System inhales CO2
Commercial carbon capture operations get underway at NRG power plant near Houston after a billion-dollar investment
T HE world’s largest carbon capture system began commercial operations in Texas on Tuesday after two years of construction, nearly a decade of planning and $1 billion of investment, NRG Energy said.
The system, at NRG’s coalfired W.A. Parish power plant southwest of Houston, holds the promise of removing carbon dioxide from coal and other fossil fuels and keeping them viable as governments around the world tighten emissions regulations in an effort to slow climate change. But NRG officials acknowledged that the technology faces an uncertain future largely because of uncertain markets for the carbon dioxide that is captured.
The main buyer of carbon
dioxide is the oil industry, which pumps the gas into older wells to increase production.
Until other markets emerge, NRG and its partners planned to make money by pumping carbon dioxide into wells they own and selling the oil. But conditions have changed drastically since construction began in the summer of 2014, when crude hovered near $100 a barrel.
Oil settled at $50.82 a barrel on Tuesday in New York. Unless oil prices rise, Houston-based NRG is unlikely to invest in another carbon capture project, CEO Mauricio Gutierrez said.
“At $50 a barrel we cover our costs, but as for having a new project with the returns that we need, it makes it very difficult,” Gutieriez said Tuesday. “All else being equal, prices have to be north of $50 for us to think about investing in another project like this.”
The carbon capture project, called Petra Nova, is a joint venture with JX Nippon Oil and Gas Exploration Corp., a Japanese energy company, which shared the cost with NRG. Mitsubishi Heavy Industries, another Japanese company, provided the plant’s technology, which captures emissions, known as flue gas, and uses a solvent to separate the carbon dioxide from other gases.
After it’s separated, the carbon dioxide is pressurized into liquid and transported via pipeline to an oil field about 80 miles from the plant. Petra Nova can capture 5,200 tons of carbon a day. In testing over the past few weeks, the system captured more than 110,000 tons of carbon, and barring any major glitches, plant operators expect to hit 1 million tons by early summer.
Gutierrez said NRG embarked on the project to shrink its carbon footprint, in part because of Environmental Protection Agency regulations that targeted emissions from coal-fired power plants. NRG received a $190 million grant from the Department of Energy for the project. The company was also expecting initiatives from the Obama administration to expand the market for carbon dioxide, Gutierrez said, but that did not happen.
President-elect Donald Trump, who has pledged to reduce regulations on the coal and oil industries, appears unlikely to pursue policies, such as taxing carbon emissions, that would increase the economic benefits of carbon capture systems.
NRG still plans to reduce emissions from its operations by 50 percent by 2030. In the past couple of years, the company has modified four coal-fired power plants to run on cleanerburning natural gas.
Should market and regulatory environments change, Gutierrez said, the Petra Nova project would become a more valuable asset, and the experience of building a commercialscale carbon capture system would allow NRG to lower costs of future projects.