide capture and storage provides a viable approach to offsetting the environmental impact of traditional fossil fuel generating stations. The improvement of CCS technology will allow future players to achieve an overall cleaner energy supply mix as they can anticipate CCS improvements and build new fossil fuel plants that are CCS ready, alongside renewable sources of energy.

Politically, it is important to supply energy that is both clean and affordable. This task is extremely difficult to achieve and even more difficult to do so in a manner that is accepted amongst the general public. Public education in all forms of power generation should be pursued to create a more rational environment for decision making on energy supply strategies. The current ongoing change in the landscape of energy supply will undoubtedly result in increasing prices. It is worth noting that the total cost of an integrated CCS system is comparable to that of new nuclear power generation plant. Both technologies represent a form of waste with relatively clean power generation. While nuclear is capable of providing a reliable base load supply, a coal fired plant with CCS can provide “clean” demand-following electricity. A policy strategy directed at extensive use of these two technologies, integrated in a supply mix with other forms of existing generation capacity and renewable generation may prove to be a successful approach to provide clean reliable energy to the consumer. While the price per unit of energy in expected to increase, strong support for conservation practices and technologies would help to minimize the overall impact to consumers by reducing their energy consumption per capita.

Research and development of carbon dioxide capture and storage technologies should be continued and public support needs to be rallied to form early pilot projects in appropriate jurisdictions. Although, sub-components of CCS systems have been set up for experimentation in a few countries, full scale projects are needed in order to establish better cost estimates, verify simulation models and to generate public interest. Over 80 percent of the world’s energy is derived from burning fossil fuels. As the technology matures, CCS is expected to play a major role in limiting the effects of global warming and providing the world’s economies with a cleaner supply of energy.


  1. Purchase, B., “Global Energy: Economics and Geo-Politics” Institute for Energy and Environmental Policy , Queen’s University, 2008
  2. Purchase, B. “Carbon Trading: Will it Work?” Institute for Energy and Environmental Policy , Queen’s University, 2008
  3. McKinsey & Company, “Carbon Capture & Storage: Assessing the Economics”, pp. 9, McKinsey Climate Change Initiative, September 2008
  4. McKinsey & Company, “Carbon Capture & Storage: Assessing the Economics”, pp. 7, McKinsey Climate Change Initiative, September 2008
  5. NRCAN, “Canada’s Fossil Energy Future”, Alberta Energy, Natural Resources Canada, January 2008
  6. IPCC, “IPCC Special Report on Carbon Dioxide Capture and Storage”, Cambridge University Press, 2005
  7. Shafeen, A., Croiset, E., Douglas, P. L., Chatzis, I., “CO2 Sequestration in Ontario, Canada. Part II: cost estimation”, Department of Chemical Engineering, University of Waterloo, 2003
  8. Herzog, H. J., “What Future for Carbon Capture and Sequestration?”, Environmental Science and Technology, Vol 35, Issue 7, pp. 148, 2001
  9. Shafeen, A., Croiset, E., Douglas, P. L., Chatzis, I., “CO2 Sequestration in Ontario, Canada. Part II: cost estimation”, Department of Chemical Engineering, University of Waterloo, 2003
  10. Shafeen, A., Croiset, E., Douglas, P. L., Chatzis, I., “CO2 Sequestration in Ontario, Canada. Part II: cost estimation”, Department of Chemical Engineering, University of Waterloo, 2003
  11. McKinsey & Company, “Carbon Capture & Storage: Assessing the Economics”, pp. 29, McKinsey Climate Change Initiative, September 2008
  12. McKinsey & Company, “Carbon Capture & Storage: Assessing the Economics”, pp. 30, McKinsey Climate Change Initiative, September 2008
  13. Shafeen, A., Croiset, E., Douglas, P. L., Chatzis, I., “CO2 Sequestration in Ontario, Canada. Part I: storage evaluation of potential reservoirs”, Department of Chemical Engineering, University of Waterloo, 2003
  14. IPCC, “IPCC Special Report on Carbon Dioxide Capture and Storage”, Cambridge University Press, 2005
  15. McKinsey & Company, “Carbon Capture & Storage: Assessing the Economics”, pp. 28, McKinsey Climate Change Initiative, September 2008
  16. Shafeen, A., Croiset, E., Douglas, P. L., Chatzis, I., “CO2 Sequestration in Ontario, Canada. Part II: cost estimation”, Department of Chemical Engineering, University of Waterloo, 2003
  17. Herzog, H. J., “What Future for Carbon Capture and Sequestration?”, Environmental Science and Technology, Vol 35, Issue 7, pp. 148, 2001
  18. Herzog, H. J., “What Future for Carbon Capture and Sequestration?”, Environmental Science and Technology, Vol 35, Issue 7, pp. 148, 2001
  19. Shafeen, A., Croiset, E., Douglas, P. L., Chatzis, I., “CO2 Sequestration in Ontario, Canada. Part I: storage evaluation of potential reservoirs”, Department of Chemical Engineering, University of Waterloo, 2003
  20. IPCC, “IPCC Special Report on Carbon Dioxide Capture and Storage”, Cambridge University Press, 2005
  21. McKinsey & Company, “Carbon Capture & Storage: Assessing the Economics”, pp. 28, McKinsey Climate Change Initiative, September 2008
  22. CETC, “CCSTRM Canada’s CO2 Capture & Storage Technology Roadmap”, Natural Resources Canada, March 2006

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