a carbon dioxide pipeline network for wyoming - university of

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To the University of Wyoming: The members of the Committee approve the thesis of Mark A. Newcomb presented on May 13, 2011. Owen Phillips, Chairperson Dale Menkhaus, External Department Member Klaas van ’t Veld APPROVED: Owen Phillips, Head, Department of Economics and Finance Brent Hathaway, Dean, College of Business

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Page 1: A Carbon Dioxide Pipeline Network for Wyoming - University of

To the University of Wyoming:The members of the Committee approve the thesis of Mark A. Newcomb presented on

May 13, 2011.

Owen Phillips, Chairperson

Dale Menkhaus, External Department Member

Klaas van ’t Veld

APPROVED:

Owen Phillips, Head, Department of Economics and Finance

Brent Hathaway, Dean, College of Business

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Newcomb, Mark A., A Carbon Dioxide Pipeline Network for Wyoming, M.S., Department

of Economics and Finance, August, 2011.

We design a 1,645 km long pipeline network linking several anthropogenic sources of

carbon dioxide (CO2) with regions where enhanced hydrocarbon recovery and geosequestra-

tion are possible. We estimate the pipeline’s capital cost to be 880.5 million USD and that

a network-wide tariff of 0.25 USD/mcf ($4.87/tonne) would be sufficient to earn a 12% rate

of return given a 30 year life-span. The pipeline would ship CO2 from underground and

anthropogenic sources to oil and coal-bed methane fields for use in enhanced hydrocarbon

recovery. In the process, these same fields could permanently sequester at least thirty years

of Wyoming’s total annual emissions of CO2. Diameter, cost and tariff calculations are car-

ried out using an interactive MATLAB program developed specifically for this project. The

program is intended to aid future research.

1

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A CARBON DIOXIDE PIPELINE NETWORK FOR

WYOMING

by

Mark A. Newcomb, B.S.E.E.

A thesis submitted to theDepartment of Economics and Finance

and theUniversity of Wyoming

in partial fulfillment of the requirementsfor the degree of

MASTER OF SCIENCEin

ECONOMICS AND FINANCE

Laramie, WyomingAugust 2011

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Copyright c© 2011

by

Mark A. Newcomb

ii

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I dedicate this thesis to my loving wife, Allison, who has provided endless support and

encouragement. I also dedicate it to my son Charlie. You typed your first letters in the

middle of this thesis.

iii

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Contents

List of Figures vi

List of Tables viii

Acknowledgments x

Chapter 1 Introduction 1

1.1 The Need for This Research . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2 Previous Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.3 Overview and Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Chapter 2 CO2 Supply and Demand 8

2.1 Sources of CO2 Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2.1.1 Enhanced Oil Recovery (EOR) . . . . . . . . . . . . . . . . . . . . . 9

2.1.2 Enhanced Coalbed Methane Recovery (ECBM) . . . . . . . . . . . . 20

2.1.3 Deep Saline Aquifer Sequestration Potential . . . . . . . . . . . . . . 37

2.2 Sources of CO2 Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

2.3 Matching Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Chapter 3 Diameter Calculations and Network Design 45

3.1 Diameter Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

3.2 Network Routing and Design Considerations . . . . . . . . . . . . . . . . . . 50

3.3 Pipeline Route Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

iv

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Chapter 4 Pipeline Cost Estimation Model 66

4.1 Pump Station Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Chapter 5 Tariff Calculation 72

5.1 Comparisons with Other Estimates . . . . . . . . . . . . . . . . . . . . . . . 75

Chapter 6 Conclusion 82

Appendix A Simulation Input Parameters for ECBM Models 85

Appendix B MATLAB Code for Pipeline Diameter, Cost and Tariff Calcu-

lations 87

References 122

v

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List of Figures

2.1 Stylized example of enhanced oil recovery using CO2. . . . . . . . . . . . . . 10

2.2 The Lost Soldier field with its three producing horizons—the Tensleep, Madi-

son and Cambrian—would be listed as three separate FRC’s in (Cook, 2009a). 12

2.3 Example of a five-spot well pattern for ECBM production. Five-spot well

patterns for EOR would have the same arrangment. . . . . . . . . . . . . . . 15

2.4 Sample injection and recovery history for the Lance Creek/Leo FRC. . . . . 16

2.5 CO2 daily and cumulative purchases for the Lost Solder/Tensleep FRC. . . . 18

2.6 CO2 demand by basin for oil prices of $70, $100 and $120 per barrel. . . . . 20

2.7 In-seam process by which enhanced coalbed methane recovery sequesters CO2

and produces incrementally more methane (CH4). . . . . . . . . . . . . . . . 21

2.8 Example of how CBM recovery occurs. For a coal seam with initial conditions

P = 1200 psia and gas content = 308 scf/ton, water must be pumped until

the pressure is reduced to the critical desorption pressure at around 275 psia

at which point desorption occurs and gas is produced. . . . . . . . . . . . . . 27

3.1 NPS versus MMcfpd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

3.2 Statewide overview of the pipeline network, sources of CO2, targeted EOR

fields and targeted coal fields. . . . . . . . . . . . . . . . . . . . . . . . . . . 54

3.3 Southwestern pipeline sections and their relation to fields screened for EOR. 55

3.4 Green River Basin sections as designed and their relationship to sources and

fields screened for EOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

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3.5 Wind River Basin sections as designed and their relationship to fields screened

for EOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

3.6 Bighorn Basin sections as designed and their relationship to screened fields. . 61

3.7 Southeast sections as designed and their relationship to sources and screened

fields. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3.8 Southern Powder River Basin sections as designed and their relationship to

sources, screened fields and coalbed methane fields. . . . . . . . . . . . . . . 63

3.9 Northern Powder River Basin sections as designed and their relationship to

sources, screened fields and coalbed methane fields. . . . . . . . . . . . . . . 64

4.1 LCC versus MMcfpd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

4.2 LCC versus MMcfpd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

5.1 Tariff versus MMcfpd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

5.2 Tariff versus MMcfpd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

5.3 Tariff versus MMcfpd and segment length (km). . . . . . . . . . . . . . . . . 77

A.1 Some parameter values used for Robertson’s (2008) coal-seam model. . . . . 85

A.2 Some parameter values used for Robertson’s (2009) coal-seam model. . . . . 85

A.3 Some parameter values used for Ross’s (2009) coal-seam model. . . . . . . . 86

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List of Tables

2.1 EOR CO2 demand: By basin given prices of $70/bbl for oil and $2.25/mcf

for CO2 — cumulative and in terms of mass flow rates (Cook, 2009a). . . . . 19

2.2 ECBM CO2 demand by basin, cumulative and in terms of mass

flow rates. Basins in which ECBM production is negligible or for which no

estimates have been made are not listed. . . . . . . . . . . . . . . . . . . . . 36

2.3 CO2 potential supply and demand by basin in terms of mass flow

rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

3.1 Pipeline layout for the Power County Energy Center-Jim Bridger-Wind River

Basin line based on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR. 57

3.2 Pipeline layout for the Wind River Basin-Bighorn Basin line based on mass

flow rates given $70/bo and $2.25/mcf CO2 for EOR. . . . . . . . . . . . . . 60

3.3 Pipeline layout for the Jim Bridger-Dave Johnston line based on mass flow

rates given $70/bo and $2.25/mcf CO2 for EOR. . . . . . . . . . . . . . . . . 60

3.4 Pipeline layout for the Dave Johnston-Wyodak line based on mass flow rates

given $70/bo and $2.25/mcf CO2 for EOR. . . . . . . . . . . . . . . . . . . . 65

4.1 Estimation results for equation (4.3) . . . . . . . . . . . . . . . . . . . . . . 68

5.1 Tariff per segment for the Green River and Wind River Basins portion of CO2

pipeline network, based on mass flow rates given $70/bo and $2.25/mcf CO2

for EOR applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

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5.2 Tariff per segment for the Bighorn Basin portion of CO2 pipeline network,

based on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR applications. 79

5.3 Tariff per segment for the Southeastern portion of CO2 pipeline network based,

on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR applications. . 79

5.4 Tariff per segment for the Powder River Basins portion of CO2 pipeline net-

work, based on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR

applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

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Acknowledgments

I would like to thank Professor Phillips for encouraging me to take this project on and

guiding me through its many twists and turns. Thank you, Professor Menkhaus, for making

time to read my thesis and come up with excellent thoughts and questions for my defense.

And thank you very much, Professor van ’t Veld, for encouraging me to dive into the field

of economics and for encouraging me to learn MATLAB.

Thank you Allison and Charlie for moving with me down to Laramie and for providing

encouragement and support. And thank you for granting me the time to “vacation” in

Midland, Texas to attend a conference on enhanced oil recovery!

Thank you Mom and Dad and sisters Lisa and Maria for your regular motivational talks.

Mark A. Newcomb

University of Wyoming

August 2011

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Chapter 1

Introduction

1.1 The Need for This Research

Widely considered a waste gas and leading cause of climate change, carbon dioxide is also

a commodity that could generate significant economic activity in Wyoming through en-

hanced oil recovery (aka tertiary recovery or, more specifically, EOR) and enhanced coalbed

methane recovery (ECBM).1 EOR operators use CO2 to enhance the recovery of stranded

oil in depleted oil reservoirs. ECBM operators use CO2 to enhance the recovery of coalbed

methane from coal seams. Meanwhile large amounts of the CO2 that is used in the enhanced

hydrocarbon recovery process can be permanently sequestered in the reservoirs from which

the hydrocarbon is extracted.2 Both depleted oil reservoirs and coalbed methane fields are

plentiful in Wyoming, and the revenues from EOR and ECBM can generate positive profits

for pipeline operators and/or be used to offset the costs of CO2 capture from anthropogenic

sources (Herzog et al., 2005).

Wyoming annually produces around 57 million metric tonnes (Mt) of CO2 (EIA, 2009b).

1Often the term ‘enhanced hydrocarbon recovery’ covers both enhanced oil and enhanced coalbed methaneproduction. And though enhanced oil recovery actually encompasses a wide variety of techniques, our useof the term refers specifically to CO2-based recovery techniques.

2Strictly speaking, permanent sequestration involves several aspects. Geologic and hydrologic criteriamust be met (e.g. the reservoir must have a competent cap rock seal, something most oil and gas reservoirshave by nature). And a legal and regulatory framework to govern a host of monitoring, verification andaccountability (MVA) issues must also be in place. IPCC (2005) is a good source of general informationabout all aspects of carbon capture and sequestration, including economic and regulatory considerations.

1

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Of this amount, about 8 Mt comes from underground sources and is already available for

EOR and/or ECBM. This CO2 is produced as a by-product of gas streams containing other

valuable gasses such as methane and helium. Most of it is shipped via pipeline to four oil

fields for EOR while a small amount is re-injected into the reservoir from whence it came.

The remainder of Wyoming’s CO2 emissions enter the atmosphere via flue gasses from the

combustion of fossil fuels. However there are over one-hundred more EOR field-reservoir

combinations (FRC’s) within Wyoming’s borders, representing over 500 Mbo of potential oil

production, that could enter EOR production if some of this CO2 could be made available.

Furthermore, vast coal fields in the Powder River and Green River Basins could theoretically

utilize CO2 to enhance the recovery of methane.

Capturing CO2 from coal-fired power plants, even when sold for EOR, is currently uneco-

nomical. However, nationwide research partnerships are currently undertaking substantial

research targeting all aspects of carbon capture and sequestration (CCS), including reducing

the cost of capture technology (DOE, 2011b). It is within the realm of possibility that im-

provements in technology brought on by this research, combined with subsidies or taxes, will

make CCS in conjunction with EOR and ECBM economically viable.3 The combination of

looming regulation and intensive research reinforces the need to examine CCS infrastructure

requirements in Wyoming under an assumption that the majority of the state’s fixed-point

carbon emissions are not only captured but also have a place to go. In short, any vision of a

world using captured anthropogenic CO2 as an input into the production of fossil fuels must

include the infrastructure to deliver the CO2 to those producers.

According to INGAA (2009), CO2 can be transported over land in trucks and by rail,

but pipelines are the most efficient means of shipping large quantities with minimal risk. In

2009 over 5,800 km (∼3,600 miles) of pipeline shipping over 40 Mt of CO2 per year existed in

the U.S. (INGAA, 2009). Wyoming’s relatively sparse population, long distances and open

3See Cook (2010) and Cook (2009b) for a thorough treatment of recently proposed legislation and thepotential implications for CCS. Cook (2009b)’s analysis finds that some of the recently proposed tax/subsidypolicy schemes would favor the sequestration provider which in turn would favor the construction of CO2

pipelines. Also see ACES (2011) as an example of recent regulatory efforts. See DOE (2010) for an updateof the ongoing efforts funded in part by the Department of Energy (DOE). Moniz (2011) makes a strongcase that cost-lowering capture technologies are imminent.

2

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landscape make the state especially conducive to pipeline transport of CO2.4 This paper

calculates total demand and daily average demand for CO2 in Wyoming from potential EOR

and ECBM operations, summarizes how the demands are calculated, matches the demand

to existing and planned sources of supply, designs a CO2 pipeline of sufficient diameter to

transport our estimated daily quantities from sources to regions of demand, estimates the

pipeline’s capital cost and proposes a tariff structure sufficient to earn an industry standard

internal rate of return.

Cook (2010) calculates that existing oil fields with EOR potential could ultimately

consume as much as 289.2 million metric tons (Mt) (∼5.5 Tcf) of CO2 while producing

another 768 million barrels of oil (MMbo). Using the sequestration rates of existing EOR

operations to forecast future sequestration rates, at least 1.35 Tcf (∼28-69 Mt) of the CO2

could be permanently sequestered underground by EOR operations. If studies done by

Robertson (2008, 2009); Ross et al. (2009) and Nelson et al. (2005) on ECBM are accurate,

the process could enhance coalbed methane production (CBM) by between 2.5 and 12.6 Tcf

while permanently sequestering 1.0 to 6.5 billion tonnes of CO2 (between 20 to 110 years

worth of Wyoming’s current annual CO2 emissions).

We obtain average daily flow rates representative of the levels of consumption mentioned

above by estimating the pace of EOR and ECBM development based on past rates of de-

velopment. We then match estimated rates of CO2 consumption with average annual rates

of CO2 production from several of Wyoming’s largest emitters as well as three more sources

currently under construction or in the planning process. Given the resulting estimates of

average daily flows of CO2, we design a 1,645 km (∼1,045 mile)-long pipeline that links

sources of supply to regions of demand. The line ranges in diameter from 6 to 34 inches and

requires 13 booster stations. We estimate the total cost to build the pipeline and booster

stations to be around 880.5 million USD (2009 dollars). Based on this estimate, and on

our calculation that the network as a whole would ship about 2,428 MMcfpd (∼46.6 million

tonnes per year), a levelized tariff of $0.25/mcf ($4.87/tonne) is sufficient to earn a 12% rate

4In CCS jargon, pipelines connect sources with sinks. EOR and ECBM sites are considered sinks, as arethe two most prominent sites for pure geo-sequestration in Wyoming, the Moxa Arch and the Rock SpringsUplift.

3

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of return given a 30-year operational life expectancy.5

We note that EOR and ECBM, as well as geosequestration, are evolving technologies

undergoing much current research. Most notably, the American Recovery and Reinvestment

Act designated $3.4 billion, to be administered by the Department of Energy, to power

plants planning to implement CCS technology (NETL, 2009).6 In EOR, research is being

done on how to simultaneously optimize CO2 storage and oil recovery, which may increase

the amount of CO2 stored as well as the amount of oil recovered (Kovscek and Cakici, 2005;

Kovscek and Wang, 2005). Two other areas of research indicate that depleted oil reservoirs

and their surrounding geology could contain even more recoverable oil than once thought,

potentially adding sequestration potential as well. One is the discovery of residual oil zones

(ROZ’s) linked to existing depleted oil reservoirs that could use CO2 floods to produce oil

above and beyond the oil available in the main play (Melzer, 2010). The other is a recent line

of research by Han and McPherson (2009) indicating that saline aquifers in the saline-only

section below the oil-water contact underlying reservoirs may make good sequestration sites.

Our pipeline model rests on estimates that are less certain than what one might normally

see in an academic study. We have done our best to answer three broad questions based on

existing studies and existing development: What is the total potential demand for CO2 from

state-wide enhanced hydro-carbon recovery? At what rate will the demand come on line

(all at once or over a period of time) given a surge in supply driven by capture mandates?

And what will the geographic distribution of this demand be as it comes on line? And we

have done our best to follow the existing literature in estimating CO2 injection rates (which

impact pipeline flow rates) and total reservoir (sink) capacity. But we don’t know how

accurate our predicted injection rates will prove to be. Nor do we know the extent to which

injection rates will be volatile or relatively stable. Nor do we know what the true capacity

of reservoirs is, both individually and in aggregate. Finally, we don’t know whether CCS

will ever be economically viable, a condition largely determined by government policy and

partly by the pace of technological innovation.

5This calculation excludes a ramp-up period during which time the pipeline would operate at less thanfull capacity.

6Also see MIT’s Carbon Capture & Sequestration Technologies home page, http://sequestration.mit.edu/,for access to links and other sources of information about international CCS projects and studies.

4

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Uncertainties of such magnitude render our pipeline network somewhat of a thought

experiment. As such, limits must be set. Our interpretation of EOR and ECBM production

potential and storage capacity is taken strictly from published research or from industry

presentations delivered at EOR and CCS conferences. Where estimates among different

strands of research vary, notably in the simulations of ECBM in Powder River Basin coals,

we strive to present and summarize the available research to allow one to use their own

judgement when considering the wide range of estimates for CO2 demand and methane

recovery. Hence we believe our thought experiment to be a relatively informed view—and

perhaps even a moderately sound prediction—of one possible carbon management scenario

out of the many currently facing Wyoming’s and the nation’s policy makers.

1.2 Previous Research

Other CO2 pipeline networks for Wyoming have been proposed. Reyes (2009) and Jeffries

(2009) have calculated capital costs and associated tariffs for a pipeline network they designed

that incorporates existing anthropogenic sources but targets only EOR fields. Surdam (2010)

presents an in depth evaluation of the Rock Springs uplift for geosequestration. He also

estimates that Powder River Basin EOR operations would require a total of 1.2 Tcf of

CO2 and could produce 120 million barrels of oil more than without a supply of CO2.

He posits that a likely source for CO2 would be coal-to-liquids plants situated relatively

close to the oil fields in need of the CO2. This type of arrangement would lessen the need

for a large trunk line into the basin as we have designed it. Smart and Helmke (2009)

created a test CCS model that captures CO2 from the flue gas of power plants in Wyoming

and Montana for sequestration in the Northern House Creek Field in the Powder River

Basin and in the Moxa Arch anticline near La Barge, Wyoming. As did we, they used

ARC-GIS to design the pipeline route and calculate distance. Their GIS program includes

an interactive component and access to extensive source, sink, geologic and infrastructure

data.7 They used a spreadsheet model to calculate diameters and costs. And they calculated

7See Helmke (2008) as well as the website http://bsi1.msu.montana.edu/CarbonAtlas22/index.html toview the results of her efforts.

5

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capture costs and injection costs as well as transportation costs in order to estimate a supply

curve for CO2. However they considered only one field in the Powder River Basin as a

target for CO2, whereas we develop a network of trunk lines connecting several sources with

multiple potential sinks. Finally, MIT’s Energy Lab, a department of their Carbon Capture

& Sequestration Technologies program, has created a comprehensive suite of tools for ARC-

GIS software that allow a user to create a CCS system with a pipeline transportation network

and evaluate its economics.8 However we were unable to get the program to work, perhaps

due to user error.

Meanwhile private efforts to secure new sources of CO2 and link them to EOR fields

are well under way. Denbury is leading the way with plans for the Greencore line (Denbury,

2010). They have completed much (if not all) of the permitting and right of way acquisition

for a 232 mile 20” line that would initially connect the Lost Cabin gas processing facility in

central Wyoming with the Bell Creek Field just over the border in southeastern Montana

(but within the Powder River Basin). According to the report, the line would eventually

incorporate CO2 from a coal to fuels plant near Medicine Bow and an underground coal

gasification facility in the Powder River Basin as well as tap CO2 from the Anadarko line

that currently supplies Salt Creek. One proposed extension would link the Lost Cabin facility

to the Elk Basin field in the Bighorn Basin. Another would extend the Bell Creek line to

the Cedar Creek Anticline in eastern Montana. The line would have an ultimate capacity of

725 MMcfpd.

IPCC (2005) and INGAA (2009) are excellent resources both for a broad overview of

CCS and for estimates of CCS infrastructure costs. Haszeldine (2009) is a condensed source

of information on CCS and presents estimated timelines for the implementation of various

technologies. McCollum and Ogden (2006), McCoy and Rubin (2008), McCoy (2008), Parker

(2000), Vandeginste and Piessens (2008), and Robertson (2009) present more detailed studies

of CO2 transport by pipeline and the costs it entails.

8See the website http://e40-hjh-server1.mit.edu/energylab/wikka.php?wakka=MIT for the program anddocumentation. The home page for MIT’s CC&S Technologies program, http://sequestration.mit.edu/,provides access to comprehensive information about CCS projects and studies from around the world.

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1.3 Overview and Organization

Chapter 2 details the calculations of CO2 supply and demand across Wyoming. Chapter

3 lays out the pipeline network and details the calculations used to estimate diameters.

Chapter 4 presents the cost estimation model by which we generate the capital cost for each

segment of line, the sum of which is the capital cost (or land construction cost) for the

entire pipeline. Chapter 5 describes our calculation of the tariff required to earn an industry

standard return based on a 30-year operational life expectancy. Chapter 6 concludes the

paper.

7

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Chapter 2

CO2 Supply and Demand

2.1 Sources of CO2 Demand

As previously mentioned, CO2 is required for EOR and ECBM. In EOR CO2 is a primary

component of miscible floods that mobilize oil stranded in place, allowing it to be flushed out

of extractor wells. Much of the CO2 resurfaces with the oil and is captured, separated and

recycled in subsequent floods. But eventually as much as 50% of the total amount injected

may remain sequestered (Evans, 2009; Melzer, 2009). CO2 EOR has been practiced since the

1980’s in Wyoming and Texas with the most widespread use occurring in the Permian Basin

of Texas. It is commercially viable even at relatively low oil prices. Moreover, simulation and

screening models have become ever more sophisticated and ever more accurate at determining

which reservoirs will respond favorably to CO2 floods and at predicting how much more oil

a field will produce using EOR. The basic process is shown in figure 2.1.

ECBM involves injecting CO2 into unminable coal seams where the coal undergoes

a chemical process adsorbing (bonding with) CO2 and desorbing (letting go of) methane.

CO2 remains sequestered within the coal seam while helping produce incrementally more

methane compared to traditional pressure depletion coalbed methane recovery (CBM). There

are currently no commercial ECBM operations in existence, but several pilot projects have

demonstrated the potential for enhancing methane production through the injection of CO2

while attaining sequestration rates of nearly 100% (Gunter et al., 2002; Pekot and Reeves,

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2002; van Bergen et al., 2001; Wong et al., 2007). The interaction between CO2, coal and

methane (CH4) is shown in figure 2.7.

2.1.1 Enhanced Oil Recovery (EOR)

The most certain and immediate demand for CO2 in Wyoming is for use in enhanced oil

recovery (EOR).1 EOR has been practiced for over four decades, and the Lost Soldier and

Tensleep fields in Wyoming have used CO2 for EOR production since the late 1980’s. As

a result the process is relatively well understood, substantial infrastructure is already in

place, and a regulatory framework is in existence, all of which create a stable environment

for continued EOR development.

In the production of oil, primary and secondary recovery efforts typically recover about

45% of the original oil in place (OOIP). One of the best known and most successful methods

for recovering some of the remaining 60-65% is to use CO2 in miscible floods whereby the

injection of 95% pure CO2 mobilizes in situ oil. Slugs of water injected after each slug of

CO2 force the mix of water, CO2 and oil to producer wells where it is brought to the surface

and separated. CO2 floods enable operators to retrieve upwards of 15% more OOIP.2

Currently about 3.3% of the world’s oil is produced from EOR, and some in the industry

forecast this will increase to around 45% by 2020 (Brown, 2009). The U.S. is the world’s

leader in EOR with production rates of around 250,000 bbl per day and total CO2 consump-

tion rates of around 3 Bcfpd. The U.S. Department of Energy estimates nation-wide EOR

reserves of 89 billion bbls (DOE, 2011a). The Permian Basin in west Texas accounts for 1.1

to 1.3 Bcfpd of EOR-based CO2 consumption, while Wyoming accounts for ∼340 MMcfpd

1CO2 EOR is one method for recovering a portion of a reservoir’s original oil in place (OOIP) duringthe third phase of a field’s operating life, commonly known as tertiary production. The first phase, primaryproduction, entails pumping oil to the surface that has been driven to the well bore by the reservoir’s naturalpressure. The second phase, secondary production, entails injecting water or gas to displace oil and drive itto the producing well. The third phase, tertiary production, entails mobilizing as much of the remaining oil(what’s known as the stranded oil) as possible through the use of heat (steam injection), chemicals (chemicalinjection) or gasses that dissolve in the oil while helping push it to the well bore (nitrogen and/or CO2

injection). In this paper, when we refer to EOR, we are referring strictly to the method that uses CO2 tomobilize stranded oil.

