Making the Business Case for CCUS Technologies
President Obama has made clear that the United States’ energy security and economic competitiveness depend on our ability to develop every source of American energy. In the Office of Fossil Energy (FE), we are doing our part to advance this all-of-the-above energy strategy by continuing to work with industry to safely, responsibly and sustainably develop our nation’s fossil energy resources.
Part of that commitment includes focused research in Carbon Capture and Storage (CCS) technologies, widely recognized by energy experts worldwide as essential in helping to reduce the carbon pollution that comes from burning fossil fuels like coal, oil and gas.
Today, the Energy Department is leveraging its cutting-edge research to show that not only can CCS technology help industry make fossil energy use cleaner, safer and more sustainable, it also shows promise as a method to extract more, hard-to-access and presently untapped fossil energy resources. The Energy Department is strategically focusing the program’s R&D toward the economic “utilization” of captured carbon dioxide (CO2) for commercial purposes – evolving from CCS to Carbon Capture, Utilization and Storage, or CCUS. By putting the captured CO2 to use, CCUS provides an additional business and market case for companies or organizations to pursue the environmental benefits of CCS.
For those unfamiliar with the term, CCS technologies capture CO2 – a major greenhouse gas – from industrial and power plants, compress and transport it, and then inject and permanently store it in suitable geological formations underground. Energy Department research and development (R&D), led by FE and the Department’s National Energy Technology Laboratory (NETL), has played a prominent role in moving these important CCS technologies toward commercial deployment. And through our Clean Coal Program, we are continuing to work toward the goal of applying CCS technologies in real-world applications.
While the U.S. continues to accelerate the innovation, manufacture and deployment of renewable energy technologies and introduce that energy into the national electricity grid, the Energy Information Administration projects coal – the largest single source of domestic CO2 emissions – will remain important for electric generation for many years to come. CCS technology has an enormous potential to significantly reduce CO2 emissions from both existing and new power and industrial plants, but promising technologies currently under development by industry and DOE and likely to be deployed initially may be expensive to install and operate. And absent a price on carbon, utilities today don’t see the commercial potential for participating in CCS demonstrations or moving forward to deploy the technology.
Consequently, the Energy Department’ R&D program – which has traditionally focused on bringing down the costs of CCS technology and understanding the physical and chemical processes of long-term geologic storage – is looking toward new utilization research and technology to demonstrate the commercial case for CCUS efforts.
There are a number of emerging applications in this regard, but the major near-term opportunity is in CO2 enhanced oil recovery (EOR), or injecting CO2 into depleted oil wells to recover untapped oil.
CO2-EOR is a well-established and mature technology already providing about 5 percent of U.S. oil production, and we estimate that CO2-EOR has further potential to add 60 billion barrels of crude oil to U.S. recoverable resources. That’s three times current proven reserves. The U.S. oil industry could make much greater use of injection with a larger supply of CO2, such as from industrial sources and power plants.
Greater application of CO2-EOR could yield a significant boost to the U.S. economy, including increased economic activity, improved balance of trade, job creation, and reduced oil imports (see infographic above). Most importantly, CCUS would benefit the environment by helping reduce atmospheric man-made CO2.
Technology and innovation are the keys for CO2 utilization. Our R&D portfolio is focused on reducing the cost and increasing the effectiveness of CO2 capture systems to supplement CO2-EOR projects. We continue to demonstrate large-scale geologic CO2 storage, and lead research efforts to confirm and monitor permanent CO2 storage. Moving forward, we believe shifting our focus to carbon capture, utilization and storage provides the best business case for making CCUS commercially viable in the near future, and offering a low-carbon way to further the President’s all-of-the-above strategy for U.S. energy.