On 30 January 2013, Olivier Soupa and Bruno Lajoie from the Schlumberger Business Consulting (SBC) Energy Institute presented the findings and insights from the SBC Energy Institute’s Factbook on Bringing CCS to Market.

1. LEADING THE ENERGY TRANSITION
Carbon Capture
and Storage
Bringing Carbon Capture and Storage to Market
Webinar presentation hosted by the Global CCS Institute
SBC Energy Institute
30 January 2013

2. Agenda
 TECHNOLOGY
 PROJECTS
 ECONOMICS
 PERSPECTIVES
1
© 2012 SBC Energy Institute. All Rights Reserved.

3. INTRODUCTION
CCS is expected to play an important role in achieving the lowest-cost pathway
to mitigating CO2 emissions
CO2 ABATEMENT LEVERS IN THE IEA‟S 450 SCENARIO RELATIVE TO NEW POLICIES SCENARIO
Annual energy-related CO2 emissions (Gt)
Energy
Efficiency
Notes: The 450 scenario is the lowest cost pathway to mitigate CO2 concentration level below 450ppm in the future and gives a 50% chance to limit
global warming below 2°C, the UNFCCC target. The New Policy Scenario is IEA‟s central case.
Activity describes changes in the demand for energy services, such as lighting or transport services, due to price responses. Power plant
efficiency includes emissions savings from coal-to-gas switching
Source: IEA, World Energy Outlook 2012 2
© 2012 SBC Energy Institute. All Rights Reserved.

4. INTRODUCTION
In power generation alone, it offers significant CO2 abatement potential at a
reasonable cost
CURRENT COSTS OF CO2 AVOIDED BY LOW-CARBON POWER TECHNOLOGY*
VERSUS RESPECTIVE SHARES OF CO2 EMISSIONS-REDUCTION IN 2050 IN IEA 2DS SCENARIO**
$/tCO2 avoided
250 239
Range of cost of CO2 avoided relative to coal 213
200
176
Share of emissions-reduction potential 11% 11%
among low-carbon power technologies (%)
150
8%
106 139
100 92
4% 115
17% 90
49
50 67
18 11% 53
8
20% 11%
0
3% 6% 9 100%
-7 -8
-27
-50 -37
Geoth Hydro Nuclear Wind Biomass CCS CCS Wind Solar Solar
(onshore) (heat & power) (Coal) (gas) (offshore) (PV) (CSP)
Notes: * Cost of CO2 avoided with current technologies in the US relative to coal, except for CCS (gas), which is compared with a gas-fired power plant. Coal is taken as the
reference plant because it emits the highest level of CO2 of all power-generation technologies. The cost of CO2 avoided can be negative, implying that the technology is
more cost-effective than coal even without considering the emissions impact. This is the case for hydropower and conventional geothermal power.
** Economic potential of each technology to contribute – at the global level – to the lowest-cost pathway to limiting global warming to 2°C compared with business-as-
usual projection by 2050 (IEA‟s 2DS and 6DS scenario in Energy Technology Perspective, 2012)
Source: SBC Energy Institute. Costs derive from 19 international studies gathered by the Global CCS Institute in “The costs of CCS and other low-carbon technologies – issues
brief 2011, No.2”. One figure gave an abatement cost of only $23/t for coal CCS and has been voluntarily excluded from this dataset. Other sources include: Bloomberg
New Energy Finance for Wind and Solar; IEA, “Industrial Roadmap for CCS”, 2011;
© 2012 SBC Energy Institute. All Rights Reserved.
3