2See van ’t Veld and Phillips (2010), Mason and van ’t Veld (2011), Cook (2010) and Alleman (2011)for helpful overviews of how CO2 is used in miscible floods and figure 2.1 for a simplified illustration of theprocess.

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Figure 2.1: Stylized example of enhanced oil recovery using CO2.Source: Alleman (2011)

(Doll et al., 2009). However, if screening models created by van ’t Veld and Phillips (2010)

are accurate, Wyoming could see its share of CO2 consumption increase to over 720 MMcfpd

based on average injection rates for over the first four years of statewide EOR production

given an oil price of $70/bbl and CO2 price of $2.25.

The following analysis relies heavily on extensive research carried out by Professors

Klaas van’t Veld, Chuck Mason and Owen R. Phillips, as well as PhD student Ben Cook at

the University of Wyoming Department of Finance and Economics, results of which can be

found in van ’t Veld and Phillips (2010), Cook (2009a) and Cook (2010). In brief, the original

screening model developed by van ’t Veld and Phillips (2010) and Cook (2010) required that

field-reservoir combinations (FRC’s) be large enough in scale to take on substantial up front

investment in EOR infrastructure (cumulative production of at least 5 MMbo through the

end of 2005) and have a complete set of production and reservoir data.3 Of these FRC’s,

3Typically one field accesses more than one reservoir. Each reservoir is usually named after the rockformation in which it is contained. Reservoirs with the same name, such as the Madison (a limestone that

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those with geophysical properties unsuitable for EOR (for example minimum miscibility

pressures greater than the reservoir’s fracture pressure) were eliminated. The remaining

FRC’s were evaluated according to the available data in order to ascertain their production

potential, rate of production, total demand for CO2 and rate of demand for CO2. Based

on the assumptions made by van ’t Veld and Phillips (2010) and Cook (2009a), within

the state’s four primary oil-producing basins—the Powder River, Wind River, Big Horn,

and Green River Basins (PRB, WRB, BHB and GRB respectively)—there are around 100

FRC’s that meet basic screening criteria for EOR.4

Five fields (the Lost Soldier and Tensleep fields—aka Lost Soldier/Wertz—operated by

Merit Energy Company, the Salt Creek and Monell fields operated by Anadarko Petroleum

Company, and the Beaver Creek Field operated by Devon Energy) are already in production.

A sixth field, the Grieve, will begin EOR production in the near future (Fugleberg, 2011a).

These fields rely solely on CO2 produced from a gas stream near La Barge, Wyoming that is

exploited by ExxonMobil for helium and methane as well as CO2. The stream is separated

at the Shute Creek processing facility before being shipped via pipeline to the aforemen-

tioned FRC’s (except for 50 MMcfpd of which that is shipped south to Rangely, Colorado)

(Nevarez, 2009; Page, 2009; Peterson, 2009). Using this CO2, Salt Creek currently produces

∼8,000 bopd while the Lost Soldier/Wertz and Beaver Creek together produce another

∼1,700 bopd (Doll et al., 2009; Page, 2009). Having been in production and undergone

extensive geophysical mapping, operators of these fields have constructed detailed models of

the reservoirs undergoing CO2 floods, and their predictions of future response curves to CO2

flooding are relatively reliable. However the oil, water and gas production and CO2 injection

curves for all other FRC’s, upon which we base our estimates of CO2 demand, can only be

can be oil-bearing given the right geologic structure), may appear in several different fields, each field havinga distinct name. Hence van ’t Veld and Phillips (2010) screened each field-reservoir combination (FRC)as opposed to screening just the field. For example, the Wind River Basin (WRB) field, labeled as SaltCreek East in Cook (2009a), accesses four reservoirs: the Tensleep, Wall Creek, Wall Creek 2 and Muddy.Each reservoir represents a separate stratigraphic layer (aka horizon) of oil-bearing rock. The Salt CreekEast-Tensleep is the FRC representing the Tensleep reservoir (rock layer/horizon) in the Salt Creek Eastfield. In the WRB the Tensleep layer is also an oil-bearing horizon in the Steamboat Butte, Big Sand Draw,Teapot Naval Reserve and Sheldon fields. See figure 2.2 for a graphical example of the Lost-Soldier fieldwith its associated reservoirs.

4See Cook (2010); van ’t Veld and Phillips (2010) and Kinder Morgan (2009) for a more in-depth reviewof the criteria used to screen FRC’s for EOR viability.

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Figure 2.2: The Lost Soldier field with its three producing horizons—the Tensleep, Madisonand Cambrian—would be listed as three separate FRC’s in (Cook, 2009a).

Source: Eves and Nevarez (2009)

estimated from existing literature.

Three broad sources of uncertainty impact estimations of final overall EOR CO2 demand

as well as the rate of demand (which ultimately determines pipeline diameter): CO2 and

oil price fluctuations, how closely the screening model matches reality (which is related to

geologic factors), and the rate at which EOR projects would come on line given access to

CO2.

Van ’t Veld and Phillips (2010) address price uncertainty by analyzing 300 CO2 purchase

contracts from Permian Basin operations and finds that CO2 prices are linked to the price

of oil according to the approximate relationship

PCO2 = $0.50 + 0.025 ∗ Pbbl (2.1)

where PCO2 is the price per mcf for CO2 and Pbbl is the price of oil per barrel. As the

price of oil rises, contract prices for CO2 are revised upwards, typically on a quarterly basis.

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Rents collected from higher oil prices are therefore shared by CO2 and EOR producers while

downside risk is hedged for EOR operations (van ’t Veld and Phillips, 2010). Incidentally, as

oil prices rise, the demand for CO2 continues to increase despite the associated increase in

the price of CO2 (van ’t Veld and Phillips, 2010). Under our assumption of a CCS regime,

it’s worth pondering whether this relationship would still hold. Indeed the laboratory work

of Cook (2010) indicates it may not.

Cook (2010) uses Monte Carlo analysis to extend van ’t Veld and Phillips (2010)’s work.

He assigns probability distributions to OOIP, injectivity, maximum well-pattern spacing and

incremental EOR oil response, then traces out CO2 ‘demand’ and incremental oil supply

curves along with 95% confidence bands based on the results from 500 simulations when

the four variables are allowed to vary independently.5 Only those results that meet a 20%

internal rate of return (IRR) are included in calculating the totals. The results of the Monte

Carlo simulation show that aggregate demand over all four basins given $3.00/mcf for CO2

amounts to 6.4 Tcf with a 95% confidence interval from 5.4-7.2 Tcf. While 1.8 Tcf variation

in cumulative demand is substantial, our use of the average demand over the first four years

of operation dilutes the overall impact of changes in oil and/or CO2 prices. Furthermore

Cook (2010)’s Table 42 indicates that if prices for CO2 were to fall, as they may under a

scenario in which emitters are forced by regulations to seek sequestration providers, CO2

demand would increase by no more than 11%. Finally, the incremental oil supply curves

generated by Cook (2010) show that the bulk of EOR activity will be undertaken at oil

prices below $100/bbl.6

The upshot for EOR CO2 demand in Wyoming is that most screened EOR operations

are profitable at prices well below $100 per bbo and that higher prices will not substantially

impact the rates of demand that we use to calculate pipeline diameters (see figure 2.6). What

5The quotation marks around demand are there because the curves are not true demand curves that showhow much CO2 would be demanded at a given price at a point in time. Rather they show the cumulativedemand over a variable period of time (determined by the operating life-span of the projects) when the priceof oil is known and follows a fixed path over that period of time.

6When Cook (2010) takes into consideration variability in oil prices as well as uncertainty surroundinginjectivity and oil response curves, he finds that Wyoming’s overall EOR potential is 768.03 MMbo with a95% confidence interval of 554-931 MMbo. But he adds that achieving that potential requires between 3,788and 6,608 Bcf of injectable CO2, an amount well above currently available supply.

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increases in demand that do result from oil prices above $100/bbl could likely be met by

relatively low-cost increases in pump capacity at key points in the line. Hence it’s plausible

to assume that even if oil prices remain well above $70/barrel our pipeline design would

change little if at all.

The second source of uncertainty is hard to avoid. Geologic factors (structure, rock type,

reservoir thickness, reservoir depth, fault patterns, etc.) vary among FRC’s, and a field’s

production rates can be heavily dependent on these characteristics (e.g. the discovery that

a fault had been mis-mapped enabled Devon to substantially improve the efficiency of their

CO2 flood in the Beaver Creek field by reconfiguring the field to match the fault’s actual

location (Chodur, 2010)). The analog model assumes that, not withstanding such differences,

what ultimately drives a field’s suitability for EOR are injectivity and the hydrocarbon pore

volume (HCPV) accessed by a single well pattern.7

Fundamental differences in geology between fields may cause injection and production

forecasts based solely on differences in HCPV and injectivity to differ substantially from

actual injection and production curves. EOR operators themselves are best equipped to

evaluate the true potential of their FRC’s, and even they undergo some trial and error in

optimizing injection versus field response as field development progresses from phase to phase.

Hence we are comfortable noting this uncertainty but consider the screening model to provide

suitable guidance for the level of generality at which we are working in the construction of

our pipeline model.

A third significant source of uncertainty is related to the timing and pace of EOR de-

velopment. Pipeline capacity (dictated by pipeline diameter) must be able to accommodate

aggregate peak demand, and peak demand is driven by the extent to which the peak de-

mands of individual fields occur at the same or similar times. As can be seen from figure

2.4, demand is high early in the process then drops off quickly as increasing amounts of CO2

are recycled. In other words, predicted CO2 injection remains constant, but CO2 purchases

decrease rapidly after CO2 flooding is initiated.

7A well pattern is typically a square cluster of five wells with one at each corner and one in the middle.The wells at the corners are used for injection while the one at the center is used for production. See Figure2.3.

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Figure 2.3: Example of a five-spot well pattern for ECBM production. Five-spot well pat-terns for EOR would have the same arrangment.

Source: Oldenburg and Benson (2001)

If federal energy policy implemented CCS requirements and/or financial incentives for

CCS, then within a relatively short amount of time a large supply of CO2 could become

available, possibly creating an environment in which all viable EOR fields would try to enter

production at nearly the same time. This could result in a jump in CO2 demand.8 The peak

flows demanded under such a jump scenario would require pipeline diameters well in excess

of those needed to supply CO2 under a more paced scenario.

Fortunately there is reason to believe CO2 demand would be spread out over several

years rather than spike over a much shorter period of time. Switching to CO2 floods requires

extensive screening, modeling and planning as well as time and capital (i.e. construction

of spur pipelines, drilling of new wells and reconfiguring existing wells), all of which takes

time. Partly for this reason fields tend to enter EOR production in phases. Salt Creek, for

example, is being developed in 16 phases. Six have been completed over a six year time

span, and a seventh is now underway.9 Given the time to switch an FRC to CO2-EOR as

well as the phasing of field development, it’s unlikely that all screened FRC’s would attain

peak levels of CO2 demand within a relatively short span of time. Cook (2009a) breaks

CO2 injection rates into an initial average over the first four years of operation and a second

8Cook (2010)’s research supports this line of thinking—see Chapter 1 of his paper.9As of June, 2010 Anadarko was injecting 420 MMcfpd of CO2 through 338 injection wells to produce

more than 1,000 BOPD. CO2 injection began at Salt Creek in 2004 (Roux and Anderson, 2010).

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Figure 2.4: Sample injection and recovery history for the Lance Creek/Leo FRC.Source: Phillips et al. (2009)

average over the remaining operating life of a field up to thirty years. Given these choices,

calculating EOR demand based on the average injectivity over the first four years seems to

strike the best balance between accommodating potential high peak flows related to a jump

condition and the time-intensive requirements of switching to CO2-EOR production.

Evidence from the field also indicates that estimating demand based on the injection

rates over the first four years of operation may lead to demand calculations that are on the

low side. According to Cook (2009a), the Salt Creek field would have an average demand

over 4 years of ∼65 MMcfpd while in fact they are purchasing 110 MMcfpd, and the Beaver

Creek field would demand 7.1 MMcfpd over the first four years of operation while in fact

they have contracted for 40 MMcfpd (Reyes, 2009).

Beaver Creek poses an interesting example of the difficulty in estimating pipeline ca-

pacity based on CO2 purchases. Prior to initiation of EOR, reservoir engineers may have

forecasted that they would need to inject as much as 40 MMcfpd at some point during EOR

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production—perhaps for only a few days, perhaps longer—in order to assure a relatively

high probability of success. Indeed Watson (2010) shows that cumulative CO2 purchases

for the Lost Soldier/Wertz FRC (aka Bairoil) from January, 1986 through December, 2009

amounted to around 310 Bcf, which averages to a flow rate of around 35 MMcfpd—see figure

2.5. Actual daily purchases, however, vary widely. In the first four years of EOR, peak daily

purchases sometimes amounted to seven or eight times the lowest daily purchases. In the

ten years leading up to 2010, purchases were substantially smoother, but on more than one

occasion they dropped by half.10

It seems unlikely that the operators of the Beaver Creek EOR project would purchase

40 MMcfpd if indeed average injection rates were as low as 7.1 MMcfpd. The additional cost

incurred by purchasing 40 MMcfpd when injectivity averages only 7.1 MMcfpd is substantial

(e.g. after four years Devon would have purchased around 48,000 MMcf more CO2 than if

purchases averaged 7.1 MMcfpd, and the additional cost would be around $108 million given

a price of $2.25 per mcf). One could assume, then, that actual injectivity is probably higher

than 7.1 MMcfpd. One upshot is that calculating EOR demand based on average forecast

injectivity rates over thirty years would almost surely underestimate demand, and perhaps

by an egregious amount.

All things considered, the above analysis leads us to believe that the average injection

rate over the first four years as forecast by the screening model is the best choice for es-

timating mass flows through the pipeline that are sufficient to meet EOR demand. The

daily average demand over the first four years balances the front-loading of CO2 purchases

with the phasing in of EOR production that is likely to occur if supplies of CO2 are made

available. The column in Cook (2009a) that contains these estimates is the sixth column

from the left.

Finally, one more uncertainty in our calculations is related to the potential difference

between EOR as it is practiced now and as it would be practiced under a CCS scenario.

Currently EOR operators incur a cost for the CO2 they purchase, leading them to optimize

by minimizing the ratio of CO2 injected to oil produced. However if CCS were required,

10Using the four-year average injection rate in Cook (2009a), the combined CO2 demand from all producinghorizons in the Lost Soldier/Wertz would amount to ∼61 MMcfpd.

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Figure 2.5: CO2 daily and cumulative purchases for the Lost Solder/Tensleep FRC.Source: Watson (2010)

there may be an incentive to inject and sequester higher volumes of CO2 while maximizing

oil recovery. This so-called ‘cooptimization’ process is detailed by Kovscek and Wang (2005),

Kovscek and Cakici (2005) and Han and McPherson (2009). If indeed this is the case, our

estimates of both CO2 demand and EOR oil production could be on the low side.

The screening model used by van ’t Veld and Phillips (2010) and developed by Cook

(2009a) identifies profitable FRC’s and estimates production curves given a range of oil and

CO2 prices. For rough calculations, we use the estimated oil production and CO2 demand

curves given an oil price of $70/barrel and a CO2 price of $2.25 per mcf (∼$40 per tonne),

and we assume that oil and CO2 prices remain constant over the life of the project.11 The

assumed internal rate of return used to define profitable FRC’s is 20%. The demand resulting

from their screening model is listed in table (2.2). By basin, EOR operations would demand

on average 115.3, 146.2, 368.0 and 89.7 MMcfpd for the Powder River, Wind River, Big

11According to industry sources, a rough rule of thumb is that one barrel of oil requires between 5 and 10mcf CO2 and that over the life of an EOR operation 30-40% of the CO2 will ultimately remain sequestered.

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Horn, and Green River Basins respectively (Cook, 2009a). Excluding the demand from Salt

Creek, Lost Soldier/Wertz and Beaver Creek that is already being met by CO2 from Shute

Creek, the estimated demand for the four basins would be 115.3, 74.3, 368, and 28.6 MMcfpd

respectively. Finally, the screening model indicates that CO2 demand for EOR would not

increase significantly even for oil prices around $120 per bbo (figure 2.6).12

Table 2.1: EOR CO2 demand: By basin given prices of $70/bbl for oil and $2.25/mcf forCO2 — cumulative and in terms of mass flow rates (Cook, 2009a).

Basin: CumulativeCO2 De-mand (Bcf)

Avg. CO2 De-mand years 1-4(MMcfpd)

PV of Prof-its ($MM)

IncrementalOil Prod.(MMbo)

Big Horn 1,476.3 368.0 1,372.7 191.7Green River 335.4 89.7 1,015.0 92.8GreenRiver*

127.7 28.6 204.5 36.6

PowderRiver

392.5 115.3 368.5 61.1

Wind River 466.3 146.2 844.4 71.3WindRiver*

290 74.3 410.9 42.7

Statewide 2,760.5 719.2 3,513.8 416.9Statewide* 2,286.5 586.2 2,356.6 332.1*Estimates excluding demand from FRC’s for which pipelines are already in service.

Using GIS data from WOGCC (2010b), we include all the FRC’s listed in Cook (2009a)

on the pipeline maps shown in figures 3.2 through 3.9. Field locations are represented by

an oil drop and labeled with their respective field name except on the statewide map (figure

3.2) where the labels have been removed to avoid clutter.

12Mason and van ’t Veld (2011) extend the research done by van ’t Veld and Phillips (2010) and createEOR demand curves for CO2 in the Powder River and Green River Basins given low, reference and high oilprices as listed in forecasts made by the Energy Information Agency in 2009. They find that at our assumedprice of $2.25 per mcf (∼$40 per tonne), EOR demand for the Powder River Basin and Green River Basinwould be about 2.1 Mt per year (∼104 MMcfpd) and 0.35 Mt per year (∼18 MMcfpd) respectively. As canbe seen in Table 2.1, these are close to our estimates and therefore do not materially impact our pipelinediameter calculations.

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70 100 1200

50

100

150

200

250

300

350

400

450

Oil Price ($/bo)

CO

2 de

man

d (M

Mcf

pd)

BHB

GRB

PRB

WRB

Figure 2.6: CO2 demand by basin for oil prices of $70, $100 and $120 per barrel.Source: Cook (2009a)

2.1.2 Enhanced Coalbed Methane Recovery (ECBM)

The second type of enhanced hydro-carbon recovery that requires CO2 is ECBM. Much of

the world’s supply of coal resides in seams that are too deep or too thin to mine economi-

cally. In ECBM CO2 is injected into such ‘unminable’ coal seams where it chemically adsorbs

to the coal matrix, displacing residual methane molecules. The CO2 remains sequestered

while the displaced methane increases cumulative recovery rates relative to those attainable

through standard coalbed methane recovery (aka primary pressure depletion). ECBM is also

a highly effective means of sequestering CO2. Nationwide, DOE Regional Carbon Sequestra-

tion Partnerships (RCSP’s) have identified a potential storage capacity of 60 to 117 billion

tonnes in unminable coal seams (NETL, 2010). Figure 2.7 shows the basic process by which

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coal adsorbs CO2 and desorbs methane.

Figure 2.7: In-seam process by which enhanced coalbed methane recovery sequesters CO2

and produces incrementally more methane (CH4).Source: Chai and Shimada (2010)

While ECBM is not currently practiced on a commercial scale, several pilot studies have

demonstrated its feasibility, and more are underway.13 One of the larger pilots completed

to date, and one of the richest sources of data, comes from a study done on the Allison

unit in northern New Mexico (Taillefert and Reeves, 2003). Smaller pilots in the U.S. have

been undertaken in Illinois (Frailey, 2011), Alabama (Pashin, 2011), Virginia (Ripepi and

Carpenter, 2011), New Mexico (Grigg and Oudinot, 2011) and North Dakota (Hamling,

2011). Pilots outside the U.S. include the Dayton project in Alberta (Faltinson, 2007; Gunter

et al., 2002), the Qinshui project in Shanxi Province, China (Wong et al., 2007), the Ariake

project in Japan (Fujioka et al., 2010), the Sulcis project in Italy (Amorinao et al., 2005)

13An easy way to scan recently updated news about ECBM and other types of sequestration pilots is togo to the website http://www.coal-seq.com/Tech Transfer.asp and scroll down to forums where there is ahyperlink to Presentations from the Seventh International Forum on Geologic Sequestration of CO2 in CoalSeams and Gas Shale Reservoirs.

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and the RECOPOL field project in Poland (Bergen et al., 2007).

In Wyoming, the Powder River Basin, Greater Green River Basin and Williston Basin all

have unminable coal seams with theoretical potential for ECBM. The best potential exists in

the Powder River Basin where there are already over 28,000 CBM wells and where extensive

research by Ross et al. (2009), Robertson (2008), Robertson (2009) and Nelson et al. (2005)

have helped reduce the uncertainties surrounding ECBM production. The Green River Basin

is less studied but known to have extensive coal deposits meeting the requirements for ECBM

production. The Williston Basin is less likely to see extensive ECBM activity because of the

type of its coal, and because much of its coal resides at depths that are less than ideal. A

simulation carried out by Robertson (2008) indicated that Williston Basin coals have CO2

injection rates and methane production rates so low as to be relatively unfeasible under

almost any scenario, leading us to eliminate the Williston Basin from our analysis. Perhaps

further analysis will find otherwise.

Sources for estimates of sequestration potential in PRB coals include Ross et al. (2009),

Robertson (2008), Robertson (2009), Nelson et al. (2005), Reeves (2003) and NETL (2010).

Nelson et al. (2005) estimates the CO2 storage capacity in the unminable portion of the

Wyodak Anderson coal zone to be 6.2 billion tonnes. Robertson (2008) estimates the se-

questration potential of unminable coals in the PRB to be ∼5.9 billion tonnes. Robertson

(2009) finds the sequestration potential of unminable PRB coals to be ∼152 billion tonnes

in total (see discussion below regarding this anomalous figure). Reeves (2003) estimates

total storage within the PRB to be 14 billion tonnes. Ross (2007) estimates that unminable

coalbeds in the PRB can sequester 1.3 to 1.8 billion tonnes while Ross et al. (2009) estimate

storage amounts between 1.15 and 1.59 billion tonnes. Finally, estimates compiled by the Big

Sky Carbon Sequestration Partnership and published in NETL (2010) list the total storage

potential in the PRB as 11 billion tonnes and the storage potential of the Green River Basin

as 44 million tonnes.

Due to the wide range of estimates and the subsequent impact on mass flow rates

in a pipeline network (which impact pipeline diameters), we provide a somewhat in-depth

overview of ECBM and the complexities involved in modeling coal and simulating fluid flows

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in coal seams. In doing so we hope to provide readers with resources to evaluate our estimates

and follow up with their own research.

A good overview of the CBM process is given by Aminian (2005). A more in depth

description is given by White et al. (2005), a summary of which we provide here. Coal is

formed from marsh-like environments rich in organic material. With time and pressure the

organic matter lithifies (a process known as coalification) into a rock containing macerals

(organic matter) and minerals (inorganic matter). It occurs in seams that vary in thick-

ness, spatial distribution, fracture spacing, porosity and permeability (i.e. coal seams are

anisotropic). Coal is dual porosity in that it has micro-pores (tiny pores within the matrix)

and macropores (fractures). Fractures (aka cleats) form during coalification and are of two

types, face cleats that are planar and continuous, and butt cleats that are discontinuous and

perpendicular to face cleats. The spacing, aperture and connectivity of cleats predominantly

dictate a seam’s permeability, which can range from 0.1 to 100 mD (usually 0.1 to 10 mD),

while the orientation of the cleats dictates how well a seam responds to hydraulic fracturing

(discussed below).

Coalbed methane forms when plant matter that has been deposited at rates fast enough

to prevent decay becomes exposed to increasing temperature and pressure during burial. Bio-

genic methane forms as bacteria break down the organic matter, and thermogenic methane

forms later when the coal is buried at greater depths (i.e. greater pressures) and tempera-

tures. Powder River coalbed methane is mostly biogenic in origin.

At equilibrium conditions, the size of the micropores causes methane to exist almost

entirely (∼95-98% by volume) in a chemically bonded (adsorbed) state, typically modeled

as one-layer thick. It is held in place by hydrostatic pressure. Methane desorbs from the

matrix once enough water is pumped from the coal seam to lower the hydrostatic pressure

to the desorption point (the critical desorption pressure). Desorbed methane molecules flow

through coal first by diffusion through the micropores of the matrix according to Fick’s Law of

Diffusion and then through the fracture system (cleats) via laminar flow according to Darcy’s

Law. The economic viability of CBM and/or ECBM depends on the total gas-in-place and

the ability of the gas to travel through the seam to a producing well (gas deliverability).

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The first is dictated by coal chemistry and porosity while the second is dictated largely by

permeability.

