Working with Robert Socolow, Tom Kreutz has developed an analytical framework for investigating the economics and climate mitigation implications of making transportation fuels from CO2 , termed “CO2 activation” (CCA). The research has focused on a prototypical system that combines low carbon H2 (i.e. H2 produced from renewable or nuclear energy sources) and CO2 to make synthetic liquid transportation fuels via the reverse water gas shift reaction followed by Fischer-Tropsch synthesis. Detailed simulations of thermodynamic performance have been carried out as a basis for economic analysis.

Kreutz found that high oil prices favor CCA over the two alternatives: CO2 venting [Vent (BAU)] and CCS (Figure 9). At low CO2 emissions prices (below the price P* needed to induce CCS), CCA mitigates GHG emissions by capturing CO2 en route to the atmosphere and re-using the carbon to make synthetic transport fuels. In this way the carbon is “used twice” before entering the atmosphere as CO2 . This climate benefit is reflected in Figure 9 by a breakeven oil price (BEOP) between CCA and Vent (BAU) which falls with increasing CO2 price; in other words, a rising carbon tax makes CCA increasingly competitive. At CO2 emissions prices above P*, however, the BEOP for CCA becomes flat; compared to the alternative option, CCS, CCA provides no benefit to the climate.

Figure 9: The parameter space shown here and described in the text is divided into segments, in each of which the indicated option is the most profitable investment opportunity. The set of blue lines are applicable wherever CO2 EOR is an available opportunity; the black lines apply when CO2 EOR is not an option and CO2 activation (CCA) is favored.

CO2 EOR is much less expensive than CCA, which requires costly capital equipment and vast quantities of low carbon H2. As a result, the oil prices required for profitable CO2 EOR (blue lines) are much lower than those needed to induce CCA (black lines), and thus CO2 EOR is the economically preferred method of “converting” CO2 to transportation fuels. The climate benefits of CCA and CO2 EOR are also quite similar.

This work confirms a key result from a previous paper by Kreutz (presented in 2010 at the 10th International Conference on Greenhouse Gas Control Technologies), that CCA does not significantly reduce CO2 emissions when CCS at power plants is an economically viable option for CO2 disposal. Moreover, the present analysis shows that, if CO2 EOR is available as an option for providing additional liquid fuels, EOR will be far more profitable than CCA while providing roughly comparable carbon mitigation benefits.