Infrastructure to enable deployment of carbon capture, utilization, and storage in the United States

Abstract

In February 2018, the United States enacted significant financial incentives for carbon capture, utilization, and storage (CCUS) that will make capture from the lowest-capture-cost sources economically viable. The largest existing low-capture-cost opportunity is from ethanol fermentation at biorefineries in the Midwest. An impediment to deployment of carbon capture at ethanol biorefineries is that most are not close to enhanced oil recovery (EOR) fields or other suitable geological formations in which the carbon dioxide could be stored. Therefore, we analyze the viability of a pipeline network to transport carbon dioxide from Midwest ethanol biorefineries to the Permian Basin in Texas, which has the greatest current carbon dioxide demand for EOR and large potential for expansion. We estimate capture and transport costs and perform economic analysis for networks under three pipeline financing scenarios representing different combinations of commercial and government finance. Without government finance, we find that a network earning commercial rates of return would not be viable. With 50% government financing for pipelines, 19 million tons of carbon dioxide per year could be captured and transported profitably. Thirty million tons per year could be captured with full government pipeline financing, which would double global anthropogenic carbon capture and increase the United States’ carbon dioxide EOR industry by 50%. Such a development would face challenges, including coordination between governments and industries, pressing timelines, and policy uncertainties, but is not unprecedented. This represents an opportunity to considerably increase CCUS in the near-term and develop long-term transport infrastructure facilitating future growth.