Comment Log Display

Perhaps in 15 years electrical vehicles are the norm on the
highways of California, but today liquid renewable fuels, if
provided the opportunity, can combine with Carbon Capture and
Sequestration (CCS) rules used in conjunction with enhanced oil
recovery (EOR) to keep the Low Carbon Fuel Standard reduction goals
of the state on track to meet established law. Grain starch is
plentiful, more economical for consumers and in many cases can have
a much lower carbon score delivered to California than Brazilian
imported sugar cane ethanol.  

I.	CCS and Enhanced Oil Recovery Sequestration Opportunities:
Alongside of federal tax legislation to be introduced this year,
the California Air Resources Board with the establishing of
reasonable CCS field monitoring requirements could incentivize the
ethanol and pipeline industries to deliver and sequester over
12,000,000 million metric tons per year of “recycled” carbon
dioxide. Photosynthesis and CCS through EOR, achieves true
mitigation when compared to combustion source capture or the
capture of mined sources of CO2 that also exist. The Permian basin
of west Texas has long term (decades) of CO2 demand exceeding the
volume referenced above with economic potential from EOR surpassing
those of other basins in the United States.

Many states support geological survey departments which oversee the
proper injection of carbon dioxide in these fields for stimulation
with established rules protecting important shallower ground water
supplies and validating geology so neighboring fields and
injections do not interact. These Class II rules have been
practiced by operators for many years, are understood and have a
track record which has led to good stewardship of the surface and
reservoirs targeted for dozens of successful tertiary oil recovery
projects. The hope by industry is that the Air Resources Board will
acknowledge and make use of existing state legislation in
establishing monitoring rules which overlap well with their own
carbon reduction goals. Seldom are goals of various public and
private parties and institutes found so uniquely aligned. Producers
want injected CO2 to remain in the reservoir for continued oil
stimulation and to reduce the high  purchasing expense of
compressed CO2 supplies. Just like an individual consumer, if he or
she had to pay five dollars a pound to air up their car tires, they
would be much more diligent in buying tires that would not leak.
EOR producers live with this same incentive, boding well for CCS
progress, domestic jobs and an increased tax base.

To accelerate an agreement and project development to this end
however, EBR Development, LLC would propose a “Default Decree”
option for ethanol plants, refiners and the CO2 purchasers they are
working with for CCS / EOR purposes. Whatever the volume of CO2
captured and compressed at the ethanol plant and taken by pipeline
to an oilfield, under the Default Decree (or whatever the name) if
these ethanol gallons are destined for California and the state
gasoline pool, the California ethanol buyer (refiner) and the
ethanol plant (seller), in order to avoid long term (decades) of
carbon storage liability risk (which will kill projects) could
agree to accept the decree, hence, only 95% of the carbon intensity
(CI) reduction as measured with GREET for the ethanol plant would
inure to the refiner’s California carbon mitigation obligation. For
the EOR producer, this would enable them to stay free of additional
monitoring requirements beyond Class II state rules. The California
obligated refiner could have access to lower CI ethanol gallons
(due to ethanol plant CO2 now being sequestered) but would now be
required, based on the quarterly average for carbon prices in
California, to pay this unrealized 5% CO2 captured volume,
multiplied by the quarterly price for carbon into a newly
established Environmental Justice (EJ) research fund. This fund
would be managed by ARB with resources dedicated to research and
perhaps direct project investment targeting emission issues and
concerns in the state. If 1.5 billion gallons per year of the
ethanol headed to California were associated CO2 pipeline connected
gallons, using $100/mT for carbon, this 5% decree deferment would
create around $11,000,000 each year for this EJ fund and more with
higher blends of ethanol discussed below. If a 25 CI point
reduction occurs with CO2 capture, then the carbon dollar value of
1.25 points per gallon would go to the EJ fund as the refiner
obligation at the same time providing ethanol gallons which
continue to be of decreasing carbon scores allowing the refiners
continuation of fuel sales in the state within LCFS rules. 
     PART I Summary:
		         A) Do not recreate the rules for injection, recycling
and monitoring sequestration in EOR projects 
			  without providing  a mechanism to leverage today’s successful
approaches. Studies indicate
			  that well over 99% of injected CO2 in these projects stays
sequestered. 
The default decree choice is the avenue to avoid the bureaucratic
inertia that appears inevitable without such an option. 
			  The goal should be to create an incentive environment for
environmental progress, but there 
			  is risk in the opposite occurring with the rule making taking
place. Just as the ARB is looking
			  decades ahead, EOR project duration will be decades long as
well, so while price assumptions for forecasting 
			  is large, risk mitigation and liability assessment loom
equally large and should be considerations of ARB in current rule
making.

