TY - JOUR
T1 - Rethinking CCS developing quantitative tools for analyzing investments in CCS
AU - Eide, Jan
AU - Herzog, Howard
AU - Webster, Mort
N1 - Funding Information:
This paper is based on research conducted at MIT from September 2011-October 2012. We would like to thank the MIT Carbon Sequestration Initiative for their financial support of this research effort.
PY - 2013
Y1 - 2013
N2 - Lack of climate policy and CO2 markets along with a global economic slowdown suggest that we need to rethink our approach to demonstrating CCS at a commercial scale. Austerity measures make it likely that public funding will be tight in coming years, and there is a striking need to ensure that limited funds are spent optimally. Quantitative tools exist for aiding decision making under uncertainty, yet few of them have been applied to build a model that can help answer the question of what is the optimal allocation of a given amount of money across a portfolio of demonstration projects that maximizes learning about CCS. Developing such a model is the goal of this paper and we employ the model to assess the proper role of Enhanced Oil Recovery ((EOR) in a CCS demonstration portfolio. We find that if we want to maximize learning, a CCUS-only (CCS + EOR) approach to developing CCS as a mitigation technology would only be advisable if there was little uncertainty in non-EOR storage. As we believe that this condition is unlikely to be true, we suggest that U.S. policy makers should be particularly cautious in relying on a CCUS-only approach to CCS development. Nonetheless, we also find that a portfolio consisting of a mix of CCS and CCUS projects can be an effective strategy in a number of situations, notably if EOR can teach us important lessons about non-EOR storage.
AB - Lack of climate policy and CO2 markets along with a global economic slowdown suggest that we need to rethink our approach to demonstrating CCS at a commercial scale. Austerity measures make it likely that public funding will be tight in coming years, and there is a striking need to ensure that limited funds are spent optimally. Quantitative tools exist for aiding decision making under uncertainty, yet few of them have been applied to build a model that can help answer the question of what is the optimal allocation of a given amount of money across a portfolio of demonstration projects that maximizes learning about CCS. Developing such a model is the goal of this paper and we employ the model to assess the proper role of Enhanced Oil Recovery ((EOR) in a CCS demonstration portfolio. We find that if we want to maximize learning, a CCUS-only (CCS + EOR) approach to developing CCS as a mitigation technology would only be advisable if there was little uncertainty in non-EOR storage. As we believe that this condition is unlikely to be true, we suggest that U.S. policy makers should be particularly cautious in relying on a CCUS-only approach to CCS development. Nonetheless, we also find that a portfolio consisting of a mix of CCS and CCUS projects can be an effective strategy in a number of situations, notably if EOR can teach us important lessons about non-EOR storage.
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U2 - 10.1016/j.egypro.2013.06.711
DO - 10.1016/j.egypro.2013.06.711
M3 - Conference article
AN - SCOPUS:84898756621
VL - 37
SP - 7647
EP - 7667
JO - Energy Procedia
JF - Energy Procedia
SN - 1876-6102
T2 - 11th International Conference on Greenhouse Gas Control Technologies, GHGT 2012
Y2 - 18 November 2012 through 22 November 2012
ER -