The surface area of the micro pores and the confining hydrostatic pressure are the

primary factors controlling carbon dioxide and methane storage volumes (adsorption capac-

ities). Adsorption capacities are modeled using Langmuir monolayer desorption and adsorp-

tion isotherms. The shape of the isotherm is governed by two parameters, the Langmuir

pressure and Langmuir volume, both of which are determined through laboratory analysis

of a sample of coal. The Langmuir volume is the maximum amount of gas storage capacity

at infinite pressure, and the Langmuir pressure is the pressure at which gas storage capacity

is one half the Langmuir volume (see figure (A.3) for an example). Gas storage capacity

increases with Langmuir volume and decreases with Langmuir pressure according to the

Langmuir equation.14

Finally, coal is not a rigid solid, it shrinks with the desorption of water and hydrocarbon

molecules and swells with the adsorption of gas molecules (White et al., 2005). This so-called

matrix shrinking and swelling can impact ECBM injectivity and recovery rates. As methane

is depleted in a reservoir, matrix shrinkage causes a dramatic increase in permeability (Palmer

et al., 2006). On the other hand, injection of CO2 causes matrix swelling and a decrease in

permeability (Pekot and Reeves, 2002).

In ECBM, injected CO2 molecules preferentially displace CH4 molecules. The displace-

ment ratio depends on the rank of the coal. In high rank anthracite coal the ratio of CO2

to CH4 molecules is around 2:1, while in the low rank sub-bituminous coals of the PRB the

ratio is between 7:1 and 10:1. Incremental methane production increases as the injected

CO2 plume comes into contact with an ever wider expanse of coal. Eventually the CO2

reaches the producing well, an event known as ‘breakthrough‘. At breakthrough, most of

the incremental methane has been produced, and CO2 is following pathways along which

most molecular displacement has already occurred. The percentage of the coal seam that

actually comes into contact with the CO2, what’s known as sweep efficiency, matters greatly.

Methods such as hydraulic fracturing, horizontal drilling and alternating slugs of nitrogen

14See Aminian (2005) for a general Langmuir Equation and Ross (2007) for a more detailed extendedLangmuir equation that is more commonly used in reservoir simulation software.

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with slugs of CO2 can be used to increase sweep efficiency. Differences in simulation results

can reflect differences in how the models handle sweep efficiency, so it is important to pay

attention to how the CO2 is delivered to the target coal seam.

Results from the pilot projects mentioned above indicate that CO2 storage in coal is

feasible in the short term, although MVA efforts are still underway at most pilot projects

to verify that CO2 stored in coal seams is also stable in the long-term. Results furthermore

indicate that injecting CO2 enhances the recovery of methane in every instance, though in

varying amounts. Fujioka et al. (2010) reports that injecting CO2 enhanced the recovery

of methane to rates of about five times pre-injection rates. But Grigg and Oudinot (2011)

found that methane recovery rates increased barely at all (26 MMcf increase out of total

production of 18,390 MMcf).

The pilots also reveal that losses in injectivity rates due to matrix swelling are indeed

a universal phenomenon but that the effect varies. In terms of PRB coals, Ross (2007);

Ross et al. (2009) find that the net matrix shrinkage in their simulation leads to a 10%

reduction in injectivity, but they add that matrix shrinkage can be mitigated by hydraulic

fracturing, (aka fracking).15 In the Allison unit pilot project, Reeves et al. (2003) found

‘clear evidence of significant coal permeability reduction with CO2 injection’ but did not try

to mitigate the permeability reduction with hydraulic fracturing. Data from other pilots

indicates that the loss of permeability can be mitigated by strategic placement of producers

and injectors relative to the orientation of face and butt cleats in combination with fracking.16

Researchers have also partially offset the injectivity losses associated with matrix swelling

through refinements in fracking techniques, adjustments to CO2 injection temperatures and

pressures, and alternating slugs of nitrogen with slugs of CO2. Evidence from the pilot

studies also indicates that multi-seam injection, advanced well completion techniques and

horizontal drilling promise substantially higher injection rates, fewer wells and smaller surface

footprints for large-scale ECBM projects (Hamling, 2011). Finally, research is also underway

on developing and improving mathematical modeling techniques to account for changes in

15Fracking is a widely used procedure that involves injecting water, chemicals and solid particles (propents)under high pressure to enhance CBM recovery by mitigating the permeability reduction that occurs due tosuch matrix swelling and by cleaning wellbores of drilling fines (Colmenares and Zoback, 2007).

16See for example Frailey (2011) and Bergen et al. (2007).

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coal properties during injection (Koperna, 2011). In general, scientists are optimistic about

the technology and have suggested that larger pilot projects would assure the public and

investors that the technology works (Ripepi and Carpenter, 2011).

The economics of ECBM are driven by the price operators must pay for CO2, the

price they receive for methane, costs surrounding the capture, transportation and injection

process, and the ratio of CO2 injected to the amount of incremental methane extracted.

The amount of incremental methane (CH4) recovered using ECBM versus CBM depends on

adsorption isotherms for CO2 and CH4 and varies according to coal rank. The ratio of CO2

molecules adsorbed to CH4 molecules desorbed within the pore space is dependent on coal

rank. Burrus (2003) found ratios in North Dakota lignites (low ranking) to be greater than

13:1, in PRB subbituminous coals to be between 7:1 and 10:1, and in anthracites (high-

ranking) to be around 2.5:1. Among the subituminous type coals of the PRB, isotherms

vary according to depth, but they are spatially relatively alike (Stricker et al., 2006). Hence

adsorption isotherms found through laboratory analysis of coals in one part of the basin

can be used to estimate adsorption/desorption ratios basin-wide. Note, however, that this

ratio has economic implications for ECBM when an operator must pay for CO2. Since

operators would seek to produce as much methane as possible using as little purchased CO2

as possible, they would seek out higher ranking coals, making PRB and GRB coals less

attractive as targets for ECBM under a non-sequestration policy scheme.

Another factor with significant economic implications is the amount of incremental

recovery an ECBM operator can expect versus traditional CBM pressure depletion. The

more incremental recovery, the better the odds an operator will be able to cover the capital

and operating costs of ECBM. Simulations on PRB coals by Robertson (2009) indicate that at

average unminable depths methane recovery rates using ECBM are around 1.35 times those

of recovery rates using traditional pressure depletion. Simulations by Ross et al. (2009) on

PRB coals find the ratio to be 1.5 to 5. They find that hydraulic fracturing plays the largest

role in determining the final ratio, but that bottom-hole pressures and the orientation of

least principal stress also have an affect.

Of the pilot projects completed to date, none found that ECBM was economical given

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Figure 2.8: Example of how CBM recovery occurs. For a coal seam with initial conditionsP = 1200 psia and gas content = 308 scf/ton, water must be pumped until the pressureis reduced to the critical desorption pressure at around 275 psia at which point desorptionoccurs and gas is produced.

Source: Aminian (2005)

current prices for CO2 and methane. And when the costs of capture are included (in an

ECBM CCS scheme) the economics became even less attractive. Reeves and Oudinot (2005)

found that ECBM in the Allison unit was uneconomical at gas prices around $2.20/mcf but

became economical at gas prices higher than $2.57 (based on a price for CO2 of $0.30/mcf

(∼$5.88/tonne)).17 On the other hand, simulations based on models built using data from

the Qinshui pilot found that a 90-well ECBM project with CCS, using CO2 from a fertilizer

plant, was economical based on a price for CO2 of $11.98 per tonne (∼$0.67/mcf) (Deng

et al., 2008). Yet another economic evaluation of CCS carried out by Robertson (2009), using

CO2 captured from the flue gas stream of a typical coal-fired power plant and transported

80 km via pipeline for use in a hypothetical PRB ECBM project, shows the CCS process

17These prices are in 2003 dollars.

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(not just the ECBM component) from source to sink to be uneconomical based on a natural

gas price of about $8 per mcf and a transportation tariff of about $0.45 per mcf (∼$8.90 per

tonne). He points out, however, that under the right regulatory environment, CO2 could

attain a price such that CCS with ECBM becomes economically viable. Recent simulations

and calculations carried out by Mason and van ’t Veld (2011) indicate that ECBM is not

profitable if CO2 costs operators more than $2 per tonne. However all projects are profitable

if operators were to receive $3 per tonne. At that price and above (or below, depending on

how you look at it), demand would peak at about 200 Mt CO2 per year or more than 10,000

MMcfpd, a level with dramatic implications for any pipeline network that needs to supply

CO2 to the PRB.18

Powder River Basin

We calculate that if CO2 was attainable at economically viable prices, ECBM in the PRB

could generate demand for another 1.0 to 7.0 billion tonnes of CO2 (31.4 Tcf) depending

on whose coal seam model and simulation results we use, Ross et al. (2009)’s or Robertson

(2008)’s. Even the low estimate amounts to hundreds of millions of cubic feet of CO2, or

thirty-plus years’ worth of the entire state’s annual production of CO2.

In the PRB the Wyodak-Anderson and Big George coal zones, constituents of the

Tongue River Member of the Tertiary Fort Union Formation, produce the vast majority

of CBM. The coals are largely sub-bituminous in nature with a methane content of around

16-76 scf/t (vs. methane content of 150 to 500 scf/t for higher-ranking bituminous and

anthracitic coals in the San Juan Basin) (Ayers, 2002). In 2009 the Wyoming Oil and Gas

Conservation Commission listed 364 CBM-producing reservoirs tapped by 28,531 CBM wells

that produced 550,576,470 mcf of methane (Barclay et al., 2009). The average lifetime of

a CBM well in the PRB is 7-15 years (Ross, 2007). In 2008 methane production from the

Big George was ∼320,893,437 mcf, while production from the Wyodak-Anderson totaled

18In comparison, we design our pipeline around a flow rate into the basin of about 2,410 MMcfpd (requiringa pipeline NPS of 34”). Based on their CO2 demand curve for ECBM, shown in Figure 3, our estimatedCO2 flow rate into the basin (most of which is slated for ECBM) would only be attained when the price forCO2 dropped to around $1.40 per tonne. At the price we assume, $2.25 per tonne, no ECBM activity wouldbe undertaken.

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∼56,062,922 mcf. Production from all other formations totaled 111,252,435 mcf (Barclay

et al., 2009). Due to the proliferation of wells within the Big George and Wyodak-Anderson

coal zones, ECBM studies on PRB coals have focused on those zones .19

Estimates of the volume of unminable coal range from 197 by Nelson et al. (2005) to

278 billion tonnes (217-307 billion short tons) by Flores and Bader (1999b). Flores and

Bader (1999b) estimate that the total volume of coal in the Wyodak-Anderson formation

ranges from 416 to 582 billion tonnes (459 - 642 billion short tons) with a 90 percent level of

confidence. DeBruin (2001) estimates that gas volumes in PRB coals total 25.2 Tcf, while

the Potential Gas Committee (2006) estimates that volumes are closer to 18.5 Tcf, 4,637

billion cubic feet of which are considered ‘probable.’ According to Shp files constructed by

Ellis et al. (1999b) and evaluated by Driess (2008) using ARC-GIS software, the surface

area of Wyodak-Anderson coals at depths greater than 1,000 ft. amounts to approximately

1,937,487 acres (∼7.841 billion square meters) with an average seam thickness of around 100

ft. (Ellis et al., 1999b; Robertson, 2009).

Total CO2 sequestration and methane production depend on the surface area of un-

minable coals, which dictates how many well-patterns can access the coal, as well as the

total volume of coal and the average seam thickness. The GIS data provided by Ellis et al.

(1999b) amounts to 6,055 320-acre five-spot patterns with 160-acre well spacing, or twice

that number of 160-acre five-spot patterns with 80-acre well spacing.20 However not all of

this acreage is available for new (so-called ‘greenfield’) development. Mason and van ’t Veld

(2011) find that of the unminable coal in the PRB at average depths of 1,750 ft. and 1,250

ft., 97% and 51% respectively is already under CBM production. Thus incremental produc-

tion from wells that switch from CBM to ECBM (so-called ‘brown-field development’), as

19Recent revisions in nomenclature for PRB coals label the Big George as the Smith/Big George coalbed located within the Wyodak Rider coal zone within the Ft. Union Formation. The Anderson Rider,Anderson and Lower Anderson coal beds are located within the Upper Wyodak, right beneath the WyodakRider in the stratigraphic column (Copeland and Ewald, 2008). However in most of the recent literaturethe Smith/Big George and Anderson coal beds have been grouped together as the Wyodak-Anderson, andthe ‘Big George’ coal is where five beds from the Anderson and Canyon coals merged into one, an area ofunminable coal in the central PRB about 950 square-miles in extent (Flores and Bader, 1999b).

20A five-spot pattern is made up of four producing wells, one in each corner, and one injector well inthe center. A 320-acre five-spot pattern of purely producing wells can be converted to a 160 acre five-spotpattern for ECBM production by drilling one injector well in the center of each 320-acre square, resulting inone well per 40 acres.

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well as incremental production from greenfield ECBM development, must both be considered

when calculating total incremental production from ECBM in the PRB. Although this study

does not include an adjustment for brownfield development, we note that our final estimated

volumes are well within their theoretical upper limit of total potential demand (see Figure

3 of Mason and van ’t Veld (2011)).

We also note that in order for unminable coals in the PRB to be suitable sites for the

permanent sequestration of CO2, they must be completely isolated from aquifers suitable for

human consumption. While much of the CO2 would be adsorbed within the coal matrix, a

substantial amount would remain outside the matrix and form a plume dominated by Darcy

flow. Preliminary simulation results from the Ariake pilot project in Japan calculate that

only about 11 percent of the CO2 would be adsorbed in the short-term (Chai and Shimada,

2010). And simulations done by Ross et al. (2009) on PRB coals also predict that much of

the injected CO2 would form a plume and find its way to the top of the seam within the

operating life of the project. If the seam is not overlain by a competent seal, then indeed

there is a possibility that the CO2 could contaminate nearby aquifers (Zoback et al., 2004).

Evidence from the Powder River Basin indicates that the vast majority of coal seams

that would be targeted for ECBM are overlain by competent seals (Zoback et al., 2004).

As for the water quality in PRB coal seams, Rice et al. (2000) find that while many of the

coal-seam aquifers have levels of salinity and total dissolved solids (TDS) above what are

considered safe levels for drinking, there are some that would be considered safe by state and

federal drinking water standards. However they note that the flow regimes of the aquifers

tend to be towards the center, deeper portions of the basin and away from agricultural

and drinking-water wells. Although in our eyes this issue appears to be unresolved, it has

not prevented researchers from going forward with estimates of CO2 storage potential in the

PRB. We go by the estimates generated by these researches, but we do not deny that ultimate

storage potential may be less than research indicates due to the potential for groundwater

contamination.

Since there have not been ECBM pilot studies on PRB coals, researchers rely on simula-

tions to estimate CO2 sequestration and CH4 production curves. These simulations require

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the input of several parameters, some of which can only be determined through labora-

tory studies on coal samples extracted as cores from well-bores. Such cores are not readily

available for PRB coals, and certain parameters, such as those for relative permeability and

matrix shrinking and swelling, must be inferred based on information from other coals and

on mathematical models (Ross et al., 2009). The physical characteristics of PRB coals also

vary from area to area, resulting in a fairly wide spread of cleat permeability and porosity

estimates. Predictions of CO2 storage potential vary according to how researchers choose to

address these issues when designing their coal seam models and ECBM simulations.

Reeves (2003) calculates CO2 storage volumes based on estimates of original CBM in

place, applying CO2/CH4 replacement ratios typical of the sub-bituminous type coals that

comprise the Wyodak-Anderson and Big George coal zones to estimate the final storage

capacity. Robertson (2008, 2009) and Ross et al. (2009) use reservoir flow simulation software

to analyze theoretical models of Wyodak-Anderson and Big George coals. They each use

a different flow-simulation software package, and they each use different parameter values

for their coal-seam model. Ross et al. (2009) use the Generalized Equation-of-State Model

Compositional Reservoir Simulator (GEM) while Robertson (2008) and Robertson (2009)

use the Comet3 package developed by Advanced Resources International. According to a

study carried out by Law et al. (2002), the two simulators handle the specific challenges

posed by gas and fluid flow simulation in coal in much the same way, so differences in results

probably arise from model construction and differences in the estimation of parameter values.

Tables showing the parameter values used to construct the models simulated in Robertson

(2008) and Ross et al. (2009) are given in Appendix A.

Robertson (2008) uses a homogenous, single-layer model with parameter values as listed

in A.1, Appendix A. He analyzes a base-case pressure depletion (CBM) scenario to which

he compares an ECBM scenario with CO2 injection started at the initiation of recovery

efforts (time 0). He defines ‘unminable’ as any coal deeper than 1,000 ft (304.8 m.), uses

an average depth of 1500 ft (457.2 m) for the unminable portion of the Wyodak-Anderson,

and an average coal-seam thickness of 100 ft. (30.5 m). He does not model the effects of

fracking. He calculates that one quadrant of a 320-acre five-spot pattern serviced by one

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injection well would sequester ∼245,000 tonnes (∼270,000 tons) of CO2 with breakthrough

occurring in 6.3 years.21 This amounts to a basin-wide total of ∼6.5 Gt (5.9 billion tonnes)

(Robertson, 2008).

Robertson (2009) uses a one-layer model very similar to Robertson (2008) and analyzes

a base-case conventional pressure depletion CBM operation to which he compares two ECBM

scenarios: one using pure CO2 and one using ‘flue gas’ (a mix of nitrogen and CO2), both

starting injection upon the initiation of recovery efforts. He defines the depth and thickness

of the coal seam and the injection scenario as above and uses a one-layer, homogenous

coal seam with no fracking (Robertson, 2009). Discarding the flue gas scenario due to

insufficient volumes of sequestered CO2, he focuses on pure CO2 injection and finds that

∼6.3 million tonnes (∼6.9 million tons) of CO2 per quadrant is sequestered over 19 years

(when breakthrough occurs and injection ceases) amounting to 27.6 million tons per 320-acre

pattern (1.45 million tons/year/well) (Robertson, 2009). Using the GIS data from Flores and

Bader (1999b), this would amount to a sequestration potential for the entire basin of over

∼151.5 billion tonnes (167 billion tons), which is orders of magnitude greater than estimates

made by Robertson (2008), Ross (2007), Ross et al. (2009), Reeves (2003) and Nelson et al.

(2005).

Ross et al. (2009) conducted a detailed reservoir characterization study and fluid flow

analysis of the Big George coal to investigate the possibility of CO2 migration into overlying

strata. They simulate CO2 injection and CH4 recovery from a multi-layer model developed

using geostatistical techniques to capture the intrinsic heterogeneity of a 16 m (53 ft.) thick

coal seam accessed from a 160 acre 5-spot pattern with 80-acre spacing. Their simulations

include scenarios with and without matrix shrinkage and swelling and with and without a

100 m. horizontal fracture to mimic fracking.

In their base-case simulation, five years of CBM are followed by 13 years of ECBM.

They find that upon breakthrough one 160-acre five-spot pattern would sequester 92,000

- 103,000 tonnes of CO2 per well and produce between 9.5 and 11 million m3 of methane

21Wyoming statutes allow 40-acre spacing for gas wells unless specified otherwise. In the southwesterncorner of the state, township 12 - 28 and Range 89 - 121 are specified as 160-acre spacing (Barclay et al.,2009).

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(∼310 to 330 MMscf) over a 13-year injection period. Basin-wide storage based on the USGS

GIS data would amount to between 1.15 and 1.28 billion tonnes (Ellis et al., 1999b; Ross

et al., 2009). However, since no data regarding BHP was available for the wells used in their

model, they used a production well BHP of 1700 kPa based on history matching. Lowering

the production well BHP to values typical of BHP’s in the San Juan Basin (∼350 kPa)

would increase CO2 storage to ∼131,000 tonnes (1.59 billion tonnes basinwide) and increase

methane production to ∼17.6 million m3 (622 MMscf).22 For gas in place, Ross et al. (2009)

used a mixture of 90% CH4 and 10% Nitrogen. They note that in reality, the typical gas

content of PRB coals is 72% CH4, 22% N2 and 5% CO2, meaning that their estimates of CO2

storage are upper bounds (i.e. injected CO2 would have 5% fewer pore spaces to occupy,

so breakthrough and the cessation of CO2 injection both occur earlier in the process) (Ross

et al., 2009).

These figures are lower than Robertson’s due to a buoyancy effect picked up by their

multi-layer model. At the depths and pressures considered by Ross, CO2 is lighter than

the surrounding material and flows upwards through the cleats, overriding the bulk of the

methane-bearing coal and dramatically reducing sweep efficiency (Ross et al., 2009).23 Single-

layer models do not capture buoyancy, and as a result they tend to overestimate breakthrough

times and storage volumes (Ross, 2007; Ross et al., 2009).24 Ross et al. (2009) simulated

flows within a single-layer model constructed from the same parameter values as their multi-

22Both the injection and production wells have BHP’s, and each is given a constraint in fluid flow simula-tions. Because the gas is stored by sorption, a low producer well BHP is required to recover a large amount ofthe original gas-in-place. The injector BHP constraint determines the maximum injection rate. Ross (2007)does a sensitivity analysis on the injector BHP constraint and finds that raising it from 4000 to 5000 kParesults in an increase in CO2 sequestration of 105% and an increase in CH4 production of 140%. It alsoreduces breakthrough to 5900 days versus 6720 in the base case. Ross et al. (2009) focus on the productionwell BHP constraint, decreasing it from 1700 to 345 kPa, which results in an increase in CO2 sequestrationof around 125% and an increase in CH4 production of around 172% .

23Ross (2007) estimates that only 25% of the coal volume will come into contact with the CO2. Incidentally,this buoyancy effect also demonstrates why sequestration of CO2 in unminable coal seams requires that theformation be overlain by a competent impermeable layer such as shale or slate. If it weren’t, then CO2 couldseep into overlying formations and possibly contaminate sources of potable water. The majority of coal inthe PRB is in fact overlain by impermeable rock formations (Ross et al., 2009; Zoback et al., 2004).

24Ross et al. (2009) and Ross (2007) are confusing on this point. They claim that the single-layer modelwill ‘underestimate’ breakthrough times. Yet they find that breakthrough for a single-layer model occursin 5420 days versus 2460 days for a six-layer model. Nonetheless, their comparative simulations reflect themuch higher predicted values for CO2 storage in the single-layer case versus the six-layer case.

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layer model and found that the one-layer model predicted levels of CO2 adsorption 325% -

340% above those predicted by their multi-layer model. They point out that pre-injection

simulations in the RECOPOL pilot project proved erroneous compared to actual results

likely because of the use of a one-layer model (Ross et al., 2009). And Ross (2007) suggests

that ‘it is imperative that....models with fine gridding (i.e. multi-layer models) in the vertical

direction be used,’ to avoid over-estimating quantities of sequestered CO2.

Of the three simulation-based estimates Robertson (2009)’s estimate of 152 billion

tonnes basin-wide storage seems anomalously high. Of the remaining two, Ross et al. (2009)

is the lowest. Their simulation predicts that 5 years of CBM followed by 13 years of ECBM

would sequester around 91,000 tonnes of CO2 per 160-acre 5-spot pattern. This amounts to

a basin-wide total of 1.22 billion tonnes. Robertson (2008)’s is the higher of the two and

predicts that six to seven years of strictly ECBM production would result in the storage of

490,000 tonnes of CO2 per 320-acre 5-spot pattern, amounting to a basin-wide total of ∼5.9

billion tonnes. For the purposes of this paper, we conservatively choose the average of Ross

et al. (2009)’s lower (1.15 billion tonnes) and upper (1.59 billion tonnes) estimates, which

amounts to 1.32 billion tonnes of total storage.

Assuming this amount of cumulative demand for CO2 in the PRB, is it possible that

demand could theoretically outstrip supply? Given the almost right-angled shape of the

demand curve for CO2 in the PRB as shown in Mason and van ’t Veld (2011), this seems to

be a possibility. If Wyoming maintains current levels of fossil fuel-based emissions, and if all

currently known proposed coal to fuels and fertilizer projects come on line, then the state’s

total emissions by the year 2015 could amount to just over 72.6 Mt per year. Subtracting

the four-year average demand for CO2 from EOR would leave 70.7 Mt for ECBM (∼3,600

MMcfpd). Given Ross et al. (2009)’s per-well estimate that one well would sequester 6,629

tonnes of CO2 in one year, 1.32 billion tonnes of total demand would require 9,935 injection

wells coming on line all at once and operating for just under 17.5 years on average. This

would require a mass flow rate of just over ∼65 Mt per year (3,400 MMcfpd), theoretically

a rate that could be met by statewide supply.

Is it reasonable to assume that almost 10,000 wells could feasibly enter production within

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a relatively short span of time? One would think that constraints, such as permitting time

and infrastructure construction, would constrain the pace of ECBM development, no matter

how low the price for CO2. Data from the Wyoming Oil and Gas Conservation Commission

(WOGCC) provides a rough measure of the potential pace of new well development. In 2008

4,626 CBM wells were permitted in Wyoming, and another 1,395 were issued through July,

2009 (WOGCC, 2009). Given that rate of development, it is reasonable to assume that 5,000

new wells could theoretically come on line every year for 12 years, amounting to 60,000 new

wells, enough to account for the amount of supply generated under a capture mandate.

