Strategic Development Aug 11 2026

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Unknown: Good evening, everyone, and welcome to the Strategic Development Committee and Special

SPEAKER_08: Board Meeting of August 11, 2026.

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SPEAKER_08: ends.

SPEAKER_08: Thank you.

SPEAKER_08: All those in favor of the motion, please conduct the roll call.

SPEAKER_07: All committee members present, also present are directors rose and Buick-Thompson.

SPEAKER_07: Thank you.

SPEAKER_08: So first we will have item ‑‑ it's probably the only item on the agenda ‑‑ tonight's

SPEAKER_08: agenda is to provide the board's informational ‑‑ informational internal and external

SPEAKER_08: presentations and discussion about enhanced geothermal which I'm extremely excited about

Unknown: and also carbon capture and storage.

SPEAKER_08: So we have a very full evening and our presenters right now we have a number of presenters here.

SPEAKER_08: Unfortunately, Eric Miner from the California resources corporation was not able to attend

SPEAKER_08: tonight.

Unknown: But we will start off with a brief introduction from our own Brian Swan, director of resource

SPEAKER_08: planning and settlements.

SPEAKER_08: And then I'll ask each of the speakers briefly to introduce themselves prior to their presentations.

SPEAKER_08: So we'll start with you.

SPEAKER_08: Mr. Swan.

Unknown: Great.

SPEAKER_10: Thank you, Chair Sanborn.

SPEAKER_10: Great to see you all here tonight.

SPEAKER_10: We have a great list of presenters here to really highlight some of the emerging technologies

SPEAKER_10: that we're really excited about.

SPEAKER_10: Being enhanced geothermal and carbon capture and sequestration as mentioned by Chair Sanborn

SPEAKER_10: there.

SPEAKER_10: Through our zero carbon work we understand these are very important resources.

SPEAKER_10: These are resources that are clean, reliable, 24‑7.

SPEAKER_10: So really support the decarbonization pathways.

SPEAKER_10: We know there's only so much you can do with things like wind and solar.

SPEAKER_10: So geothermal as we know today provides a lot of benefits in our portfolio.

SPEAKER_10: Carbon capture and sequestration we're also very excited about and exploring a project

SPEAKER_10: with Calpine Sutter.

SPEAKER_10: As we're listening to the presenters tonight I want to highlight again as we talked about

SPEAKER_10: in the April zero carbon plant update we have an IRP process that's kicking off in October.

SPEAKER_10: So a lot of the information we're hearing tonight is great groundwork for those ‑‑ that

SPEAKER_10: process, right?

SPEAKER_10: So kicking off in October.

SPEAKER_10: Things like when can we reasonably expect these resources to be available?

SPEAKER_10: At what price?

SPEAKER_10: And so on.

SPEAKER_10: So do be thinking about that upcoming IRP process.

SPEAKER_10: Our first speaker from EPRI will provide an overview of enhanced geothermal.

SPEAKER_10: Again, a great resource today in our portfolio that contributes about 12% of our energy supply

SPEAKER_10: to meet retail sales.

SPEAKER_10: We have about 150 megawatts of existing geothermal technology in our fleet.

SPEAKER_10: Some in northern California, some in southern California down in Salton Sea as well as out

SPEAKER_10: by the geysers in northern California.

SPEAKER_10: We also have an additional 50 megawatts due online between 2028 and 2030 again from the

SPEAKER_10: geysers project from Calpine.

SPEAKER_10: Now current opportunities for existing technology on geothermal, very limited today, right?

SPEAKER_10: A lot of it's been identified and used and utilized today.

SPEAKER_10: And so the thought of additional geothermal using new technology is very exciting from

SPEAKER_10: a resource planning perspective.

SPEAKER_10: Second we'll hear from another speaker from EPRI and the California resources corporation

SPEAKER_10: in carbon teraVolt.

SPEAKER_10: They'll highlight carbon capture and storage.

SPEAKER_10: They'll highlight costs associated with the technology, some existing projects that are

SPEAKER_10: out there.

SPEAKER_10: And really interesting from the carbon teraVolt side, we'll hear about a number of vaults

SPEAKER_10: that are being explored in California to sequester carbon.

SPEAKER_10: And again, our exploration of CCS has been in depth.

SPEAKER_10: As we heard about in the April 15th ZCP update, that Calpine Sutter carbon capture and sequestration

SPEAKER_10: opportunity that's out there continues to be explored with Calpine and John Olson and

SPEAKER_10: the contracts team.

SPEAKER_10: And we do anticipate potentially discussing an offer sometime mid to late 2027.

SPEAKER_10: So I wanted to provide some context on some of the resources that we're exploring in these

SPEAKER_10: areas.

SPEAKER_10: Last but not least, I just want to thank all the speakers for joining us here tonight.

SPEAKER_10: Thank you so much for taking time out of your busy lives to be here and just really join

SPEAKER_10: the discussion.

SPEAKER_10: We couldn't do it without industry coming out and really providing a lot of great detailed

SPEAKER_10: information.

SPEAKER_10: So thank you all.

