20 July, 2017
Courtesy of the Energy Wire
If there’s a rock star in the U.S. carbon capture business in 2017, David Greeson might be it.
The vice president at NRG Energy Inc. guided the Petra Nova project southwest of Houston to an “on time and on budget” opening late last year and has been in demand ever since.
Greeson, 58, told a conference here yesterday that Petra Nova has captured more than 700,000 tons of carbon dioxide and is doing well, even with the expected bumps that come with a new facility. It’s the world’s largest retrofit of a coal plant with carbon capture technology.
“So far, so good,” Greeson said.
His description is welcome news for backers of carbon capture technology, especially given the high-profile drama at Southern Co.’s Kemper County Energy Facility in Mississippi. That project saw delays and billions of dollars in cost overruns before regulators decided that it will run on natural gas, not gasified coal (Energywire, July 7).
Despite a $1 billion price tag, Petra Nova became a reality in part because it received about $190 million from the Department of Energy and a loan from the Japanese government. The project is a joint venture that involves NRG and JX Nippon Oil & Gas Exploration Corp., and the CO2 goes to an oil field through a deal with Hilcorp Energy Co.
Petra Nova benefited from advance engineering and conceptual design work, according to NRG. The project is capturing about 5,200 tons of CO2 a day and about 94 percent of the CO2 in the flue gas it processes, the company said.
The annual target for Petra Nova is about 1.6 million tons of captured carbon dioxide a year. NRG said 2017 was expected to be different, and it doesn’t appear on track to reach that annual milestone in year one.
Items such as pumps have led to downtime, Greeson said in an interview this week, and the decision previously was made to skip redundancy in some aspects of the facility.
Outside factors also have caused interruptions. For example, work at the West Ranch oil field, which is accepting the carbon dioxide, might need new equipment. Or the coal-fueled unit at NRG’s W.A. Parish plant, which sends flue gas to Petra Nova, might go offline for maintenance.
“Probably by now, if we’d been running continuously, we’d be over a million tons captured,” Greeson said.
But Greeson, who is a vice president of development at NRG, said he’s thrilled with how Petra Nova is doing. The 1.6-million-ton annual target remains for the future.
Role of oil
A key part of the project is its use of carbon dioxide for enhanced oil recovery in Texas. The West Ranch oil field previously produced less than 300 barrels a day of oil and is on the way up.
“It’s a high-five moment when things go as planned,” Greeson said. “And things are going as planned in the oil field. We’re at over 4,000 barrels a day.”
NRG has said oil field production might rise at some point to 15,000 barrels. A wild card for a project like Petra Nova remains the price of oil.
Investors could get their money back with oil at about $50 a barrel over 10 or 12 years, according to Greeson. Upsides and downsides accompany price swings, and at $25, an enhanced oil recovery project likely would stop operating. Benchmark U.S. oil was trading for about $47 a barrel yesterday, according to Bloomberg data.
Greeson’s public remarks were at the Carbon Management Technology Conference, and the cloudiness of the industry was evident this week. Speakers cited both CCS for carbon capture and storage and CCUS for carbon capture, utilization and storage.
On Tuesday, Jeff Erikson, general manager for the Americas region at the Global CCS Institute, noted a number of negative headlines about the industry. He described carbon capture as “essential but not inevitable,” discussing efforts to help translate facts into messages and eventually investments and facilities.
During an interview, Greeson discussed the unique role of Petra Nova at the moment.
“I think that our place is to say, ‘Hey, carbon capture and enhanced oil recovery can work, and we’re showing that it can work,'” he said.
Greeson said he appreciated help from Southern Co. in the past and was personally saddened by how events unfolded at Kemper.
“It makes it a little harder for all the rest of us to raise capital for the next projects that might come along,” he said.
It remains to be seen exactly how NRG might leverage its experience and knowledge of carbon capture in the years ahead. Among the unknowns is how NRG’s portfolio and outlook may change. The company recently announced a transformation plan that’s expected to raise cash and include significant asset sales and cost reductions (Energywire, July 13).
In April, Greeson said that “two to three years from now,” the company could be “looking at possibly announcing the start of another project.” But there’s no firm commitment. Greeson said this week that he continues to watch the industry.
“I talk to a lot of technology providers to see where are they in their development, are they ready for prime time, do they need any non-monetary help from NRG,” he said.
Greeson said that it might be 2023 before another retrofit carbon capture project goes online in the United States if any company attempts one. A tax credit could play a role.
He said he isn’t sure if he will reach a certain long-term goal, but said, “I’m working toward finding a technology that cuts the cost, gets the cost down low enough to where I can be a CO2 seller to the oil industry or to anybody else that wants CO2 without a DOE grant.”
In Houston yesterday, CEO Mike Monea of the International CCS Knowledge Centre noted a separate Boundary Dam carbon capture facility in Canada and Greeson’s work in Texas.
An operating plant “takes away the myths or the fabrication of what these things should do because they’re doing it,” Monea said.
Greeson told the crowd that the biggest barrier for carbon capture remains upfront capital. He outlined personal views on what’s ahead for the retrofit industry, including the need for technology to get cheaper.
The NRG vice president said enhanced oil recovery “is the game” for CO2 at this point. Other options on the horizon may include liquid fuels and bulk materials such as cement and plastics.
Headwinds in Greeson’s mind include costs, a need for more choices, scale, how to make a business, a better reputation and time. He called for more people in the industry who own coal plants to hear his message.
On Tuesday, Charles McConnell, executive director of Rice University’s Energy and Environment Initiative, advocated for projects that utilize enhanced oil recovery. While some might question the idea of boosting oil production given climate change concerns, McConnell said the world’s oil demand isn’t set by carbon capture.
“Go find geology that’s got oil in it, and then go find the closest fossil fuel facility to that oil that you can capture the CO2 from and go make an economic model around it,” McConnell said.
In the meantime, interest in Petra Nova remains high. The facility has seen over 30 tours this year, according to NRG. People have visited from outside the United States, and it was the site of a celebration in April that featured Energy Secretary Rick Perry and Texas Gov. Greg Abbott (R) (Energywire, April 14).
“I don’t want to say that it was unexpected,” said David Knox, an NRG spokesman, “but it has really been refreshing to see how many people are really very, very interested in this project, how it’s going and looking towards the future.”