5. 1. Technologies
CCS technologies are now proven
© Bloomberg LP.
4

6. TECHNOLOGIES
Individual technologies required to build large-scale integrated projects are
available
INVESTMENT-RISK CURVE OF INDIVIDUAL CCS TECHNOLOGIES
CO2 geological sequestration and monitoring Technologies required for first
in aquifer demonstration projects
Capital requirement * Technology risk
Technologies in the making
CO2 geological sequestration and
CO2 shipping
monitoring in oil and gas fields
Oxycombustion boiler
2nd Generation separation technologies 1st generation membranes (for CO2/CH4 separation at
Enhanced coal bed methane (solvents, sorbents, membranes) wellheads)
Mineralization 1st generation sorbents (for coal-to-liquid plants)
Algae biosequestration 1st generation solvents (for gas processing
Oxygen chemical looping plants)
CO2 injection for EOR
Atmospheric capture
CO2 pipelines for EOR Air separation unit
Technological
„Valley of Death‟
Large/Commercial-scale projects
Lab work Bench scale Pilot Scale with ongoing optimization Widely-deployed commercial scale projects
Research Development Demonstration Deployment Mature Technology
Maturity
Notes: EOR stands for Enhanced Oil Recovery with CO2-injectino in mature oil fields.
Source: SBC Energy Institute
© 2012 SBC Energy Institute. All Rights Reserved.
5 5

7. TECHNOLOGIES
CO2 capture induces energy and water penalty
ILLUSTRATION OF A 20% ENERGY PENALTY ON A WATER CONSUMPTION OF VARIOUS PLANT TYPES
500MWe COAL PLANT L/MWh
CO2 stored Base plant water consumption
CO2 emitted With CCS
MtCO2/year
+20%
4.0 Hydro 17,010
3.6
3.5 Geothermal 5,200
3.0
3.0
Soalr thermal 3,156
2.5
2.0 3.2 Nuclear 2,116
-2.6 CO2 avoided
1.5
Coal (PC) 1,474 2,697
1.0
Coal (IGCC) 756 907
0.5
0.4
0.0 Natural Gas 680 1,265
500 MWe net 500 MWe net
(without CCS) (with CCS)
 Energy penalty currently ranges between 16% and  Water penalty currently ranges between 10% and
43%, depending on the capture process 80%, depending on the capture process
Source: World Policy Institute (2011), The Water-Energy Nexus; and NETL (2010), Cost and Performance Baseline for Fossil Energy Power Plants
© 2012 SBC Energy Institute. All Rights Reserved.
6 6

8. 2. Projects
Only oil and gas related projects are moving forward
© Bloomberg LP.
7

9. PROJECTS
CCS entered the demonstration phase in 2008
STAGE OF CCS DEVELOPMENT Future: “Generation 2”
Current: Commercialization
Full CCS scale Demonstration phase
commercialization “Generation 1” Gov. commitments: 27 new Large Projects
Testing components IEA target: 100 Large Projects
7 Large
Projects
 Testing and commercializing  Demonstration Projects  Commercial CCS projects
components in separate industries  Integrate “gen 1” technology  Demand pull
 Capture: CO2/Gas separation used in  Direct public funding  Process covered by warrantees
upstream O&G and hydrogen industries  Demonstrate various combinations of CCS  Incorporate new technologies
 Transport: CO2 pipelines for EOR  Define and reduce system costs
 Storage: Commercial EOR and aquifer trials
 “Low hanging fruit” CCS projects  R&D for “generation 2”  Build common infrastructure
 Commercial scale in gas processing  Cost improvements  Transport trunk lines
 Pilot scale in power generation  Focused on capture  Common storage sites
 No direct public funding
Basic
comprehension
1980 First Large Project First Large Project 2007 2014: First Large Project for 2020 CCS competitive with other low- 2030+
(Shute Creek) in aquifer (Sleipner) power generation carbon energy technologies
Funding Price of CO2 increases progressively
hypothesis Direct subsidies temporarily fill the gap
Companies can raise project financing
Notes: „Large Projects‟ refers to integrated CCS projects larger than 0.6MtCO2/year
Source: SBC Energy Institute
© 2012 SBC Energy Institute. All Rights Reserved.
8

