A UK Pathway to Rapid and Profitable CCS Rollout, Stuart Haszeldine, University of Edinburgh - UKCCSRC Strathclyde Biannual 8-9 September 2015

1. Stuart.Haszeldine@ed.ac.uk
Scottish Carbon Capture & Storage
Murchison House, West Mains Road, Edinburgh EH9 3LA
Telephone +44 (0)131 650 0270 www.sccs.org.uk
Pathway to UK CCS rollout: CO2-EOR
Professor Stuart Haszeldine
SCCS & UKCCSRC
University of Edinburgh
UKCCSRC twice-a-year meet
Strathclyde, 9 Sept 2015

2. Stuart.Haszeldine@ed.ac.uk
Power sector (all sources) has not decarbonised at all since 1990.
Growth in Renewables and Efficiency has matched the increased global demand
UK carbon budget 4: gap by 2027
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
2
Gap 70 Mt, progressively increases to 250 Mt : need ways of storing/reducing carbonGap 70 Mt, progressively increases to 250 Mt : need ways of storing/reducing carbon
Electricity emissions
150Mt/yr
Other fossil fuels
400 Mt/yr
Electricity emissions
150Mt/yr
Other fossil fuels
400 Mt/yr

3. Stuart.Haszeldine@ed.ac.uk Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
1 Mt CO2 / yr
CO2 capture and storage proven
1 Mt CO2 / yr since 1996 : Sleipner
3

4. Stuart.Haszeldine@ed.ac.uk
Basic Rollout Questions
• Does CCS need acceleration and money ?
• Does CO2-EOR need acceleration ?
• Can both of these be combined,
profitably and environmentally ?
4Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
YES

5. Stuart.Haszeldine@ed.ac.uk
5
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Inject CO2 into deep
oilfield.
Makes the oil less viscous,
Repressurises,
Produces 5 – 15% extra oil
Recycle CO2, all stored
What is
CO2 – EOR ?

6. Stuart.Haszeldine@ed.ac.uk
6
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
More than 20
Suitable oilfields
Geological knowledge
and expertise
Legacy pipelines
Overlap with CO2
Storage regions
UK or EU supply CO2
Where is
CO2 – EOR ?

7. Stuart.Haszeldine@ed.ac.uk
Does CO2-EOR work now ?
• No CO2 supply
• Expensive Investment
• Licensing and
Regulation
• Oil price
7Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
• CCS supplies CO2
• Financial incentives,
set to Profit Index to
compete globally
• Enabling oil,
plus CO2 storage
• Oil price > $ 60/bbl

8. Stuart.Haszeldine@ed.ac.uk
Gas-EOR works in the North Sea
8Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
Magnus (BP) uses stranded CH4, to produce extra oil, 39API
40% of field production in 2012 attributable to gas injection EOR
Magnus (BP) uses stranded CH4, to produce extra oil, 39API
40% of field production in 2012 attributable to gas injection EOR
SPE 171780-MS

9. Stuart.Haszeldine@ed.ac.uk
This Report: tackling the barriers
9
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
• Economics
• Stakeholder
• EOR performance
• CO2 Management
& Environmental
• Legal
• CO2 Supply
A series of studies
Designed and directed by the
steering group of the JIP
Enacted independently by
academic experts, or by
recognised consultants
Report – summary versions
Website – full versions (may
be commercially limited)
www.sccs.org.uk/expertise/
reports/sccs-co2-eor-joint-
industry-project
A series of studies
Designed and directed by the
steering group of the JIP
Enacted independently by
academic experts, or by
recognised consultants
Report – summary versions
Website – full versions (may
be commercially limited)
www.sccs.org.uk/expertise/
reports/sccs-co2-eor-joint-
industry-project

10. Stuart.Haszeldine@ed.ac.uk
CO2-EOR Economic Multiplier
10
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
Linkage of CCS, and EOR offshore has
LARGEST LEVERAGE
£1 Treasury invested = £7.2 Output
Linkage of CCS, and EOR offshore has
LARGEST LEVERAGE
£1 Treasury invested = £7.2 Output
Value-for-Money
finance help from
Government
= input
can be measured
by the effects
= output
Multiplier =
activity into wider
UK economy
Offshore Wind = 3.3
CCS – pure storage = 2.6
CCS + CO2-EOR = 7.2

