Co2

The potential benefit of EOR can be deduced from the CO2 purchase price and the net storage costs for CO2-EOR storage case studies. The indicative value of the potential benefit from enhanced oil production to CO2 storage is usually in the range of 0-16 US$/tCO2. In some cases, there is no benefit from EOR. The maximum estimate of the benefit ranges up to $92 per tonne of CO2 for a single case study involving favourable parameters. In general, higher benefits will occur at high-oil-price scenarios similar to those that have occurred since 2003 and for highly favourable sites, as shown above. At 50 US$ per barrel of oil, the range may increase up to 30 US$/tCO2.

5.9.4.3 Cost of CO2 storage with enhanced gas recovery CO2-enhanced gas recovery is a less mature technology than EOR and it is not in commercial use. Issues are the cost of CO2 and infrastructure, concerns about excessive mixing and the high primary recovery rates of many gas reservoirs. Cost estimates show that CO2-EGR (enhanced gas recovery) can provide a benefit of 4-16 US$/tCO2, depending on the price of gas and the effectiveness of recovery (Oldenburg et al., 2002).

5.9.4.4 Cost of CO2 storage with enhanced coal bed methane

The injection of CO2 for ECBM production is an immature technology not yet in commercial use. In CO2-ECBM, the revenues from the produced gas could offset the investment costs and provide a source of income for investors. Cost data are based on other types of CBM operations that are in use.

There is significant uncertainty in the effectiveness of CO2 storage in coal beds in conjunction with ECBM, because there is no commercial experience. The suggested metric for CO2 retention is 1.5-10 m3 of CO2 per m3 of produced methane. The revenue benefit of the enhanced production will depend on gas prices.

Well costs are a major factor in ECBM because many wells are required. In one recent study for an ECBM project (Schreurs, 2002), the cost per production well was given as approximately US$750,000 per well, plus 1500 US$ m-1 of in-seam drilling. The cost of each injection well was approximately US$430,000.

The IEA-GHG (1998) developed a global cost curve for CO2-ECBM, with storage costs ranging from -20 to + 150 US$/tCO2. It concluded that only the most favourable sites, representing less than 10% of global capacity, could have negative costs. Estimates of onshore CO2-ECBM storage costs in the United States have been made by using the approach described for EOR (Bock et al., 2003). They estimate the effectiveness of ECBM in terms of CO2 injected for incremental gas produced, ranging from 1.5 to 10 units (base case value of 2) of CO2 per unit of enhanced methane. Other key inputs are the gas well production rate, the ratio of producers to injectors, well depth and the number of wells. The base case, storing 2.1 MtCO2 per year for a representative reservoir at 610 m depth in a newly built facility, requires 270 wells. The assumed gas price is US$1.90 per GJ (US$2.00 per Mbtu). It has a net storage cost of -8.1 US$/tCO2 stored. Low- and high-cost cases representing a range of parameters are -26.4 and +11.1 US$/tCO2 stored. The range of these estimates is comparable to other estimates - for example, those for Canada (Wong et al., 2001) and Europe (Hendriks et al, 2002), 0 to +31.5 US$/tCO2. Enhanced CBM has not been considered in detail for offshore situations and cost estimates are not available.

Only one industrial-scale CO2-ECBM demonstration project has taken place to date, the Allison project in the United States and it is no longer injecting CO2 (Box 5.7). One analysis of the Allison project, which has extremely favourable geological characteristics, suggests the economics of ECBM in the United States are dubious under current fiscal conditions and gas prices (IEA-GHG, 2004). The economic analyses suggest this would be commercial, with high gas prices about 4 US$ per GJ) and a credit of 12-18 US$/tCO2. Alternatively, Reeves (2005) used detailed modelling and economic analysis to show a break-even gas price of US$2.44 per GJ (US$2.57 per Mbtu), including costs of 5.19 US$/tCO2 for CO2 purchased at the field.

5.9.5 Cost of monitoring

While there has been extensive discussion of possible monitoring strategies in the literature and technologies that may be applicable, there is limited information on monitoring costs. These will depend on the monitoring strategy and technologies used and how these are adapted for the duration of storage projects. Some of the technologies likely to be used are already in widespread use in the oil and gas and CBM industries. The costs of individual technologies in current use are well constrained.

Repeated use of seismic surveys was found to be an effective monitoring technology at Sleipner. Its applicability will vary between options and sites. Seismic survey costs are highly variable, according to the technology used, location and terrain and complexity. Seismic monitoring costs have been reviewed for an onshore storage project for a 1000 MW power plant with a 30-year life (Myer et al., 2003). Assuming repeat surveys at five-year intervals during the injection period, monitoring costs are estimated as 0.03 US$/tCO2, suggesting that seismic monitoring may represent only a small fraction of overall storage costs. No discounting was used to develop this estimate.

Benson et al. (2005) have estimated life-cycle monitoring costs for two scenarios: (1) storage in an oil field with EOR and (2) storage in a saline formation. For these scenarios, no explicit leakage was considered. If leakage were to occur, the 'enhanced' monitoring programme should be sufficient to detect and locate the leakage and may be sufficient to quantify leakage rates as well. For each scenario, cost estimates were developed for the 'basic' and 'enhanced' monitoring package. The basic monitoring package included periodic seismic surveys, microseismicity, wellhead pressure and injection-rate monitoring. The enhanced package included all of the elements of the 'basic' package and added periodic well logging, surface CO2 flux monitoring and other advanced technologies. For the basic monitoring package, costs for both scenarios are 0.05 US$/tCO2, based on a discount rate of 10% (0.16-0.19 US$/tCO2 undiscounted). The cost for the enhanced monitoring package is 0.069-0.085 US$/tCO2 (0.27-0.30 US$/tCO2 undiscounted). The assumed duration of monitoring includes the 30-year period of injection, as well as further monitoring after site closure of 20 years for EOR sites and 50 years for saline formations. Increasing the duration of monitoring to 1000 years increased the discounted cost by 10%. These calculations are made assuming a discount rate of 10% for the first 30 years and a discount rate of 1% thereafter.

5.9.6 Cost of remediation of leaky storage projects

No estimates have been made regarding the costs of remediation for leaking storage projects. Remediation methods listed in Table 5.7 have been used in other applications and, therefore, could be extrapolated to CO2 storage sites. However, this has not been done yet.

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