Finally, how should we calculate the daily average flow-rates that determine pipeline

diameters? Here we undertake a little bit of hand-waving. Our calculation that the total

acreage of unminable coal in the PRB could support as many as 12,110 160-acre 5-spot

patterns implies that the theoretical upper limit on ECBM-related wells is 60,550, including

producers and injectors (roughly half would be injectors). If ECBM production came on

line over a 12-year span at the rate of 5,000 wells per year, and if the wells that came on

line in the last year operated for 17 to 18 years, demand for CO2 would be spread over 30

years. At peak development there would be around 60,000 wells in operation.25 All things

considered, spreading our total estimated demand of 1.32 billion tonnes over 30 years seems

the appropriate choice in terms of what is realistic in the way of well-development rates.

The resulting demand for CO2 in the PRB from theoretical ECBM development amounts to

a mass flow rate of 2,362 MMcfpd.

Green River Basin ECBM

The predominant coal-bearing formations in the Green River Basin are the Paleocene (55.8 -

65.5 million year-old) Fort Union and Eocene (33.9 - 55.8 million year-old) Wasatch Forma-

tions (Flores and Bader, 1999a). The Fort Union Formation contains at least three prominent

coal zones, the Deadman coal zone, found in the lower 200 feet of the formation, and two

unnamed zones. The Deadman coal zone, with beds as thick as 32 feet (∼9.8 m), was de-

posited in swamps associated with meandering rivers (Flores and Bader, 1999a). Due to the

25This is in the ballpark of a prediction made by Stricker et al. (2006) that the PRB would see totaldevelopment of at least 60,000 wells.

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depositional environment, coal deposits in the Green River Basin are less planar in nature

relative to those of the Powder River Basin, leading to lower overall estimates of total coal

volumes and total CO2 sequestration and CH4 production capacity.

Green River Basin coals have been studied less for ECBM and more for their potential to

supply coal-fired electric power plants, especially the 2,110 Mw Jim Bridger Plant near Rock

Springs. Hence we base estimates of ECBM CO2 sequestration and CH4 recovery potentials

on estimates of CBM potential and use typical CO2/CH4 sequestration/recovery ratios to

calculate daily mass flow rates (Nelson et al., 2005). According to the NETL (2010), total

storage potential of the GRB is 836 Bcf (44 Mt). The Potential Gas Committee (2006)

estimates likely recoverable reserves of CBM within the Greater Green River Basin to be

2.5 Tcf. Given recovery rates of 5% (a reasonable estimate according to Ross (2007)), then

approximately 125 Bcf of methane are available for recovery. Using a conservative ratio of

5:1 for CO2 sequestered to methane recovered, total CO2 storage would be 625 Bcf (31.8

Mt).26 For this level of generality, the two estimates (44 Mt versus 31.8 Mt) are not far off.

Taking the higher of the two, and averaging demand over 30 years, would amount to mass

flow rates of 78.7 MMcfpd.

Table 2.2: ECBM CO2 demand by basin, cumulative and in terms of mass flowrates. Basins in which ECBM production is negligible or for which no estimates have beenmade are not listed.

Basin: Cumulative CO2 Demand (Mt) 30 Year Avg. CO2 Demand (MMcfpd)Green River 44 78.7

Powder River 1,320 2,362Statewide 1,364 2,440.7

26Typical ratios of CO2 stored to CH4 recovered in PRB sub-bituminous coals vary from 7:1 to 10:1(Burrus, 2003). However GRB coals are deeper and of higher rank (bituminous). Hence the ratio would belower (Burrus, 2003; Ellis et al., 1999a).

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2.1.3 Deep Saline Aquifer Sequestration Potential

Wyoming possesses two of the nation’s best sites for geosequestration, the Rock Springs

uplift and the Moxa Arch. Both are forms of deep saline acquifers. The former was stud-

ied extensively by the Wyoming Geological Survey as a potential site for the FutureGen

CCS pilot project, and the latter, located west of LaBarge, is being evaluated as a site for

geosequestration in Phase III of the DOE-funded Big Sky Carbon Sequestration Partnership.

The two together have the capacity to store hundreds of years of Wyoming’s total annual

emissions of CO2.

Currently there is no economic benefit from pure sequestration, especially since there is

no prospect of recovering any of the cost via incremental gains in hydrocarbon production.

Whether or not CO2 is ever shipped to these storage sites depends entirely on the implemen-

tation of carbon capture mandates, a policy not currently under consideration at either the

state or federal level. Thus we leave the potential demand for CO2 from the Rock Springs

Uplift and Moxa Arch out of our final calculations, but we mention them here due to the

massive quantity of CO2 that these structures are estimated to be capable of storing.

The Rock Springs uplift is a 50 mile by 35 mile, doubly-plunging anticline (dome)

containing two potential sequestration reservoirs, the Pennsylvanian Weber Sandstone and

the Mississippian Madison Limestone, that meet all the criteria for the permanent storage of

CO2 (Surdam and Jiao, 2007). According to a detailed analysis carried out by the Wyoming

State Geological Survey as part of the application process for the FutureGen IGCC CCS

project, the two reservoirs’ combined CO2 storage capacity is 23.6 billion tonnes (equal to

about 485 years’ worth of total state-wide emissions) (Surdam and Jiao, 2007). The 2,110-

megawatt Jim Bridger power plant, producing approximately 12 million metric tonnes (Mt)

of CO2 per year (812 MMcfpd), lies within the eastern portion of the uplift, affording it

the possibility of sequestering its emissions on site if its CO2 does not get used for EOR or

ECBM. In fact, 30 years’ worth of the entire state’s coal-fired power plant emissions (∼50

million tonnes or 2,685 MMcfpd) would theoretically occupy less than 10% of the uplift’s

total combined capacity.

The Moxa Arch is another doubly-plunging anticline located in the southern Green River

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Basin and is currently under study as a large-scale sequestration site by the DOE-funded Big

Sky Carbon Sequestration Partnership. Phase III of the study will inject up to 3 million tons

of CO2 into the 11,000 ft.-deep Nugget Sandstone over the course of three years. The test

CO2 will be provided by a nearby gas processing plant at Riley Ridge operated by Cimarex

Energy. The plant will produce about 1.36 million tonnes of CO2 per year (∼73 MMcfpd)

as a byproduct of producing helium and methane (BSCSP, 2009). Current estimates of

sequestration potential in the Moxa Arch are around 8.53 billion tonnes, or nearly 200 years’

of Wyoming’s total CO2 emissions from fossil fuel electric power generation (BSCSP, 2009).

2.2 Sources of CO2 Supply

It is well known that the number one constraint on increases in EOR production is a lack

of available CO2 supply (Kuuskraa, 2010). In Wyoming there are three categories of CO2

supply: natural underground sources, anthropogenic supply from coal-to-fuels plants, and

existing anthropogenic point sources, mostly in the form of coal-fired electric power gener-

ating stations. The first category is comprised of CO2 stripped from gas streams produced

either for the CO2 or for other salable gasses within the stream. The second includes CO2

from plants that capture the molecule as part of the fuel production process. The quantity

of CO2 produced by these first two categories is currently below levels that would support

EOR in Wyoming at its maximum potential. So Reyes (2009) and Jeffries (2009) have pro-

posed utilizing the third category of potential supply: CO2 emitted as a product during the

combustion of fossil fuels. If CO2 from existing anthropogenic sources were made available,

it could potentially provide quantities sufficient to meet the state’s total potential demand

for CO2 from EOR and to sustain a large ECBM industry.

CO2 from existing anthropogenic sources has to be captured from flue gas, a process that

requires retrofitting existing plants with capture technology.27 Not only is this a high upfront

27There are three known technologies for capturing CO2 from fuel: post-combustion using amine-basedscrubbing technology, pre-combustion in which CO2 is captured in the process of transforming coal intoliquid or gas fuels, and oxy-fuel combustion, a process by which flue gas is reincorporated into the combustionprocess to create a CO2-rich flue gas (K. Bliss et al., 2010). We know of no plans to build an oxy-fuel plantin Wyoming at this time.

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capital investment, but the capture process itself, along with the required compression, is

costly. Due to the high overall cost of capture, existing coal-fired power plants are not

currently a viable source of CO2. Nonetheless, we include them as a source in our calculations

as a theoretical solution to the existing shortfall in CO2 supply and to inform debates about

future energy policies.

The first category, underground sources, has proven to be economically viable and

currently supplies numerous profitable EOR operations throughout Texas, Mississippi and

Wyoming with CO2. The second category includes two coal to fuels plants (Medicine Bow

Fuels and LINC Energy) that are either permitted or under construction. Both plants show

substantial promise of providing reliable supplies of CO2, and contracts have already been

signed for most of the CO2 the plants will produce (OGJ, 2011c). The third category, exist-

ing anthropogenic sources, is by far the largest potential source of supply. However procuring

the CO2 is costly given existing technology, and without subsidies that lower or eliminate

capture costs, regulations on emissions, developments in technology, or some combination of

all three, these plants would not likely comprise a reliable source of supply.

Underground sources currently produce as much as 500 MMscfpd (∼9.3 million tonnes

per year) (Moritis, 2009; Towler et al., 2008). Of that amount 450 MMscfpd (∼7.5 million

tonnes per year) is produced at a gas-processing plant owned and operated by Exxon-Mobil

near La Barge, Wyoming.28 Currently ExxonMobil is shipping 320 - 340 MMcfpd (∼6.5

Mt per year) CO2 through 48 miles of 24” pipeline and 112 miles of 20” pipeline (Parker,

2009). However, Towler et al. (2008) points out that with additional compression the existing

pipeline has the capacity to handle up to 605 MMcfpd (∼11.2 Mt per year). A second gas

plant at Lost Creek produces 50 MMcfpd (∼1 Mt per year), of which 70% will be shipped via

a 232 mile long pipeline operated by Denbury (who purchased Encore, the original developer

of the project) to the Bell Creek field in southeast Montana. The remaining 30% will be

reserved for use in possible acquisitions in the PRB (Moritis, 2009). If Cimarex Energy

28Towler et al. (2008) writes that at the time of their research the plant was producing 450 MMcfpdand venting 200 Mmcfpd. DeBruin (2001) lists the CO2 production at the La Barge facility at around 435MMcfpd. According to Parker (2009) and Thomas (2009) the plant re-injects, rather than vents, the CO2.The composition of the gas stream from which the CO2 is produced is 66% CO2, 21% methane, 7% nitrogen,5% hydrogen sulfide, and 0.6% helium (Towler et al., 2008).

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chooses to sell CO2 from the Riley Ridge plant, some 70 to 80 MMcfpd could be added to

the above quantities in the near term.29 Current plans call for sequestering the CO2 on-site

back into the producing formation (Gearino, 2010).

Anthropogenic emitters are by far the largest potential source of CO2 (Doll et al., 2009).

In 2007, coal-fired power generation in Wyoming emitted 45.1 million tonnes of carbon

dioxide (EIA, 2009b). Five power plants are responsible for the bulk of the state’s carbon

emissions: the Jim Bridger (15.7 Mt, ∼816 MMcfpd, located in the north-central GRB), the

Laramie River Station (12.3 Mt, ∼639 MMcfpd, located between Cheyenne and Casper),

the Dave Johnston (5.7 Mt, ∼295 MMcfpd, located in the southern PRB), the Naughton

(5.3 Mt, ∼276 MMcfpd, located in the western portion of the GRB) and the Wyodak plants

(1.7 Mt, ∼81 MMcfpd, PRB) (EORI, February, 2011b).

The cost of capturing and compressing CO2 from existing anthropogenic sources is

higher than from the other two sources. Mohan (2009) and INGAA (2009) calculate that

capture costs vary from around $34 per tonne for gasification combined cycle plants to as

much as $70 per tonne for existing fossil fuel plants. And the DOE notes that, using existing

technology, retrofitting existing plants with post-combustion technology adds around 80%

to the cost of electricity (DOE, 2010).30 A price for CO2 of $2.25 per mcf amounts to $40

per tonne. Hence ECBM and EOR are uneconomical at capture costs that could range as

high as $80 per tonne.

The economics of utilizing existing anthropogenic CO2 sources has been evaluated by

several researchers. An analysis done on CCS combined with ECBM by Robertson (2009)

estimates that capturing CO2 from the Wyodak pulverized coal (PC) power plant would cost

∼$42/ton ($46.2 per tonne), and that transporting the CO2 via a 50-mile (80-km) pipeline

would cost ∼$0.46 per mcf ($9 per tonne), resulting in a total cost for the CO2 of $3.03 per

mcf ($59.38 per tonne). Since he estimates that ECBM increases methane recovery rates by

only 17%, an $8.00/mcf price for methane means that spending $3.03 to inject 1 mcf CO2

29According to Bleizeffer (September 19, 2010), Denbury holds a 42.5% interest in Riley Ridge, indicatingCO2 sales are a possibility.

30The report further notes that extensive efforts are underway to bring the impact on electricity costsdown to 35%. If that were to happen, it seems feasible that a tax/subsidy structure could be implementedthat makes post-combustion capture from existing plants a realistic option.

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would return $1.36 worth of additional methane—clearly uneconomical.31

Other estimates of the size of subsidy required to make ECBM economical have been

made by Massarotto (2007). He models CCS using ECBM in Australian coals and finds

that capture costs are 75% of total costs and that the unit cost of CO2 avoided is $52/ton

($57/tonne), a value within range of Robertson (2009)’s ∼$60/tonne cost for delivered CO2

(2007 Dollars). These numbers are based on ECBM production rates that are 50% higher

than CBM production rates. He finds that the incremental revenues from ECBM, even with

a ‘low fieldgate’ price of $2.25/GJ (∼$2.38/mcf), would be sufficient to cover 46% of the

total CCS costs, reducing the net CCS costs to ∼$27.3/ton ($30/tonne) (Massarotto, 2007).

In other words, any tax on carbon in excess of $27.3 per tonne (or a capture subsidy in

tandem with caps on CO2 production) may motivate operators of coal-fired electric power

plants in Australia to capture carbon and sell it to ECBM producers. Still, the bottom line

is that existing large-scale emitters are unlikely to provide a reliable supply of CO2 without

capture subsidies, caps on emissions, or both.

We note here that in the design of our pipeline we have taken into consideration the

relationship between annual average mass flows, or nominal flows, maximum design flows and

the constraints imposed by post-combustion capture efficiency. CO2 production levels for

power plants are typically listed in terms of nominal flows (tonnes per year). For our pipeline

calculations, we convert nominal flows to daily flow rates (MMcfpd). But if base-load plants

operate on average at 80% capacity, peak CO2 output any given day could be 25% higher

than its average daily flow rate (nominal flow divided by 365 days per year), and pipelines

must be designed to ship these peak volumes. However existing capture technologies are

not 100% efficient. Thambimuthu et al. (2005) reports CO2 capture efficiencies in the 63 to

94% range. At 80% capture efficiency, peak pipeline capacity equals the daily average as

calculated without capture (e.g. if a plant produces CO2 at a rate of X MMcf per year, then

we use X/365 = .8 x (X/365) x 1.25 as the flow rate that our pipeline must accommodate.).

31However Ross et al. (2009) concludes that ECBM can produce five times the amount of CH4 comparedto primary production and up to eight times the amount when used in conjunction with fracking. In thiscase, spending $3.03 to inject 1 mcf CO2 would return $15 to $24 worth of additional methane (disregardingadditional costs related to fracking). This suggests that the ratio of ECBM recovery levels to CBM recoverylevels can make a large difference to the level of subsidy needed to make CCS with ECBM economical.

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As for the third category of potential CO2 supply, there are currently three projects

likely to come on line by 2015: a coal-to-fuels plant near Medicine Bows, an underground

gasification plant not far from Casper and a fertilizer plant near American Falls, Idaho.32

Most certain is the coal-to-fuels plant owned by DKRW Advanced Fuels LLC and operating

as Medicine Bow Fuel & Power LLC. DKRW expects the plant to be in service by late 2014,

to produce 20,000 bbl of diesel per day, and to capture 83% of its carbon emissions (DKRW,

2011; Kelly, 2009). DKRW is optimistic enough about coal-to-fuels technology to predict

that by 2020 they will be producing 44,000 bbo per day.33 According to OGJ (2011c),

Denbury has contracted for the plant’s entire CO2 production of about 200 MMcfpd and

plans to utilize it for EOR in the Rocky Mountain region. And according to (Reyes, 2009),

this plant will come on line with ∼210 MMcfpd in 2013 (∼3.9 million tonnes).34

The second potential anthropogenic pre-combustion source is a proposed underground

coal gasification plant to be built by Linc Energy Limited, an Australian firm, about 70

miles north of Casper (Bleizeffer, 2009; Conner, 2009; Linc Energy, 2009). Reyes (2009) lists

the plant as producing 115 MMcfpd CO2, although Covell (2009) suggests that a typical

UCG plant that generates 200 MW of electricity would produce ∼172 MMcfpd (∼3.2 mil-

lion tonnes) CO2 per year. Linc recently purchased three nearby fields, Big Muddy, South

Cole Creek and South Glenrock B, with estimated EOR production of 70 million barrels

(Fugleberg, 2011b).

The third source is a planned fertilizer and fuel plant located near American Falls,

Idaho, known as the Power County Advanced Energy Center and operated by Refined Energy

Holdings (Reyes, 2009). This plant would produce ∼90 MMcfpd by 2011 and 175 MMcfpd

by 2015 (Reyes, 2009; Vanderau, 2008). Latest reports, however, indicate that the project

is on hold pending funding (O’Connell, 2011).

32Because there is considerable interest in China and China’s pace of alternative fuel development, wenote that according to OGJ (2011b) China is building four coal-to-fuels plants in Xinjiang Province.

33They claim that with this technology the supplies of coal in the U.S. represent the equivalent of 437billion bbo or 165% of Saudi Arabia’s total oil reserves (DKRW, 2011).

34In estimating the flow rates for our pipeline, we eliminate from our calculations the CO2 that is currentlysupplying EOR operations. While Denbury has contracted for ownership of Medicine Bow Fuel’s CO2, it isnot currently supplying existing EOR or ECBM operations. So we include it in our pipeline calculations inthe off chance that our line ships the CO2 towards one of their target fields.

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If completed as proposed, these three sources would contribute ∼500 MMcfpd to state-

wide supplies by the year 2015. Adhering to our assumption that all known potential sources

can and will be made available, we model our pipeline based on production of 500 MMcfpd

from these three sources.

2.3 Matching Supply and Demand

Under our assumption that CO2 capture technology is employed on existing pulverized coal-

fired power plants, the Green River and Powder River Basins would supply the bulk of

the state’s CO2. The bulk of CO2 production and demand is in or near the Powder River

Basin where three large power plants, the Laramie River Plant, the Dave Johnston Plant

and the Wyodak Anderson Plant, and two future sources, Medicine Bow Fuels and Linc

Technology, could meet roughly half of the CO2 demand from EOR and ECBM. State-wide,

total annual demand falls just shy (by ∼104 MMcfpd) of total annual supply (see table

2.3). That means that the additional demand from ECBM on the eastern half of the state

can be accommodated by CO2 emissions in the western half of the state. Furthermore a

pipeline linking Western and Eastern Wyoming would potentially be able to ship CO2 in

either direction in the event there were a need to move supplies from the PRB region to the

Rock Springs Uplift for geosequestration.

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Table 2.3: CO2 potential supply and demand by basin in terms of mass flow rates.

Basin: NaturalSup-ply**

ExistingAnthropo-genic**

FutureAnthropo-genic**

TotalSup-ply**

EORDe-mand**

ECBMDe-mand**

TotalDe-mand**

Big Horn 0 0 0 0 368.0 0 368.0Green R. 450.0 1,092.0 175.0 1,658.0 89.7 78.7 168.4GreenR.*

0 1,092.0 175.0 1,267.0 28.6 78.7 107.3

PowderR.

0 1,015.0 325.0 1,350.0 115.3 2,362.0 2,556.4

Wind R. 50.0 0 0 50.0 146.2 0 146.2Wind R.* 0 0 0 0 74.3 0 74.3Statewide 500.0 2,107.0 500.0 3,107.0 719.2 2,440.7 3,159.9Statewide* 0 2,107.0 500.0 2,607.0 586.2 2,440.7 3,026.9*Estimates excluding supply and demand for which pipelines are already in service.

**All values are in MMcfpd.

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Chapter 3

Diameter Calculations and Network

Design

CO2 has certain physical properties that distinguish it from other substances commonly

shipped by pipeline. These properties and how they influence CO2 pipeline design, as well

as schematics describing the capture, compression, drying and shipping of CO2, are laid out

in further detail in McCoy (2008), IPCC (2005), Towler et al. (2008), Zhang et al. (2006)

and INGAA (2009). In short, CO2 must be relatively pure (at least 90% pure), dry (most

water removed prior to shipping), and in a sub-cooled liquid or super-critical state (at typical

pipeline operating temperatures, this means it must be compressed to pressures well in excess

of its critical pressure (∼1072 psi or 7.39 MPa)). The fact that liquid and supercritical CO2

compress (shrink) under increasing pressure must also be taken into consideration. Zhang

et al. (2006) finds that pipeline transport of CO2 as a subcooled liquid is the most efficient

means so long as pipeline temperatures do not exceed 31.1 C (∼88 F.), which is not a difficult

criterion for underground pipelines to meet.

3.1 Diameter Calculations

We use four equations out of Menon (2005) to calculate diameter: one derived from the

general energy balance equation for a flowing liquid in a pipeline, one known as the Panhandle

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A, one known as the Panhandle B, and one known as the Weymouth equation. We take

the larger of the four calculated diameters to use for the final nominal pipeline size (NPS).1

Our calculations are based on an estimated pressure drop of 35 kPa/km that we fix for

all calculations. Our procedure for calculating diameter using the energy balance equation

for a liquid flowing in a pipe closely follows McCoy (2008). However he adjusts his final

pressure drop by using his calculated diameter to back-calculate actual pressure drop.2 For

our purposes, the change in pressure drop obtained by the back-calculation changes the

diameter by only a little and the capital cost by almost nothing at all. In our model, the

slightly larger pipeline diameter that results from back-calculating pressure-drop is accounted

for through the addition of pumps to maintain pressure. And since pump capital costs, which

are based on pump size and power requirements, are a relatively insignificant part of the

overall capital cost, we leave out the final calculation of actual pressure drop.3

Our derived diameter is the optimal inner diameter for the given mass flow rate over

the given distance and associated pressure drop. If our calculated diameter does not exactly

match the inner diameter for an existing NPS (it rarely does), we adjust our calculated

diameter upwards to match the next highest NPS. A graph of nominal pipeline sizes versus

the range of mass flow rates encountered in our network is shown in figure 3.1. We calculate

pipeline thickness based on McCoy (2008), but find that calculations using his method result

in thicknesses about 10% less than those listed in INGAA (2009). We adjust ours accordingly

(upwards by 10%) and use the results to calculate the total tons of steel required in each

segment of line, which we eventually sum to find the total amount of steel required in the

network as a whole. This may be of interest if one wants to research whether an increase

in demand for steel generated by the construction of a network of this scale would influence

the price of steel.

1Pipe is manufactured in regular intervals known as nominal pipeline sizes (NPS). For NPS’s of 12” andbelow, the NPS is the actual inner diameter. For NPS’s of 14” and above, the NPS is the outer diameter,and the final inner diameter depends on the pipe wall thickness.

2The actual pressure drop will always differ from the estimated pressure drop because the final innerdiameter associated with the NPS is always larger than the diameter calculated via the equations.

3Note that EOR and ECBM producers who need to make sure that the final pressure of the CO2 comingout of the pipeline is greater than minimum miscibility pressures and below reservoir fracture pressureswould require an exact calculation of pressure drop along any spur line delivering CO2 from the trunk line.Typical injection pressures are greater than 7.0 MPa (Zhang et al., 2006).

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0 500 1000 1500 2000 25005

10

15

20

25

30

35

Mass Flow Rate (Mmscfpd)

NPS

(inc

hes)

Nominal Pipeline Size vs. Mass Flow (100km segment)

Figure 3.1: Nominal Pipeline Size versus mass flow rate as generated by our model.

The entire algorithm is coded using MATLAB to create an interactive design environ-

ment that allows someone with relatively limited knowledge of CO2 and pipelines to calculate

pipeline diameters based on segment length, the given mass flow rate and whether or not a

pump station is required. The routine will calculate a network either segment by segment

or by evaluating a pre-configured system using an Excel spreadsheet. MATLAB can easily

handle sensitivity analysis and Monte Carlo simulations, providing subsequent researchers

opportunities to enhance our analysis.

In our model, whether a pump station is needed or not depends on two factors: distance

traveled since the last pump station and whether or not new CO2 is coming into the line at

some point within the segment.4 Efficient pipeline transport requires that CO2 be shipped

in a supercritical or sub-cooled liquid phase over the entire length of the line.5 Fluids

4Elevation rise can also decrease pressure in the line, but we ignore this effect for this version of ourmodel. Also, the need for pump stations can be obviated by using larger diameter pipelines, providingpipeline operators a choice between a larger diameter line or more pump stations (Heddle et al., 2003;McCoy, 2008).

5Technically speaking compressors pressurize CO2 in its gaseous phase (at pressures below 7.38 MPa)while pumps pressurize CO2 in its supercritical phase (INGAA, 2009; McCollum and Ogden, 2006). Howeverthe term compression is often used interchangeably. The distinction is important in that compression requiresvastly greater amounts of energy per unit CO2 (hence much higher costs) than does pumping (McCollum

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undergoing pipeline transport experience head (energy) loss due primarily to frictional forces.