11. Stuart.Haszeldine@ed.ac.uk
Economic sensitivity oil & CO2 price
11Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Reference Loan Low Tax Low CO2
Claymore
Scott
Buzzard
Claymore
& Scott
90
40
£
Size of dot =
NPV
Public data only
For each field
OilPrice
62
$
140
CO2 £ /ton
Kris Welkenhuysen,
Geological Survey Belgium
100-5
Double
Monte Carlo:
reserves and
prices
for this evaluation no oil company
has provided detailed decision-
making inputs

12. Stuart.Haszeldine@ed.ac.uk
CO2-EOR Stakeholders
12
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
Seven types of public: each hope for good, but expect poorSeven types of public: each hope for good, but expect poor

13. Stuart.Haszeldine@ed.ac.uk
CO2-EOR Performance
13Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
0
2
4
6
8
10
2 2a 2b 2c 3a 3b 4a 4b 5a 5b 6a 6b 6c 6d 7a 7b 8a 8b 9a 9b
IncrementalOilRecovery%STOIIP
@ 10 years LOF
@ 15 years LOF
Conti nuous gas
injection cases
Increased injection
rate cases
WAG cases
Re-pressurisation
cases
1 Mt/yr
cases
0
20
40
60
80
100
2 2a 2b 2c 3a 3b 4a 4b 5a 5b 6a 6b 6c 6d 7a 7b 8a 8b 9a 9b
NetCO2StoredMtCO2
Conti nuous gas
injection cases
Increased injection
rate cases
WAG cases
Re-pressurisation
cases
1 Mt/yr
cases
Incremental oil recovery
Net CO2 stored
More CO2 injection rate = more oil
= more CO2 stored
More CO2 injection rate = more oil
= more CO2 stored
Olden & MacKay Heriot-Watt

14. Stuart.Haszeldine@ed.ac.uk
CO2-EOR Environmental
14Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Compare emissions 3.96 Mt CO2 of CCS plus imported oil against 4.25 Mt CO2
emissions CCS + CO2-EOR which produces oil
Minimal additional carbon required to produce 100 Mbbl oil in 10 yrs
Low-carbon electricity unaffected
Compare emissions 3.96 Mt CO2 of CCS plus imported oil against 4.25 Mt CO2
emissions CCS + CO2-EOR which produces oil
Minimal additional carbon required to produce 100 Mbbl oil in 10 yrs
Low-carbon electricity unaffected
3.96 Mt CO2
4.25 Mt CO2

15. Stuart.Haszeldine@ed.ac.uk
CO2-EOR Legal
15Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
• CO2 for food is moved across EU boundaries.
• CO2 for EOR operations can be moved across EU
boundaries
• Bilateral contracts can be enacted, before any
federal agreement
• Property rights offshore are unclear, and practical

16. Stuart.Haszeldine@ed.ac.uk
CO2-EOR Supply : shipping
16Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Transportcosts(US$/tCO2)
Source: Doctor et al, 2005
Shipping is flexible and similar
cost to pipes
Shipping is flexible and similar
cost to pipes

17. Stuart.Haszeldine@ed.ac.uk
CO2-EOR accelerates storage
17Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
CO2-EOR acceleration stores 12x more CO2 by 2050,
Compared against slow Government development rate
CO2-EOR acceleration stores 12x more CO2 by 2050,
Compared against slow Government development rate

18. Stuart.Haszeldine@ed.ac.uk
Summary
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
18

19. Stuart.Haszeldine@ed.ac.uk
Summary
19
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
• CO2-EOR could produce an extra 1 Billion barrels UKCS oil
• Gas injection recovery works in the North Sea, on very large fields
• The Prize is blocked by investment size, perceived risk, and CO2 availability
• Fiscal allowance CAPEX on fields and clusters needed, to £23 /bbl oilpretax
• Environmental and carbon budget effects are similar to oil produced now
• Acceleration of CCS development, can deliver adequate CO2 by 2030
• Economic Multipliers are very favourable 7.2 x; better than off-wind or CCS
• Carbon budget is favourable, electricity stays “green”, more CO2 is stored
• Stakeholders are favourable, if CO2-EOR is part of a low-carbon Transition
Next Phase of CO2-EOR project seeks sponsors, Oct 2015Next Phase of CO2-EOR project seeks sponsors, Oct 2015