Legislature(2023 - 2024)BUTROVICH 205

03/06/2023 03:30 PM Senate RESOURCES

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Audio Topic
03:30:21 PM Start
03:30:54 PM Presentation(s): Development Issues in Today's Carbon Capture Utilization Storage Marketplace
04:07:28 PM Presentation: Alaska Ccus Workgroup and a Roadmap to Commercial Deployment
05:00:30 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Presentation: Carbon Capture, Utilization and
Storage by David Greeson, Carbon Capture Project
Consultant; Frank Paskvan, Affiliate Professor on
Carbon Capture, Utilization, and Sequestration,
University of Alaska Fairbanks
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 6, 2023                                                                                          
                           3:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Cathy Giessel, Co-Chair                                                                                                 
Senator Bill Wielechowski, Vice Chair                                                                                           
Senator Scott Kawasaki                                                                                                          
Senator James Kaufman                                                                                                           
Senator Forrest Dunbar                                                                                                          
Senator Matt Claman                                                                                                             
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATION(S):  DEVELOPMENT ISSUES IN TODY'S CARBON CAPTURE                                                                   
UTILIZATION STORAGE MARKETPLACE                                                                                                 
     - HEARD                                                                                                                    
PRESENTATION: ALASKA CCUS WORKGROUP AND A ROADMAP TO COMMERCIAL                                                                 
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
DAVID GREESON, President                                                                                                        
Proven Project Development Group                                                                                                
Houston, Texas                                                                                                                  
POSITION STATEMENT: Presented Development Issues in today's                                                                   
Carbon Capture Utilization Storage Marketplace.                                                                                 
FRANK PASKVAN, Affiliate Professor                                                                                              
Institute of Northern Engineering                                                                                               
University of Alaska Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:  Presented  Alaska   CCUS  Workgroup  and  a                                                             
Roadmap to Commercial Deployment.                                                                                               
ACTION NARRATIVE                                                                                                              
3:30:21 PM                                                                                                                  
CO-CHAIR  CATHY  GIESSEL  called the  Senate  Resources  Standing                                                             
Committee meeting  to order at 3:30  p.m. Present at the  call to                                                               
order  were  Senators  Wielechowski,  Kawasaki,  Dunbar,  Claman,                                                               
Kawasaki, Co-Chair Bishop, and  Co-Chair Giessel. Senator Kaufman                                                               
arrived during the introductions.                                                                                               
^PRESENTATION(S):  DEVELOPMENT ISSUES  IN TODAY'S  CARBON CAPTURE                                                               
UTILIZATION STORAGE MARKETPLACE                                                                                                 
 PRESENTATION(S):  DEVELOPMENT ISSUES IN TODAY'S CARBON CAPTURE                                                             
                UTILIZATION STORAGE MARKETPLACE                                                                             
                [Contains discussion of SB 49.]                                                                                 
3:30:54 PM                                                                                                                    
CO-CHAIR  GIESSEL   stated  the   committee  was   beginning  the                                                               
discussion of  the governor's SB  49 relating to  carbon capture,                                                               
utilization, and  storage with presentations from  two experts in                                                               
the field. She welcomed David Greeson to begin his presentation.                                                                
3:31:54 PM                                                                                                                    
DAVID  GREESON,  President,  Proven  Project  Development  Group,                                                               
introduced  himself,  reviewed  his  credentials  in  the  carbon                                                               
capture industry, and conveyed his  interest in helping to figure                                                               
out how to continue to use fossil fuels.                                                                                        
MR.  GREESON  began the  presentation  with  an overview  of  the                                                               
carbon  capture process  based on  the  diagram on  slide 3.  The                                                               
drawing  on  the  upper  left  represents  a  power  plant  where                                                               
something is  being combusted. This is  a source of flue  gas and                                                               
CO2 is  emitted into  the atmosphere.  To prevent  that emission,                                                               
the flue gas is sent  to a post-combustion carbon capture system.                                                               
Today's  state-of-the-art  technologies   capture  more  than  90                                                               
percent  of  the  CO2  in  that flue  gas.  He  noted  that  most                                                               
technology  providers are  guaranteeing 95  percent CO2  capture.                                                               
The clean  flue gas that has  less than 1 percent  CO2 is emitted                                                               
into the  atmosphere. The remaining  pure CO2, which is  close to                                                               
food grade, is ready for secure geologic storage.                                                                               
He mentioned a project in North  Dakota where the pure CO2 can be                                                               
