Alaska CCUS Workgroup and a Roadmap to Commercial Deployment

Abstract

A group of Alaskans formed a Workgroup in July 2022 to accelerate commercial carbon capture, use, and storage (CCUS) projects in the State of Alaska (State). The Workgroup’s mission is to attract new investments and create options that enable continued operation of carbon intensive activities vital to the State’s economy including power generation, refineries, and oil and gas production. To meet the dual challenge of increasing global energy demand and a growing population, there is a need to provide affordable and reliable energy while addressing the risks of climate change. Policies are being created and refined to incentivize carbon dioxide removal from the atmosphere including capture at the point of generation and direct air capture. Since 2008, US Federal tax credits have been established, increased, extended, and expanded for CCUS projects. Energy policy in the US and globally is evolving, moving from exclusive focus on renewable energy towards supporting low-emission energy systems, including those employing CCUS [COP 26]. This shift recognizes utility-scale renewable energy generation generally depends on fossil fuel for back-up power. The intermittent nature of renewable power generation gives rise to energy generation gaps. Coal, natural gas, and oil generation fill these gaps to provide stability to an energy system, and CCUS is increasingly viewed as a critical part of a complete clean energy portfolio. Costs to establish clean energy security would be more than twice as expensive without CCUS [IPCC]. Interest in CCUS is growing rapidly. As of 2020, 21 large-scale CCUS facilities operate globally [IEA CCUS], with 80% of capacity based in the USA. Operations began as far back as 1972 for enhanced oil recovery and more recently for geologic sequestration. As of 2022, over 190 CCUS facilities are in the project pipeline globally. Assuming one million tonnes carbon dioxide captured per year per project, over 2,500 facilities are needed by 2040 to reach the objective of 2.52 gigatonnes captured per year [IEA 2020]. This paper addresses three important topics:The importance, value, and cost of CCUS. Costs increase rapidly as the carbon dioxide (CO2) concentration decreases within the capture inlet gas stream. Herein, costs are compared with the value of capture especially 45Q tax credits. Other revenue and value drivers are also discussed. Costs typical of the contiguous 48 states of the US were used in this screening.The Alaska CCUS Workgroup’s mission, leadership, and participating organizations are discussed. Results, future plans, and approaches to ensure participant value are shared for four focus areas:Develop a State legal and regulatory framework,Track and respond to government funding opportunities,Perform public education and outreach, andDevelop a roadmap to accelerate commercial CCUS deployment in Alaska.The North Slope, Interior, and Cook Inlet regions are reviewed for CO2 storage potential, stationary emission sources, seismic hazards, and expected capture costs. Potential Alaska CCUS projects are discussed, and additional work is proposed to advance commercial deployment. Key observations, findings, and recommendations are provided.