Commercial Structures for Integrated CCS-EOR Projects

Agarwal, Anna; Parsons, John E.

doi:10.1016/j.egypro.2011.02.575

Cited by 16 publications

(7 citation statements)

References 4 publications

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“…The net profit for the emitter will then be $60/t CO 2 − $14.55/t CO 2 = $45.45/t CO 2 captured. In order to equally share the project value and the project risk (Agarwal and Parsons, 2011), it will be assumed that 50% of the net profit of the emitter (0.5 × $45.45/t CO 2 = $22.73/t CO 2 ) will be allocated to the operator in order to cover the costs of transportation, underground storage, monitoring, verification and accounting strategies. It is assumed that the contract has a fixed price for CO 2 carbon credit.…”

Section: Decision Analysis Frameworkmentioning

confidence: 99%

Assessing the value of permeability data in a carbon capture and storage project

Puerta-Ortega

Bickel

Hovorka

2013

International Journal of Greenhouse Gas Control

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Section: Decision Analysis Frameworkmentioning

confidence: 99%

Assessing the value of permeability data in a carbon capture and storage project

Puerta-Ortega

Bickel

Hovorka

2013

International Journal of Greenhouse Gas Control

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“…However, quantitative discussion of feasible contractual mechanisms or business models for CCS-EOR projects is not enough. To the best of our knowledge, Agarwal and Parsons (2011) evaluated two contract types based on the net present value method (NPV), wherein the oil field company pays the power plant company for CO 2 delivery according to a fixed CO 2 contract price or an oil-indexed CO 2 contract price. They found that fixed price contracts have weaknesses in terms of ex-post insolvencies and poor incentive structures that result in suboptimal decision-making by the involved stakeholders.…”

Section: Introductionmentioning

confidence: 99%

“…In addition, the operational flexibilities in CO 2 -EOR projects are considered by allowing oil field operators to hold the abandon option. (2) Different from previous studies that only considered market uncertainties (e.g., oil prices, carbon prices) in CO 2 -EOR projects (Compernolle et al 2017;Agarwal and Parsons 2011), through modeling of a piecewise uncertain EOR curve, we take geological uncertainty into account to better reflect the endogenous risk in CO2-EOR.…”

Section: Introductionmentioning

confidence: 99%

Evaluation of cooperative mitigation: captured carbon dioxide for enhanced oil recovery

Zhu

Yao

Zhang³

2020

Mitig Adapt Strateg Glob Change

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Robust mitigation options will play significant role in achieving the target of limiting global change to below 1.5°C above pre-industrial levels by 2100. To support cooperation for mitigation development, we establish a real options-based model to evaluate the rational decisions of exercising the abandon option for carbon capture and storage-enhanced oil recovery (CCS-EOR) projects under oil market and geological uncertainties. Three possible cooperative mechanisms (fixed carbon dioxide (CO 2 ) price, oil-indexed CO 2 price, and joint venture contracts) among CO 2 -EOR stakeholders are evaluated. The results show that the conflicts in profit maximization targets for different stakeholders in cooperative mitigation are to a great extent unable to be avoided. A joint venture business model is preferred in cooperative mitigation as it can effectively weaken such conflicts. And it is more reasonable to provide incentives to the downstream of the CO 2 -EOR chain than compensating the adoption cost of carbon capture technologies in the upstream. From a global perspective, the inefficient cooperation can be a main barrier that hinders the development of deep-cutting options. Global mitigation strategies should not only focus on promoting technology progress but also the design of innovative business models to balance the benefits among stakeholders. A joint venture business model is recommended in both the developed and developing countries for seizing the early mitigation opportunities. Keywords Real options . Monte Carlo simulation . Carbon capture and storage (CCS) . Enhanced oil recovery (EOR) . Cooperative mechanism of mitigation

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“…In this way, businesses and government entities understand the range of possibilities regarding the system costs and benefits as well as different business relationships that are possible. Some previous work discusses CO 2 prices and business relationships among entities involved in CCUS for EOR (Agarwal andParsons 2011, Esposito et al 2011). Agarwal and Parsons (2011) discuss how combinations of assumed contract oil and CO 2 sales prices between a power plant and oil field operator shifts the profits from one to the other.…”

Section: Introductionmentioning

confidence: 99%

“…Some previous work discusses CO 2 prices and business relationships among entities involved in CCUS for EOR (Agarwal andParsons 2011, Esposito et al 2011). Agarwal and Parsons (2011) discuss how combinations of assumed contract oil and CO 2 sales prices between a power plant and oil field operator shifts the profits from one to the other. Esposito et al (2011) layout how different business models ('self-build', 'joint venture', and 'pay at the gate') provide tradeoffs in risk and reliability between electric power and oil production.…”

Section: Introductionmentioning

confidence: 99%

The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast with pure CO ₂ -EOR flood

King

Gülen

Cohen

et al. 2013

Environ. Res. Lett.

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This letter compares several bounding cases for understanding the economic viability of capturing large quantities of anthropogenic CO 2 from coal-fired power generators within the Electric Reliability Council of Texas electric grid and using it for pure CO 2 enhanced oil recovery (EOR) in the onshore coastal region of Texas along the Gulf of Mexico. All captured CO 2 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 CO 2 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 CO 2 from three coal-fired power plants to produce oil via CO 2 -EOR over 20 years and assuming no CO 2 emissions penalty. The NPV drops when we consider a larger network to produce oil more quickly (21 coal-fired generators with CO 2 capture to produce 80% of the oil within five years). Upon applying a CO 2 emissions penalty of 60$2009/tCO 2 to fossil fuel emissions to ensure that coal-fired power plants with CO 2 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.

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Commercial Structures for Integrated CCS-EOR Projects

Cited by 16 publications

References 4 publications

Assessing the value of permeability data in a carbon capture and storage project

Assessing the value of permeability data in a carbon capture and storage project

Evaluation of cooperative mitigation: captured carbon dioxide for enhanced oil recovery

The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast with pure CO ₂ -EOR flood

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Commercial Structures for Integrated CCS-EOR Projects

Cited by 16 publications

References 4 publications

Assessing the value of permeability data in a carbon capture and storage project

Assessing the value of permeability data in a carbon capture and storage project

Evaluation of cooperative mitigation: captured carbon dioxide for enhanced oil recovery

The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast with pure CO 2 -EOR flood

Contact Info

Product

Resources

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The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast with pure CO ₂ -EOR flood