Download PDF Summer Bridge on Engineering the Energy Transition June 26, 2023 Volume 53 Issue 2 This issue explores the energy transition needed to address the mounting threats of climate change. The articles are an excellent resource to help inform meaningful decisions and steps for energy-related contributions to reduce carbon emissions. The US Gulf of Mexico Region: Leader in Energy Production and the Energy Transition Wednesday, June 7, 2023 Author: David E. Daniel, Akhil Datta-Gupta, Ramanan Krishnamoorti, and James C. Pettigrew The Gulf region can leverage its energy history, infrastructure, capacity, and expertise to lead the energy transition. Beginning with some of the earliest American oil wells in the mid-19th century and continuing with the first true offshore oil rig in the 1940s, the US Gulf of Mexico region is steeped in history as an energy production hub with global influence. Initial oil exploration in Texas and Louisiana progressed from windfalls to a sophisticated balance of risk and reward across the region, spurred by engineering advances and geologic expertise that shifted prospects to new topographies and, eventually, deeper waters. The progression of the energy industry in the area paralleled immense growth in port infrastructure, development of a technically skilled workforce, and the expansion of numerous top engineering institutions. As a result, the Gulf is a crucial region for national and international energy production with established infrastructure and a world-class experienced workforce. How will the Gulf region leverage its energy history, expertise, and capacity to lead a sustainable and just energy transition? This article addresses three Gulf Coast capabilities that are key to enabling this country’s bright energy future: carbon capture and storage, hydrogen, and experienced, resilient communities. We discuss strengths and challenges in each area. Carbon Capture and Storage Building on its long legacy of leadership in hydrocarbon exploration, production, and refining, the Gulf Coast region is well positioned to play a leading role in carbon capture and storage (CCS). Offshore CCS is still in the early stages of development, but the region’s leadership in the upstream industry can make it a frontrunner in offshore CCS for the United States. Carbon storage in the form of CO2-enhanced oil recovery (EOR), a vital bridge technology for carbon sequestration, has been practiced in the Permian basin for over 50 years. The oil and gas industry has significant experience in the large-scale injection of CO2 into the subsurface. Data and Characterization Much of the experience and many of the technologies and processes developed by the oil and gas industry can be transitioned to CCS projects. These include a broad range of modeling, measurement, and monitoring tools for reservoir surveillance and management strategies for pressure maintenance. The Gulf of Mexico is one of the most well-explored basins for hydrocarbon potential, with thousands of square miles of integrated 3D seismic data and thousands of well logs that allow for a detailed assessment of regional CO2 storage potential (Meckel et al. 2021). But some site characterization challenges need to be addressed (NASEM 2019). Data sparsity is typically a significant challenge for CCS, particularly for regionally extensive aquifers, which will be the primary CO2 storage resource as opposed to oil and gas reservoirs. Increased data density will reduce geologic uncertainty and enhance model calibration and forecasting. Economies of Scale and Storage Capacity The industrial landscape of the coastal areas of Texas and Louisiana hosts clusters of coal- and natural gas–fired power plants, refineries and petrochemical complexes, and gas liquefaction, cement, and other stationary industrial emission sources. The Gulf Coast region therefore has the highest CO2 emissions in the country, accounting for nearly 20 percent of total US emissions. This large volume provides economy of scale for large CCS projects, while the concentrated CO2 sources provide “low-hanging fruit” for rapid CCS deployment as CO2 capture is typically the most significant component (generally 60–70 percent) of the overall project cost. The Gulf’s thousands of square miles of 3D seismic data and thousands of well logs enable detailed assessment of regional CO2 storage potential. Two major projects in the Gulf Coast region illustrate existing capacities: The first industrial CCS project was completed in 2013 to capture about 1 million tons per year of CO2 at the Air Products hydrogen plant at Port Arthur, TX. The CO2 was