2021 ] CARBON CAPTURE , UTILIZATION , AND SEQUESTRATION 49
Under the post-combustion capture method , CO 2 is extracted from the mixture of gasses released from a facility ’ s exhaust stack . 17 A vessel called an “ absorber ” captures the mixture of gasses , called “ flue gas ,” and then scrubs the flue gas with an amine solution , which generally captures 85 %– 95 % of the CO 2 emissions generated by the facility . 18 The solvent is then pumped to a second vessel called a regenerator . 19 Once the solution has been successfully separated into the regenerator , steam is introduced to the solution to create a stream of concentrated CO 2 , which is then compressed and transported by pipeline to either storage , disposal , or utilization facilities . 20 One example of this technology is the Petra Nova plant located outside Houston , Texas . The plant is fitted with equipment that captures the CO 2 emissions from its operations and then transports the captured CO 2 to a nearby oil field for EOR operations . 21 In July of 2020 , after capturing an estimated 3.9 million tons of CO 2 , the operator of the Petra Nova project announced it planned to cease its capture operations at the plant until economics improve . 22
Due to the historic drop in oil prices brought on by COVID-19 demand shock , coupled with increases in supply of OPEC + nations , the Petra Nova plant has struggled to maintain its profitability . This highlights some of the challenges faced by stakeholders for projects using CCUS technology for EOR . CCUS EOR projects may be subject to commodity price exposure and other project specific operational challenges . 23 As one commentator remarked , “ fossil fuel companies cannot afford carbon capture in the short-term , but they know they need it to survive in the [ long-term ].” 24 However , technological innovations continue to show promise for CCUS technology ; Exxon recently demonstrated
17 . Id . at 5 . 18 . Id . at 3 . 19 . Id . 20 . Id . 21 . The Petra Nova coal-fired power plant outside Houston , Texas , generates and captures between 1.4 and 1.6 million tons of CO 2 each year . Id . at i , 12 . Since its carbon capture facilities became operational , the plant estimates that it has captured about 90 % of the CO 2 emissions contained in its exhaust gas , which the plant then sells to E & P companies for EOR operations . Id . at i , 12 . Specifically , the plant transports the CO 2 by pipeline to the West Ranch oil field where it is deployed for EOR operations . Carbon Capture and the future of coal power , PETRA NOVA , NRG , https :// www . nrg . com / casestudies / petra-nova . html ( last visited Oct . 18 , 2020 ). The operator of the West Ranch oil field has successfully increased production from about 300 bpd pre-EOR to over 4,000 bpd after EOR measures were implemented . Because the owners of the Petra Nova plant also own an interest in the oil field ’ s production , the increased production revenues resulting from CO 2 EOR help to offset their initial capital investment . Post-combustion projects implemented today may also qualify for tax credits under Section 45Q . Bracewell represented the operator of the oil and gas field in a joint venture transaction with the owner of the power plant . Bracewell also negotiated the management services agreement along with the CO 2 supply and transportation agreements which govern the CO 2 operations for this project .
22 . Charles Kennedy , Biggest U . S . Coal Carbon Capture Project Halted After Oil Price Crash ,
OILPRICE . COM ( July 29 , 2020 , 9:30 AM ), https :// oilprice . com / Latest-Energy-News / World-News / Biggest-US-Coal-Carbon-Capture-Project-Halted-After-Oil-Price-Crash . html .
23 . Chris Tomlinson , Oil industry could lose by gambling on carbon capture , HOUSTON CHRONICLE ( July 31 , 2020 ), https :// www . houstonchronicle . com / business / columnists / tomlinson / article / Oil-industrycould-lose-by-gambling-on-carbon-15446419 . php .
24 . Id .