10. PROJECTS
So far, CCS has been advancing at two speeds: O&G-related projects are making
progress but CCS in power or industrial plants without EOR has stagnated
DISTRIBUTION OF THE 16 LARGE PROJECTS* IN OPERATION OR PAST FINAL INVESTMENT DECISION (FID)
As of October 2012
Oil & Gas related projects Non-EOR EOR
Lower costs
5 Large Projects 4 Large Projects
O&G
Decrease of capture costs
2 past FID 1 past FID
PROCESSING**
3 operating 3 operating
4 Large Projects
INDUSTRIAL 1 Large Project
2 past FID
HYDROGEN*** past FID
2 operating
POWER OR 2 Large Projects
0 Large Project
HEAVY INDUSTRY past FID
High costs _ No storage revenues Storage revenues +
Note: * “Large Projects” refers to integrated CCS projects above 0.6MtCO2/year.
** Natural gas processing plant or oil sand upgrader
*** hydrogen production plant for chemical or fertilizer, including steam methane reforming and coal gasification plants
FID: Final Investment Decision
Source: SBC Energy Institute based on GCCSI database 9
© 2012 SBC Energy Institute. All Rights Reserved.

11. PROJECTS
All integrated projects in operation are associated with the oil and gas industry
Val Verde Snøhvit
(Sharon Ridge) Statoil
Shute Creek (Labarge) ExxonMobil
Val Verde North Sea
Snøhvit
Enid Fertilizer
• ExxonMobil, Chevron, Texas
• ExxonMobil Aquifer
• Statoil
• Koch Nitrogen,
Anadarko EOREOR
• • MtCO2
0.7Aquifer /year
Anadarko
• EOR • 1.3 MtCO2
1.3 MtCO2/year/year • EOR • 0.7 MtCO
Carbon Tax 2/year
• 7 MtCO2/year • revenues
EOREOR revenues • 0.68 MtCO2/year • Carbon Tax
• EOR revenues • EOR revenues
1986 1999 2003 2007
1985 1990 1995 1996 2000
2000 2004 2005 2010
Project Name Sleipner Great Plains Synfuel In Salah Century plant
• Statoil • Dakota gasification, • BP, Sonatrach, • Occidental
• Owner
• Aquifer Cenovus, Apache Statoil petroleum,
• Storage type • 1 MtCO2/year • EOR • Onshore Sandridge
• CO2 storage rate • Carbon Tax • 3 MtCO2/year • Aquifer • EOR
• Rationale for investment • EOR revenues • 1 MtCO2/year • 5 MtCO2/year
• CERs* • EOR revenues*
Aquifer storage
O&G processing plant
Industrial hydrogen production & use
Notes: *Certified Emissions Reductions (Kyoto Protocol)
Source: SBC Energy Institute.
© 2012 SBC Energy Institute. All Rights Reserved.
10

12. PROJECTS
Projects for CCS power plants without EOR revenues are facing difficulties
Scottish Power
NINE PROMISING CCS POWER PLANTS HAVE BEEN CANCELLED Longannet
In red when abandoned mainly due to local public opposition $1,500 million granted
Economic reasons
TransAlta Project Pioneer Grant proved insufficient to
$782 million granted retrofit this old and inefficient
Economic reasons plant
Horizontal multi-frac well technology is
delaying the needs for CO2-EOR in Hunterston
Alberta’s mature oil fields. The CCS project Underlying plant cancelled
without EOR revenues became non- Overwhelming local opposition
commercial to the construction of the coal
FutureGen power plant
$700 million granted
Economic reasons RWE Eemshaven
Dates back 2004, was cancelled due to Storage opposition
rising costs. A new project, FutureGen2.0, Dutch government banned
smaller in size, is still struggling to pass onshore CO2 storage
FID and is not expected to be built before
2016
Shell Barendrecht
AEP Mountaineer $40 million granted
$334 million granted Storage opposition
Economic reasons Dutch government banned
Uncertain climate policy had weakened the strategic case onshore CO2 storage
for the project, but cost-sharing issues with West Virginia
commissioners eventually derailed it Vattenfall Jänschwalde
ZeroGen $180 million granted
$300 million granted Storage opposition
Economics reasons Lack of political will to
Abandoned by the Queensland provide legislation needed
government, due to escalating costs for CCS in Germany,
especially on storage
Source: SBC Energy Institute
© 2012 SBC Energy Institute. All Rights Reserved.
11

