A privately developed underground reservoir to permanently store carbon dioxide in southwest Louisiana is inching closer to reality, and with it a new business model for carbon capture and storage.
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Benjamin Heard, a principal with Gulf Coast Sequestration, said in an interview Oct. 14 that the company is "on the leading edge of a developing industry."
"One of the things that makes our project and company distinct is that we are focused on sequestration," said Heard. "As opposed to being a source that is looking for a particular sink, we envision we will take volumes from the region and ... from multiple sources."
Heard said GCS is capitalizing on the federal Section 45Q tax credit, which provides $50/mt of CO2 that is geologically sequestered, amid a growing movement within the industry to lower its carbon footprint.
"I think it's totally fair to say there has been an increase in the number of companies that are making commitments in their efforts to improve the carbon footprint they create and they are making meaningful announcements around the goals they want to achieve," said Heard. "Many of those will need solutions like CCS to achieve those goals, and the trend is certainly positive."
The Lake Charles, Louisiana-based company announced Oct. 13 it has applied to the US Environmental Protection Agency for a permit to develop the underground reservoir, which would be located between Lake Charles and the Sabine River.
The site is in close proximity to significant industrial clusters, and the reservoir would be able to hold more than 80 million mt of CO2, with capacity to inject 2.7 million mt annually.
Heard said GCS would work with prospective customers on how to deliver CO2 to the reservoir, either by pipeline or possibly even by truck.
It would be just the second geologic sequestration facility in the US, and one of just a handful in the world, according to Jeff Erikson, general manager of the Washington-based Global CCS Institute.
"This is intending to capture CO2 from multiple sources ... the hub and cluster model that's very important going forward," said Erikson. "This is the future."
SECTION 45Q TAX CREDIT
Heard said GCS is purposely keeping its business model flexible in order to facilitate CO2 sequestration, so its remuneration may come from either fees, participation in a tax equity finance structure built around the 45Q tax credits, or some other negotiated means.
He was unable to state when he expects the reservoir to become operational, partly due to the fact that the Environmental Protection Agency has received very few permits for such a facility, but he expects it would take roughly a year to construct once the permit was approved.
Erikson noted that current regulations require a 45Q facility to be in construction by the end of 2023 to be eligible, though federal legislation to extend that deadline is currently pending.
According to Erikson, there are only about 20 CCS facilities operational worldwide, with an annual storage capacity of roughly 32 million mt/year. Most of the captured CO2 is used for enhanced oil recovery, meaning CO2 is pumped into old oil fields in order to boost production.
The 45Q program provides a $35/mt CO2 tax credit for EOR, which is what underpins NRG's Petra Nova CCS plant in Texas.
Enchant Energy, a New Mexico-based company that has an agreement to purchase the San Juan Generating Station, has plans to build a CCS facility and sell the CO2 for EOR, as well as possible geologic storage.
Energy-related CO2 emissions in the US in 2019 were more than 5 billion mt, according to the US Energy Information Administration.