injected  directly into  the storage  facility beneath  the power                                                               
plant and  noted that many  other carbon capture projects  in the                                                               
Lower 48 have landowner issues  associated with running pipelines                                                               
to  connect the  source and  the carbon  capture system  with the                                                               
storage facility.                                                                                                               
3:37:46 PM                                                                                                                    
MR. GREESON  advanced to  slide 4, State  Policy Should  Focus on                                                               
Deployment - Not More Research, and spoke to the following:                                                                     
     • DOE is shouldering the burden on research                                                                                
     • Congress has enacted incentives for first movers                                                                         
          • States should focus on filling the gaps to                                                                        
        • Policies and local incentives that make sense                                                                         
3:39:41 PM                                                                                                                    
MR. GREESON  conveyed that policymakers  asked him to  talk about                                                               
opportunities for states to  enhance decarbonization. He directed                                                               
attention to the  chart on slide 5 that  shows the energy-related                                                               
carbon  dioxide emissions  by state,  as of  2016. It  shows that                                                               
Texas, followed  by California  and Florida  are the  largest CO2                                                               
emitters whereas  Alaska is a low  emitter. If the US  is to have                                                               
an impact on  decarburization, he said it is those  states on the                                                               
far  left of  the chart  that need  to think  about incentivizing                                                               
capture and storage.                                                                                                            
3:41:18 PM                                                                                                                    
MR. GREESON turned to slides 6  and 7 to discuss the economics of                                                               
carbon  capture. He  said the  charts came  from a  peer-reviewed                                                               
report by  the National Petroleum  Council. The numbers  show the                                                               
estimated cost of  carbon capture by facility  type. He described                                                               
natural gas,  ethanol, and ammonia processing  as the low-hanging                                                               
fruit.  The off-gas  from processing  natural gas  is 90  percent                                                               
CO2, from  ethanol it's  90-95 percent CO2,  and from  ammonia it                                                               
can be as much as 99  percent CO2. He said hydrogen producers and                                                               
cement plants  are next with  CO2 concentrations in the  flue gas                                                               
generally  in the  20-30 percent  range. Refinery  FCC (fluidized                                                               
catalytic  cracking) facilities  and those  farther to  the right                                                               
are   clustered  in   the   10  percent   range   for  flue   gas                                                               
He directed attention  to the chart on slide 7  that reflects the                                                               
large difference  in economics between  a typical  carbon capture                                                               
system for ethanol  versus a power plant. He relayed  that in the                                                               
US, the  wind industry is  getting about $61/tonne in  tax credit                                                               
subsidies  for   its  low-carbon  power  production.   After  the                                                               
increase last  year, the credit  for fossil fuel  or point-source                                                               
carbon   capture  is   $85/tonne.   He  opined   that  the   cost                                                               
differential   made  sense   because   wind  facilities   provide                                                               
intermittent power,  which is less  valuable. He stated  that the                                                               
delivery of  pipeline-ready CO2  from an  ethanol plant  is about                                                               
$30/metric tonne. For the average  power plant, the cost is about                                                               
$104/metric  tonne;  some  power  plants can  deliver  for  about                                                               
$50/metric  tonne,  and   for  others  the  cost   is  closer  to                                                               
$150/metric tonne.                                                                                                              
MR. GREESON opined  that the older and  more expensive facilities                                                               
probably  would  not  be  considered  for  investment  in  carbon                                                               
capture; it  would be plants  in the  $50-75 range that  would be                                                               
considered.  The  reason  is  that  markets in  the  US  are  not                                                               
offering more for carbon-free products,  power in particular. The                                                               
$85/tonne tax  credit has to pay  for all the carbon  capture; if                                                               
CO2 can  be captured  and delivered  for $50-60/tonne,  it leaves                                                               
$20-25/tonne  for  transport  to  the storage  facility  and  the                                                               
storage itself.                                                                                                                 
3:48:43 PM                                                                                                                    
MR.  GREESON advanced  to slide  8, NPC  Study Estimated  Cost of                                                               
CCS. The chart  reflects the breakdown for the  CCS components to                                                               
arrive at  the total assumed  value of $110/tonne.  Transport and                                                               