13. PROJECTS ‒ INVESTMENTS AND KEY PLAYERS
Overall investments in CCS are still much lower than in renewables, and public
money allocated to CCS projects has not yet been spent
TOTAL INVESTMENTS IN CCS (2006-2011) TOTAL INVESTMENTS IN RENEWABLES AND CCS
$ billion (2011)
$ billion
Allocated Grants
Public Markets
VC/PE 9.2
Solar 147.4
Asset Finance
8.0
Wind 83.8
Biomass 10.6
6.0
5.1 Biofuels 6.8
Small hydro 5.8
3.3
2.7 Geothermal 2.9
1.0
1.4 CCS 2.3
2.9 3.1
0.7 2.3
1.2 Marine 0.2
0.3
2007 2008 2009 2010 2011
Notes: Private investments include project financing, equipment manufacturing scale-up, R&D and small distributed capacity (below 1MW). The data
only include completed deals that have not been cancelled or postponed.
Source: UNEP (2012) “Global Trend in renewable Investment” and Bloomberg New Energy Finance, extracted from database July 27 2012
© 2012 SBC Energy Institute. All Rights Reserved.
12

14. PROJECTS ‒ INVESTMENTS AND KEY PLAYERS
As a result, CCS development is not seeing the necessary growth rate
recommended by the IEA for its demonstration phase
GAP IN ANNUAL GROWTH RATE REQUIRED IN IEA‟S 450 SCENARIO
% of growth rate in installed capacity (GW for power, MtCO2/year for CCS)
60%
60%
Current growth rate (5 year average)
55% Required growth rate in the 450 scenario (until 2020)
50%
45%
40%
35%
30% 27%
25%
20% 18%
15%
10% 4% 7% 8%
5% 6%
5% 3%
0%
Nuclear Geothermal Hydro CCS Biomass CSP Biofuels Wind Solar PV
Power power
Notes: Growth rates are a function of installed generation capacity (GW) or installed storage rate capacity (MtCO2/year) for CCS. The current rate for wind and
biofuels is the annual average growth rate from 2005 -2010. For solar PV, biomass, geothermal, and CSP, this period is 2004-2009. The current rate and
status of nuclear includes capacity under construction. Required growth rate in the 450 scenario is for the period 2010-2020
Source: IEA (2011), “Clean Energy Progress Report” and IEA(2009), “Technology Roadmap, Carbon capture and storage”
© 2012 SBC Energy Institute. All Rights Reserved.
13

15. 3. Economics
Only EOR revenues compensate for the lack of carbon-pricing mechanisms
© Bloomberg LP.
14

16. ECONOMICS
Despite greatly increasing the levelized costs of production…
INCREASE IN LEVELIZED COST OF PRODUCTION FOR CCS PLANTS
Based on current technologies in the US, with storage site at 100 km by pipeline in an identified aquifer
max
Power plants (first-of-a-kind)
AVERAGE
100 min
90
82%
80 Heavy industries (first-of-a-kind)
69%
70 65%
60
50 47% 45%
40 Industries emitting high-purity CO2
30 streams (CCS is mature technology)
20
12%
10 3% 1%
0
Coal post- Coal oxy- Natural gas Coal pre- Cement Steel Ammonia Natural gas
combustion combustion post- combustion Plant processing
combustion
Notes: Natural gas plant uses combined cycle technology (NGCC). Post-combustion and oxy-combustion base plant are supercritical pulverized coal. Pre-
combustion base plant is an integrated gasification combined-cycle unit.
Source: Global CCS Institute, “Economic Assessment of Carbon Capture and Storage Technologies” 2011 update; Bloomberg NEW Energy Finance 2012
© 2012 SBC Energy Institute. All Rights Reserved.
15

