Jan-2010

Can refiners afford carbon capture?

CCS is not widely considered an economical way of reducing refiners’ carbon footprints, but case studies indicate great variation in the cost of implementation

Erich Mace and Thomas Yeung
Hydrocarbon Publishing Company

Article Summary

Carbon capture and storage, also referred to as carbon capture and sequestration, or CCS, is regarded sas an essential technology to meet greenhouse gas (GHG) reduction goals. CCS is the only GHG reduction method that decouples fossil fuel usage from CO2 emissions. R&D activities in carbon capture are mostly tailored to coal-fired power plants, the largest stationary source of CO2 emissions. However, the refining industry, along with other sectors such as steel and cement production, is beginning to investigate CCS as a viable method of reducing GHG emissions. It is thought that, as the price to emit CO2 rises, these energy-intensive industries will find CCS more worthy of investment. In fact, refiners are already investing to some degree, as exemplified by work during phase II of the CO2 Capture Project, an international collaboration of oil companies. Phase II focused partly on developments in refinery carbon capture.

CCS involves the production and recovery of CO2 from industrial processes, and is typically followed by drying and compression to approximately 2.2K psi (15 MPa) so that it may be shipped to storage sites via pipeline. The captured CO2 can be injected into depleted oil and natural gas fields (DOGFs) and saline aquifers; it can be used for the recovery of methane from unminable coal seams and to recover oil and gas from DOGFs; it can be stored in the ocean by various mechanisms; or, alternatively, the CO2 can be used as a chemical feedstock or for algal biofuels production, among other applications.

Carbon capture methods
Carbon capture technologies can be organised into three categories: pre-combustion, oxycombustion and post-combustion. The predominant advantage of pre-combustion carbon capture is the availability of a high-partial-pressure CO2 stream for capture. The method consists of converting a hydrocarbon fuel into syngas, followed by water-gas shift (WGS) to produce a CO2 and H2 stream from which CO2 can be separated. For the refiner, this most often refers to the steam methane reformer (SMR), although flexicoker, partial oxidation, autothermal reforming and gasification units may also be in use in some refining complexes.

Oxycombustion, also called oxyfiring or oxyfuel combustion, refers to combustion with pure oxygen. Its advantage lies chiefly in the fact that, ideally, only water and CO2 are produced in the effluent stream, which is cooled to condense and remove water vapour. Close to 100% of the CO2 is captured at purities of 80–98%. Since N2 is not present in the oxygen feed, NOX emissions are also reduced by an order of magnitude. In practical application, this technique often requires a CO2-rich flue gas recycle to limit burner temperatures, which increases energy consumption. Refinery candidates for oxy-combustion capture are, in principle, any process employing combustion, although, in practice, only the largest combustion sources of CO2 would be considered. These emitters include the large boilers associated with the power/steam plant, major process heaters such as those on the crude distillation unit (CDU) and catalytic reformer, and the FCCU regenerator. Oxycombustion requires an air separation unit (ASU) and some level of burner and oxygen injection system modification.

Post-combustion methods are end-of-pipe solutions for industrial combustion processes. Flue gases for post-combustion capture generally have less than 15% CO2 and are near atmospheric pressure. In the refinery, any combustion exhaust is a candidate, but only the largest high-partial-pressure sources of CO2 are practical considerations. Such sources include the FCCU regenerator, the power/steam plant or any large combined stack. Figure 1 summarises current methods of carbon capture.

The prospect of refinery carbon capture is primarily centred around one question: will the project achieve a desirable NPV/discounted cash flow? Unfortunately, the risks associated with carbon capture, particularly the unknown cost to emit CO2, are making this question hard to answer. If refiners had a better sense of the cost to emit or capture CO2, decisions could be made with greater confidence. In other words, making the decision to capture CO2 depends heavily on reliably predicting profitability and much less on technological feasibility. A reliable prediction of profitability will, in turn, depend heavily on accurate cost estimates of capture technologies and confidence in knowing the price of CO2.

Five key drivers of carbon capture
• Capturability Refiners need to identify the most favourable capture areas in the refining complex. Of course, the unique characteristics of each refinery will play a large role in determining which units are most amenable to capture
• Capture cost Cost data for refinery carbon capture is not widely published. Refiners can, however, undertake their own initial studies to prioritise units based on capture cost
• Transport, storage and other costs  These costs will vary, based on the transport distance, the storage method and the political and business environment of the CCS project
• Financial impacts on individual refiners The total cost of CO2 will vary, depending on a refiner’s circumstances. With the right capture technology and CO2 product value, a refiner may pay $5/mt or less to deal with CO2. If conditions are ideal, CCS may even be profitable. On the other hand, differing circumstances could dictate a refiner paying $30/mt or more to address CO2 if carbon prices reach their projected value by 2020
• Coordinating capture, transport and storage Even if a refiner finds the total cost to emit to be small or even negative and wishes to proceed with carbon capture, the initiation of the project cannot occur before transport and storage become available. That is to say, none of the three components of CCS make sense without the other two. To encourage the foundations of transport and storage networks, research activity concerning the technical, economic and legal aspects of transport and storage is under way.

Capture costs
The cost of CO2 avoided (Ca) and the cost of CO2 captured (Cc), as shown in equations 1 and 2, are two widely used metrics for cost analysis of carbon capture. Ca can be generally defined as the difference between the equivalent annual operating cost (EAOC, $/y) of the technology with carbon capture and the EAOC of the original reference case without capture; this is divided by the difference between the CO2 emitted in the original reference case (CO2ref) and the CO2 emitted in the carbon capture case (CO2cap), measured in mt CO2/y. EAOC is commonly used in engineering economic analysis and adds the amortised project capital investment to the estimated operating costs in order to compare projects of differing lifetimes.¹