storage are estimated to be  about one-third of the cost. Storage                                                               
fees on  the Gulf  Coast are projected  to run  from $7-14/metric                                                               
tonne and transporters are quoting  prices from $14-30/ tonne. So                                                               
far, no firm transactions have been made in this range.                                                                         
3:50:03 PM                                                                                                                    
MR.  GREESON advanced  to slide  9, CapEx  as a  Function of  CO2                                                               
Concentration. The  chart shows that  the cost of  carbon capture                                                               
is directly related to the concentration  of CO2 in the flue gas.                                                               
The typical  power plant configuration  for natural  gas combined                                                               
cycle (NGCC)  is about 3 percent;  the stream is very  dilute and                                                               
hard to  capture. Coal fired plants  hit the sweet spot  of about                                                               
11  percent.  Moving  to  the right,  cement  and  steam  methane                                                               
reforming  (SMR) have  higher concentrations  of  CO2. The  steam                                                               
methane reforming  estimate is 22  percent, which is  the average                                                               
of two  tailpipes. One tailpipe  has a concentration of  about 10                                                               
percent and the other is nearly pure CO2.                                                                                       
MR. GREESON  advanced to slide  10, CCS  is Expensive -  There is                                                               
Reason  for  Hope.  The  chart shows  that  when  there's  enough                                                               
replication and  enough effort is  focused on lowering  the cost,                                                               
it will happen. He spoke to the following points:                                                                               
        • Solar technology was not even close to economic                                                                       
          just 10 years ago                                                                                                     
        • Today, costs are close to the value of                                                                                
          intermittent power                                                                                                    
3:53:54 PM                                                                                                                    
MR. GREESON advanced  to slide 11, Policies  Developers Look For.                                                               
He spoke to the following policies:                                                                                             
        • Primacy on Class VI permitting                                                                                    
        • Public lands opportunity for storage solves a lot                                                                     
          of problems for CCUS developers                                                                                       
          •  One creditworthy landowner                                                                                         
          •  Storage cost certainty                                                                                             
          •  Consistent with other public interest missions                                                                     
             of the state                                                                                                       
        • Long-term liability for stored CO2                                                                                    
3:57:41 PM                                                                                                                    
SENATOR WIELECHOWSKI asked how long  it takes states to get Class                                                               
VI primacy.                                                                                                                     
MR. GREESON replied that it took Wyoming three years.                                                                           
SENATOR KAWASAKI  asked what  the overall  market was  for carbon                                                               
capture and storage.                                                                                                            
MR.  GREESON answered  that  there's currently  a  huge push  for                                                               
carbon capture  projects in  the US.  Congress increased  the tax                                                               
credit to $85/tonne and direct pay  is allowed for the first five                                                               
years  of  the  12-year  program, which  moderates  the  risk  of                                                               
entering  the  market.  The overseas  market  is  more  difficult                                                               
because there isn't a comparable tax credit.                                                                                    
SENATOR  KAWASAKI  asked  whether  the Petro  Nova  project  near                                                               
Houston, Texas was still operating.                                                                                             
4:00:52 PM                                                                                                                    
MR. GREESON  answered that the current  owners recently announced                                                               
they were actively  working on restaffing and  restarting the oil                                                               
company. He explained  that the project started  before there was                                                               
a tax  credit so the carbon  capture had to pay  for itself. That                                                               
wasn't a problem  when the price of oil was  $110/barrel, but the                                                               
price dropped  to $30/barrel  before construction  was completed.                                                               
It ran for about six years, three with carbon capture.                                                                          
SENATOR KAWASAKI asked if the  federal tax credits were necessary                                                               
for a project to be economic.                                                                                                   
MR. GREESON answered yes; not  everybody is capturing CO2 so that                                                               
cost can't be passed along to the consumer.                                                                                     
4:04:54 PM                                                                                                                    
