By Tip Meckel and Susan Hovorka
The potential to increase imports of hydrocarbons from Canada remains attractive. One resource of current interest is the heavy oil typically referred to as the ‘oil sands’ in Alberta. The transport of these oils for upgrading (refining) is being considered via the proposed Keystone XL pipeline, linking Alberta with east Texas.
Environmental aspects of heavy crude production, transportation, and refining have been discussed in Congress and the media, with the current U.S. administration indicating that approval of the pipeline would only come if it would not ‘significantly exacerbate’ associated greenhouse gas emissions. Debate in Canada related to the production of heavy crude resulted in Shell’s Quest carbon capture and storage (CCS) project associated with production in Alberta.
Large-scale replication of a Quest-type project in the Port Arthur region could integrate the interests of a wide variety of stakeholders in CO2 emissions:
INDUSTRY: refiners and exporters (oil, liquid natural gas);
STATE GOVERNMENT: Texas General Land Office, Texas Railroad Commission;
FEDERAL GOVERNMENT: Department of Energy, National Energy Technology Laboratory; and
ACADEMIC RESEARCH: State research institutions including the Jackson School of Geosciences at UT-Austin; Gulf Coast Carbon Center at the Texas Bureau of Economic Geology; Local institutions including Lamar University Commercialization & Innovation Center Entrepreneurship (CICE).
Similar deployments of CCS in the Gulf Coast could advance U.S. interests in three associated energy-related sectors: 1) refining related to heavy oil imports from Canada via the Keystone pipeline, 2) Gulf Coast Enhanced Oil Recovery (EOR), and 3) Liquefied Natural Gas (LNG) exports. These interests are all currently aligned in the Port Arthur region of east Texas. Port Arthur is already a carbon-handling hub that has all the right elements to justify additional investment in CCS capture and storage technologies. A first successful capture project leveraged by U.S. Department of Energy CCS research program funding captures one million tons per year of CO2 at the Air Products hydrogen plant. That CO2 is transported via the Denbury Resources Green Pipeline and successfully used for enhanced oil recovery at Hastings Field near Houston.
Large-scale expansion of the Air Products type project in the Port Arthur region is feasible because it hosts the largest oil refining capacity in North America (e.g Exxon, Motiva, Valero, Total), which are envisioned as the recipient of Keystone oil imports. CO2 capture, utilization, and storage in the Texas Gulf Coast would significantly increase the environmental acceptability of these oil imports by offsetting emissions. Interests in LNG export (e.g. Golden Pass, Cheniere) also add to the CO2 footprint of the area. An offshore CCS demonstration project in that region would simultaneously serve multiple National interests by demonstrating the sustainability of and minimizing the environmental impacts of a suite of energy-related activities that play a major role in the future National energy supply chain.
The Texas General Land Office (GLO) has already invested in research of the CO2 storage potential of the Texas offshore State lands, including the area offshore Port Arthur. A GLO and DOE/NETL-funded three-year project characterizing this storage potential currently being conducted by the Texas Bureau of Economic Geology (Gulf Coast Carbon Center) is nearing completion (September 2014), and these efforts have identified attractive storage prospects in the State-owned lands of the near offshore of the Port Arthur region. Lease revenue from GLO lands funds the State’s Permanent School Fund. The logical next phase of that study is a CCS demonstration project involving injection in that near offshore geologic setting.