		          B) CO2 from ethanol plants with the photosynthesis
advantage discussed are truly differentiated
			   from others in this evaluation. Much like when baking bread,
yeast are eating carbohydrates 
			   and releasing the CO2, it is just not in the oven making
bread rise. The alcohol from these yeast
			   is captured to create octane (113) for energy. The story
could be further enhanced with true 
			  atmospheric mitigation by closing the loop on this other
product of good yeast. Again, clearly
			  differentiating this source from that which is mined (drilled
for) or others which are typically subsets
			  of a combustion activity is not unfair.

C) Representatives of thirty two ethanol plants to date have had
preliminary conversations with EBR Development,
    LLC and depending on final rules, have expressed interest in
CO2 compression
     equipment being installed in conjunction with a pipeline to
transport this supply seamlessly   
     into the oilfield for enhanced oil recovery and sequestration.
The final ARB CCS
    rulemaking activities will determine the viability or need to
continue these discussions.
			   			   

II.	Requirements to Reduce NOx in California:
The Fifth Circuit Court of Appeals ruled last month that the Air
Resources Board must find avenues to reduce nitrous oxide
emissions. While much of the focus here was on biodiesel, the
ethanol industry 
could be an avenue to a solution while complementary to section I
above. Aromatics such as toluene, benzene and xylene boost gasoline
octane but are key concerns for both tailpipe and evaporative
emissions.
	Take a look  https://www.youtube.com/watch?v=sg6sZq8Sefk and
https://www.youtube.com/watch?v=MwbO2c1wdxg links.
The attached article from Ethanol Across America indicates that
aromatics are three times more reactive to forming ozone. This
could be reduced with higher blends of ethanol beyond the 10%
included in gasoline today. Higher compression engines entering the
market are prime candidates to capture power and mpg for the
consumer from this cleaner burning, high octane fuel.

Also discussed is the decrease in Reid Vapor Pressure (RVP) as
ethanol concentrations increase. Allowing higher blends of ethanol
along with the pipeline discussed above would make more low carbon
intensity
ethanol carry additional benefit in meeting the mandated lowering
of carbon in California fuel. NOx reduction also occurs making
higher blends of ethanol one solution to the relief sought be the
court in Poet vs. CARB LCFS, all while potentially increasing
California emission research dollars through infrastructure i.e.:
pipelines for EOR. 

III.	Fiber Conversion to Ethanol: Carbon Excellence
Gen 1.5™ : Incremental ethanol gallons will soon be created by
converting low value corn fiber into fuel. Exciting in that these
are existing bushels the ethanol plant is processing today, yet
adding 6-9% yields with 
carbon intensity scoring per gallon of 15-25 g CO2 e/MJ. Coupling
these incremental gallons with the CCS strategy discussed above
could generate ethanol gallons with a carbon intensity score of
close to “0” g CO2 e/MJ if a plant is pipeline connected to the
oilfield and  given credit for sequestration for the CO2 produced
and is also converting their fiber to fuel. Rulemaking will dictate
the potential 
scoring contribution this combination could provide to the low
carbon fuel needs of California. Additional low carbon gallons that
can go into California from plants that are pipeline connected can
help create EJ
fund dollars annually should the markets and producer opt into the
default decree through the mechanism discussed.

A tangential benefit also occurs with this fiber separation and
conversion process. Today, biodiesel makes and important
contribution to progress made to achieving the goals of the LCFS.
It was reported in 2015
that 1/3 of the biodiesel sold in California was produced using
crude corn oil. The Gen 1.5™ process in addition to accessing and
creating fuel from fiber also frees up bound up oil which can lead
to additional
biodiesel production if needed. Though under review as mentioned,
biodiesel typically is a good scoring fuel under the GREET model
and more could be produced through lengthening the crude corn oil
market.

Conclusion:

“To get what you want, be willing to help enough other people get
what they want.”  Zig Ziglar said this years ago, but I think for
success to occur with CCS rule making and this Scoping Plan
discussion, this attitude should be at the for front for all.
Agendas of all parties should be kept clear so time is not wasted,
which means candor should win the day. I tried to be concise and
grow the needs of both state and industry with the approach above.
This would be a $2 B investment to achieve. Plenty of private
investment money is available today for good projects, but defining
the rules for a forth coming 20 year period can be tough, so my
council to the Air Resources Board would be put yourself in the
shoes of the investor and strive for clarity and a realistic rule
making outcome that will  be stimulative to reaching your goals,
not inhibitive.