Carbon capture utilization and storage market dynamics: Matching CO2 supply and demand for enhanced oil recovery
Type
Master thesisNot peer reviewed

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Date
2014-08-15Author
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This thesis describes the project, which is a part of a wider
collaboration between the University of Bergen, Norway and the
University of North Dakota (UND) and the Institute for Energy
Studies (IES), US established in March 2013. The project was
performed by Eduard Romanenko, the author of this thesis,
together with his European Master in System Dynamics colleague
Julian Andres Gill Garcia, who focused on a different but related
aspect of the issue, under the supervision of Prof. Pål Davidsen
(University of Bergen) and Scott T. Johnson, a Principal Advisor in
the IES. The fieldwork was conducted in March-May 2014 in Grand
Forks, ND.
There is currently a significant number of carbon capture,
utilization, and storage (CCUS) technologies under development
and assessment in the US and globally. Most of these technologies
have been tested in small scale. The IES has developed and
successfully tested the UND technology called CACHYS. Yet, the
further commercialization of this and similar technologies is
constrained by unfavorable economics of high costs and uncertain
potential benefits. On the other hand, there is the CO2-Enhanced
Oil Recovery (EOR) industry whose current development is
constrained by the lack of CO2 supplies. For the CCUS developers
like the IES, CO2-EOR represents an excellent source of demand,
which has the potential to pay additional costs of CCUS
commercialization. The challenge is that there is a gap between the
maximum willingness to pay for CO2 by EOR operators and the
costs of CO2 capture by the CCUS. Yet, there is a potential for costs
reduction attributed to anticipate learning effect in the CCUS
industry.
To study the problem, the system dynamics model of an integrated
CO2-EOR-CCUS system, similar to the demand-pull market for
carbon dioxide currently developing in the Permian Basin, TX, has
been constructed. By making explicit the key feedback structure
behind the CO2-EOR-CCUS system, the model reveals the
reinforcing mechanisms that can potentially generate the self-
sustaining growth and provides a simulation environment where
policies aimed at activating those mechanisms can be tested on
their robustness.
The thesis is structured as following. Chapter 1 defines the context,
problem, research objectives and research questions. Chapter 2
describes the structure of the model both from stock-and-flow and
feedback perspective. Chapter 3 is devoted to the behavior that the
model produces. Chapter 4 establishes the confidence in the model
through validation analysis. Chapter 5 deals with policy design and
testing. The thesis concludes with the summary of results, a
discussion on limitations and directions for further work.
Publisher
The University of BergenCollections
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