As a result, the farther the fluid travels, the lower the pressure within the line. If pressure

drops enough the flow can become two-phase, and efficiencies gained while in liquid phase

are lost. We assume all CO2 comes on-line having been pressurized at the source to 15.3 MPa

(∼2220 psi). Since the critical point for CO2 is 31C (87.98F) and 7.38 MPa (1,073.1 psi),

engineers generally abide by the rule that the pressure of CO2 within the pipeline should

not drop below 10.3 MPa (1,494 psi) (Heddle et al., 2003; Towler et al., 2008). According to

McCollum and Ogden (2006), pressure drop with a CO2 line is around 35 kPa/km. Thus,

given an initial pressure of 15.3 MPa, a rule of thumb is that a pump station is required

roughly every 150 km (∼90 miles).6

Also, since we assume that the CO2 entering the line from a new source is pressurized

to 15.3 MPa (∼2220 psi), CO2 already within the line must be re-pressurized to match this

pressure at the point where the new CO2 is entering the line. Hence a pump station is also

required wherever new sources are coming on-line. Altogether our network requires 13 pump

stations.

Compression requires large upfront capital cost as well as substantial operations and

maintenance (O&M) costs due to high rates of power consumption. We assume that the

cost of compressing CO2 to 15.3 MPa at the source will be borne by the supplier (whether

through subsidies, output price increases or both) and therefore include only the cost of

in-line pumping in our O&M costs.

The MATLAB routine also calculates capital costs (segment by segment and network-

wide), O&M costs, per mcf and per tonne tariffs, pipe wall thickness, and tons of steel. As a

final step, the routine calculates the overall length of pipe in the network, the network-wide

tariff per-mcf and per-tonne as well as the total amount of steel in the network. The code is

included in Appendix B.7

Our calculated diameters either match or are within one NPS of those produced by

and Ogden, 2006).6Zhang et al. (2006) finds that the maximum distance between pump stations for pipeline on level ground

is around 196 km, so we feel placing a pump station every 150 km is sufficiently conservative.7Portions of the code, specifically those regarding the solution to the implicit Colebrook function for the

friction factor, were developed using problems and solutions from Recktenwald (2000).

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Smart and Helmke (2009)’s model (though their model only goes up to an NPS of 24”). Our

calculated NPS’s are generally one NPS lower than those calculated by McCoy and Rubin

(2008). For example, McCoy and Rubin (2008) calculates an NPS of 16” for a 100-km

segment shipping 5 Mt per year (∼260 MMcfpd), while we calculate an NPS of 14”.

The difference lies partly in how they handle head (pressure) loss within the line. Under

their assumptions, inlet and outlet pressures are fixed no matter what the length of the

segment in question (i.e. they vary head loss per km as segment length changes). Our inlet

pressure is fixed, but our outlet pressure varies according to length (i.e. we leave head loss

per km fixed no matter what the length of the segment). As a result, the longer a length

of pipe evaluated in their model, the wider the diameter must be in order to meet the fixed

head loss. In their model, shipping 5 Mt per year would require an NPS of 14” in segments

between 30 and 60 km in length, an NPS of 16” in segments between 60 and 110 km in

length, and an NPS of 18” in any segment longer than that. Our model calculates an NPS

of 14” regardless of segment length. However, segments longer than 150 km in length would

require a pump station to maintain appropriate pressure within the line. For 10 Mt per year

transported over a distance of 75 km, McCoy and Rubin (2008) calculates an NPS of 20”

while we calculate an NPS of 18”. They do not show results for mass flow rates above 10

Mt per year.

When compared to existing pipelines shipping similar quantities, our calculated diam-

eters are generally on the low side. Kinder Morgan (2010) lists the 30” Cortez Pipeline as

having a capacity of 1,300 MMcfpd (we calculate an NPS of 26”). Kinder Morgan (2010)

also lists the 386 MMcfpd Bravo Pipeline as having an NPS of 20” (we calculate 16”); the

330 MMcfpd Sheep Mountain Pipeline as having an NPS of 20” (we calculate 16”) as well

as a stretch of 480 MMcfpd 24” line (for which we calculate 18”); the 600 MMcfpd Central

Basin Pipeline as having an NPS ranging from 26” down to 16”, the capacity of which could

be increased to 1200 MMcfpd if pump capacity were increased (we calculate 20”); the Este

Pipeline as having a capacity of 250 MMcfpd for a 14” stretch of line (we calculate 12”)

and a capacity of 150 for a 12” stretch of line (we calculate 12”); the 160 MMcfpd Slaughter

Pipeline as having an NPS of 12” (we calculate 12”); the West Texas and Llano Lateral

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Pipelines as having an NPS of 8 to 10” to carry ‘approximately’ 100 MMcfpd (we calculate

10”); and the 270 MMcfpd Canyon Reef Carriers Pipeline as having an NPS of 16” (we

calculate 14”). Denbury’s Green Pipeline is 24” in diameter and expected to ship up to 800

MMcfpd (we calculate 22”). Finally, the 205 mile Weyburn Pipeline from a coal gasifica-

tion plant in Beulah, North Dakota to the Weyburn EOR field in Saskatchewan ships 250

MMcfpd and is 14” in diameter to the border where it drops to 12” diameter (we calculate

14”).

Pipeline segments, distances, diameters and land construction costs (LCC) are listed in

tables 3.1 through 3.4.

3.2 Network Routing and Design Considerations

Of the two broad categories of pipeline infrastructure design, point-to-point or integrated

backbone, we choose the latter. Chrysistomidis et al. (2009) show that an integrated system,

though more costly up front, ultimately provides the lowest average CO2 shipping cost while

supporting a better overall market for CO2 with lower barriers to entry. Chrysistomidis et al.

(2009) point out, however, that the relative benefits of the integrated design depend on high

early utilization rates and low policy uncertainty regarding carbon prices. In choosing the

integrated design, we assume that there is sufficient certainty in carbon policy and pricing

such that CCS becomes not only viable but required, resulting in full capacity utilization.

Designing for potential capacity is common in the natural gas industry, where according to

EIA (2010a), pipelines are designed so that additional capacity can be met by adding com-

pression capacity. Moreover natural gas regulations require that pipelines passing through

highly populated areas lower their operating pressure (EIA, 2010a). In Wyoming this is a

minor consideration that we ignore for our calculations.

The ultimate routing and design of the pipeline depends on the timing and type of

new sources of supply as well as the viability of ECBM. Currently the sole economically

viable source of CO2 in Wyoming is from natural sources as a byproduct of gas streams

that contain other valuable gasses. For the near term, the five EOR projects already on line

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have contracted for all available supply, and with its acquisition of Encore, Denbury now

has possession of the soon-to-be-developed Lost Cabin source (currently slated for use in the

Bell Creek Field just over the border in Montana). Other than the possible source from the

Cimarex Energy plant on the Moxa Arch, no other sources of natural supply currently exist

(Doll et al., 2009).

Anthropogenic sources are left to shoulder the load for the remaining demand. There

are two general categories of anthropogenic sources: existing coal-fired power plants that

require retrofitting with scrubbing technology, and planned coal-to-fuels and coal gasification

plants that can utilize less costly pre-combustion processes to capture CO2. Of the in-place

anthropogenic emitters, coal-fired electric power generating plants retrofitted for carbon

capture (likely amine scrubbing of flue gas) easily comprise the largest potential source.

However according to Rochelle (2009), amine scrubbing technologies would likely not be

fully deployed until 2018 under even relatively optimistic scenarios. Boosting supply in any

meaningful amount beyond what is available from natural sources may then be left up to

coal-to-fuels projects. Currently there is no clear winner in the competition for most viable

of the ‘clean-coal’ options, and many experts feel that both scrubbing and coal-to-fuels will

eventually play a role (Doll et al., 2009; Evans, 2009; Kelly, 2009).8 The fact remains that

utilizing all three sources of supply is currently the only way to meet the existing demand

from EOR fields. And if ECBM were to prove viable, whatever CO2 captured in excess of

EOR needs could be utilized by ECBM operators and sequestered in coal seams. We account

for both opportunities in the design of our pipeline.

If indeed coal-fired power plants come on-line with the full amount of their current

output, the general flow of CO2 would be from the Southwest and Southern parts of the

state towards the CBM and EOR fields in the Northern, Northeastern and Eastern parts

of the state. As can be seen in table 2.3, demand in the PRB outweighs supplies, even

given the full development of all potential sources. This necessitates an east-west connector

which logically originates from the Jim Bridger Power Plant and passes by Medicine Bow

8As of April, 2011, the Medicine Bow coal-to-fuels plant is under construction, and contracts for 200MMcfpd have been signed with Denbury, who plans to use the CO2 for EOR in the Rocky Mountain Region(OGJ, 2011c).

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Fuels before linking with the line from the Laramie River Plant that leads towards the PRB.

However if PRB EOR and/or ECBM operators fail to come on-line or were to go off-line for

a period of time, an east-west line could also reverse-ship CO2 from the large emitters in the

east towards the Rock Springs uplift, or to pipelines that could ship it northward to EOR

operators in the Big Horn and Wind River Basins, two basins that have substantial EOR

demand and little or no local supply.

There exists yet one more solution to the possibility that at times CO2 supply will

outpace CO2 demand from EOR and ECBM. Trading could be allowed so that producers

who have access to active EOR, ECBM and/or sequestration sites could effectively sequester

CO2 produced elsewhere. For example ECBM is still in its trial phase and may not come

on-line for several years, even after the implementation of a cap and trade or carbon tax,

leaving CO2 producers such as the Laramie River Plant without a ‘buyer’ (or perhaps the

term ‘sequesterer’ would be more appropriate) for their CO2. In that case the Jim Bridger

Plant, for example, might sequester (in the Rock Springs Arch) and/or ship more than its

mandated quota of CO2 to EOR producers in the Big Horn and Wind River Basins, then

sell or trade the difference to the Laramie River Plant.

We reiterate that the listed EOR sites are those FRC’s that meet technical screening

criteria and that are profitable given a price for oil of $70/bo, a price for CO2 of $2.25/mcf,

and a 20% rate of return (Cook, 2009a; van ’t Veld and Phillips, 2010). Furthermore ECBM

demand is largely based on the work of Ross et al. (2009), from which we extrapolated

using volume estimates for coal with ECBM potential from Ellis et al. (1999a) and Ellis

et al. (1999b). The pipeline is designed to be a trunk line and as such is routed directly

from major sources to regions of potential high CO2 demand. We assume regional EOR and

ECBM producers will work in conjunction with pipeline development companies to design

and build the grid system necessary to deliver CO2 from the trunk line to its final destination.

We break the line into segments. Each segment initiates from either a potential source

of CO2 or from the end of another segment and terminates at either a source of demand

for CO2, at another source for CO2, or at a pump station. We route the pipeline along

existing right-of-ways (ROW’s) based on the assumption that existing pipelines by and large

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are logically placed relative to geographic and terrain features. In doing so we assume that

additional pipelines could be laid through existing ROW’s, either by the existing owners or

through profit-sharing agreements, at lower costs compared to obtaining permits for new

ROW’s. Nonetheless our cost estimation model includes ROW costs, so if a pipeline were in

actuality constructed along an existing ROW, it is possible that overall capital costs would

decrease slightly from our model’s prediction.

We constructed maps using a student version of ARCGIS 9.2 based on GIS data sup-

plied on the Map Server link at WOGCC (2010a), from WYGISC (2009) and from van ’t

Veld (2009). A map of the entire network is shown in figure 3.2. Although individual seg-

ments are not shown on the printed maps, they have been drawn into ARC-GIS in such a

way that the network can be reconfigured by manipulating, deleting or creating additional

segments. The software readily produces distances which, combined with mass flow rates,

can be entered into the MATLAB routine to calculate land construction costs for any chosen

pipeline configuration.

3.3 Pipeline Route Description

The first two segments connect the proposed Power County Energy Center, a fertilizer and

liquid fuels plant to be located southwest of American Falls, Idaho, to the Naughton Power

Plant near Kemmerer, Wyoming 235 kilometers away. If completed as proposed, this line

would ship about 175 MMcfpd by the year 2015 (Vanderau, 2008). One pump station is

required at the 150-km (93-mile) mark and one at the Naughton Plant to pressurize the line

back up to 15.3 MPa.9 The Naughton Plant generates on average 269 MMcfpd, increasing

the available supply of CO2 to 444 MMcfpd.

Figures 3.3 and 3.4 show the pipeline route as envisioned in the southwest and Green

River Basin. From the Naughton plant, the line (segment no. 3) heads east for 21 km (∼13

mile) along existing gas and oil pipelines to a major natural gas pipeline junction. At this

point, a southerly spur could supply 10 MMcfpd to the Painter Reservoir near Evanston,

9Lacking suitable GIS data for Idaho, we sketched the proposed line and calculated its length using GoogleEarth.

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Figure 3.2: Statewide overview of the pipeline network, sources of CO2, targeted EOR fieldsand targeted coal fields.

while a northerly trending spur could supply 6 MMcfpd to the Dry Piney, Hogsback, Tip

Top, McDonald Draw and Green River Bend fields. Segment no. 4 continues in an east-

erly direction to a junction with the 24” ExxonMobil CO2 pipeline (EM1). At this point

the ExxonMobil line splits into a southeast trending line towards Rock Springs and a 20”

northeast trending line towards the Bairoil field in the southeast corner of Fremont County.

Towler et al. (2008) shows that the existing line from Shute Creek to Salt Creek, with spurs

to Rock Springs, Rangely, Monell, Baroil, Beaver Creek and Hartzog Draw, could support a

flow of 605 MMcfpd given 2,000 hp of additional compression at 85% efficiency located at the

point where the Baroil, Beaver Creek and Salt Creek lines diverge. ExxonMobil currently

plans to increase CO2 shipped from the LaBarge facility to around 320 MMcfpd, meaning

it is feasible that 280 of the 434 MMcfpd coming from the Naughton plant could be added

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to the ExxonMobil line to supplement shipments to Rangely, Baroil, Patrick Draw and Salt

Creek (or to ship to other fields if the line is ever extended). Since ExxonMobil may dis-

agree with this finding or not agree to add more to their line, we find it prudent to design a

separate line (segment no. 5) along existing natural gas lines near Rock Springs that lead to

the Jim Bridger power plant. Since the combined span of the two segments is greater than

150 km, a logical point for a pump station would be at the EM1 junction. A pump station

is also required at the Jim Bridger Plant to re-compress the 429 MMcfpd already in the line

to 15.3 MPa, the pressure of the CO2 captured and compressed by the plant.

Figure 3.3: Southwestern pipeline sections and their relation to fields screened for EOR.

According to EORI (February, 2011b), the Jim Bridger Plant could contribute around

816 MMcfpd, bringing the total available CO2 supply at that point to 1,244 MMcfpd. By

our calculations (see table 2.1) at least 437 MMcfpd is needed to fulfill the demand from

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FRC’s in the Green River, Big Horn and Wind River Basins that currently have no supply

and that could be accessed by a northerly-trending trunk line from the Jim Bridger Plant.

We allot 537 MMcfpd to this line, leaving 100 MMcfpd of spare capacity in the event that

using the average CO2 injection rate over the first four years undershoots the actual flow

rates required by the targeted fields. The remaining 707 MMcfpd is reserved for an easterly-

trending trunk line to target EOR and ECBM fields in the easter half of the state and to

supply ECBM in the Green River Basin.

Figure 3.4: Green River Basin sections as designed and their relationship to sources andfields screened for EOR.

From the Jim Bridger Plant, the northern branch stretches for a distance of 480 km to

the end of the line near Elk Basin. There are currently no significant sources of CO2 along

that stretch. The distance requires three pump stations to maintain proper pressure within

the line. We break the 480-km stretch into eleven segments, each segment ending at a point

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from which spur lines could be built to supply EOR operations and/or provide opportunities

for sequestration (table 3.1).

Table 3.1: Pipeline layout for the Power County Energy Center-Jim Bridger-Wind RiverBasin line based on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR.

Green River BasinSeg.no.

From: To: Length(km/miles)

Massflow(Mm-scfpd)

NPS(in)

LCC(MillUSD)

1. PCEC Pump Station I 150/93 175 12 40.5*2. Pump Station I Naughton I 85/53 175 12 24.9*3. Naughton Painter Jct. 21/13 444 18 12.2*4. Painter Jct. ExxonMobil line

(EM1)64/40 428 18 32.8*

5. EM1 Jim Bridger 90/56 428 18 44.0*6. Jim Bridger EM2 23/14 537 18 30.2*7. EM2 Crooks Gap 102/63 537 18 47.08. Crooks Gap Big Sand Draw 53/33 531 18 30.2*9. Big Sand Draw Beaver Creek 15/9 516 18 9.210. Beaver Creek Butte Jct. 36/22 516 18 19.311. Butte Jct. Lake Cr. /Mur-

phy Dome91/57 467 18 45.6*

*Includes pump station capital cost

The first of these segments, no. 6, runs north-northwest to the ExxonMobil line. Seg-

ment no. 7 parallels that line to a junction in the ExxonMobil line from which the Lost

Soldier/Wertz and Beaver Creek fields are supplied. At this point 6 MMcfpd could be de-

livered to the Crooks Gap/Happy Springs area, 3 of which is needed at Mahoney Dome.10

Segment no. 8 stops at Big Sand Draw with a demand of 15 MMcfpd (see figure 3.5).11

Number 9 leads to the junction with the Beaver Creek field which currently has its own

10Crooks gap is listed twice in Cook (2009a), once in the Green River Basin associated with the LakotaReservoir and once in the Wind River Basin associated with the Muddy Reservoir. However WOGCC(2010b) lists only one Crooks Gap. Most likely both the Muddy and the Lakota are two different reservoirsaccessed by the same field, so we combine the injection rates and include them under the Green River BasinCrooks Gap.

11The first of the three required pump stations is located 28 km from the end of this segment.

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supply. Since there is no question that Beaver Creek’s 8” line is too small to handle the 516

MMcfpd needing to be shipped under our assumptions, we design a separate line. Segment

no. 10 stops at a point along the right-of-way for southwest-northeast trending gas and oil

pipelines (labeled as Butte Junction in table 3.1). From there a spur could supply 49 MMcfpd

to Steamboat Butte, Pilot Butte and Sheldon. Segment no. 11 enters the Bighorn Basin,

stopping near the Lake Creek and Murphy Dome fields (CO2 demand ∼11 MMcfpd).12

Segment no. 12 (table 3.2) leads to a junction near the town of Kirby, from which a

northwest trending spur could be built to supply the numerous fields on the basin’s western

margin (see figure 3.6). These fields in total demand ∼182 MMcfpd, reducing the flow rate

in the line at that point to 273 MMcfpd. Segment no. 13 returns the pipeline to roughly the

center of the basin where an easterly trending spur could supply ∼14 MMcfpd to fields on the

basin’s eastern margin (see figure 3.6).13 Segment no. 14 follows a gas line north-northwest

to a point we label Cody Spur where a westerly spur could access the Shoshone field near

Cody. Segment no. 15 supplies the Byron (58 MMcfpd), Garland (22 MMcfpd) and Whistle

Creek (1 MMcfpd) fields, and no. 16 supplies Elk Basin South (12 MMcfpd) and Elk Basin

(63 MMcfpd).14

The eastern branch leaving the Jim Bridger Plant leads to the proposed Medicine Bow

coal to liquids plant (table 3.3). Setting aside 50 MMcfpd for ECBM in the Green River

Basin leaves 657 MMcfpd to ship through the line headed eastward towards Medicine Bow

Fuels. The first segment (no. 17) stops at the CO2 line into Monell (aka Patrick Draw) where

9 MMcfpd could be offloaded for the Brady field either into the existing line or into a spur.

Shipments could be increased in the event that Monell requires more CO2 than what they

are currently getting from ExxonMobil. Segment 18 stops near Sinclair in case a spur needs

to be added from there towards Mahoney Dome. A pump station is required at Sinclair due

to distance and another at Medicine Bow Fuels to equilibrate pressure in the line.

Medicine Bow Fuels may contribute another 210 MMcfpd, creating a total volume of

12The second of the three required pump stations is located 20 km from the end of this segment.13Cook (2009a) lists another field in this part of the Basin, named Enigma, that would demand∼3 MMcfpd.

However according to Christofferson (2008), the Enigma underwent an ASP chemical flood between 2001and 2008 and may not need CO2. Thus we leave it out of our demand calculations.

14The third of the three pump stations is located 15 km from the end of segment no. 15.

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Figure 3.5: Wind River Basin sections as designed and their relationship to fields screenedfor EOR.

858 MMcfpd to ship northwards towards the PRB. A pump station is needed at Medicine

Bow Fuels to re-pressurize the 648 MMcfpd already in the line. To keep all options open,

we end segment no. 20 at a point where the line meets with a natural gas line operated

by Colorado Interstate Gas, approximately 25 miles east of Medicine Bow. Segment no. 21

brings the western half of the states CO2 to a junction where it combines with the bulk of

the eastern half of the state’s CO2 (labeled as Dave Johnston Plant Junction).

Two major coal-fired power plants represent significant potential sources, namely the

Dave Johnston plant (295 MMcfpd) and the Laramie River plant (639 MMcfpd). We divert

10 MMcfpd of Dave Johnston’s production westward (segment no. 24) to supply the Teapot

Naval Reserve and Salt Creek, in the event that more were needed there (or for sequestration

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Table 3.2: Pipeline layout for the Wind River Basin-Bighorn Basin line based on mass flowrates given $70/bo and $2.25/mcf CO2 for EOR.

Bighorn BasinSeg.no.

From: To: Length(km/miles)

Massflow(Mm-scfpd)

NPS(in)

LCC(MillUSD)

12. Lake Cr. /Mur-phy Dome

Kirby 26/16 455 18 14.6

13. Kirby Basin Center 19/12 273 14 8.214. Basin Center Cody Spur 70/44 259 14 24.915. Cody Spur Byron 30/19 257 14 13.7*16. Byron Elk Basin 15/9 175 12 5.5

BHB excess CO2 given $70/bo and $2.25/mcf CO2: 100 MMcfpd

*Includes pump station capital cost

Table 3.3: Pipeline layout for the Jim Bridger-Dave Johnston line based on mass flow ratesgiven $70/bo and $2.25/mcf CO2 for EOR.

East Wind River/South Powder River BasinsSeg.no.

From: To: Length(km/miles)

Massflow(Mm-scfpd)

NPS(in)

LCC(McCoy/New-comb)Mill US $

17. Jim Bridger Monell Jct. 24/15 657 20 15.618. Monell Jct. Sinclair 120/75 648 20 65.6*19. Sinclair Med Bow Fuels 77/48 648 20 44.3*20. Med. Bow Fuels Col. Int. Gas 40/25 858 22 27.221. Col. Int. Gas Dave J. Plant

Jct.106/66 858 22 66.2*

22. Laramie RiverPlant

Dave J. PlantJct.

109/68 639 20 59.7*

*Includes pump station capital cost

purposes).15 We also assume that the 11 MMcfpd required by Glenrock South could be

15According to Mullen (2010), the Grieve is ideal for CO2 but unable to obtain a source. Instead the

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Figure 3.6: Bighorn Basin sections as designed and their relationship to screened fields.

supplied via a spur directly from the Dave Jonhston Plant. The remaining 274 MMcfpd is

shipped eastward to the Dave Johnston Plant Junction (Dave J. Jct.) to merge with the

Medicine Bow Fuels supply and the Laramie River Plant supply (table 3.4). The three flows

combined amount to 2,410 MMcfpd. From the Dave J. Jct. CO2 would flow north for 120

km into the Powder River Basin Proper (segment no. 25).

As noted under the calculation of CO2 demand in Chapter 1, ECBM in the Powder

River Basin may have the potential to utilize as much as a billion tonnes of CO2, seques-

tering almost 100% in the process.16 We estimate that if that were the case, ECBM in

owners have chosen to use a chemical flood. We note their need and design the pipeline to accommodate it.16Recall that the one billion tonnes figure came from applying the results from Ross et al. (2009)’s simu-

lation basin-wide, and that it is the lowest estimate for total CO2 ECBM storage capacity for the PRB outof all the research we examined for this paper. Note that NETL (2010) lists CO2 storage potential in thePRB to be as high as 11 billion tonnes.

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Figure 3.7: Southeast sections as designed and their relationship to sources and screenedfields.

the PRB could utilize around 2,362 MMcfp. Furthermore, as seen in figures 3.8 and 3.9,

the preponderance of ECBM CO2 demand would be from fields located in the central and

west-northwest portions of the basin, while the preponderance of EOR demand is located in

the eastern portions of the basin. How a trunk line should be routed into the basin hinges

on which source of demand one believes will predominate. If EOR ultimately provers to be

the sole source of CO2 demand, then the routing as presented in Jeffries (2009) and Reyes

(2009) would be the logical choice, as it brings CO2 more directly to fields such as the Skull

Creek field near Newcastle and the dense cluster of fields between Gillette and Sundance.17

Our trunk line skims the eastern edge of the largest concentration of CBM fields before

17Surdam (2010) presents a third option, which is to utilize CO2 emissions from PRB coal-to-fuels plantssituated so that they have quick access to coal as well as to sequestration sites and EOR fields.

