Focus: N. America's old pipelines seek new life moving carbon in climate push

Transcontinental

23/02/2022 20:01

By Rod Nickel, Liz Hampton and Nia Williams
    Feb 23 (Reuters) - North American oil and gas pipeline
companies are gearing up to compete for a budding market moving
greenhouse gases to carbon capture and storage (CCS) projects -
by building new pipelines to transport carbon dioxide or giving
new life to old, under-used ones.
    Utilities, chemical makers and oil refiners are counting on
CCS to allow them to reduce atmospheric carbon emissions by
burying them underground, to help them meet climate change
goals. 
    Few existing pipelines move carbon dioxide, and those that
do mostly ship the gas to oilfields where it flushes out crude
oil. That lack of pipelines may pave the way for building new or
refurbishing old lines for transporting carbon.
    If the United States is to deliver on net-zero ambitions to
bury or utilize 1 billion tonnes of carbon per year by 2050, it
will need 19,000 kilometres (11,806 miles) of carbon pipelines,
moving at least 65 million tonnes per year by 2030, according to
a 2021 Princeton University study.
    "This is a real opportunity to (serve) the same customers we
know, but in a new business line that until recently didn’t
really exist," said Scott Goldberg, a vice-president at pipeline
operator EnLink Midstream  ENLC.N . 
    For now, there is little commercial reason to build.
Available tax credits, taxes on carbon emissions, and carbon
trading schemes are not sufficient to make CCS profitable for a
wide range of industrial emitters.
    In Canada, carbon emitters must pay C$50 per tonne, rising
to C$170 in 2030. Canadian oil producers say they also need a
tax credit to pay the cost of 75% of CCS facilities.
 urn:newsml:reuters.com:*:nL1N2R325U 
    A U.S. tax credit for sequestering carbon, called 45Q, is
scheduled to rise to $50 a tonne in 2026. Congressional bills
have proposed raising the credit to $85 per tonne.
    Yet, building new carbon pipelines and underground storage
faces opposition from environmentalists who see CCS as extending
the life of high-emission industries, not paving way for clean
energy.  urn:newsml:reuters.com:*:nL1N2UB257
    
    PRESSURE PROBLEM
    The easiest way to move carbon might be to convert existing
natural gas pipelines - but that comes with a technical problem.
    Carbon travels most efficiently through pipelines at
pressure of up to 2,600 pounds per square inch (psi), much
higher than natural gas pipelines, which operate at about 800 to
1,200 psi, said Edouard Asselin, professor of materials
engineering at University of British Columbia.
    Redeploying natural gas lines requires an operator either to
pump carbon at that lower pressure or to install costly pipeline
reinforcements every 500 meters, called crack arrestors, to
handle greater pressure, Asselin said.
    Running at higher pressure than a pipeline's original design
risks fracturing a line. If the pipeline were to crack
underground, the escaping pressure could be explosive and
endanger urban areas, Asselin said.
    But EnLink's Goldberg says converting existing pipelines to
carry carbon is more cost-efficient than starting from scratch,
and regulatory processes needed to convert lines are already
established.
    EnLink hopes to recycle under-utilized Louisiana natural gas
lines to transport carbon. It aims to combine new,
higher-pressure pipeline segments with older pipes that have
been checked for structural integrity and hydrotested, Goldberg
said.
    For existing pipelines, EnLink will transport carbon from
refiners or other polluters at lower pressure to new pump
stations, which will then raise pressure through new lines.
    Some industry players say new construction is necessary.
Most gas lines do not connect the places suitable for picking up
and sequestering carbon, said Colin Gruending, Enbridge Inc's
 ENB.TO  executive vice president of liquids pipelines.
    Canada's Wolf Midstream is building new lines rather than
converting older pipes. It operates a C$326-million Alberta
pipeline that delivers carbon for oil recovery, and in January
said it would build a pipeline to move carbon from
Archer-Daniels-Midland Co's  ADM.N  Iowa ethanol plants to a
sequestration site about 350 miles away.
    "We designed for very high pressure, much higher pressure
than most existing hydrocarbon pipelines," said Jeff Pearson,
president of Wolf's carbon business. "You would have to do a
whole lot of work to think about repurposing them."
    Kinder Morgan Inc  KMI.N , which transports carbon for oil
recovery, is negotiating with Midwest emitters to expand its CCS
business, said Jesse Arenivas, president of Kinder's Energy
Transition Ventures unit, including new pipelines to move carbon
for sequestration, and possibly oil recovery.
    "We do believe there is limited opportunity over a short
distance to repurpose pipes," Arenivas said. "Long-haul, we
believe, will require new construction."

 (Reporting by Rod Nickel in Winnipeg, Liz Hampton in Denver and
Nia Williams in Calgary,
Editing by Marguerita Choy)
 ((rod.nickel@tr.com; Twitter: @RodNickel_Rtrs;
1-204-230-6043;))