transported for EOR to the Hastings Field, about 25 miles southeast of Houston. The Petra Nova CCS project, started in 2017 and located southwest of Houston, is the largest US postcombustion CO2 EOR project. It is designed to capture approximately 90 percent of the CO2 from a 240 MW slipstream of flue gas and sequester approximately 1.4 million metric tons of this greenhouse gas (GHG) annually for EOR at the West Ranch oil field, near Vanderbilt, TX (Olalotiti-Lawal et al. 2019). The experience gained from these projects to capture CO2 from industrial emissions, transport, and sequester it will be critical for the large-scale expansion of such efforts. The storage capacity of on- and offshore saline formations along the Gulf Coast is estimated to be over a trillion tons of CO2, making it the largest in the United States (NETL 2015). The estimated capacity in the greater US Gulf region can accommodate decades of annual regional emissions. The near-offshore state waters of Texas and Louisiana offer a further advantage due to their single land ownership and distance from major population centers. Decarbonization Hubs The Gulf region offers the potential for multiple hubs that could accelerate decarbonization on a national basis. The CCS supply chain includes transport to a suitable location for permanent storage or conversion to valuable products such as fuels, chemicals, and materials, and the region already has a mature CO2 pipeline network across multiple states (figure 1; Meckel et al. 2021). At-scale deployment of CCS through the development of industrial hubs will support the development of integrated capture, storage, and transport. Such hubs would provide a mechanism to focus investments for infrastructure, accelerate innovation to minimize or eliminate GHG emissions, and engage stakeholders in building public confidence in CCS technology. With its experienced workforce and technical expertise, the oil and gas industry can provide the necessary human capital to build and operate these CCS hubs. Several large corporations have announced significant investments to develop the greater Houston area into a low-carbon hub, and many CCS-favorable characteristics of the Texas coastal region also apply to Louisiana. Importance of Community Engagement Although the Gulf Coast region is uniquely positioned to offer leadership in the large-scale implementation of CCS, gaining public support and confidence will require outreach efforts and engagement across a broad range of stakeholders, including policymakers, industrial groups, nongovernmental agencies, and, most importantly, Gulf Coast communities. Several demonstration projects of the Regional Carbon Sequestration Partnerships sponsored by the US Department of Energy have established that CCS operations are safe and environmentally sound.[1] But storage integrity and the potential for induced seismicity remain significant public concerns that need to be addressed, along with trustworthy monitoring, verification, and accounting of greenhouse gases to ensure air quality. Cost-effective regulatory regimes are necessary for widespread deployment of CCS. Hydrogen The Gulf Coast is the world’s leader in the hydrogen (H2) economy, with more than 1,400 miles of H2 pipelines (figure 2)—90 percent of the nation’s and a third of global pipelines—and more than a third of US H2 production (Parfomak 2021). Most current production is of “gray” hydrogen,[2] which has a high carbon footprint. It is produced using steam methane reforming (SMR) of natural gas, a process that produces hydrogen, CO2, and carbon monoxide as byproducts. In addition, the Gulf Coast region hosts just over half of the US natural gas processing capacity, providing an advantageous feedstock nearby. The region also has substantial salt cavern storage capacity and the experience base to safely store H2 in the world’s only three salt domes used for such storage (with a total capacity of 5–8 billion cubic feet). Salt dome storage has proven safe and has a high round-trip efficiency and long-term (multiday to multiweek) storage capability. With over 47 percent of US petroleum refining capacity, a sizable end-use market exists for produced hydrogen (figure 2). An early opportunity to diversify end use at scale involves blending H2 with natural gas, currently underway for power generation and as fuel for industrial heating. Moreover, the region is pioneering autothermal reforming in combination with carbon capture to develop low-cost, low-carbon ammonia and H2, and its ability to export hydrogen—as liquefied H2, as fuels such as ammonia and methanol, or as liquid