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Figure 3.8: Southern Powder River Basin sections as designed and their relationship tosources, screened fields and coalbed methane fields.

bending to the west to access fields in the west-northwest quadrant of the PRB, a route

that splits the difference between the EOR fields and the bulk of the ECBM fields. Thus

CO2 from Dave J. Jct. would be shipped northward to a point where it intersects a pipeline

operated by Western Gas Resources about 45 km (28 miles) south of Gillette. From there 11

MMcfpd could be shipped eastward towards Skull Creek and possibly Lance Creek for EOR.

However costs for the spur may be prohibitive. We calculate a land construction cost of

$5.2 million, resulting in a tariff of $0.30/mcf or $5.84/tonne. The bulk of the 650 MMcfpd

offloaded at this point would be slated for ECBM producers to the west of the line.

The next distribution point would be near the Maysdorf FRC where just under 50

MMcfpd CO2 could be distributed to Maysdorf and several field-reservoir combinations 30

to 35 km east-northeast of Maysdorf. We also off-load another 650 MMcfpd for ECBM

producers that would mostly be located west of the line. From Maysdorf the line continues

northwards for about 26 km to the Wyodak Plant (near Gillette) which produces about 81

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MMcfpd (segment no. 27).

We estimate that EOR fields east-northeast of Wyodak would demand just under 35

MMcpd (figure 3.9). We offload 604 MMcfpd from the pipeline and combine it with the

remaining 46 MMcfpd to supply 650 MMcfpd to the ECBM fields located west and north

of the Wyodak Plant. That leaves 445 MMcfpd to ship to the end of the line near the Big

Horn Gas Gathering facility. This somewhat arbitrary point was chosen due to its central

location within the USGS GIS maps of known coalbed methane reservoirs in the northern

PRB (Ellis et al., 1999b). All the remaining CO2 would be off-loaded at this point to be

utilized for ECBM in fields located in the upper central and eastern portions of the PRB.

Figure 3.9: Northern Powder River Basin sections as designed and their relationship tosources, screened fields and coalbed methane fields.

Finally, we note that the Sussex West, Cellars Ranch, and Sandbar East fields, all of

which were successfully screened by Cook (2009a) for EOR, would be more conveniently

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supplied by CO2 from the Lost Cabin plant via Denbury’s Greencore line (Evans, 2010;

Moritis, 2009). However we are not aware of any plans to supply these fields via the Greencore

line at this time.

Table 3.4: Pipeline layout for the Dave Johnston-Wyodak line based on mass flow ratesgiven $70/bo and $2.25/mcf CO2 for EOR.

Powder River BasinSeg.no.

From: To: Length(km/miles)

Massflow(MM-cfpd)

NPS(in)

LCC mil-lion US $

23. Dave J. Plant Dave J. PlantJct.

12/7 274 14 5.7*

24. Dave J. Plant Grieve Jct. 39/24 10 4 3.225. Dave J. Plant

Jct.Phillips etc. 120/75 2,410 34 131.3*

26. Phillips etc Maysdorf 24/15 1,760 30 25.927. Maysdorf Wyodak 26/16 1,060 24 21.028. Wyodak Big Horn Gas

Gathering58/36 445 18 29.1

*Includes pump station capital cost

The total length of pipeline required by our network as designed is 1,682 km (1,045

miles) and includes 13 pump stations. To grasp the scale of the network, we note that the

construction of the 204 mile Weyburn CO2 pipeline from Beulah, North Dakota to Weyburn

in Saskatchewan, Canada averaged 2-3 miles per day (Brown, 2009). Thus our network could

theoretically be constructed within a two-year time span.

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Chapter 4

Pipeline Cost Estimation Model

As with similar techno-economic models, we use data for natural gas pipelines to estimate

capital costs (aka land construction costs or LCC). Such costs are filed with the Federal

Energy Regulatory Commission (FERC) and compiled by the Oil and Gas Journal.1 Promi-

nent among past studies are those done by Parker (2000), Heddle et al. (2003) and McCoy

and Rubin (2008). They reason that dry CO2 (CO2 having a relative humidity well below

its dew point) transported at pressures similar to those for natural gas (greater than 10

MPa) would require materials similar to those used in natural gas pipelines (Heddle et al.,

2003; McCoy and Rubin, 2008; Parker, 2000; Seiersten, 2002).2 However in INGAA (2009),

the authors note that the differences in pipeline materials and construction details between

natural gas and CO2 pipelines are significant enough, especially for diameters greater than

36”, to require adjustments in capital cost calculations based on natural gas pipeline data.

For this reason Essandoh-Yeddu and Gulen (2008) incorporate a cost-escalation factor to

bring costs in line with industry estimates for CO2 pipelines in Texas. We do not include

an escalation factor for our final capital cost calculations, but our graphs include one line

representing our estimated costs and one line representing our estimated cost plus a 10%

escalation factor.

1In an article about pipeline construction cost equations based on information given by companies toFERC, the authors note that it’s impossible to know if there have been inconsistencies in the reporting ofthe data. Nevertheless, they feel it is the best data that is publicly available (Brown et al., 2011).

2CO2 needs to be relatively dry for EOR and sequestration purposes as well (Seiersten, 2002; van ’t Veldand Phillips, 2010).

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Cost data in the Oil and Gas Journal is broken into four categories: materials, labor,

ROW and miscellaneous. McCoy and Rubin (2008) estimate a Cobb-Douglas function of

the form

Kpl = a0 ∗ La1 ∗Da2nps, (4.1)

which in log-log form becomes

logKpl = b1 + a1logL+ a2logDnps. (4.2)

Kpl is the pipeline capital cost (land construction cost) in 2009 dollars, L is pipeline length

in kilometers, Dnps is the nominal pipeline size in inches and b1 = log(a0). In Cobb-Douglas

form the sum of the parameters a1 and a2 indicate whether or not the capital cost exhibits

increasing (> 1), decreasing (< 1) or constant (= 1) returns to scale. In log-log form,

parameters represent cost elasticities for pipeline length and diameter.

Using ten years’ (1995 - 2005) worth of cost data for natural gas lines, McCoy and Rubin

(2008) estimate a log-linearized Cobb-Douglas production function for each of the four cost

categories, and they evaluate returns to scale within each category. Readers may find their

results interesting, though not surprising—for example material, labor and miscellaneous

costs exhibit increasing returns to scale (lower costs per unit for longer and larger lines) but

ROW costs increase one-for-one with length.

We adopt a similar model but focus solely on total construction costs. Our data rep-

resents fifteen years worth of land construction costs for lines constructed in the Central

geographic region (which includes Wyoming) as defined by the EIA (EIA, 2010a).3 Costs

are taken from annual articles in the Oil and Gas Journal and are adjusted to 2009 dollars

using the Marshall and Swift equipment cost index (Smith, 2006, 2007, 2008, 2009; True,

1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003; True and Stell, 2004) and (Mar-

shall and Swift Index, 2009). We eliminate lateral lines (extensions to existing lines) and

loops (segments that parallel existing lines) that may skew the results downward, resulting

in 34 data points. Pipelines that cross roads and rivers are also excluded from the data as

3McCoy and Rubin (2008) found significant cost differences between regions, with costs in the Centralregion significantly lower than costs in the Northeastern region.

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listed in the Oil and Gas Journal. By regressing LCC on length and diameter we estimate

the parameters b1, a1, and a2. Results are listed in table 4.1. The R2 of almost 0.96 indicates

that most of the variation in cost is explained by variation in length and diameter, while the

estimated values for parameters are statistically significant at the 1% level.

Table 4.1: Estimation results for equation (4.3)

Variable Coefficient (Std. Err.)log nps 1.249∗∗ (0.222)log length 0.854∗∗ (0.041)Intercept 4.389∗∗ (0.290)

N 34R2 0.958F (2,31) 354.853.Significance levels : † : 10% ∗ : 5% ∗∗ : 1%

By our model, approximate land construction costs can be estimated according to the

following equation,

Kpl = 24, 491 ∗D1.249 ∗ L0.854. (4.3)

Figure 4.1 shows the construction cost and construction cost plus ten percent versus the

mass flow rate predicted by our model for a 100 km segment. The stepped appearance is due

to the fact that a one-step increase in NPS (representing a 2” increase in inner diameter)

accommodates a range of mass flow rates. Our model predicts a capital cost of 880.5 million

USD for the entire network of 28 segments and 13 pump stations. In per-inch-mile terms,

our model predicts a cost of $62,539 for a 125-km long, 16”-diameter line (substantially lower

than the estimate of $78,116 per-inch-mile listed in INGAA (2009) for a segment of identical

length and diameter), and a bit less than Phillips (2009)’s estimate of $70,000 per inch-mile.

However CO2 pipelines require thicker pipe (more welding and higher transportation

costs), CO2-resistant elastomers around valves and other fittings, and fracture arrestors

every 1,000 feet due to higher fracture propagation related to the slower decompression

characteristics of CO2 (INGAA, 2009). According to Essandoh-Yeddu and Gulen (2008),

industry estimates that the additional cost for these reinforcements is about 10%, which

would increase our per inch-mile costs to about $69,000.

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0 500 1000 1500 2000 25000

2

4

6

8

10

12 x 107

Mass Flow Rate (Mmcfpd)

LCC

(200

9 U

S $)

Cost vs. Flow (100km segment)

LCC110% LCC

Figure 4.1: Capital cost and capital cost plus 10% versus mass flow rate given a 100 km longsegment.

Our model agrees well with another cost model for natural gas pipelines created by

the Pacific Northwest National Laboratory (PNNL) (Brown et al., 2011). PNNL generated

equations for average cost/mile for three of the four cost categories reported in the Oil &

Gas Journal (materials, labor and ROW). The equations are based on 30 years’ worth of

data representing 2,000 pipeline segments from all regions. Like McCoy and Rubin (2008),

they too developed different equations for different regions. Rather than follow the EIA’s

delineation of regions by state, they chose their own, each representing an area of similar

geography and population distribution. The region that includes Wyoming also includes

Nevada, Idaho, New Mexico, Arizona, Montana, Utah and Colorado. Cost equations for

that region are listed as

Cmat = 53, 904 ∗ exp(0.0678) ∗D,

Clab = 2.065 ∗ 7127.9 ∗D1.1641,

Crow = 2.302 ∗ (1112.9 ∗D + 19180) .

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0 500 1000 1500 2000 25000

2

4

6

8

10

12 x 107

Mass Flow Rate (Mmcfpd)

LCC

(200

9 U

S $)

Cost vs. Flow Newcomb and PNNL

NewcombPNNL

Figure 4.2: Capital cost as calculated by Newcomb’s model vs. as calculated by the modelgenerated by Pacific Northwest National Laboratories (segment length of 100 km).

Cmat, Clab and Crow are materials, labor and right of way costs, respectively while D

is diameter. Total cost per mile is simply the sum of the three category costs. Multiplying

this total by the length of any segment gives the total LCC for that segment. Figure 4.2

compares costs generated by our model to those generated by PNNL’s over a range of mass

flow rates given a segment length of 100 km.

Finally, we note that Denbury Resources is currently completing a 320-mile, 24” pipeline

that will ship up to 800 MMcfpd at a projected total cost, including right of way, materials,

and engineering and installation costs, of approximately $730 million or around $95,000 per

inch per mile (Denbury, 2009; Evans, 2009). Using our model, we can replicate this pipeline

in two ways. The first is to calculate the cost of the entire line, 515 km in length, all at once

without pump stations. In doing so we calculate an NPS of 24”, a total capital cost of $268.7

million and a per-inch-mile cost of around $56,300. The second, which is the method used in

the cost calculation for our network, is to calculate the cost of four segments: three of length

150 km, each with a pump station at the 150-km mark, and one of length 65 km that has

no pump station. In this scenario NPS is calculated to be 22”, total capital cost is $307.9

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million, and per inch-mile cost is about $70,400. Considering that McCoy and Rubin (2008)

find construction costs in the Central region to be almost 34% lower than in the Midwest

region, we believe our cost estimates are accurate within a margin of error appropriate for

the scale at which we are working.

4.1 Pump Station Costs

Recall from Chapter 2 that we do not include the cost of compression at the source but

include pump stations in the line to maintain super-critical pressures. Our design requires

13 pump stations. We calculate pumping costs based on equations found in McCollum and

Ogden (2006). We use an electricity cost of 4.92 cents/kWh, the average price of industrial

electricity in Wyoming over ten years as of June, 2010 (EIA, 2010b). Note, however, that

under most CCS scenarios, the cost of electricity could be substantially higher. Also note that

EOR requires that CO2 be pressurized above minimum miscibility pressure upon delivery,

which may necessitate booster stations at the terminus of the line (van ’t Veld and Phillips,

2010). And if the CO2 is over-pressurized relative to the needs of the EOR or ECBM

producer, a system of orifices must be used to lower the pressure (Towler, 2009).

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Chapter 5

Tariff Calculation

We calculate a tariff using a simple static net present value (NPV) model. In the model

there is a one-time up-front investment required to cover the pipeline and pump station

capital costs.1 Subsequent future cash flows are based on the tariff per unit of CO2 times

the quantity of CO2 net of taxes and operating costs. Cash flows are discounted at a rate

consistent with the natural-gas-shipping industry average return on equity of 12% (Tonery

and Perez, 2010). The operational life-span of the pipeline is taken to be 30 years.2 We do

not, however, include a ramp-up period which would delay the maximum level of cash-flows

and result in higher tariffs. By setting the NPV equal to 0, we are essentially establishing the

minimum tariff at which the pipeline (or any segment thereof) could be built and operated

and still earn the desired return on equity. The model as formulated is

NPV =30∑t=1

QtTCO2(1− τtax)− xp − xom(1 + r)t

−Ktot, (5.1)

where Qt is the quantity of CO2 shipped (MMcf per year), TCO2 is the tariff (per mcf), τtax

is the tax rate (royalties, severance and property taxes), xp is the cost of pumping (electric

1It is realistic to expect that the network will be built in phases rather than all at once. Long-termcontracts among the beneficiaries of a particular phase (EOR and/or ECBM concerns and a pipeline concern),would likely support a combination of corporate debt and federal subsidies or guarantees sufficient to payfor that phase (INGAA, 2009).

2Some EOR fields are estimated by Cook (2009a) to operate for 40 years while others may operate foronly a year. As a trunk line, the pipeline may operate for more than 30 years. But 30 years is a typicalplanning horizon for pipeline operators.

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rate times kW’s required), xom is the pipeline operating and maintenance cost, r is the cost

of capital and Ktot is the total cost of constructing the pipelines and pump stations.3

Qt is input by the user, τtax is set at 35% and xom is set at 2.5% of capital costs

(McCollum and Ogden, 2006).4 As for xp, according to EIA (2010b) the average price

of electricity for the industrial sector in Wyoming between 1990 and June, 2010 was 4.92

cents per KWh, a price obviously exclusive of any costs related to carbon capture. Since

our model is contingent on a CCS scenario that involves costly post-combustion capture

and compression, actual electricity prices could be 30% to 50% higher in the absence of

subsidies (INGAA, 2009). Predicting electricity prices in an environment of mandatory CCS

is beyond the scope of this paper, so we proceed for now based on past costs for industrial

electricity and set xp = $0.0492. Ktot is the land construction cost as estimated by our

cost-estimation model (based on segment length and NPS) plus the capital cost for pump

stations (based on the size of the pump as measured by horsepower). Our choice of r is

based on Tonery and Perez (2010) who lists 12% as the industry average return on equity for

operating natural gas pipelines. The article points out that some companies have reported

returns as high as 25% but that these companies are being investigated by the Federal Energy

Regulatory Commission (FERC) under suspicion that such rates of return are unreasonably

high.5 Results are in 2009 dollars.

The tariffs we calculate are dependent on a discount factor that only applies given several

important assumptions. First, we assume that some form of regulation will impose a cost

on the emission of carbon sufficient to incentivize the capture of carbon, whether from flue

gas or through coal-to-fuels technologies.6 Second, we assume a level of stability on the the

3There would also likely be a charge associated with defraying the costs of the regulatory agency thatoversees CO2 pipeline operations. But the fee is small and not worth including. According to FERC (2011b),payments made by operators of natural gas companies for this purpose amount to less than 0.2% of revenues.

4Heddle et al. (2003) uses a value of $5,000/mile (2002 dollars, $6,650/mile in 2009 dollars) independentof pipeline diameter.

5FERC is given statutory authority to regulate rates for natural gas under sections 4 and 5 of the NaturalGas Act (NGA), thereby capping profit potential for pipeline operators. CO2 pipelines are currently regulatednot by FERC but by the U.S. Department of Transportation’s Surface Transportation Board (STB), whowas given authority to regulate interstate pipelines transporting commodities other than water, oil or naturalgas. The STB only acts to regulate rates when a complaint is filed (Kelliher, 2008). Under current regulation,operators of CO2 pipeline networks may have more leeway in charging rates that could earn a rate of returnabove the average for the pipeline industry in general.

6According to Coddington (2010), the only regulatory impetus for CCS associated with power generation

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regulatory front such that CO2 pipeline operators will be comfortable in assuming stability

in earnings over the course of the operating lifetime of the line.7 Taken together, these two

assumptions should lead to the fulfillment of the third and most important assumption: there

is a reliable supply of CO2 available such that EOR and ECBM producers are comfortable

committing to contracts for a level of supply sufficient to meet their requirements. Without

substantial certainty on each of these major fronts, the risk of an investment in a CO2

pipeline would be higher. Given higher risk, investors would demand a higher rate of return,

driving up the hurdle rate and increasing the discount factor.

To find TCO2 , first calculate an annuity factor, A, for a 12% cost of capital:

A =1

0.12− 1

0.12∗(

1

(1 + 0.12)30

). (5.2)

Annual payments, P , sufficient to pay back the initial investment of the pipeline’s capital

cost equal the total capital cost of the pipeline or segment, Ktot, divided by the annuity factor:

P =Ktot

A. (5.3)

These payments are also known as the equivalent annual cash flow. The tariff is then

calculated as

TCO2 =xc + xom + P

Q(1− xt). (5.4)

The tariff can also be found using a financial calculator or in MATLAB using the pvvar

function. Since the internal rate of return (IRR) is the discount rate that makes NPV

equal to 0, a suitable cross-check on the tariff is to make sure that the stream of cash flows

generated by charging our calculated tariff results in an NPV of 0 given an IRR of 12%. In

MATLAB the rate of return of a stream of cash flows can be found using the irr function. In

our code we do the calculations according to the formulas above, since pvvar and irr are part

of the Financial Toolbox, which is inexpensive for student use but less so for professional use.

thus far stems from recent EPA decisions regarding CO2 as a pollutant. Regulations regarding the emissionof CO2 due to this ruling only impact new sources of emissions or major plant upgrades, in which caseCCS must be considered as a possible best available control technology (BACT). Operators will not have toimplement CCS if they can prove that it is too costly or technologically unattainable.

7See Wolfe (2010) for a good overview of the current regulatory structure surrounding shipping CO2 bypipeline.

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0 500 1000 1500 2000 25000

1

2

3

4

5

Mass Flow Rate (Mmscfpd)

Tarif

f (U

S $/

tonn

e)

Tariff per tonne vs. Mass Flow (100km segment)

$/tonne$/tonne for 110% LCC

Figure 5.1: Tariff ($ per tonne) versus mass flow rate given a 100-km long segment.

Per-segment tariffs are listed in tables 5.1 through 5.4. For a 100-km segment of pipeline,

the calculated tariff per mcf in US cents is given in figure 5.1. Tariff versus segment length,

given a mass flow rate of 350 MMcfpd, is shown in figure 5.2. And tariff versus both length

and mass flow is shown in figure 5.3.

5.1 Comparisons with Other Estimates

We considered three different approaches to calculating tariffs within our network. One

would be segment by segment, as listed in tables 5.1 through 5.4. The second would be to

calculate the tariff over the distance traveled by the CO2 from its source to where it would

exit the pipeline, a method similar to how natural gas transmission tariffs are listed according

to areas and segments.8 By this method, operators of the Elk Basin field would pay the sum

of the per-segment tariff over the ten segments required to ship CO2 from the Jim Bridger

plant to the off-loading point at the terminus of the trunk line, an amount totaling $7.46

8See FERC (2011a) for an example of a tariff schedule filed with FERC by a natural gas transmissioncompany.

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0 50 100 1500

0.5

1

1.5

2

2.5

Segment Length (km)

Tarif

f (U

S $/

tonn

e)

Tariff per tonne vs. Length (350 MMcfpd)

$/tonne$/tonne for 110% LCC

Figure 5.2: Tariff ($ per tonne) versus segment length given a mass flow rate of 350 MMcfpd.

per tonne ($0.38 per mcf). Operators off-loading CO2 at the Kirby junction, that is several

segments closer, would pay only $4.69 per tonne ($0.24 per mcf). The third approach is to

estimate a levelized, system-wide tariff. At full capacity, 2,428 MMcf of CO2 would move

through our network in a day. If this flow rate were maintained over a full year, the levelized

tariff under our set of assumptions, and given a capital cost of $880.5 million, would be $4.87

per tonne ($.25 per mcf). In making comparisons with other models, we generally use the

segment-by-segment calculations.

Direct comparisons of our estimated tariffs to others in the literature also must take

into account whether or not compression costs are included, as well as whether the mass

flow rates under consideration are low enough to be in the steep (red) portion of the the

tariff surface depicted in Figure 5.3. Compression has substantial capital and operating costs

that increase tariffs. Furthermore tariffs at low volumes vary widely due to rapid changes

in pipeline capital costs before efficiencies of scale are achieved at flow rates of around 350

MMcfpd (again see Figure 5.3), and some estimates in the literature are based on relatively

low-flow scenarios. Robertson (2009), for example, calculates the total capital cost, including

compression, for shipping 2,383,000 m3 per day (84 MMcfpd) via an 80 km (∼50 mile)

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0 50 100 150 200 250 0500

10001500

20002500

0

1

2

3

4

5

6

7

8

9

Mass flow rate (MMcfpd)

Tariff vs. length and flow rate

Segment Length (km)

Tarif

f ($/

tonn

e)

Figure 5.3: Surface plot of tariff ($ per tonne) versus segment length (km) and mass flowrate (MMcfpd).

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Table 5.1: Tariff per segment for the Green River and Wind River Basins portion of CO2

pipeline network, based on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR ap-plications.

Green River and Wind River BasinsSeg.no.

From: To: Length(km)

Massflow(Mm-scfpd)

NPS(in)

Tariff($ permcf/$ pertonne)

1. PCEC Pump Station I 150 175 10 0.15/3.022. Pump Station I Naughton 85 175 10 0.09/1.853. Naughton Painter Jct. 21 444 18 0.02/0.344. Painter Jct. ExxonMobil line

(EM1)64 428 18 0.05/1.01

5. EM1 Jim Bridger 90 428 18 0.07/1.366. Jim Bridger EM2 23 537 18 0.02/0.307. EM2 Crooks Gap 102 537 18 0.06/1.088. Crooks Gap Big Sand Draw 53 531 18 0.04/0.869. Big Sand Draw Beaver Creek 15 516 18 0.01/0.2210. Beaver Creek Butte Jct. 36 516 18 0.02/0.4611. Butte Jct. Lake

Cr./MurphyDome

91 467 18 0.07/1.37

pipeline to be $522,000/km (which equals a total cost of $41,760,000). His cost estimates for

compression are based on the equipment used at the ExxonMobil Shute Creek facility and

come to around $39,500,000. He calculates a tariff of $0.000201/m3/km ($0.00000916/cf/mile

or $0.46/mcf). Mohan (2009) estimates transportation costs to be $8 - $9 per ton (∼$7.25 -

$8.15 per tonne or ∼$0.37 - 0.42/mcf). INGAA (2009) lists transportation costs for a flow

rate of 19,139 tonnes per day (361 MMcfpd), through a 75-mile (120-km) long pipeline that

is 16” in diameter, as $3.25 per tonne (∼$0.17/mcf). By our calculations the tariff would be

$1.59 per tonne.

Assuming a 30-year operating period and a 15% capital recovery factor, McCoy and

Rubin (2008) calculate that the cost of transporting 5 Mt of CO2 (∼260 MMcfpd, or ap-

proximately equal to the annual production of an 800 MW power plant) through a 100-km

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Table 5.2: Tariff per segment for the Bighorn Basin portion of CO2 pipeline network, basedon mass flow rates given $70/bo and $2.25/mcf CO2 for EOR applications.

Bighorn BasinSeg.no.

From: To: Length(km/miles)

Massflow(Mm-scfpd)

NPS(in)

Tariff($ permcf/$ pertonne)

12. Lake Cr. /Mur-phy Dome

Kirby 26 455 18 0.02/0.40

13. Kirby Basin Center 19 273 14 0.02/0.3714. Basin Center Cody Spur 70 259 14 0.06/1.1915. Cody Spur Byron 30 257 14 0.04/0.8216. Byron Elk Basin 15 175 12 0.02/0.39

Table 5.3: Tariff per segment for the Southeastern portion of CO2 pipeline network based,on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR applications.

