American Oil and Gas Reporter - July 2023 - 81

SpecialReport: The CCS Journey
That geologic expertise has made it
possible to quickly identify areas where
carbon sequestration may be viable, Davis
says. " The Gulf Coast is a tremendous
location for CCS, not only in the United
States but globally, " he says. " Beyond
geology, it has the skilled labor, infrastructure
and equipment to get projects
done economically and at scale, which is
extremely important.
" But CCS will not be limited to the
Gulf Coast, " Davis predicts. " We are already
seeing activity in the Rockies and
the Midwest. Any active hydrocarbon
basins may have candidates for CO2 injection,
including the San Joaquin Valley
in California, as well as places in
Wyoming. "
Offshore projects also show great
promise, Davis assesses. " In the Gulf of
Mexico, there are sites that can store billions
of tons of CO2, " he demonstrates.
" These sites initially will have higher development
costs than onshore projects.
However, as the industry scales up, the
costs should become more competitive. "
First, Davis says, the CCS industry
must launch smaller, less complex onshore
projects. " As these projects get up
and running, they will improve the economics
for future projects. An industrial
site that does not make sense today may
become economic in the future as carbon
storage hubs are permitted and new
pipeline infrastructure is built, " he says.
" Shared infrastructure will gradually unlock
locations. "
Davis compares that evolution to the
midstream industry's, where " clusters
of production moving to demand centers "
eventually became connected by big
trunk lines.
Initial Projects
According to Davis, Milestone Carbon
plans to be among the companies that
help CCS get off the ground. " We are
looking for projects that can move to
market quickly, " he says. " Think sites
that are near emission sources with highly
concentrated CO2. "
The purer the CO2, the less it costs to
transport and inject, Davis mentions.
" The composition of the CO2 stream affects
how we engineer the pipelines and
wells, " he explains. " We want the waste
stream to be at least 90%-and ideally
more than 95%-pure CO2. "
Achieving that purity requires processing
because many emission sources
start with low concentrations. Davis cites
the example of natural gas power plants,
which emit CO2 at purities as low as 4%.
By isolating and conditioning the CO2,
the purity can hit 90%-95%.
" The capture and storage projects that
are moving fastest involve existing industrial
sites with high-purity CO2, " Davis
relates. " Midstream gas processing plants
already have some CO2 separation facilities,
and many are ready for storage now. "
Ethanol plants are another early adopter.
Davis points out that Illinois and North
Dakota already have plants capturing and
injecting CO2.
" The next tranche of customers will
be greenfield projects with a specific
timeline and location in mind that need a
sequestration site to create a complete
package, " he continues. " Power is one of
the natural candidates. We should see
greenfield low-carbon power plants coming
on line by 2030, which is encouraging. "
Brownfield projects may take longer
because evaluating retrofit projects can
require significant study, Davis mentions.
" For coal facilities in particular, the industry
is investigating possibilities for
CCS at existing facilities. For heavy industries
in general, I see a few brownfield
projects coming on line in the late 2020s,
but because of their complexity, most
will take more time. "
Permitting's Role
The pace at which government agencies
issue permits will have a huge impact on
projects' timelines, Davis suggests. " The
permitting speed varies, " he says. " North
Dakota, which has primacy, issued a
Class VI permit in less than a year. We
are hoping Louisiana will get primacy
soon, as the governor is bullish about issuing
permits in a timely manner. "
The EPA, meanwhile, has indicated
that evaluating permits may take twofour
years. " Given our relationship with
some of the regional offices, we think
our projects' permitting time will fall
closer to two years, " Davis says.
Milestone Environmental Services, the
parent company of Milestone Carbon,
has permitted and built eight slurry injection
facilities as part of its oil field
waste disposal business. " We respect regulators'
role and understand that they
often have smaller teams and fewer resources
than they should, " Davis says.
" To the extent we can, we try to make
their work easier by giving them the information
they need in the way they are
used to receiving it. "
Davis says CO2 sequestration has a
strong track record of safe operations.
" Industry has been capturing, moving
and disposing of CO2 for a long time, "
he points out. " The United States has
more than 5,000 miles of carbon dioxide
pipelines and thousands of CO2 injection
wells. Gas processing plants have been
safely injecting acid gas, a combination
of CO2 and the toxic gas hydrogen sulfide,
into the subsurface for decades.
" No industry is free from safety incidents
or hazards, " he acknowledges.
" However, regulators and developers are
incorporating lessons from past incidents-including
ones from outside the
industry-to minimize the risks. "
As regulatory frameworks continue to
evolve, Davis expresses hope that they
will focus on outcomes rather than processes.
Doing so will give companies the
freedom to develop more economic and
reliable ways to meet safety and environmental
objectives, he explains.
After Class VI wells have been plugged,
operators must monitor the wells for at
least 50 years to verify that the CO2 remains
sequestered, Davis notes. " Some
states are looking at eventually having
the state take responsibility for the CO2
once the injection well has been operated
safely, shut in and monitored for a long
time, " he says. " That should help more
projects get off the blocks, as it allows
developers to provide some certainty to
their investors. "
One of the concerns relates to insurance.
" It can be difficult for markets to
price risk decades out, " Davis says. " Since
CO2 sequestration is about tackling a societal
challenge, one that affects the whole
world rather than people in a particular
location, we think it makes sense for society
to bear some of the risk after a well
has been monitored and the risk has become
extremely small. "
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JULY 2023 81
American Oil and Gas Reporter - July 2023

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