The fossil fuel prices assumed for the models and cash flow analysis affect electricity generation dispatch, costs, and revenues, as well as revenues and costs for EOR oil production

Figure 2. The fossil fuel prices assumed for the models and cash flow analysis affect electricity generation dispatch, costs, and revenues, as well as revenues and costs for EOR oil production. Low sulfur light crude oil price is used.

Abstract

This letter compares several bounding cases for understanding the economic viability of capturing large quantities of anthropogenic CO₂ from coal-fired power generators within the Electric Reliability Council of Texas electric grid and using it for pure CO₂ enhanced oil recovery (EOR) in the onshore coastal region of Texas along the Gulf of Mexico. All captured CO₂ in excess of that needed for EOR is sequestered in saline formations at the same geographic locations as the oil reservoirs but at a different depth. We analyze the extraction of oil from the same set of ten reservoirs within 20- and five-year time frames to describe how the scale of the carbon dioxide capture, utilization, and storage (CCUS) network changes to meet the rate of CO₂ demand for oil recovery. Our analysis shows that there is a negative system-wide net present value (NPV) for all modeled scenarios. The system comes close to breakeven economics when capturing CO₂ from three coal-fired power plants to produce oil via CO₂-EOR over 20 years and assuming no CO₂ emissions penalty. The NPV drops when we consider a larger network to produce oil more quickly (21 coal-fired generators with CO₂ capture to produce 80% of the oil within five years). Upon applying a CO₂ emissions penalty of 60$2009/tCO₂ to fossil fuel emissions to ensure that coal-fired power plants with CO₂ capture remain in baseload operation, the system economics drop significantly. We show near profitability for the cash flow of the EOR operations only; however, this situation requires relatively cheap electricity prices during operation.