East Wind River/South Powder River BasinsSeg.no.

From: To: Length(km/miles)

Massflow(Mm-scfpd)

NPS(in)

Tariff($ permcf/$ pertonne)

17. Jim Bridger Patrick Draw 24 657 20 0.01/0.2918. Patrick Draw Sinclair 120 648 20 0.07/1.4119. Sinclair Med. Bow Fuels 77 648 20 0.05/0.9320. Med. Bow Fuels Col. Int. Gas 40 858 22 0.02/0.3921. Col. Int. Gas Dave J. Plant

Jct.106 858 22 0.05/1.07

22. Laramie RiverPlant

Dave J. PlantJct.

109 639 20 0.06/1.27

segment of pipeline in the Central region to be around $0.77 per tonne (2004 USD), while

we calculate a tariff of $1.60 per tonne (2009 USD) for shipping a similar amount over a

similar distance.9

9They calculate a transportation cost of $1.16 per tonne for the Midwest region using a similar set ofassumptions.

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Table 5.4: Tariff per segment for the Powder River Basins portion of CO2 pipeline network,based on mass flow rates given $70/bo and $2.25/mcf CO2 for EOR applications.

Powder River BasinSeg.no.

From: To: Length(km/miles)

Massflow(MM-cfpd)

NPS(in)

Tariff($ permcf/$ pertonne)

23. Dave J. Plant Dave J. PlantJct.

9/6 300 16 0.01/0.29

24. Dave J. Plant Grieve Jct. 39 10 4 0.20/3.9025. Dave J. Plant

Jct.Phillips etc. 120 2,410 34 0.04/0.80

26. Phillips etc Maysdorf 24 1,760 30 0.01/0.1827. Maysdorf Wyodak 26 1,060 24 0.01/0.2428. Wyodak Big Horn Gas

Gathering58 445 18 0.04/0.80

Smart and Helmke (2009) calculate transportation costs for ten pipelines designed to

transport CO2 from various power plants in Wyoming and Southern Montana to the Northern

House Creek Field sequestration site in the PRB and to the Moxa Arch sequestration site

near La Barge. They find that, given a 12% interest rate and 30-year facility time span, the

average annual transportation cost per ton ranges from $0.89 to $7.32.

The most direct comparison would be to the rates generated by the example network

proposed by Reyes (2009) and Jeffries (2009). Their network costs roughly a billion US

Dollars. Under one scenario, tariffs are roughly $15 per tonne ($0.90 per mcf), while under a

second scenario tariffs are roughly $8 - $9.50 per tonne ($0.45 - $0.55 per mcf). However they

assume a ten-year return on capital and a ten-percent blended cost of capital. Assuming a

ten-year, rather than 30-year, return on capital substantially increases the tariff. Assuming

a ten-percent cost of capital brings it back down, but not to a level matching our results.

For example, under the scenario described above in INGAA (2009), decreasing the return

on capital to ten years raises the tariff to $3.61 per tonne. Lowering the discount factor to

ten-percent brings it down to $2.00/tonne, a rate still well above our calculated $1.59 per

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tonne.

Our tariffs are lower than those generated by Jeffries (2009) for three possible reasons.

One is the economies of scale achieved in our pipeline by shipping large quantities. The vast

majority of segments ship quantities in excess of 350 MMcfpd, thereby incurring tariff rates

well into the blue range in figure 5.3. The second may be due to our chosen cost of capital.

In actuality companies may seek a higher rate of return, which in turn would drive up tariff

rates. Finally, our calculated tariffs are only for shipment via the trunk line. Shipment from

the trunk line to the point of demand would incur additional costs and increase the overall

tariff.

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Chapter 6

Conclusion

This study seeks to build on the substantial (and growing) body of research at the University

of Wyoming that examines the energy industry in Wyoming from the perspective of both

productivity and carbon management. The research is being carried out by professors and

students across many different departments that are associated with the School of Energy

Resources, the School of Environment and Natural Resources and the Carbon Management

Institute. Research carried out through the Enhanced Oil Recovery Institute, affiliated with

the University of Wyoming, has also made significant contributions to the field of CO2

management and enhanced hydrocarbon recovery. Their research plays a significant role in

the development of our vision of a statewide pipeline network for shipping CO2. We seek to

fill an important niche, not only by designing the pipeline network, but also by developing

tools that could be used by others who are considering doing research on energy and CCS

infrastructure projects.

In determining the final design capacity of the pipeline, we had to choose whether

to design the pipeline to handle much, if not most, of the state’s production of CO2, or

whether to design the pipeline to handle the current demand for CO2 based on current CO2

and fossil fuel prices. At today’s prices, all the available supply of CO2 is spoken for, and

no further sources are known to exist. In order for more CO2 to become available, either

the cost of fossil fuels must rise to a point such that the owners of enhanced hydrocarbon

recovery operations are able and willing to purchase CO2 captured at substantial cost from

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anthropogenic sources, or the cost to the emitters of capturing CO2 must be reduced through

subsidies. Or, of course, some combination of these two options must occur. Since private

efforts have already built one network and laid the groundwork for a second—networks

considered economical given current prices—we felt it would be more beneficial to examine

the other extreme: a scenario of mandated or subsidized capture such that the price for CO2

faced by owners of enhanced hydrocarbon operations is in line with prices that exist today.1

Under such a scenario, the supply of CO2 is dramatically increased.

In deciding to assume a mandatory capture scenario, we faced considerable uncertainty

in estimating the total sequestration potential of the state’s enhanced hydrocarbon recov-

ery industry. As a result, there is ample opportunity for future research. Our forecasts of

injection rates, sequestration rates and mass flow rates should be revised as energy policy

and technology evolve. Given the growing focus on efforts to utilize our nation’s vast coal

resources in a manner that avoids releasing the bulk of their carbon content into the atmo-

sphere, it is safe to assume that current and future research will provide much data that

should be used to revise the estimates and assumptions made in our study. Indeed coal

gasification and coal liquefaction are two technologies that appear to be both feasible and

on the verge of economic viability (OGJ, 2011a,c).

Our research required seven phases. The first was to compile the research done by

van ’t Veld and Phillips (2010) and Cook (2010) to estimate EOR demand. The second

was to analyze research on ECBM in Wyoming coals and determine theoretical mass flow

rates that could be generated from ECBM activity. The third was to calculate total CO2

supply based on the assumption that costs are imposed on the emission of CO2, thereby

incentivizing emitters to capture and compress their CO2 emissions. The fourth was to

develop an algorithm for calculating pipeline diameters in order to determine final capital

costs. The fifth was to develop a cost estimation model specific to Wyoming. The sixth was

to lay out the network and calculate its capital cost. The seventh and final phase was to

estimate the tariff (or tariff structure) that a pipeline operator would need to charge in order

to earn back their capital expenditure based on a 12% return on equity (any tariff higher

1The ACES legislation (aka Waxman-Markey Bill) is the best example of a regulatory effort that wouldhave subsidized capture and possibly brought this scenario to fruition (Cook, 2010).

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than our calculation would earn a positive return on capital).

Each of these phases presents opportunities for more research across many fields, from

geology to reservoir engineering to economics to environmental and energy-policy analysis.

While the pipeline network contemplated by this research may never get built, the process

may be useful none the less. Our pipeline-diameter algorithm and cost-estimation models

will hopefully be valuable tools for students and professors interested in evaluating the costs

associated with various CCS and energy transportation schemes. And though this study in

general is somewhat of a thought experiment, we feel it is helpful in framing future debates

about energy and climate policy.

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Appendix A

Simulation Input Parameters for

ECBM Models

Figure A.1: Some parameter values used for Robertson’s (2008) coal-seam model.Source: Robertson (2008)

Figure A.2: Some parameter values used for Robertson’s (2009) coal-seam model.Source: Robertson (2009)

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Figure A.3: Some parameter values used for Ross’s (2009) coal-seam model.Source: Ross et al. (2009)

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Appendix B

MATLAB Code for Pipeline

Diameter, Cost and Tariff

Calculations

Users may calculate a diameter, capital cost and tariff either one segment at a time or

several segments at once by using a pre-configured network laid out in an Excel xls file. If

calculating segment by segment, follow the instructions. If calculating the diameter and cost

of a segment longer than 150 km, include a pump station at the 150-km mark. If calculating

the diameter and cost for a segment terminating at a junction with a new source coming on

line at 15.3 MPa, include a pump station at the end point of the segment. After entering all

segments, the routine asks for the total amount of CO2 being shipped. This is the sum of all

CO2 coming on-line. Entering this value allows the program to calculate the network-wide

tariff.

If calculating a pre-configured network, create a spreadsheet using the included template.

Save the template in the directory from which you are working, otherwise MATLAB won’t

find it.

The algorithm uses an iterative process to find a diameter associated with a Reynolds

number and Fanning friction factor that are appropriate for that particular diameter. We

assume that all CO2 entering the pipeline network has been compressed to 15.3 MPa (2,219

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psi) and cooled to 15 C (59 F.). Pressures within the pipeline should remain above 10.3 MPa

in order to comfortably avoid dropping below critical pressure (Heddle et al., 2003). So we

include pump stations where needed to account for pressure drop or to equalize pressures

wherever new CO2 enters the supply line (i.e the CO2 stream already in the line must be

repressurized to match the pressure of the freshly compressed CO2 entering the line (15.3

MPa)). To account for pressure drop and to maintain critical pressure, we place a pump

station wherever CO2 has traveled about 160 km without re-pressurization.1

Contents

• BEGIN

• MANUAL ENTER

• NPS

• PUMP CAPITAL COST

• PIPE CAPITAL COST

• TARIFF

• DISPLAY OUTPUT

• CALC ARRAY

• BUILD ARRAY

• CALC TOTALS

• GRAPH ARRAY

• FIND ROW & COL:

• DIAM VS FLOW (length set at 100 km)

• LCC VS FLOW (length set at 100 km)

• LCC VS FLOW (KM = 100, NEWC VS PNNL)

• TARIFF VS FLOW (length set at 100 km)

• TARIFF VS LENGTH (mass flow rate set at 350 Mmscfpd)

1Based on McCollum and Ogden (2006), we assume a pressure drop of 35 kPa per kilometer. Others,including Heddle et al. (2003), assume a maximum pressure drop of 49 kPa per kilometer. INGAA (2009)provides a good overview of CO2 transportation requirements as well as pipeline design considerations anddesign parameters for different flow rates.

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• TARRIFF SURFACE CALCULATIONS

• TARRIFF SURFACE

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

% Code for calculating pipeline diameter, NPS, pipe wall wall, pump %

% capital costs, total pipe and pump capital cost and tariff. The code %

% allows calculations to be made either one seg at a time or for more %

% than one seg at a time by passing in a pre-configured spreadsheet. %

% Graphs can also be generated to evaluate capital cost versus mass flow %

% rate, tariff versus mass flow rate, NPS versus mass flow rate and %

% tariff versus length %

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

BEGIN

clear all;

close all;

global r;

global mps;

graph = 0;

blank = (’ ’);

disp(blank)

disp(blank)

MANUAL ENTER

query = input(...

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’Are you calculating one segment at a time? [y/n]: ’,’s’);

if query == ’y’

enter = 1;

seg = 0;

while enter

clear D D_final pa_1 pa_2 f fan Re NPS iter diff;

seg = seg + 1; % Increase the seg counter by one.

disp(blank) % Create space between last output.

disp(blank)

fprintf(’SEGMENT NUMBER %d.\n’,seg) % print seg no.

disp(blank)

% Input parameter values

km(seg) = input...

(’Enter length of the pipeline seg in km: ’);

mile(seg) = km(seg)*0.621371192;

disp(blank)

query = input(’Is a pump station required? [y/n] ’,’s’);

disp(blank)

pump_dist(seg) = 0;

pump(seg) = 0;

if query == ’y’

pump(seg) = 1;

pump_dist(seg) = input(...

’Length of span over which pressure drop occurs (km): ’);

end

disp(blank)

mmcf(seg) = input(’Enter mass flow rate per day (MMcfpd): ’);

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NPS

% Call a function that calculates NPS, wall thickness and tons of

% steel:

[tonnespd(seg) pa_1 pa_2 mps(seg) NPS(seg) wall(seg) tons(seg)]...

= pl_nps_calc(km(seg),mmcf(seg));

PUMP CAPITAL COST

% Call a function that calculates pump cap costs and power

% requirements:

[K_pump(seg), Wp(seg), Wp_hp(seg)] = ...

pl_pump_calc(pump(seg),pump_dist(seg),tonnespd(seg),pa_1,pa_2);

PIPE CAPITAL COST

% Estimate capital cost using the statistical model developed by

% Newcomb:

K_pl(seg) = 24491*(NPS(seg)^1.249193)*(km(seg)^0.8540587);

K_tot(seg) = K_pl(seg) + K_pump(seg);

% Oil Gas Journal equations (developed by Pacific Northwest National

% Laboratory) see OGJ, Jan. 3, 2011:

mat_cost = 53904*exp(0.0678*NPS(seg));

lab_cost = 2.065*7127.9*NPS(seg)^1.1641;

row_cost = 2.302*(1112.9*NPS(seg)+19180);

K_tot_pnnl(seg) = mile(seg)*(mat_cost+lab_cost+row_cost)...

+ K_pump(seg);

% Estimate cost per inch-mile:

per_in_mile(seg) = (K_tot(seg)*1.609)/(NPS(seg)*(km(seg)/1.609));

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% Estimate cost per tonne

tonnespy(seg) = tonnespd(seg)*365;

costptonne(seg) = K_tot(seg)/(30*tonnespy(seg));

TARIFF

% Call a function that calculates the tariff:

[tariff_mcf(seg) tariff_tonne(seg)] = pl_tar_calc(K_tot(seg),...

Wp(seg),mmcf(seg));

DISPLAY OUTPUT

% Build a structure array with 50 pl segs, each containing fields

% for seg length, mass flow rate, NPS, pl wall, tons of steel,

% capital costs for each seg and pumps using Newcomb’s cost model,

% total capital cost, tariff per mcf and tariff per tonne.

% Populate the structure with values as calculated per segment:

pl(1,50) = struct(’seg_length’,[],’mmcfpd’,[],’NPS’,[],...

’pl_wall’,[],’tons’,[],’K_pump’,[],...

’K_pl’,[],’K_tot’,[],’tariff_mcf’,[],’tariff_tonne’,[]);

pl(seg).seg_length = km(seg);

pl(seg).mmcfpd = mmcf(seg);

pl(seg).NPS = NPS(seg);

pl(seg).pl_wall = wall(seg);

pl(seg).tons = tons(seg);

pl(seg).K_pump = K_pump(seg);

pl(seg).K_pl = K_pl(seg);

pl(seg).K_tot = K_tot(seg);

pl(seg).tariff_mcf = tariff_mcf(seg);

pl(seg).tariff_tonne = tariff_tonne(seg);

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disp(blank)

disp(blank)

disp(blank)

fprintf(...

’NPS for a %d km seg with flow rate %d MMcfpd is %d inches.\n’,...

km(seg), mmcf(seg), NPS(seg))

disp(blank)

fprintf(...

’Land construction cost: %4.1f million USD.\n’,...

K_tot(seg)/10e+5)

if pump(seg)

fprintf(...

’Pump station capital cost: %4.1f million USD.\n’,...

K_pump(seg)/10e+5)

disp(blank)

end

disp(blank)

global r;

fprintf(...

’For a %d%% cost of capital, the tariff is %3.2f USD/mcf.\n’,...

r*100,tariff_mcf(seg))

fprintf(’(%3.2f USD/tonne).\n’,tariff_tonne(seg))

disp(blank)

query = input(...

’Is there another seg to calculate? [y/n] ’,’s’);

if query == ’y’, enter = 1; else enter = 0; end;

end

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else

%clear D D_final pa_1 pa_2 f fan Re NPS iter diff pl;

clear all;

close all;

global r;

global mps;

graph = 0;

blank = (’ ’);

disp(blank)

enter = 0;

disp(blank)

fprintf(’Your data file must be placed in the folder from which\n’)

fprintf(’you are currently working.\n’)

disp(blank)

file_name = input(’Enter the name of your pipeline data file: ’,’s’)

new_array = xlsread(file_name);

no_segs = size(new_array,2);

seg = 0;

CALC ARRAY

while seg < no_segs

seg = seg + 1;

km(seg) = new_array(2,seg);

mmcf(seg) = new_array(3,seg);

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pump(seg) = new_array(4,seg);

pump_dist(seg) = new_array(5,seg);

mile(seg) = new_array(2,seg).*0.621371192;

% Call a function that calculates NPS, wall thickness and tons of

% steel:

[tonnespd(seg) pa_1 pa_2 mps(seg) NPS(seg) wall(seg) tons(seg)]...

= pl_nps_calc(km(seg),mmcf(seg));

% Call a function that calculates pump cap costs and power

% requirements:

[K_pump(seg), Wp(seg), Wp_hp(seg)] = ...

pl_pump_calc(pump(seg),pump_dist(seg),tonnespd(seg),pa_1,pa_2);

% Estimate capital cost using the statistical model developed by

% Newcomb:

K_pl(seg) = 24491*(NPS(seg)^1.249193)*(km(seg)^0.8540587);

% Total capital cost for this segment:

K_tot(seg) = K_pl(seg) + K_pump(seg);

% Oil Gas Journal equations (developed by Pacific Northwest National

% Laboratory) see OGJ, Jan. 3, 2011:

mat_cost = 53904*exp(0.0678*NPS(seg));

lab_cost = 2.065*7127.9*NPS(seg)^1.1641;

row_cost = 2.302*(1112.9*NPS(seg)+19180);

K_tot_pnnl(seg) = mile(seg)*(mat_cost+lab_cost+row_cost)...

+ K_pump(seg);

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% Call a function that calculates the tariff:

[tariff_mcf(seg) tariff_tonne(seg)] = pl_tar_calc(K_tot(seg),...

Wp(seg),mmcf(seg));

% Build a structure array with 50 pl segs, each containing fields

% for seg length, mass flow rate, NPS, pl wall, tons of steel,

% capital costs for each seg using Newcomb’s cost model,

% total capital cost, tariff per mcf and tariff per tonne.

% Populate the structure with values as calculated per segment:

pl(1,50) = struct(’seg_length’,[],’mmcfpd’,[],’NPS’,[],...

’pl_wall’,[],’tons’,[],’K_pump’,[],...

’K_pl’,[],’K_tot’,[],’tariff_mcf’,[],’tariff_tonne’,[]);

pl(seg).seg_length = km(seg);

pl(seg).mmcfpd = mmcf(seg);

pl(seg).NPS = NPS(seg);

pl(seg).pl_wall = wall(seg);

pl(seg).tons = tons(seg);

pl(seg).K_pump = K_pump(seg);

pl(seg).K_pl = K_pl(seg);

pl(seg).K_tot = K_tot(seg);

pl(seg).tariff_mcf = tariff_mcf(seg);

pl(seg).tariff_tonne = tariff_tonne(seg);

end

end

BUILD ARRAY

disp(blank)

disp(blank)

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% Build cell array, pl_array, for export to Excel csv spreadsheet:

pl_array = cell(11,seg+1);

pl_array{1,1} = ’seg No.’;

for i = 1:seg, pl_array(1,i+1) = {i}; end;

pl_array{2,1} = ’seg Length (km)’;

pl_array{3,1} = ’Flow Rate (MMcfpd)’;

pl_array{4,1} = ’NPS’;

pl_array{5,1} = ’Wall Thickness (in)’;

pl_array{6,1} = ’Steel (tons)’;

pl_array{7,1} = ’Pump Cost (2009 $$)’;

pl_array{8,1} = ’Pipeline Cost (2009 $$)’;

pl_array{9,1} = ’Total Cost(2009 $$)’;

pl_array{10,1} = ’Tariff/mcf (2009 $$)’;

pl_array{11,1} = ’Tariff/tonne (2009 $$)’;

% Concatenate the values stored in the struct array labeled pl first by

% column then by row:

d(1,1:seg) = cat(2,pl.seg_length);

d(2,1:seg) = cat(2,pl.mmcfpd);

d(3,1:seg) = cat(2,pl.NPS);

d(4,1:seg) = cat(2,pl.pl_wall);

d(5,1:seg) = cat(2,pl.tons);

d(6,1:seg) = cat(2,pl.K_pump);

d(7,1:seg) = cat(2,pl.K_pl);

d(8,1:seg) = cat(2,pl.K_tot);

d(9,1:seg) = cat(2,pl.tariff_mcf);

d(10,1:seg) = cat(2,pl.tariff_tonne);

% Add the numerical data to the cell array pl_array:

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[rows, cols] = size(pl_array);

for row = 2:rows

for col = 2:cols

pl_array{row,col} = [d(row-1,col-1)];

end

end

CALC TOTALS

Find the total distance, mass flow, tons of steel, pump cap ex, pipeline cap ex, pipeline plus

pump capex:

Totals = sum(d,2);

length_total = Totals(1);

mmcfpd_total = Totals(2); %Note: this does NOT represent total supply

tons_total = Totals(5);

K_pump_total = Totals(6);

K_pl_total = Totals(7);

K_tot_total = Totals(8);

Wp_tot = sum(Wp);

% Calc an overall tariff for the entire network:

T = 30; % Use a 30-year life-time for calculating NPV

%r = .12; % Use a 12% cost of capital for discounting cash streams

A = 1/r - 1/(r*(1+r)^T); %global r carries over from pl_tar_calc.m

payment_total = K_tot_total/A;

% Here Q_ann_tot needs to be the total overall supply coming on line:

Q_tot = input(...

’Enter the total network-wide supply to be shipped (MMcfpd): ’);

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Q_ann_tot = Q_tot*365;

X_OM = .025*K_tot_total;

X_PUMP = .0492*Wp_tot*365*24;

X_TAX = .35; %35% tax rate

tariff_total = (payment_total + X_PUMP + X_OM)/(Q_ann_tot*(1-X_TAX));

tariff_mcf_total = (round((tariff_total/1000)*100))/100;

tariff_tonne_total = (round(((19.59701321/1000)*tariff_total)*100))/100;

disp(blank)

disp(blank)

fprintf(’NETWORK TOTALS:\n’)

disp(blank)

fprintf(...

’The capital cost of the entire network is %6.1f million USD.\n’,...

K_tot_total/10e+5)

disp(blank)

fprintf(...

’The network-wide tariff averages out to %3.2f USD/mcf or\n’,...

tariff_mcf_total)

fprintf(’%3.2f USD/tonne.\n’,tariff_tonne_total)

disp(blank)

fprintf(...

’The network is %d km long and will require %3.0f tons of steel.\n’,...

length_total,tons_total)

%}

% Export data as a comma separated file to an Excel spreadsheet named

% pl_output.csv:

pl_data = pl_array(2:rows,2:cols);

disp(blank)

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disp(blank)

fprintf(’Writing file to Excel file pl_ouput.csv. Columns correspond to\n’)

fprintf(...

’segs and rows correspond to labels in pl_array. Ignore Warning.\n’)

disp(blank)

disp(blank)

% Download the file as file name pl_output.csv in folder pl_data:

%xlswrite(’pl_output.csv’,pl_data)

% Use this when testing the program

xlswrite(’pl_output.csv’,pl_data)

if graph

GRAPH ARRAY

% Here we generate a structure array populated with data for graphs.

% Flow rates range from 50 to 2400 Mmscfpd in increments of 50 and pipeline

% lengths range from 20 to 160 km in increments of 10. We then generate a

% vector of construction costs and tariffs for a segment length of 100 km.

% Next we generate a vector of tariffs for a mass flow rate of 350 mmcfpd.

% Finally we generate two vectors, diam and flow, to be used on the x axes

% of the graphs. Variables with ’ten’ are for costs 10% greater than

% calculated.

clear all;

close all;

km_low = 10;

km_high = 160;

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array_height = (km_high - km_low)/10 + 1;

mmcf_low = 50;

mmcf_high = 2400;

array_width = (mmcf_high - mmcf_low)/50 + 1;

graph_array(array_height,array_width) = struct(’km’,[],’mmcf’,[],...

’tonnespd’,[],’NPS’,[],’K_tot’,[],’K_tot_ten’,[],’K_tot_pnnl’,[],...

’tar_mcf’,[],’tar_tonne’,[],’tar_nl_mcf’,[],’tar_mcf_ten’,[],...

’tar_tonne_ten’,[],’in_mile’,[]);

row = 1;

for km = (km_low:10:km_high) %Loop through lengths (rows)

col = 1;

for mmcf = (mmcf_low:50:mmcf_high) %Loop through flow rates (cols)

% Populate cells of structure with data:

graph_array(row,col).mmcf = mmcf;

graph_array(row,col).km = km;

% NPS FOR GRAPHS

% Call a function that calculates NPS, wall thickness and tons

% of steel:

[tonnespd pa_1 pa_2 NPS wall tons] = pl_nps_calc(km,mmcf);

graph_array(row,col).NPS = NPS;

% PIPE CAPITAL COSTS FOR GRAPHS

% Estimate capital cost using the statistical model developed

% by Newcomb (assume no pump station costs):

graph_array(row,col).K_tot = 24491*(NPS^1.249193)*(km^0.8540587);

graph_array(row,col).K_tot_ten = graph_array(row,col).K_tot*1.1;

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% Estimate capital cost using Oil Gas Journal equations (developed

% by Pacific Northwest National Laboratory) see OGJ, Jan. 3, 2011:

miles = 0.6214*km;

mat = 53904*exp(0.0678*NPS);

lab = 2.065*7127.9*NPS^1.1641;

r_way = 2.302*(1112.9*NPS+19180);

graph_array(row,col).K_tot_pnnl = miles*(mat+lab+r_way);

graph_array(row,col).in_mile = ((graph_array(row,col).K_tot/km)...