17. ECONOMICS
…CCS electricity could be competitive with other decarbonized options, while
providing baseload power capacity
RANGE OF LEVELIZED COST OF ELECTRICITY (LCOE) IN THE US WITH CURRENT TECHNOLOGIES
$ per MWh
300 300
Baseload or dispatchable capacity 265 265
250 Intermittent capacity
215
200
175
185
150 166
119 146
113
100 94 107
86 100
89 Conventional thermal power plants (coal, natural gas)
61 60 81
50 67 68
43 52
0
Geothermal Hydro Wind Nuclear Biomass CCS CCS Wind Solar Solar Geothermal
(onshore) (coal) (gas) (offshore) (PV) (Thermal) EGS
Notes: Levelized costs of electricity do not include back-up capacity needs and grid-integration costs incurred by the intermittency of variable renewable output
Source: Estimates are ranges of LCOE in the United States with current available technologies, and derive from 19 international studies gathered by the Global
CCS Institute in “The costs of CCS and other low-carbon technologies – issues brief 2011, No.2”.
Estimates for EGS are highly hypothetical and derive from models from MIT, 2006; and Huenges and Frick, 2010.
© 2012 SBC Energy Institute. All Rights Reserved.
16

18. ECONOMICS – COST STRUCTURE
The main hurdle are the substantial up-front costs required for the capture
system
500MW POST-COMBUSTION SYSTEM LEVELIZED COST OF ELECTRICITY
$/MWh
Distribution the
124.3 increase of LCOE
Transport & storage 5.5
11%
Fuel
19.6 11%
Plant opex
Plant capex +72% 7.2 12%
66%
72.4
13.7
1.0
92.0
57.7
Investment cost 500 - 1,000 million USD
Coal without CCS Coal with CCS*
(post-combustion)
Notes: *First-of-a-kind supercritical pulverized coal power plant with amine-based post-combustion capture and onshore aquifer storage at 100 km by pipeline
Source: BP (picture); Bloomberg New Energy Finance (2012) for the levelized cost of electricity.
© 2012 SBC Energy Institute. All Rights Reserved.
17

19. ECONOMICS
High up front costs make it difficult for governments to allocate funds
COSTS OF CO2 AVOIDED IN THE US BY VARIOUS TECHNOLOGIES, RELATIVE TO COAL
$/tCO2 avoided
530
Global average subsidy for Solar PV in 2010 (implicit carbon price)
250
200
150
Feed-in-tariff for offshore wind in the UK in 2012 (implicit carbon price)
100
50
Average grant allocated to Large Projects *
EU ETS carbon market prices
0
Geoth.
Geoth Hydro Wind Nuclear Biomass CCS (all Wind Solar PV Solar
onshore types) offshore Thermal
-50
Notes: * Sum of all allocated grants over the cumulated CO2 abatement of all Large Projects subsidized
For CCS, costs of CO2 avoided are for first-of-a-kind plants, relative to the same plant without CCS. Estimated costs in the United States with current available technologies.
Source: SBC Energy Institute. Global average subsidy for Solar PV are from IEA (2011). Offshore wind feed-in tariffs in UK is from UK Department of Climate Change. CO2 market
price for EOR is from Bloomberg New Energy Finance (2012).
Costs in are derived from 19 international studies gathered by the Global CCS Institute in “The costs of CCS and other low-carbon technologies – issues brief 2011, No.2”.
Other dataset includes Bloomberg New Energy Finance; IEA “Industrial Roadmap for CCS”, 2011; Global CCS Institute, “Economic assessment of CCS technologies”
© 2012 SBC Energy Institute. All Rights Reserved.
18

