The Carbon Corner - Issue #6

Welcome back to another week of The Carbon Corner! This week, the theme is “carbon movement.”

We are covering development with large transportation projects, from a new CO2 pipeline planned by Carbon America in Nebraska to the DOE’s dedicated loan program aimed squarely at CO2 pipeline infrastructure.

We hope you enjoy!

Carbon America Pipeline coming to Nebraska

Carbon America and Bridgeport Ethanol have plans to develop a carbon capture pipeline. The pipeline location has not been determined, but Carbon America’s CEO and co-founder, Brent Lewis, has mentioned that the company is looking at sites that would allow for CO2 sequestration well below 3,000 feet underground.

A statement by Carbon America claimed that the pipeline will capture 95% of Bridgeport Ethanol’s emissions at 175,000 tons annually. Budget details have not been released, but the project is set to be complete and operational by 2024.

NRG Throws in the Towel on Petra Nova

In 2017, CCS plant Petra Nova became the first commercial-scale CCS operation tied to a coal-fired power plant in the US.

Only a few years later, NRG Energy is now selling their half of the ownership to partner JX Nippon Oil & Gas Exploration Corporation for $3.6 million. The plant’s construction cost more than 1 billion dollars and included a $195 million grant of taxpayer’s money contributed by the U.S. Department of Energy (DOE).

Despite the financial effort put into this project, Petra Nova’s operations haven’t gone exactly as planned, with much more downtime than the original estimated 85% run rate. Due to continual mechanical issues, the plant was taken offline in 2020.

Furthermore, emissions data for Parish Unit 8 reported the CO2 capture rate was possibly as low as 65% to 70%. With the inclusion of emissions from the gas-fired combustion turbine used to power the facility, that rate is closer to 55% to 58%.

JX Nippon Oil & Gas expects to return the facility to operation by mid-2023 with the assistance of new federal subsidies.

DOE Plans $2Bn in Loans for CO2 Transportation

A new loan program under the Bipartisan Infrastructure Law offers funding for large-capacity, shared carbon dioxide (CO2) transportation projects, which includes pipelines, rail transport, ships and barges, and ground shipping.

The program is known as the Carbon Dioxide Transportation Infrastructure Finance and Innovation program (CIFIA). As of last week, the group started accepting letters of interest for the $2.1 billion in loans promised.

U.S. Secretary of Energy Jennifer M. Granholm, said, “One giant challenge in deploying carbon management technologies to reduce emissions is to be able to transport the CO2 to where it is ultimately sequestered or used. The CIFIA program will help industry overcome the challenges of accessing the upfront capital needed to build shared infrastructure projects that are essential to advancing our clean energy economy.”

Indeed, one of the more important hurdles for major CO2 Sequestration hub projects is lining up financing for ambitious pipeline projects. To achieve the desired returns to stakeholders, such projects often require debt funding that has be difficult to secure without dedicated loan guarantee programs or otherwise earmarked funds.

Triangle Energy and Pilot Energy Pair Up on CCS in Australia

Plans for carbon capture projects are still heating up globally.

A formal joint venture restructuring between Triangle Energy Global Ltd and Pilot Energy for the Head JV Project and the Cliff Head Carbon Capture and Storage Project in Western Australia has been announced.

Once oil production on Cliff Head is concluded and permits are received, the site will turn into a CCS facility. A feasibility study has already been conducted by Pilot, who, under this updated agreement, will own 60% of the asset.

It may be some time before we see the transformation at the site, but the agreement has formally set the plan in motion.

Plans for CCS Hubs in Canada

In May 2022, Alberta chose six sites around Edmonton to serve as CCS hubs in Canada. A few months later, 19 more sites have been added to that list.

Each site operator has signed an evaluation agreement allowing the province to determine if their site is suitable for CCS.

As determinations are made, more project details and locations will become available.

The first six proposals selected to explore how to develop CCS hubs in the area safely are listed below and marked on the map.

- Meadowbrook Hub Project, Bison Low Carbon Ventures Inc. for a potential sequestration hub north of Edmonton

- Open Access Wabamun Carbon Hub, Enbridge Inc., for a potential sequestration hub west of Edmonton

- Origins Project, Enhance Energy Inc. for a potential sequestration hub south of Edmonton

- Alberta Carbon Grid™, Pembina Pipeline Corp., and TC Energy Corp. for a potential sequestration hub north and northeast of Edmonton

- Atlas Carbon Sequestration Hub (Atlas Hub), Shell Canada Ltd., ATCO Energy Solutions Ltd., and Suncor Energy Inc., for a potential sequestration hub east of Edmonton

- Wolf Midstream and partners for a potential sequestration hub east of Edmonton

XOM Bringing CCS Operation to Louisiana

CF Industries, ExxonMobil, and EnLink Midstream are teaming up to make a large impact of CCS in Louisiana. CF Industries is investing $200 million to transform their Donaldsonville location to dehydrate and compress CO2. The captured CO2 will then be transported by Exxon using EnLink’s transportation network and stored using secure geological storage located in Vermillion Parish.

Jesse Arenivas, CEO of Enlink speaks of how their system is ideal for this project because it has “over 4,000 miles of pipeline already in the ground in Louisiana. Utilizing this extensive network enables us to provide the most timely and cost-effective solution to CO2 transportation, with a significantly lower environmental impact. Because of this, EnLink is uniquely positioned to be the CO2 transportation provider of choice in Louisiana’s Mississippi River corridor, which is a hub of industrial activity that is important to our economy.”

This system is expected to capture 2 million metric tons of emissions annually, which is the equivalent of replacing 700,000 gasoline vehicles with electric ones. It is backed by many in the state, including Governor John Bel Edwards who said, “The collaboration and innovation to bring carbon capture and storage technology forward at this scale reaffirms our state’s ability to grow our economy without sacrificing our long-term emission-reduction goals to net zero by 2050.”

We believe Louisiana will continue to be a major player in the CCS space, with several outfits looking at coastal sequestration projects and the state vying for Class VI well primacy from the EPA.

Come visit us at https://schaperintl.com to find out more about partnering with us to advance your site development.

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