PDF _ RL34316 - Pipelines for Carbon Dioxide (CO2) Control: Network Needs and Cost Uncertainties
10-Jan-2008; Paul W. Parfomak and Peter Folger; 13 p.

Abstract: Congress is considering policies promoting the capture and sequestration of carbon dioxide (CO2) from sources such as electric power plants. Carbon capture and sequestration (CCS) is a process involving a CO2 source facility, a long-term CO2 sequestration site, and CO2 pipelines. There is an increasing perception in Congress that a national CCS program could require the construction of a substantial network of interstate CO2 pipelines. However, divergent views on CO2 pipeline requirements introduce significant uncertainty into overall CCS cost estimates and may complicate the federal role, if any, in CO2 pipeline development. S. 2144 and S. 2191 would require the Secretary of Energy to study the feasibility of constructing and operating such a network of pipelines. S. 2323 would require carbon sequestration projects to evaluate the most cost-efficient ways to integrate CO2 sequestration, capture, and transportation. P.L. 110-140, signed by President Bush on December 19, 2007, requires the Secretary of the Interior to recommend legislation to clarify the issuance of CO2 pipeline rights-of-way on public land.

The cost of CO2 transportation is a function of pipeline length and other factors. This report examines key uncertainties in CO2 pipeline requirements for CCS by contrasting hypothetical pipeline scenarios for 11 major coal-fired power plants in the Midwest Regional Carbon Sequestration Partnership region. The scenarios illustrate how different assumptions about sequestration site viability can lead to a 20-fold difference in CO2 pipeline lengths, and, therefore, similarly large differences in capital costs. From the perspective of individual power plants, or other CO2 sources, variable costs for CO2 pipelines may have significant ramifications. If CO2 pipeline costs for specific regions reach tens, or even hundreds, of millions of dollars per plant, then power companies may have difficulty securing the capital financing or regulatory approval needed to construct or retrofit fossil fuel-powered plants in these regions. High CO2 transportation costs also could increase electricity prices in “sequestration-poor” regions relative to regions able to sequester CO2 more locally.

As CO2 pipelines get longer, the state-by-state siting approval process may become complex and protracted, and may face public opposition. Because CO2 pipeline requirements in a CCS scheme are driven by the relative locations of CO2 sources and sequestration sites, identification and validation of such sites must explicitly account for CO2 pipeline costs if the economics of those sites are to be fully understood. Since transporting CO2 to distant locations can impose significant additional costs to a facility’s carbon control infrastructure, facility owners may seek regulatory approval for as many sequestration sites as possible and near to as many facilities as possible. If CCS moves to widespread implementation, government agencies and private companies may face challenges in identifying, permitting, developing, and monitoring the large number of localized sequestration reservoirs that may be proposed. However, even as viable sequestration reservoirs are being identified, it is unclear which CO2 source facilities will have access to them, under what time frame, and under what conditions. Given the potential size of a national CO2 pipelines network, many billions of dollars of capital investment may be affected by policy decisions made today.

 [read report]

Topics: Energy, Climate Change, Risk & Reform

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