SENATOR DUNBAR  asked how  it will  pencil out  if Alaska  has to                                                               
import the carbon  it stores and the estimates  for transport are                                                               
MR.  GREESON   answered  that  long-haul  pipelines   from  North                                                               
American sources  would be one  possibility, and  tanker shipping                                                               
the  CO2 is  another option.  He cited  existing examples  in the                                                               
Lower 48  and the North Sea.  He also mentioned a  carbon capture                                                               
project in  Greece that shipped  the CO2  to the Middle  East for                                                               
enhanced oil recovery.                                                                                                          
^PRESENTATION: ALASKA CCUS WORKGROUP  AND A ROADMAP TO COMMERCIAL                                                               
PRESENTATION: ALASKA CCUS WORKGROUP AND A ROADMAP TO COMMERCIAL                                                             
                [Contains discussion of SB 49.]                                                                                 
4:07:28 PM                                                                                                                    
CO-CHAIR  GIESSEL  welcomed  Frank   Paskvan  to  discuss  carbon                                                               
capture use and storage in the Alaska context.                                                                                  
4:07:58 PM                                                                                                                    
FRANK  PASKVAN,   Affiliate  Professor,  Institute   of  Northern                                                               
Engineering, University  of Alaska Fairbanks,  Fairbanks, Alaska,                                                               
advised  that  the  presentation  was   based  on  a  Society  of                                                               
Petroleum Engineers'  paper that  he and his  co-authors prepared                                                               
for  the western  region  annual  meeting that  will  be held  in                                                               
Anchorage in  May 2023. Today  he intended to discuss  the Alaska                                                               
CCUS Workgroup,  why the group  is interested in  carbon capture,                                                               
others  who   are  interested  in  carbon   capture,  and  Alaska                                                               
opportunities in this space. He  noted that UAF joined the Plains                                                               
CO2 Reduction (PCOR)  Partnership based in North  Dakota in 2019,                                                               
and he started working on carbon capture in 2021.                                                                               
MR.  PASKVAN stated  that he  is  a reservoir  engineer who  does                                                               
reservoir  modeling and  field appraisals.  He has  experience in                                                               
subsurface and gas injection for enhanced oil recovery.                                                                         
4:11:26 PM                                                                                                                    
MR.  PASKVAN  began the  presentation  on  slide 2,  Alaska  CCUS                                                               
Workgroup Focus. He spoke to the following:                                                                                     
     The CCUS workgroup mission is to accelerate commercial                                                                     
               carbon capture projects in Alaska.                                                                               
     • To attract new investments and                                                                                           
     • To create options to decarbonize activities vital to                                                                     
        the State's economy including power generation,                                                                         
        refineries, and oil and gas production.                                                                                 
MR. PASKVAN described the CCUS workgroup's four subcommittees:                                                                  
    • Develop a State legal and regulatory framework                                                                            
     • Track and respond to funding opportunities                                                                               
     • Perform public education and outreach                                                                                    
     • Develop a Roadmap to accelerate commercial CCUS                                                                          
4:12:56 PM                                                                                                                    
MR. PASKVAN advanced to slide  3 and further described the Alaska                                                               
CCUS Workgroup:                                                                                                                 
        • Kicked off July 2022, continuation of group                                                                           
          working Alaska's Department of Energy (DOE)                                                                           
          request for information (RFI) response                                                                                
        • 110 attending meetings                                                                                                
        • 3050 members meet up to 4 times a month                                                                               
        •  Diverse representation on the Workgroup                                                                              
        • University of Alaska Fairbanks has lead role                                                                          
        • Leadership represents Academia, Industry, and                                                                         
          State Government                                                                                                      
        • DOE funds support the UAF-led Workgroup via PCOR,                                                                     
          a Regional Carbon Sequestration Partnership                                                                           
4:15:51 PM                                                                                                                    
MR. PASKVAN  advanced to  slide 4, CCUS  Impact on  Emissions. He                                                               
spoke about the  dual challenge of increasing  energy demands and                                                               
addressing the risks  of climate change, and  that carbon capture                                                               
