Gasoline from Coal and/or Biomass with CO2 Capture and Storage. 2. Economic Analysis and Strategic Context

Abstract

The detailed performance simulation results for 15 alternative process designs for the production of synthetic gasoline from coal, biomass, or coal + biomass via gasification, methanol synthesis, and methanol-to-gasoline synthesis presented in the companion paper provide the basis for capital and operating cost estimates and the economic and strategic analysis described in this paper. Economic analyses for the 15 process designs are carried out for different assumed crude oil and greenhouse gas (GHG) emissions prices; for the cases involving CO2 capture the economic analysis is carried out for storage both in deep saline formations and via CO2 injection for enhanced oil recovery (EOR). In the absence of any GHG emission price, large plants that use only coal and produce primarily liquids provide the highest internal rate of return on equity (IRRE) for 20-year levelized crude oil prices of $80/bbl to $106/bbl. At the latter crude oil price, modest-scale co-production systems with low or zero GHG emissions considered as electricity producers provide higher IRRE when captured CO2 is stored via EOR than an investment in a new natural gas combined cycle power plant. At lower oil prices, a sufficient rate of biomass co-processing would enable maintaining this advantage for coal/biomass co-production systems for CO2 storage in deep saline formations as well as via CO2 enhanced oil recovery if a strong GHG emissions mitigation policy were in place.