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Can section 45Q tax credit foster decarbonization? A case study of geologic carbon storage at Acid Gas Injection wells in the Permian Basin

International Journal of Greenhouse Gas Control

Mishra, Shruti K.; Henderson, Miles A.; Tu, David J.; Erwin, Alexander; Trentham, Robert C.; Earnhart, Dietrich H.; Fonquergne, Jean L.; Gagarin, Hannah; Heath, Jason E.

Carbon capture, utilization, and storage (CCUS) is an important pathway for meeting climate mitigation goals. While the economic viability of CCUS is well understood, previous studies do not evaluate the economic feasibility of carbon capture and storage (CCS) in the Permian Basin specifically regarding the new Section 45Q tax credits. We developed a technoeconomic analysis method, evaluated the economic feasibility of CCS at the acid gas injection (AGI) wells, and assessed the implication of Section 45Q tax credits for CCS at the AGIs. We find that the compressors, well depth, and the permit and monitoring costs drive the facility costs. Compressors are the predominant contributors to capital and operating expenditure driving the levelized cost of CO2 storage. Strategic cost reduction measures identified include 1) sourcing of low-cost electricity and 2) optimizing operational efficiency in well operations. In evaluating the impact of the tax credits on CCS projects, facility scale proved decisive. We found that facilities with an annual injection rate exceeding 10,000 MT storage capacity demonstrate economic viability contingent upon the procurement of inputs at the least cost. The new construction of AGI wells were found to be economically viable at a storage capacity of 100,000 MT. The basin is heavily focused on CCUS (tax credit – $65/MT CO2), which overshadows CCS ($85/MT CO2) opportunities. Balancing the dual objectives of CCS and CCUS requires planning and coordination for optimal resource and pore space utilization to attain the basin's decarbonization potential. We also found that CCS on AGI is a lower cost CCS option as compared to CCS on other industries.

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Quantitative approaches for including equity in risk and resilience infrastructure planning analyses

Risk Analysis

Gunda, Thushara; Wachtel, Amanda; Mishra, Shruti K.; Moog, Emily

Risk and resilience assessments for critical infrastructure focus on myriad objectives, from natural hazard evaluations to optimizing investments. Although research has started to characterize externalities associated with current or possible future states, incorporation of equity priorities at project inception is increasingly being recognized as critical for planning related activities. However, there is no standard methodology that guides development of equity-informed quantitative approaches for infrastructure planning activities. To address this gap, we introduce a logic model that can be tailored to capture nuances about specific geographies and community priorities, effectively incorporating them into different mathematical approaches for quantitative risk assessments. Specifically, the logic model uses a graded, iterative approach to clarify specific equity objectives as well as inform the development of equations being used to support analysis. We demonstrate the utility of this framework using case studies spanning aviation fuel, produced water, and microgrid electricity infrastructures. For each case study, the use of the logic model helps clarify the ways that local priorities and infrastructure needs are used to drive the types of data and quantitative methodologies used in the respective analyses. The explicit consideration of methodological limitations (e.g., data mismatches) and stakeholder engagements serves to increase the transparency of the associated findings as well as effectively integrate community nuances (e.g., ownership of assets) into infrastructure assessments. Such integration will become increasingly important to ensure that planning activities (which occur throughout the lifecycle of the infrastructure projects) lead to long-lasting solutions to meet both energy and sustainable development goals for communities.

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Performance-Based Payments for Soil Carbon Sequestration Can Enable a Low-Carbon Bioeconomy

Environmental Science and Technology

Mishra, Shruti K.

Incentivizing bioenergy crop production in locations with marginal soils, where low-input perennial crops can provide net carbon sequestration and economic benefits, will be crucial to building a successful bioeconomy. We developed an integrated assessment framework to compare switchgrass cultivation with corn-soybean rotations on the basis of production costs, revenues, and soil organic carbon (SOC) sequestration at a 100 m spatial resolution. We calculated profits (or losses) when marginal lands are converted from a corn-soy rotation to switchgrass across a range of farm gate biomass prices and payments for SOC sequestration in the State of Illinois, United States. The annual net SOC sequestration and switchgrass yields are estimated to range from 0.1 to 0.4 Mg ha-1 and 7.3 to 15.5 Mg dry matter ha-1, respectively, across the state. Without payments for SOC sequestration, only a small fraction of marginal corn-soybean land would achieve a 20% profit margin if converted to switchgrass, but $40-80 Mg-1 CO2e compensation could increase the economically viable area by 140-414%. With the compensation, switchgrass cultivation for 10 years on 1.6 million ha of marginal land in Illinois will produce biomass worth $1.6-2.9 billion (0.95-1.8 million Mg dry biomass) and mitigate 5-22 million Mg CO2e.

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8 Results
8 Results