and storage  (CCS) can  greatly reduce  emissions. He  pointed to                                                               
the  chart on  the  right that  illustrates  different styles  of                                                               
electrical generation systems and  the proportional amount of CO2                                                               
that's released  per gigawatt hour of  electricity generated. The                                                               
traditional  unabated coal  plant emits  CO2 at  a rate  of about                                                               
1,100 tonnes  per gigawatt  hour (t/GWh),  whereas a  modern coal                                                               
plant with  a second-generation carbon capture  system emits less                                                               
than  one-tenth of  the CO2.  With beneficial  use, the  heat and                                                               
carbon dioxide that's emitted could  be used to enable an Alaska-                                                               
based  agricultural facility.  This could  bring the  opportunity                                                               
for  both energy  and food  security  to the  state. He  directed                                                               
attention  to the  box  on  the upper  right  of  the chart  that                                                               
indicates that CCS also prevents pollution through post-                                                                        
combustion capture  of not just  CO2, but also  noteworthy levels                                                               
of SO2, NOx, and both PM10 and PM2.5.                                                                                           
He pointed  to the examples  of different  power plants on  the X                                                               
axis of the chart, and noted  that a second generation CCS abated                                                               
coal plant  emits just 100/tGWh of  CO2 compared to a  wind plant                                                               
that's backed  up with natural  gas that emits 250/tGWh.  He also                                                               
noted  the box  on the  lower left  of the  slide that  cites the                                                               
[Intergovernmental] Panel on Climate  Change (IPCC) estimate that                                                               
the cost  to establish clean  energy security is more  than twice                                                               
as expensive without carbon capture, use, and storage.                                                                          
4:22:08 PM                                                                                                                    
SENATOR CLAMAN commented that for  Alaska to become a significant                                                               
player  in  CO2  capture,  it will  need  to  import  significant                                                               
amounts of CO2 for storage.                                                                                                     
MR. PASKVAN  responded that  this is about  the world  facing the                                                               
dual  challenge and  Alaska establishing  the laws  and framework                                                               
that  allows  the  state  to  do its  part.  Right  now  Alaska's                                                               
emissions for stationary  sources is 14 million  tonnes per year,                                                               
so that's  what the state needs  to take care of.  CCS systems in                                                               
Alaska may  be used for  enhanced oil recovery  initially instead                                                               
of for  pure sequestration, but  the technology will  continue to                                                               
MR.  PASKVAN advanced  to slide  5  that provides  an example  of                                                               
carbon capture, use, and storage. The  two images on the top left                                                               
illustrate capturing CO2  either from a fossil  or biomass fueled                                                               
power  station at  an industrial  facility or  directly from  the                                                               
air. To  Senator Claman's question,  he said he could  envision a                                                               
wind farm  that captures CO2  directly out of the  atmosphere and                                                               
permanently stores  it in an underground  geologic formation like                                                               
a depleted  gas reservoir.  He noted  that Southcentral  has more                                                               
than  a few  depleted  gas fields  that could  be  used for  this                                                               
4:26:24 PM                                                                                                                    
MR. PASKVAN  advanced to  the diagram of  the carbon  capture and                                                               
storage  process  on  slide  6.   It  includes  geologic  storage                                                               
potential,  stakeholder engagement  and  community outreach,  and                                                               
the regulatory framework. It shows  the CO2 captured at the power                                                               
plant  is either  injected into  a  depleted gas  field or  piped                                                               
offshore and injected  into a saline aquifer. He  noted that both                                                               
storage options were available in Alaska.                                                                                       
CO-CHAIR  GIESSEL noted  that DNR  questioned whether  there were                                                               
saline aquifers in Cook Inlet.                                                                                                  
MR. PASKVAN  responded that the  Alaska Oil and  Gas Conservation                                                               
Commission's (AOGCC)  rules that  protect underground  sources of                                                               
drinking  water  have  exemptions   for  the  injection  projects                                                               
offshore  in Cook  Inlet. This  water  isn't deemed  a source  of                                                               
drinking   water  because   of  the   distance  from   shore.  He                                                               
highlighted  that  DNR,  DEC,  and AOGCC  were  looking  at  this                                                               
closely  and   were  active  participants  in   the  Alaska  CCUS                                                               
4:28:56 PM                                                                                                                    
MR.  PASKVAN  advanced  to  slide  7,  US  Department  of  Energy                                                               