20. ECONOMICS
CCS-EOR projects benefits from high CO2 contract prices in the US, while being
less affected by planning and coordination difficulties
ESTIMATED CO2 CONTRACT PRICE IN THE US, Q1 2010-Q4 2012
$/tCO2
 In the US, CO2 prices are likely to be
120 above $30/t when oil price is above
$100/bbl
100
 EOR reduces transport and storage
WTI price
costs
80
 EOR reduces storage risks
60  PR and liability issues
 EOR simplify CCS business models
40  No needs for complex joint venture
$/tCO2
 Technically speaking, EOR could
20
allow to store huge amount of CO2
globally
0
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
 Economically speaking, multi-frac
horizontal wells have become easier
to implement than CO2-injections to
enhance field‟s recovery factors
Note: Costs are based on 250 MWe base plant and capture. In the IGCC case, plant includes gasification and SO 2 removal. Capture systems refer to all additional
equipment needed for CCS at the plant (air-separation units, gas-separation systems, solvents, oxy-combustion boilers, purifiers, compressors…).
Source: Carbon capture & storage – Research note, Bloomberg New Energy Finance 2011
© 2012 SBC Energy Institute. All Rights Reserved.
19

21. 4. Perspectives
The pipeline of CCS projects remains encouraging
© Bloomberg LP.
20

22. PERSPECTIVES
On paper, the list of project is encouraging, mostly for power generation and
located in OECD countries
NUMBER OF REALISTIC LARGE PROJECTS CURRENTLY IN THE PIPELINE
As of October 2012
Industrial Hydrogen
 Many power projects have been proposed
Natural Gas processing (and oil upgrading)
Power generation 8 35
2  Proposed plants would mainly be located in US,
8 Europe, Canada and Australia
6
8
3
 Steel and cement are currently missing in the
3
19 11 panel of CCS projects
2
3
2  A growing number of companies are
considering CCS-EOR, but projects are
16 confidential until contracts are signed and many
14
are missing in this list
Planned Under Operating TOTAL
construction
Final Investment
Decision (FID)
Notes: “Realistic” project: at a sufficiently advanced stage of planning to stand some chance of being built and operating before the end of the decade
Source: SBC Energy Institute analysis, based on Bloomberg New Energy Finance database (March 2012)
© 2012 SBC Energy Institute. All Rights Reserved.
21

23. PERSPECTIVES
Governments have committed billions to demonstrate CCS but are struggling to
allocate money to specific projects
GLOBAL PUBLIC FUNDS COMMITTED TO CCS
$ billion, at Q1 2012
7.5
0.1
0.8 Total = $21 billion committed
Withdrawn in 2012
Uncertain
Unallocated
4.6 Allocated: $11 billion
0.3 4.3
1.5? 0.6
6.6 (NER 3.1
300)
1.0
1.6 3.2 1.7 1.7
2.1 0.8
1.2 0.3
0.5 0.2
0.1
US European Australia Canada UK Norway South Korea China
Union
Note: Allocated category includes only funds for specific projects, and unallocated category includes all funds promised by governments, minus the funds that are
uncertain.
Source: Global CCS Institute (2013)
© 2012 SBC Energy Institute. All Rights Reserved.
22

24. PERSPECTIVES
By 2017, 22 projects should be operating, with more than 90% of the installed
capacity related to oil & gas operations
CCS LARGE PROJECTS DEPLOYMENT FORECAST, 2012-2017
MtCO2/year CO2 SOURCES MtCO2/year CO2 STORAGE
55 55
Power plant Depleted oil and gas reservoir
50 Industrial hydrogen 50 Aquifer
45 Gas processing 45 EOR
40 40 22
(3GWe)
35 35
30 30
25 25
20 20
15 15
10 10 19
5 5
0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Power plants account for 30% of the operating EOR account for 80% of the operating capacity in
capacity in 2017 2017
Source: SBC Energy Institute analysis, based on Bloomberg New Energy Finance database (March 2012)
© 2012 SBC Energy Institute. All Rights Reserved.
23