*1.6329)/NPS;

% TARIFFs FOR GRAPHS

% Call a function that calculates the tariff (assume Wp = 0):

Wp = 0;

[graph_array(row,col).tar_mcf, graph_array(row,col).tar_tonne]...

= pl_tar_calc(graph_array(row,col).K_tot,Wp,mmcf);

[graph_array(row,col).tar_mcf_ten,...

graph_array(row,col).tar_tonne_ten]...

= pl_tar_calc(graph_array(row,col).K_tot_ten,Wp,mmcf);

[graph_array(row,col).tar_nl_mcf...

graph_array(row,col).tar_nl_tonne]...

= pl_tar_calc(graph_array(row,col).K_tot_pnnl,Wp,mmcf);

col = col+1; % Move to next column (to next mass flow rate).

end

row = row+1; % Move to next row (to next length).

end

FIND ROW & COL:

Here we find the row that corresponds to 100 km and the column that corresponds to mmcf

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= 350. These will be used to make the graphs.

for i = 1:(row-1)

if graph_array(i,1).km == 100, this_row = i; break; end;

i=i+1;

end

for j = 1:(col-1)

if graph_array(1,j).mmcf == 350, this_col = j; break; end;

j=j+1;

end

flow_vec = [graph_array(this_row,:).mmcf];

nps_vec = [graph_array(this_row,:).NPS];

K_tot_vec = [graph_array(this_row,:).K_tot];

K_ten_vec = [graph_array(this_row,:).K_tot_ten];

K_tot_pnnl_vec = [graph_array(this_row,:).K_tot_pnnl];

tar_t_vec = [graph_array(this_row,:).tar_tonne];

tar_t_ten_vec = [graph_array(this_row,:).tar_tonne_ten];

km_vec = [graph_array(:,this_col).km];

tar_t_vec2 = [graph_array(:,this_col).tar_tonne];

tar_t_ten_vec2 = [graph_array(:,this_col).tar_tonne_ten];

% Here we produce graphs of diameter vs mass flow, cost vs mass

% flow, tariff vs. mass flow and tariff vs length for cost as calculated

% and for costs 10% higher than calculated.

DIAM VS FLOW (length set at 100 km)

pl_fig_diam_flow(flow_vec,nps_vec)

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LCC VS FLOW (length set at 100 km)

pl_fig_lcc_flow(flow_vec,K_tot_vec,K_ten_vec)

LCC VS FLOW (KM = 100, NEWC VS PNNL)

pl_fig_lcc_flow2(flow_vec,K_tot_vec,K_tot_pnnl_vec)

TARIFF VS FLOW (length set at 100 km)

pl_fig_tar_flow(flow_vec,tar_t_vec,tar_t_ten_vec)

TARIFF VS LENGTH (mass flow rate set at 350 Mmscfpd)

pl_fig_tar_length(km_vec,tar_t_vec2,tar_t_ten_vec2)

TARRIFF SURFACE CALCULATIONS

This cell generates a 3-D surface of tariff versus segment length and mass flow rate.

clear all;

close all;

km_low = 5;

km_high = 240;

mmcf_low = 50;

mmcf_high = 2400;

kmVec = km_low:5:km_high;

mmcfVec = mmcf_low:50:mmcf_high;

dim = size(kmVec,2);

tar_mcfMat = zeros(dim,dim);

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tar_tonneMat = zeros(dim,dim);

tar_nl_mcfMat = zeros(dim,dim);

tar_nl_tonneMat = zeros(dim,dim);

kmMat = zeros(dim,dim);

mmcfMat = zeros(dim,dim);

row = 1;

for km = kmVec %Loop through lengths (rows)

col = 1;

for mmcf = mmcfVec %Loop through mass flow rates (cols)

% NPS FOR SURFACE

% Call a function that calculates NPS, wall thickness and tons of

% steel:

[tonnespd pa_1 pa_2 NPS wall tons] = pl_nps_calc(km,mmcf);

% PIPE CAPITAL COSTS FOR SURFACE

% Estimate capital cost using the statistical model developed by

% Newcomb (assume no pump station costs):

K_tot = 24491*(NPS^1.249193)*(km^0.8540587);

% Estimate capital cost using Oil Gas Journal equations (developed

% by Pacific Northwest National Laboratory) see OGJ, Jan. 3, 2011:

miles = 0.6214*km;

mat = 53904*exp(0.0678*NPS);

lab = 2.065*7127.9*NPS^1.1641;

r_way = 2.302*(1112.9*NPS+19180);

K_tot_pnnl = miles*(mat+lab+r_way);

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%Calculate per inch-mile cost:

in_mile = ((K_tot/km)*1.6329)/NPS;

% TARIFFs FOR SURFACE

% Call a function that calculates the tariff (assume Wp = 0):

Wp = 0;

[tar_mcfMat(row,col), tar_tonneMat(row,col)] =...

pl_tar_calc(K_tot,Wp,mmcf);

[tar_nl_mcfMat(row,col), tar_nl_tonneMat(row,col)] =...

pl_tar_calc(K_tot_pnnl,Wp,mmcf);

col = col+1; %Move to next column (to next mass flow rate).

end

row = row+1; %Move to next row (to next length).

end

TARRIFF SURFACE

grid on;

[kmMat,mmcfMat] = meshgrid(kmVec,mmcfVec);

surf(kmMat,mmcfMat,tar_tonneMat);

xlabel(’Segment Length (km)’,’Fontsize’,10);

ylabel(’Mass flow rate (MMcfpd)’,’Fontsize’,10);

zlabel(’Tariff ($/tonne)’,’Fontsize’,10);

title(’Tariff vs. length and flow rate’,’Fontsize’,14);

view(20,20);

end

function [tonnespd,pa_1,pa_2,mps,NPS,thickness,tons]...

= pl_nps_calc(km,mmcf)

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% Carry out conversions to SI units

mcf = mmcf*1000;

meters = km*1000;

tonnespd = (1/19.01752794)*mcf; % MMcf to tonnes/day.

kgps = tonnespd*1000/(24*60*60); % Tonnes/day to kg/s.

kgpd = tonnespd*1000; % kilograms per day

m3pd = 556.0125245*tonnespd; % meters^3 per day

mpa_1 = 15.3; % upstream pressure is 15.3 MPa

psia_1 = 145.037738*mpa_1; % Convert to psi for velocity calc below.

% McCoy06 lists a press drop of 35 kPa/km. Herzog06 lists 49Pa/m.

pa_1 = mpa_1*1000000; % Convert MPa to Pa for McCoy-Rubin model.

pa_2 = pa_1 - 35*meters; % pressure drop of 35 kPa/km (=35Pa/meter).

% Pressure varies non-linearly. McCoy and Rubin (2009) equation (3):

P_ave = (2/3)*(pa_2+pa_1-pa_2*pa_1/(pa_2+pa_1)); %Pascals

kpa_1 = mpa_1*1000; % Convert initial pressure to kPa

kpa_2 = pa_2/1000; % Coinvert ending pressure to kPa

% Beginning and ending elevations (6,000 ft. ~ 1830 m).

h_1 = 1830; % m above sea level

h_2 = 1830;

% Compressibility and viscosity both change as pressure and temp change. We

% assume a constant temp (12C), but a variable pressure due to pressure drop.

% Calculate compressibility (dimensionless), dynamic viscosity (Pa-s; note

% that 1 Pa-s = 10 Poise) and density (kg/m^3) using data from

% \citep{co2_calc}. We pick the compressibility, dynamic viscosity and

% density for the rounded integer value of pressures between 10 and 15 MPa.

%{

rho = 938; %McCoy personal correspondence

dv = 103;

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Z_ave = .26;

%}

% My algorithm for generating the parameters above:

P_int = round(P_ave*10^-6);

if P_int == 10

Z_ave = 0.204;

dv = 93.82;

rho = 908.26;

elseif P_int == 11

Z_ave = 0.223;

dv = 95.99;

rho = 916.49;

elseif P_int == 12

Z_ave = 0.241;

dv = 98.05;

rho = 924.12;

elseif P_int == 13

Z_ave = 0.259;

dv = 100.03;

rho = 931.23;

elseif P_int == 14

Z_ave = 0.277;

dv = 101.94;

rho = 937.90;

else Z_ave = 0.295;

dv = 103.78;

rho = 944.18;

end

%}

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% Soil Temps range from -2 to 8C in Wyoming’s relatively cool climate. But

% Towler06 uses 15 C. So we do too. 15 C = 288 K.

T_ave = 288.15; % Avg ground temperature, K.

T_f = 293.15; % Flowing gas temperature, K.

R = 8.314472; % Ideal gas constant Pa m^3/mol K

M = 44.0096; % CO2 kg/kgmol

epsilon = 0.0000457; % roughness in m

gr = 9.8; % acceleration of gravity m/s^2

G = 44.0096/28.9265; % Specific gravity of 100% pure CO2

P_b = 81.22; % Base pressure at 6000 ft. above sea level kPa

poise = dv/10; % Convert Pa-s to Poise

efficiency = 0.95; % Pipeline efficiency (could be as low as .85)

if h_1 ~= h_2

s = 0.0684*G*(h_1-h_2)/(T_f*Z_ave); %Elevation adjustment term

km_e = km*(exp(s)-1)/s; % Equivalent length adjusted for elev.

else

km_e = km;

s=0;

end

% Iterative approach to calculating diameter using the fanning friction

% factor. Start with an initial internal diameter based on a flow velocity

% of 1.36 m/s:

%McCoy in m:

%D(1,1) = sqrt( (4*(kgps/10))/(pi*rho*1.36) ); %m

%Menon in mm:

D(1,1) = 1000*sqrt( (4*(kgps/10))/(pi*rho*1.36) ); %mm

% Calculate the Reynold’s number using the initial diameter guess.

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% McCoy:

%Re(1,1) = 4*kgps/(dv*pi*D(1,1));

% Menon:

Re(1,1) = 0.5134*(P_b/T_ave)*(G*m3pd/poise*(D(1,1)*1000));

% Use the Reynold’s number to calculate the Darcy/Moody Friction Factor

% using the function ’moody’ that solves for f. McCoy’s model uses the

% Fanning friction factor which equals Darcy/Moody divided by 4:

f(1,1) = moody(epsilon/D(1,1),Re(1,1)); % Calculates Darcy fric fac

fan(1,1) = f(1,1)/4; %Converts to fanning for McCoy

% Use f to estimate dimater ala Menon, p. 419:

D(1,2) = (m3pd/((11.4946e-4/sqrt(f(1,1)))*(T_ave/P_b)*...

((kpa_1^2-exp(s)*kpa_2^2)/(G*T_f*km_e*Z_ave))^0.5))^0.4;

%{

% Use fanning to estimate diameter ala McCoy-Rubin:

D(1,2) = ((-64*Z_ave^2*R^2*T_ave^2*fan(1,1)*kgps^2*meters)/...

(pi^2*(M*Z_ave*R*T_ave*(pa_2^2-pa_1^2)+2*gr*P_ave^2*M^2*...

(h_2-h_1))))^(1/5);

%}

% Use iterative process to find final diameter:

diff = abs(D(1,2)-D(1,1));

if diff > 10^-6

iter = 2; %Counter

maxiter = 5000;

while diff > 10^-6

% Re-estimate Reynolds no.:

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% McCoy-Rubin:

%Re(1,iter) = 4*kgps/(dv*pi*D(1,iter));

% Menon:

Re(1,iter) =...

0.5134*(P_b/T_ave)*(G*m3pd/poise*(D(1,iter)*1000));

% Re-estimate the fanning friction factor

f(1,iter) = moody(epsilon/D(1,iter),Re(1,iter));

fan(1,iter) = f(1,iter)/4;

iter = iter+1;

% Calculate a new diameter:

D(1,iter) = (m3pd/((11.4946*10^-4/sqrt( f(1,iter-1) ))*...

(T_ave/P_b)*((kpa_1^2-exp(s)*kpa_2^2)/...

(G*T_f*km_e*Z_ave))^0.5))^0.4;

%{

D(1,iter) = ((-64*Z_ave^2*R^2*T_ave^2*fan(1,iter-1)*...

kgps^2*meters)/(pi^2*(M*Z_ave*R*T_ave*(pa_2^2-pa_1^2)...

+2*gr*P_ave^2*M^2*(h_2-h_1))))^(1/5);

%}

diff = abs(D(1,iter) - D(1,iter-1));

if iter == maxiter

disp(blank);

fprintf(’No convergence after %d iterations.\n’,iter);

break;

end

end

end

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clear diff;

% McCoy:

%D = (3*39.37008).*D; %Convert meters to inches.

% Menon:

D = 39.37008.*(D./1000);

% Calculate velocity at the end of the segment.

global mps;

mps = (4*(kgps/10))/(pi*rho*(D(1,iter)*.0254)^2); %m/s

%}

% Calculate diameter according to Menon’s Panhandle A:

phA_a = 4.5965e-03*efficiency;

phA_b = (T_ave/P_b)^1.0788;

phA_c = ((kpa_1^2-kpa_2^2)/(G^0.8539*T_f*km*Z_ave))^0.5394;

D_phA = (m3pd/(phA_a*phA_b*phA_c))^(1/2.6182);

D_phA = D_phA/25.4; % Converted to inches

% Calculate diameter according to Menon’s Panhandle B:

phB_a = 1.002e-02*efficiency;

phB_b = (T_ave/P_b)^1.02;

phB_c = ((kpa_1^2-kpa_2^2)/(G^0.961*T_f*km*Z_ave))^0.51;

D_phB = (m3pd/(phB_a*phB_b*phB_c))^(1/2.53);

D_phB = D_phB/25.4; % Converted to inches

% Calculate diameter according to Menon’s Weymouth:

wey_a = 3.7435e-03*efficiency;

wey_b = T_ave/P_b;

wey_c = ((kpa_1^2-kpa_2^2)/(G*T_f*km*Z_ave))^0.5;

D_wey = (m3pd/(phB_a*phB_b*phB_c))^(1/2.667);

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D_wey = D_wey/25.4; % Converted to inches

% Choose the largest of the four diameters:

x1 = [D(1,iter) D(1,iter) D(1,iter)];

y1 = [D_phA D_phB D_wey];

x2 = [D_phA D_phA D_phA];

y2 = [D(1,iter) D_phB D_wey];

x3 = [D_phB D_phB D_phB];

y3 = [D(1,iter) D_phA D_wey];

x4 = [D_wey D_wey D_wey];

y4 = [D(1,iter) D_phA D_phB];

if x1 >= y1

D_final = D(1,iter);

elseif x2 >= y2

D_final = D_phA;

elseif x3 >= y3

D_final = D_phB;

else

D_final = D_wey;

end

%Find NPS: An optimal inner diameter (inches) has been calculated that

%accomodates the exact given mass flow rate. To find the nominal

%pipeline size (NPS) that handles that flow rate, we must adjust the

%diameter to the next highest even integer. For final inner

%diameters 12" or less, NPS is the inner diameter. For final inner

%diameters greater than 12" NPS is the outer diameter. Hence we need

%to calculate pipe wall thickness and add that to the calculated inner

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%diameter, then increase the outer diameter to the next highest even

%integer, then recalculate the thickness according to that diameter.

%Use formula for pipe wall thickness from McCoy-Rubin08. We adjust the

%wall thickness by a factor of 15% to address the additional design

%requirements for CO2 pipelines (Yeddu and ICF on CCS).

p_mop = 15.3; %p_mop = max operating press = 15.3 MPa

stress = 483; %Min yield stress (S) = 483 MPa

des_fac = 0.72; %Design factor inrod’d to add margin of safety

jnt_fac = 1.0; %Joint factor = 1

% Create a vector of nominal pipeline sizes:

NPS_vec = [4:2:60]; % NPS in inches

% Create a vector of thicknesses for each NPS:

NPS_vecm = NPS_vec./39.37008; % Convert to meters for thick calc

thick_vec = 1.15*((p_mop.*NPS_vecm)./(2*stress*jnt_fac*des_fac)); %m

thick_vec = 39.37008*thick_vec; % Convert back to inches.

% Create a vector of inner diameters corresponding to each NPS:

D_innervec = NPS_vec-2*thick_vec;

if D_final < 12 % If calculated diameter is less than 12", then...

D_final = ceil(D_final);

if mod(D_final,2) == 0

NPS = D_final;

else

NPS = D_final + 1;

end

thickness = zeros(1,100);

D_outer = zeros(1,100);

thickness(1,1) = 1.15*((p_mop*NPS)/(2*stress*jnt_fac*des_fac));

D_outer(1,1) = NPS + thickness(1,1);

thickness(1,2) = 1.15*((p_mop*D_outer(1,1))/...

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(2*stress*jnt_fac*des_fac));

diff = thickness(1,2) - thickness(1,1);

count = 2;

maxcount = 100;

while diff > 10^-6

D_outer(1,count) = NPS + thickness(1,count);

count = count+1;

thickness(1,count) = 1.15*((p_mop*D_outer(1,count-1))/...

(2*stress*jnt_fac*des_fac));

D_outer(1,count) = NPS + thickness(count);

diff = D_outer(1,count) - D_outer(1,count-1);

if count == maxcount

disp(blank);

fprintf(’No thickness convergence.\n’);

break

end

end

thickness = thickness(1,count);

D_outer = D_outer(1,count);

%}

% For inner diameters greater than 12 inches, the NPS is the outer

% diameter. We use a loop to calculate the wall thickness for NPS (i.e.

% outer diameters) between 14 and 50 inches, subtract two times the wall

% thickness to find the actual inner diameter corresponding to each NPS.

% Then we compare the inner diameter based on flow to the inner diameter

% corresponding to each NPS. When we find the region containing our

% calculated inner diameter, we assign NPS to be the next highest even

% integer above that value.

else

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% Search D_innervec to find the argument that is barely larger than

% calculated diameter, D_final

counter = 1;

while D_final > D_innervec(counter)

counter = counter + 1;

end

NPS = NPS_vec(counter); %Choose the NPS that represents the even

% integer which matches the final inner diameter found by comparing

% D_final to D_innervec.

thickness = thick_vec(counter); %Choose the thickness for the

%NPS that’s one size greater than where the counter stopped.

D_inner = NPS - 2*thickness;

D_outer = NPS;

area_inner = pi*(D_inner/2)^2;

end

% Calculate the amount of steel needed for the segment in tons:

% For diameter use NPS - .5*t, convert L km to miles using .62137;

% in*in*miles*63,360in/mile/(1648in^3/ft^3) = cubic feet of steel) and

% (ft^3*489.54 lbs/ft^3)/2000 lbs/ton) = tons

tons = ((((NPS-.5*thickness)*pi)*thickness*(km*0.62137)*63360)/...

(12*12*12))*(489.54/2000);

end

function f = moody(rel_rough,Re,verbose)

% Finds friction factor by solving the Colebrook equation (Moody Chart).

% The friction factor depends only on the Reynolds number which depends on

% pipe diameter and other gas properties.

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%

% Synopsis: f = moody(ed,Re)

%

% Input: rel_rough = pipe roughness (epsilon)/inner_diameter

%

% Output: f = friction factor

%

% Note: Accounts for laminar and turbulent flow

if Re<0

error(sprintf(’Reynolds number = %f cannot be negative.’,Re));

elseif Re<2000

f = 64/Re; return %laminar flow

end

if rel_rough>0.05

warning(sprintf(’epsilon/diameter ratio = %f is not on Moody chart.’,...

rel_rough));

end

if Re<4000, warning(’Re = %f in transition range’,Re); end

% Use fzero to find f from Colebrook equation. coleFun is an inline

% function object to evaluate F(f,e/d,Re). fzero returns the value of f

% such that F(f,e/d,Re) = 0 (approximately). fi = initial guess from

% Haaland equation. Iterations of fzero are terminated when f is known to

% whithin +/- dfTol

coleFun =...

inline(’1.0/sqrt(f) + 2.0*log10( rel_rough/3.7 + 2.51/(Re*sqrt(f)) )’,...

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’f’,’rel_rough’,’Re’);

fi = 1/(1.8*log10(6.9/Re + (rel_rough/3.7)^1.11))^2; %initial guess of f

dfTol = 5e-6;

f = fzero(coleFun,fi,optimset(’TolX’,dfTol,’Display’,’off’),rel_rough,Re);

% check f

if f<0

error(sprintf(’Friction factor = %f, but cannot be negative’,f))’;

end

end

function [K_pump,Wp,Wp_hp] = pl_pump_calc(pump,pump_dist,tonnespd,pa_1,pa_2)

% Turn off ‘pump‘ while generating graphs:

% If a pump station is required calculate the amount of power

% required to pump the CO2 from p_2 MPa up to p1 (15.3 MPa):

if pump

pa_1 = pa_1/10^6;

pa_2 = pa_2/10^6; %Convert Pa back to MPa

pa_2 = pa_1 - 0.001*35*pump_dist;

if pa_2 == 10

rho = 886.543;

elseif pa_2 == 11

rho = 895.968;

elseif pa_2 == 12

rho = 904.587;

elseif pa_2 == 13

rho = 912.548;

elseif pa_2 == 14

rho = 919.956;

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else rho = 926.896;

end

etap = 0.75; %Efficiency of the pump

Pfinal = 15.3;

Pcutoff = pa_2;

%1000 = # of kg/tonne, 10 = bar/MPa, 24 = # hours/day, 36 = # m^3

%The pumping power required in kW and in horse power is

Wp = ((1000*10)/(24*36))*((tonnespd*(Pfinal - Pcutoff))/(rho*etap));

Wp_hp = Wp*1.34132; %Convert kW to hp.

%Calculate the capital cost of the pump and scale to 2009 dollars.

K_pump = 1.18*(((1.11*10^6)*(Wp/1000)) + 0.07*10^6);

else

K_pump = 0;

Wp = 0;

Wp_hp = 0;

end

end

function [tariff_mcf,tariff_tonne] = pl_tar_calc(K_tot,Wp,mmcf)

T = 30; %Assume 30-year lifespan for pipeline.

%T = input(’Enter estimated life of the pipeline in years: ’);

%r = input(’Enter the desired cost of capital in percent: ’);

global r;

r = 12; % According to Petroleum Economist return on equity for

% pipeline operators is 12%.

r = r/100;

%x_tax = input(’Enter the tax rate on CO2 in %: ’);

x_tax = 35; %percent (corporate, royalty, severance, property)

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x_tax = x_tax/100; %Tax in decimal.

% According to McCollum, O&M costs are 2.5% of capital costs

x_om = .025*K_tot;

% According to EIA Wyoming electricity data, the price for

% industrial use electricity is 4.92 cents/kWh. So the annual

% pump operating costs are

x_pump = .0492*Wp*365*24;

% Total annual mass flow is

Q_ann = mmcf*365;

% For T = 30 years*365 days, the present value of a cash flow at time t is

% pv = (Q_ann*tariff*(1 - x_tax) - x_pump - x_om)*(1/(1+r)^t). The sum of

% these values is the present value of the discounted cash flows. Factoring

% out (Q_ann*tariff*(1 - x_tax) - x_pump - x_om) from the sum results in

% (Q_ann*tariff*(1 - x_tax) - x_pump - x_om)*sum(1/(1+r)^t). The net present

% value must be greater than zero for a profitable project. So we must find

% a tariff such that

% sum[(Q_ann*tariff*(1 - x_tax) - x_pump - x_om)] - K_tot > 0.

% Let A = the sum of a geometric series: A = sum(1/(1+r)^t) for t = 1:T,

% then A = 1/r - 1/(r*(1+r)^T).

% Let payment = (Q_ann*tariff*(1 - x_tax) - x_pump - x_om);

% Then payment*A = K_tot when NPV = 0. Solving for tariff in payment

% results in the minimum tariff for obtaining a ROR such that NPV = 0.

A = 1/r - 1/(r*(1+r)^T);

% Since payment*A = K_tot:

payment = K_tot/A;

% payment = (Q_ann*tariff*(1 - x_tax) - x_pump - x_om), solving for tariff:

tariff = (payment + x_pump + x_om)/(Q_ann*(1-x_tax));

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% Calc per mcf and per tonne and round tariffs to nearest cent:

tariff_mcf = (round((tariff/1000)*100))/100;

tariff_tonne = (round(((19.59701321/1000)*tariff)*100))/100;

% Test tariff calculation to make sure NPV is 0 for the ROR that results

% from tariff as calculated above:

%Stream = ones(1,T+1);

%Stream = payment*Stream;

%Stream(1,1) = -K_tot;

%ROR = irr(Stream); % Uses functions irr and pvvar from

%NPV = pvvar(Stream,ROR); % finance toolbox

%NPV2 = pvvar(Stream,.12);

end

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