organic hydrogen carrier—is unrivalled. The combination of existing H2 infrastructure, port capacity, and knowledge and experience developed primarily in the growing liquefied natural gas market make the region a strong candidate to lead the forthcoming international hydrogen market. Challenges and Opportunities Expansion of H2 use will require improvements to the infrastructure (including pipelines) and technological advances such as burners to accommodate higher amounts of H2. But the critical challenge facing the Gulf Coast region in advancing and leading the H2 economy remains decarbonization of hydrogen production while keeping costs low. One area being examined through front-end engineering design studies and pilot demonstrations is the retrofitting of carbon capture units to SMR facilities to enable production of “blue” hydrogen. An alternate path to producing low-carbon--intensity H2 from natural gas through methane pyrolysis (leading to “purple” hydrogen) is making early-stage commercial headway in the region, but it is contingent on advancing a value-added carbon byproduct of the process. The ultimate goal for the low-carbon H2 economy is to generate “green” hydrogen (or high-density H2 carriers such as methanol and ammonia) through electrolysis (or photocatalysis) of water through the use of renewable energy. Texas has the largest wind electricity generation (primarily through onshore wind) with 26 percent of the nation’s capacity, more than 14 GW of solar capacity (over 10 percent of the nation’s solar capacity), and more than 10 percent of the installed US grid-based battery capacity. With the potential to generate 510 gigawatt-hours of offshore wind energy per year in the Gulf Coast area alone, seawater and wind energy provide tantalizing opportunities to rapidly expand a renewable low- or zero-carbon hydrogen economy. The most significant challenge for this effort is the development of earth-abundant, sustainable catalyst platforms to allow the direct conversion of seawater to hydrogen. No matter the source of hydrogen, significant enablers for the Gulf Coast are the extensive pipeline network, ample and proven storage of hydrogen in naturally occurring salt caverns along the Coast, extensive markets for H2 use, and expertise to scale the growing production, storage, and use market for hydrogen. Community of Experience and Resiliency The Gulf region is home to globally preeminent assets for the energy transition, including equipment and infrastructure, fabrication capabilities, innovation capacity, the ability to take innovations to scale, and, especially, technically experienced people. The Gulf Coast offshore oil and gas industry produces about 2.3 million barrels of oil equivalent per day and supports 345,000 US jobs.[3] The industry has a proven record of innovation, progressing from drilling at a maximum water depth of 300 feet in the 1960s to over 8,000 feet today. Some 7,000 offshore structures have been constructed in the Gulf over more than half a century.[4] With the decommissioning of older platforms and a transition to newer, more complex platforms, more than 1,500 remain active (BOEM 2023), primarily off the Louisiana coast but also off the Texas, Mississippi, and Alabama coasts. Despite this wealth of resources, the region must overcome challenges threatening its ability to lead in the energy transition. Mississippi and Louisiana rank as the two poorest states (Davis 2021); Texas, Louisiana, Alabama, and Mississippi rank among the lowest in terms of racial and ethnic equity in health care (Radley et al. 2021); and Texas, Mississippi, and Louisiana are three of the four lowest-performing states in educational attainment.[5] If the Gulf states are to be leaders in energy transition, the region’s communities must be healthy, well educated, and able to make good technology-informed decisions. The National Academies’ Gulf Research Program (GRP) was created in 2013 in the aftermath of the Deepwater Horizon incident and oil spill. The criminal settlement agreements require the GRP to address human health and environmental protection issues associated with offshore energy production and transportation in the Gulf of Mexico and the United States’ outer continental shelf. The GRP aims to fill critical gaps not addressed by other programs and to concentrate on impactful activities that align with the National Academies’ key capabilities. Figure 3 illustrates the five pillars that are the focus of the GRP’s work: offshore energy safety, health and resilience, environment, data, and education. The GRP also supports programs that cut across the pillars