25. PERSPECTIVES
Conclusions
1. Meeting international CO2 emissions-reduction targets will be extremely difficult to achieve without
CCS
2. CCS projects are technically feasible at large scale and with moderate abatement costs per ton of
CO2 avoided. There is no need to wait for building demonstration projects
3. Demonstration projects are necessary to refine understanding of CO2 sequestration mechanisms
4. R&D‟s priority is reducing the cost of CO2 capture
5. Projects associated with oil & gas production can be commercial. It will remain the main driver in
the CCS industry in the current decade
6. Projects remain at a standstill for power generation and heavy industry when targeting passive
CO2 storage
7. Despite governments promises, demonstration is has been far slower than what was projected
8. IEA has just renewed its call for action to develop CCS, listing it in its 2013 priorities
9. Public stakeholders needs increase support for CCS and private-sector needs to develop overall
awareness of the benefits of CCS
© 2012 SBC Energy Institute. All Rights Reserved.
24

26.  Annexes
25
© 2012 SBC Energy Institute. All Rights Reserved.

27. ANNEXES
CCS refers to a set of CO2 capture, transport and storage technologies that are
put together to abate emissions from various stationary CO2 sources
CCS VALUE CHAIN
Capture Transport Storage
CO2 Sources
Upstream O&G Gas sweetening Underground geological
• Natural Gas Processing • CO2/CH4 separation storage
• Deep saline aquifers
• Depleted oil and gas fields
Heavy industries
Post-combustion • Unmineable coal seams
• Steel • CO2/N2 separation
• Cement Pipelines Beneficial reuse of CO2
Oxy-fuel combustion • Enhanced oil/gas recovery
• O2/N2 air separation unit • Enhanced coal bed methane
Power generation
• Oxy-fuels boiler • Synthetic fuels
• Coal Ship – Algae biofuels
• Gas – Formic acid
• Petroleum coke – Synthetic natural gas
• Biomass Pre-combustion • Urea yield boosting
• Gasification or reformers Networks & hubs • Mineralization
Industrial hydrogen • CO2/H2 separation • Polymer processing
production and use
• Chemicals (ammonia)
• Synthetic fuels Other options in R&D
– Coal-to-liquid • Storage in basaltic formations
– Steam methane • Ocean storage
reforming Additional equipment • Working fluid for enhanced
– Biomass-to-liquid • Compression geothermal systems
• Refineries (fuel upgrading) • Dehydration
© 2012 SBC Energy Institute. All Rights Reserved.
26

28. ANNEXES
Power and industry CCS projects incur planning and coordination difficulties that
do not affect O&G-related CCS projects
BUSINESS MODELS FOR INTEGRATED PROJECTS
Project owner (potentially eligible for
CAPTURE TRANSPORT STORAGE emissions reductions)
Secondary stakeholder
• Single integrated project owner: high level of
Self-built model O&G majors___________________________________________ Govt
control, no coordination issues
(integration) • Limited to Oil & Gas majors or very large
utilities only
• Several project owners share costs and risks
Partnership Transport
Power utility operator O&G companies • Risk of cancellation if a partner pulls out
(JV, consortium)
• Difficulties in managing differing industrial
cultures, paperwork…
EOR contractual EOR producer 1
Transport • Limited to EOR
agreement Emitter operator EOR producer 2
(pay-at-the-gate) EOR producer 3
• Shared infrastructures for transport and
Emitter 1 storage reduce up-front capex
New models -
cluster Emitter 2 Publicly supervised common venture • Involvement of public authorities facilitates
approach public acceptance
Emitter 3
• Not for early demonstration phase
Source: SBC Energy Institute
© 2012 SBC Energy Institute. All Rights Reserved.
27