Perspective. He  stated that Assistant  Secretary of  Energy Brad                                                               
Crabtree spoke to the following  during his address to the Alaska                                                               
CCUS Workshop at Alaska Pacific University on February 21, 2023:                                                                
     • US has a leading role in CCUS globally                                                                                   
          BIL (Bipartisan Infrastructure Law)                                                                                   
          • Addresses all elements of CCUS                                                                                      
          • $12 billion for carbon management                                                                                   
          IRA (Inflation Reduction Act)                                                                                         
          • $300 billion in clean energy including 45Q                                                                          
          • Co-investment government & industry                                                                                 
          • Early project funding 80% Feds & 20% Industry;                                                                      
            Later Stages 50/50 plus loan guarantees                                                                             
     • Cook Inlet  World Class Storage                                                                                          
    • Alaska    grid   unique   in   USA,   Potential   for                                                                     
     • Impressed Alaskans are agents of opportunity                                                                             
MR. PASKVAN advanced  to slide 8 to  discuss examples of funding                                                                
opportunities  for  carbon  capture  projects.  The slide  shows                                                                
notices of intent.  On the left, $810  million was available for                                                                
10 large-scale  pilot programs throughout the  US. On the right,                                                                
$1.7 billion  was available  for 6  carbon capture demonstration                                                                
project programs. He pointed  to the next slide that shows which                                                                
US  states either  have  or  are in  the  process  of developing                                                                
sovereign  legislation.   The  13   states  that   already  have                                                                
comprehensive legislation  are shown on the  left and the states                                                                
that have  Class VI primacy or  are seeking it  are shown on the                                                                
right. He  credited DNR with  the extensive  research to develop                                                                
this  slide;  it  reflects  how  active  the  topic  of CCUS  is                                                                
throughout the US.                                                                                                              
4:31:35 PM                                                                                                                    
MR.  PASKVAN  advanced  to slide  9,  Sovereign  Legislation                                                                    
Survey. It shows a graphic  of the states with comprehensive                                                                    
legislation. It's an indication of  how active this topic is                                                                    
CO-CHAIR  GIESSEL  offered   her  understanding  that  North                                                                    
Dakota achieved Class  VI primacy several years  ago and was                                                                    
sequestering gas  from Wyoming.  She also  mentioned hearing                                                                    
that  Japan   had  communicated  with  North   Dakota  about                                                                    
shipping CO2  from Japan to  North Dakota  for sequestering.                                                                    
She   asked  what   he   knew   about  Governor   Dunleavy's                                                                    
discussions  about  sequestering  CO2  from  Japan  in  Cook                                                                    
Inlet, which would not require a pipeline.                                                                                      
MR. PASKVAN  responded that the opportunities  to invest and                                                                    
make projects  happen are in  places that already  have both                                                                    
Class  VI  primacy  and  comprehensive  CCS  legislation  in                                                                    
place. For  example, North Dakota  is already an  active hub                                                                    
for taking CO2 from other locations.                                                                                            
4:35:27 PM                                                                                                                    
SENATOR KAUFMAN  noted that  a bullet point  on slide  11 of                                                                    
the previous presentation  mentioned long-term liability for                                                                    
stored  CO2.  He  asked what  the  maintenance  requirements                                                                    
might be to retain carbon  that was injected and stored over                                                                    
a long term.                                                                                                                    
MR.  PASKVAN responded  that if  the state  were to  achieve                                                                    
Class VI primacy, managing the  injection well would be part                                                                    
of  the  ongoing operation  and  there  would be  associated                                                                    
costs. The  state would also  have a  long-term relationship                                                                    
with  the EPA  that manages  the monitoring,  recording, and                                                                    
verification (MRV) to  ensure that the CO2 goes  where it is                                                                    
supposed  to  go,  that  it doesn't  migrate,  and  that  it                                                                    
doesn't affect  any other zones.  The EPA also  verifies the                                                                    
volumes of stored  CO2. That is part of the  process that an                                                                    
investor  would  have  to  establish to  earn  the  45Q  tax                                                                    
4:38:08 PM                                                                                                                    
