California’s subterranean natural resources – A wealth of opportunity for CCS

The Golden state’s vast natural resources – scenic coastlines, lush forests, rugged mountains, underground oil and gas deposits, and fertile agricultural lands are well known. However, something people don’t typically think of – deep underground formations of salt water and depleted fossil fuel formations – are among the largest and most valuable resources California has yet to cultivate, and can be a key piece in the overall transition to a low-carbon economy if used for carbon capture and sequestration (CCS). 

CCS involves the separation of pure carbon dioxide from a mix of air emissions, compression of that gas, and injection of the compressed gas into underground rock formations where it stays for thousands to millions of years. To be sure that injected gas stays underground, and also prevent other environmental impacts, proper precautions must be followed to make sure projects are located, sized, operated, and monitored appropriately. See a presentation I am delivering to a blue ribbon panel of experts at the California Energy Commission on this topic later this week (presentation materials posted following the workshop). 

California’s opportunity to engage in CCS is huge. In 2008, the Energy Commission and Department of Conservation, completed an in-depth assessment of the options for the state and found between 75 and 300 metric gigatons[1] of storage capacity in underground salt water formations (saline aquifers), and 5.2 metric gigatons in depleted oil and natural gas reservoirs. This capacity represents hundreds of years of the state’s emissions, well beyond the time needed to transition away from fossil-fired energy generation.

According to the National Energy Technology Lab, there are roughly 200 projects using or planning to use CCS in the world today – and many more will be needed in the near future to reduce emissions to sustainable levels. These projects represent a big investment opportunity. Last year, EDF, in partnership with Duke University, released a study estimating $15 billion worth of investment would likely be made by 2025 through retrofits of existing coal fired power plants to accommodate CCS. Further, this year the Clean Air Task Force released a study estimating $120 billion in private investment spending by 2030 through deployment aligned with recent Congressional proposals. 

California’s proactive policies to produce low carbon energy coupled with vast sequestration potential has put the state in a favorable position to capitalize on the coming national push for CCS commercialization. This combination means that much of the CCS-related investment nationally can occur here. One such example is the Hydrogen Energy Project in Bakersfield that has already attracted $300 million in federal funding and $2.5 billion in private financing. For this investment to materialize though, California must stay in front of the curve, moving in a coordinated manner to create a welcome venue for project developers while also imposing rigorous project evaluations and oversight.

Next week on June 10, 2010, EDF is co-hosting a free workshop on the science behind CCS, and policy implications of moving ahead on CCS in California. Interested parties should attend and discover for themselves how this technology can help California’s transition to a low-carbon economy.

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[1] 1 gigaton = 1 billion tons, or 1 thousand million tons