29. ANNEXES
CO2-EOR is mainstream commercial technology in the US
US CO2-EOR PRODUCTION US CO2-EOR VS. OTHER EOR
k bbl/d, 1986-2010 %, 1986-2010
Other EOR processes
CO2-EOR
300
250
57%
200 64% 61%
72% 70%
81% 77% 77% 76% 75%
90% 85%
150 95%
100
43%
50 36% 39%
28% 30%
19% 23% 23% 24% 25%
10% 15%
0
1986 1990 1998 2002 2006 2010 1986 1990 1994 1998 2002 2006 2010
Note: CO2-EOR refers to enhanced oil recovery through CO2 injection. Other EOR processes include thermal EOR, natural gas EOR, water EOR etc…
Source: Oil & Gas Journal 2010, Bloomberg New Energy Finance Note other states includes Oklahoma, Utah, Pennsylvania, Michigan, California, Montana,
Alabama and Louisiana; Oil & Gas Journal 2010, Bloomberg New Energy Finance.
© 2012 SBC Energy Institute. All Rights Reserved.
28

30. ANNEXES
Growing demand for beneficial reuse of CO2 should support several CCS
projects during the next decade
CONSERVATIVE ESTIMATE OF THE GLOBAL INDUSTRIAL DEMAND FOR CO2 IN 2020
MtCO2/year
 Anthropogenic CO2 demand in 2020:
60Mt/year
120 118  ~10GW of CCS coal power
6
110 CAGR+5%  Mostly for EOR in North America
100  Assumes no increase in natural CO2
90 ~60 Mt/year supply
57 ~10GW of CCS • Already close to its maximum capacity
80 73
coal power plants
70 1 • Stricter regulation needed
17
60
50
40
30 55 55
20 CCS-Other reuse
CCS-EOR
10
EOR from natural CO2 sources (assuming no increase)
0
2011 2020
Note: CO2-EOR refers to enhanced oil recovery through CO2 injection. Other EOR processes include thermal EOR, natural gas EOR, water EOR etc…
Source: Oil & Gas Journal 2010, Bloomberg New Energy Finance Note other states includes Oklahoma, Utah, Pennsylvania, Michigan, California, Montana,
Alabama and Louisiana; Oil & Gas Journal 2010, Bloomberg New Energy Finance.
© 2012 SBC Energy Institute. All Rights Reserved.
29

31. ANNEXES
Over the long run, optimistic studies estimate EOR to be technically capable of
storing twice the volume specified in the IEA‟s roadmap for CCS
GLOBAL LONG-TERM POTENTIAL FOR CO2-EOR
GtCO2 stored
Cumulated CO2 storage required by 2050 in IEA's Roadmap
145
Global technical* potential 318
(within 800 km of existing CO2 sources) 65
US economic** potential at $85/bbl 20
Middle East / North Africa technical potential 125
North America technical potential 43
Former Soviet Union technical potential 42
South America technical potential 20
South Africa/Antartica technical potential 15
Asia Pacific technical potential 8
Europe technical potential 8
Undiscovered basins‟ technical potential 57
Notes: * With next-generation CO2-EOR technologies
** At an oil price of $85/bbl, a CO2 market price of $40/Mt, and a 20% ROR before tax
Source: Advanced Resources International, 2011
© 2012 SBC Energy Institute. All Rights Reserved.
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32. ANNEXES
22 Large Projects are likely operate by 2017
CCS LARGE PROJECTS DEPLOYMENT FORECAST (2012-2017)
MtCO2/year
22 Large Projects
Eight Large Projects in gas Injection rate capacity (Power Plant)
50 52MtCO2/year
processing and hydrogen
Injection rate capacity (Oil/Gas Processing)
45
Injection rate capacity (Hydrogen plant)
40
35
30
25
20
15 ADM Illinois ConocoPhillips SaskPower Leucadia Lake Shell Chevron Summit Endesa
10 CCS Lost Cabin Boundary Dam Charles Quest Gorgon TCEP OXICFB300
Gasification
5
0
2013 2014 2015 2016 2017
Air Products ACTL Mississippi Power E.ON Swan Hills Tenaska
Port Arthur Agrium Kemper ROAD Sagitawah Trailblazer
Source: SBC Energy Institute analysis
© 2012 SBC Energy Institute. All Rights Reserved.
31