Some Thoughts About 45Q Professor Sally M. Benson Department of Energy Resources Engineering Stanford, CA Hi everyone, My name is EJ and I am a graduate student here at ERE working with Sally. Today I will be talking about a project that we in collaboration with some other people in university conducted on the near-term potential for carbon negative bioenergy in the U.S. CMI Meeting April, 2018

Action on CCUS is Needed Now to Regain Confidence and Prepare for the Future Incentives of $35 per tonne for CO2-EOR and $50 per tonne for saline formation storage are economically attractive for low cost sources of CO2 (high purity sources from ethanol production, refining, and fertilizer production) Slow progress in CCUS scale-up has damaged the credibility of CCUS as a mitigation option around the world Effective response to 45 Q legislation provides a chance for turning this perception around 45 Q also buys-down the risk of advanced EOR Increase t-CO2 injected per bbl of oil produced Creates carbon neutral oil production Learning by doing for advanced CO2-EOR (gravity stable injection) Reinvigorates investment in brown-field oil reservoirs for CO2-EOR and as storage resources – avoiding large investment in potentially stranded assets Puts in place infrastructure (e.g. pipelines, wells, and monitoring) for taking advantage of stacked reservoirs for large scale storage

A Simple Economic Model for Advanced CO2-EOR (Net Emissions~-1 t/bbl)   Conventional CO2 EOR (3 bbl./T) CO2 EOR plus Storage (1 bbl. /T) Oil Price $/bbl.a 100 75 50 (CO2 Acq, Cost $/T) -60 -45 -30 CO2 Acq. Cost $/bbl. Productionb -20 -15 -10 Other CO2 related Cost $/bbl. Productionc -35 -38.5 Net Margin $/bbl. pretax 45 25 5 1.5 -8.5 -18.5 CO2 EOR Production bbl. (million) 30 48 Project EOR Margin $million 1350 750 150 72 -408 -888 CO2 incentive to break even 42.6 38.6 34.6 From Benson and Duetch, 2018, submitted.

Conventional CO2-EOR: With Water-Alternating-Gas From Lindley, 1986.

Co-Optimization of CO2-EOR and Storage: Gravity Stable Immiscible Flood From Rao, 2006

Co-Optimization of CO2-EOR and Storage: Gravity Stable Immiscible Flood From Daniel Hatchell, Stanford MS Thesis, 2017

Co-Optimization of CO2-EOR and Storage: Exsolution Enhanced EOR 10 API Gravity Oil From Scott McClaughlin, Stanford MS Thesis, 2016

Billion Dollar Question Unconventionals?

Action on CCUS is Needed Now: 45 Q Provides the Best Chance to Put CCUS Back on the CO2 Mitigation Map Financial incentives are significant Co-optimization of CO2-EOR and storage needs innovation, experimentation, and learning 45 Q also buys-down the risk of advanced EOR Supports building infrastructure for long term CO2 mitigation with CCUS Creating a new narrative: Carbon Neutral Oil