to integrate activities. Though headquartered in Washington, DC, the GRP is heavily invested in local and regional activities and partners in the Gulf. Following are some examples of this work: the Gulf Scholars Program, which supports Gulf colleges and universities in preparing undergraduate students, particularly among underrepresented groups, to prepare the next generation to address critical challenges in the region; science policy fellowships, pairing scientists with host offices of federal, state, or nongovernmental organizations to facilitate the process of bringing science into policymaking; and place-based projects and programs for K-8 youth. GRP research efforts include enhancing community networks that improve coastal environments, health, and wellbeing; studying the effects of climate change on environmental hazards in overburdened communities; improving public health data systems to address health equity challenges for at-risk communities in the US Gulf region; a workshop on investing in resilient infrastructure in the Gulf (NASEM 2022); and a workshop on navigating the energy transition in the region.[6] Conclusion The science, engineering, and technology chal-lenges associated with transitions in energy production, demand, and sources are complex and daunting. The Gulf region’s leadership strengths for the energy transition include its extensive infrastructure, experienced human resources, resilient culture, and proven ability to take innovation to commercial scale. Acknowledgments The authors acknowledge James Price for his efforts in supporting this article and thank Lauren Alexander Augustine for her vision of a safe, healthy, and resilient Gulf of Mexico. We appreciate the sage advice and patient guidance of Cameron Fletcher. References Aegir Insights. 2023. Offshore wind in the Gulf of Mexico could power clean hydrogen hubs in Texas and Louisiana, Jan 4. BOEM [Bureau of Ocean Energy Management]. 2023. Offshore statistics by water depth. https://www.data.boem.gov/Leasing/OffshoreStatsbyWD/Default. aspx. Davis E. 2021.The states with the highest poverty rates. US News & World Report, Jun 25. Meckel TA, Bump AP, Hovorka SD, Trevino RH. 2021. Carbon capture, utilization, and storage hub development on the Gulf Coast. Greenhouse Gases: Science & Technology 11(4):619–32. NASEM [National Academies of Sciences, Engineering, and Medicine]. 2019. Negative Emissions Technologies and Reliable Sequestration: A Research Agenda. National Academies Press. NASEM. 2022. Investing in Resilient Infrastructure in the Gulf of Mexico: Proceedings of a Workshop. National Academies Press. NETL [National Energy Technology Laboratory]. 2015. Carbon Storage Atlas, 5th ed. US Department of Energy Office of Fossil Energy. Olalotiti-Lawal F, Onishi T, Kim H, Datta-Gupta A, Fujita Y, Hagiwara K. 2019. Post-combustion carbon dioxide enhanced-oil-recovery development in a mature oil field: Model calibration using a hierarchical approach. SPE -Reservoir Evaluation & Engineering 22:998–1014. Parfomak PW. 2021. Pipeline Transportation of Hydrogen: Regulation, Research, and Policy. Congressional Research Service. Radley DC, Baumgartner JC, Collins SR, Zephyrin L, Schneider EC. 2021. Achieving racial and ethnic equality in US health care. Commonwealth Fund Scorecard of Statewide Performance, Nov 18. [1] Regional Carbon Sequestration Partnerships, https://netl.doe.gov/sites/default/files/2022-05/RCSP% 20Infographic_20220512.pdf [2] Gray hydrogen is produced without capturing the carbon dioxide; blue hydrogen is produced when CCS is included with the production of gray hydrogen; green hydrogen is made from water electrolysis powered using renewable electricity; purple hydrogen is made through electrolysis using nuclear energy. [3] National Offshore Industries Association, https://www.noia.org/ [4] Bureau of Safety and Environmental Enforcement, Platform/rig information, https://www.data.bsee.gov/Main/Platform.aspx [5] World Population Review, Least educated states, https://-worldpopulationreview.com/state-rankings/least- educated-states [6] Proceedings of this workshop will be available summer 2023, at www.nap.edu. About the Author:David Daniel (NAE) is former president, University of Texas at Dallas. Akhil Datta-Gupta (NAE) is Regents Professor and L.F. Peterson ’36 Endowed Chair in Petroleum Engineering, Texas A&M University. Ramanan Krishnamoorti is professor of chemical and biomolecular engineering and vice president, Energy & Innovation, University of Houston. James Pettigrew is director, energy transition and offshore energy safety, National Academies Gulf Research Program.