MR.  GREESON added  that the  Class VI  permit hearing  that                                                                    
North Dakota  went through addressed the  issue of long-term                                                                    
reservoir  maintenance  on  the  record.  He  suggested  the                                                                    
committee look at that discussion and analysis.                                                                                 
CO-CHAIR  GIESSEL noted  that  executive branch  departments                                                                    
will present that information to  the committee later in the                                                                    
week, which will include information  about the integrity of                                                                    
the reservoirs that are available in Cook Inlet.                                                                                
SENATOR CLAMAN asked  what the typical timeline  is to apply                                                                    
and get primacy and whether  it's important for the state to                                                                    
have  primacy before  it actively  pursues  bringing CO2  to                                                                    
MR. PASKVAN  replied that achieving  Class VI  primacy takes                                                                    
2-4  years,  and  to  show developers  Alaska  is  open  for                                                                    
business,  it's  necessary  to  get  Class  VI  primacy  and                                                                    
establish  a regulatory  framework for  CCUS. He  added that                                                                    
for  a project  to  be  eligible for  the  45Q tax  credits,                                                                    
construction must  start by 2032.  He said Alaska is  in EPA                                                                    
Region 10  and the EPA has  never done a Class  VI injection                                                                    
in that  region, so it  would be  a significant risk  for an                                                                    
investor   to   consider    Alaska   compared   to   another                                                                    
jurisdiction such as  North Dakota where it  might take just                                                                    
a year.                                                                                                                         
4:41:28 PM                                                                                                                    
CO-CHAIR  GIESSEL  highlighted  that  Section 31  of  SB  49                                                                    
empowers AOGCC to seek Class VI primacy.                                                                                        
SENATOR CLAMAN  asked if there  was any point in  looking at                                                                    
carbon credits before the state had Class VI primacy.                                                                           
MR. PASKVAN  confirmed investors will look  elsewhere if the                                                                    
state  doesn't  have Class  VI  primacy  and the  regulatory                                                                    
framework  of CCUS.  He  said the  federal  45Q tax  credits                                                                    
provide $85/tonne  for geologic  storage and  $180/tonne for                                                                    
direct  air capture  (DIC). He  added that  he was  aware of                                                                    
investors  that were  interested  in DIC  in Alaska  because                                                                    
it's more feasible than in warmer climates.                                                                                     
4:43:31 PM                                                                                                                    
SENATOR  KAWASAKI  asked him  to  expand  on the  discussion                                                                    
about the  long-term liability  associated with  CO2 storage                                                                    
in either a  saline aquifer or a shale cap,  and whether the                                                                    
storage is permanent.                                                                                                           
MR. PASKVAN answered  that CO2 has been stored  on the North                                                                    
Slope for decades.  The gas that's produced  in both Prudhoe                                                                    
Bay and  Point Thomson has quite  a lot of CO2  and that gas                                                                    
is  reinjected into  the reservoir.  It's  a very  effective                                                                    
enhanced oil  recovery technique, due  in large part  to the                                                                    
CO2. He directed  attention to the diagram on  slide 10 that                                                                    
shows the  injection of CO2  under multiple layers  of shale                                                                    
into  a  permeable  formation.   This  requires  drilling  a                                                                    
geologic  appraisal well  to determine  the  quality of  the                                                                    
injection formation,  the storage volume, and  the reservoir                                                                    
seal on  top. Alaska  has decades  of experience  with those                                                                    
processes at  Prudhoe Bay and  the process has proven  to be                                                                    
secure.  He  noted  that,  as written,  SB  49  assigns  the                                                                    
management of this job to AOGCC.                                                                                                
4:47:16 PM                                                                                                                    
SENATOR  DUNBAR recapped  the  estimated  timeline to  start                                                                    
construction and to achieve Class  VI primacy then asked how                                                                    
soon  Alaska could  start to  generate  revenue from  carbon                                                                    
MR.  PASKVAN answered  that  these  are capital  investments                                                                    
that take  5-6 years for  an investment decision.  Last fall                                                                    
he learned  that EPA is  encouraging developers  to co-apply                                                                    
to  EPA and  at the  state authority  that assumes  Class VI                                                                    
primacy. He  also understands that AOGCC  submitted a letter                                                                    
