A cash flow model of an integrated industrial CCS-EOR project in a petrochemical corridor: A case study in Louisiana

Abstract

Petroleum refineries and petrochemical plants are major CO2 sources, however, they are also significant capital and employment assets that are unlikely to be replaced in the near term. As a result, nations and states that are interested in reducing the carbon intensity of their economies will need to find ways to reduce the emissions of their existing industrial capacity. Industrial carbon capture provides one potential mechanism for reducing the carbon intensity of existing industrial facilities, however, an economically feasible capture system requires that the captured CO2 be integrated into a system of transport and storage with income generated either through tax credits, enhanced oil recovery (EOR), or both. Here, we present a cash-flow model of an integrated system with industrial capture, pipeline transport, and EOR, and we parameterize the model with data from Louisiana. Given a $50/bbl oil price, an integrated capture, transport and EOR system that uses ethylene oxide production, ammonia production, or natural gas processing as sources is predicted to have a net present value of about $500 million; hydrogen-based capture has a cash flow of −$214 given the same assumptions. Further, we find that the recent 45Q Tax Credit expansion has a positive impact on the cash flow of the system but does not change the overall profitability of the systems under the specified assumptions such that without the tax credits natural gas processing, ammonia production and ethylene oxide production-based capture systems remain cost-effective, while hydrogen-based capture remains unprofitable with or without the tax credit.