to EPA expressing interest in  the process so it can qualify                                                                    
for a  portion of the  $50 million  EPA aside for  any state                                                                    
that is interested in seeking primacy.                                                                                          
SENATOR DUNBAR restated his question  about how long it will                                                                    
take  for Alaska  to start  generating  revenue from  carbon                                                                    
MR. PASKVAN replied that it  depends on the project, but the                                                                    
earliest timeline  he'd seen  was 5-6  years. He  added that                                                                    
carbon capture is  a long-term effort and Alaska  can get in                                                                    
early   and   create   new   long-term   opportunities   for                                                                    
4:51:45 PM                                                                                                                    
SENATOR KAUFMAN asked if he'd  seen a level 1 master project                                                                    
schedule with the key milestones [listed on slide 11].                                                                          
MR. PASKVAN answered that he'd  been working on a case study                                                                    
under a non-disclosure  agreement, but he could  say that it                                                                    
was a capture project  that potentially would generate clean                                                                    
electricity that  would be  available at  a lower  cost than                                                                    
the current  system. The  timeline was on  the order  of six                                                                    
4:52:55 PM                                                                                                                    
SENATOR  KAUFMAN  said it  would  be  easier for  people  to                                                                    
understand  what needs  to be  in place  to move  forward if                                                                    
they could see an example of  a level 1 master schedule with                                                                    
primary deliverables for a carbon project.                                                                                      
MR. PASKVAN responded  that a schedule of  that nature would                                                                    
be  included  in   the  public  version  of   the  study  he                                                                    
described.  He  said it  should  be  available in  the  near                                                                    
CHAIR GIESSEL  noted the short  time that was  remaining and                                                                    
asked  him to  discuss the  opportunities outlined  on slide                                                                    
4:54:51 PM                                                                                                                    
MR. PASKVAN  advanced to slide  13, Alaska  CCUS Opportunity                                                                    
Roadmap. He spoke to the following:                                                                                             
     North Slope                                                                                                              
     Advantaged by low-cost natural gas                                                                                         
        Natural gas-fired capture                                                                                               
        Direct Air Capture (DAC)                                                                                                
        Subsurface data integration & site-specific data                                                                        
        gathering needed                                                                                                        
        40 year track record of successful CO2 sequestration                                                                    
        & use, ~15 TCF                                                                                                          
        Major Gas Sales 2015 LNG plan sequestered CO2 back                                                                      
        in reservoir                                                                                                            
     Existing coal plant infrastructure                                                                                         
        Coal-fired capture                                                                                                      
        Basic regional subsurface data gathering needed                                                                         
     Proximity to Port, potential for import                                                                                    
        Capture not attractive at natural gas plants or                                                                         
        refineries due to gas supply shortage & high price.                                                                     
        Coal or Hydrogen power with CCS can address natural                                                                     
        gas shortage, food security, lower emissions                                                                            
        Imported CO2 storage (US West Coast or Asia-Pacific)                                                                    
        Subsurface data integration & site-specific data                                                                        
        gathering needed                                                                                                        
4:59:45 PM                                                                                                                    
MR. PASKVAN noted that he was ending the presentation by                                                                        
showing the same slide that he started with; it talks about                                                                     
what the workgroup is doing and the reasons for doing so.                                                                       
CO-CHAIR GIESSEL thanked the presenters.                                                                                        
5:00:30 PM                                                                                                                    
There being no further business to come before the                                                                              
committee, Co-Chair Giessel adjourned the Senate Resources                                                                      
Standing Committee meeting at 5:00 p.m.                                                                                         

Document Name Date/Time Subjects
Alaska CCUS Workgroup Peer Review Paper.pdf SRES 3/6/2023 3:30:00 PM
SRES CCUS_Greeson and Paskvan_Presentation 3.6.23.pdf SRES 3/6/2023 3:30:00 PM