SPEAKER_10: With that, I'll go ahead and have our first speaker from EPRI, Ms. Laura Gierramante,

SPEAKER_10: to go ahead and introduce yourself and go ahead and jump into your material.

SPEAKER_10: Thank you so much.

SPEAKER_01: Thank you.

SPEAKER_01: Thank you for the invitation.

SPEAKER_01: My name is Laura Gierramante.

SPEAKER_01: I'm a geoscientist.

SPEAKER_01: We have geoscientists at EPRI as well.

SPEAKER_01: And I'm very happy to hear that you're excited about here now at Geothermal.

SPEAKER_01: So first I'm going to do a very brief introduction of EPRI for those of you that don't know us.

SPEAKER_01: So EPRI is a nonprofit with the benefit of the public.

SPEAKER_01: We have a very strong non-advocacy mandate.

SPEAKER_01: We are an applied research institute that our mode of over-random is basically based

SPEAKER_01: on collaboration.

SPEAKER_01: We value our credibility and independence very highly and, of course, the expertise

SPEAKER_01: we provide.

SPEAKER_01: And we explore topics around nuclear generation, power delivery, utilization, environment

SPEAKER_01: decarbonization, et cetera.

SPEAKER_01: So Abodjit and myself are part of the generation sector.

SPEAKER_01: And I'm the geothermal lead inside EPRI.

SPEAKER_01: So with that, I'm going to talk about geothermal and try to answer why the question about why

SPEAKER_01: utilities are reevaluating geothermal right now.

SPEAKER_01: Geothermal is a very mature technology.

SPEAKER_01: Conventional or hydrothermal has been going on for more than 100 years.

SPEAKER_01: It's a reliable, clean source of power.

SPEAKER_01: And with technology innovations that I'm going to be talking about, it's really a very attractive,

SPEAKER_01: clean, reliable power for the future of energy that we all know we need a lot.

SPEAKER_01: So it's a continuous renewable energy.

SPEAKER_01: Energy factors could be around 90%.

SPEAKER_01: It's clean, relatively low emissions.

SPEAKER_01: It has a low lifecycle greenhouse emissions.

SPEAKER_01: Minimal land footprint that is always very important.

SPEAKER_01: Leverages existing fossil energy supply chains and work flow and innovation chain and provides

SPEAKER_01: great stability and energy security.

SPEAKER_01: So why now, what is the big jump on or why we are considering geothermal so much is with

SPEAKER_01: all these technology innovations that I discussed, there are a lot of new technologies that are

SPEAKER_01: allowing for geothermal to be really a promise and actually a reality moving away from this

SPEAKER_01: niche of focus that it was before.

SPEAKER_01: There are commercial projects already emerging.

SPEAKER_01: Water scalers, they see geothermal as a very strong potential source of clean energy and

SPEAKER_01: they are committing and helping with innovation advances.

SPEAKER_01: The potential by 2050 globally is almost 800 gigawatts and it's estimated that it can provide

SPEAKER_01: around 15% of future global electricity demand growth.

SPEAKER_01: It's a very important and 24 seven carbon free resource.

SPEAKER_01: Just in order to talk about the innovations, I just wanted to make sure to everyone we

SPEAKER_01: are talking about the same.

SPEAKER_01: Conventional or hydrothermal geothermal is this very mature technology that has been

SPEAKER_01: going on in Italy and California, the geysers, et cetera, for a long time.

SPEAKER_01: In order for you to be able to generate electricity with geothermal, you need three things.

SPEAKER_01: You need the heat source to be close to the surface, close enough that you can actually

SPEAKER_01: drill and access it.

SPEAKER_01: You need to have fluid to harness the heat on the subsurface and you need permeability,

SPEAKER_01: which is basically conduct for this fluid to percolate in the subsurface to move and

SPEAKER_01: then so you can extract it to the surface and with that hot water you generate electricity.

SPEAKER_01: So in order, the reason that you have these three elements that you need is what made

SPEAKER_01: geothermal to be a niche technology because these three elements usually you can find

SPEAKER_01: them in the plate tectonic areas, in the border of where there is a lot of earthquakes, a

SPEAKER_01: lot of volcanoes, et cetera.

SPEAKER_01: That is what made conventional geothermal being relatively limited over these 100 years.

SPEAKER_01: Of course, California is part of this area so we were lucky to have the US is one of

SPEAKER_01: the highest producers of conventional geothermal right now.

SPEAKER_01: All this geothermal revolution, what is happening is that actually there are a lot of engineering

SPEAKER_01: systems or processes that you can do when you don't have these three elements that you

SPEAKER_01: need.

SPEAKER_01: So basically, like in the center, is one of the most well-known enhanced geothermal or

SPEAKER_01: EGS.

SPEAKER_01: Most of you might have heard about FERBO, the company that is actually leading the development

SPEAKER_01: of EGS projects.

SPEAKER_01: What they are doing is basically apply the shell gas playbook from the oil and gas, horizontal

SPEAKER_01: wells connecting these well-width fractures and circulating water to cold water goes in,

SPEAKER_01: extract the heat from the rock and then produce hot water and with that they generate electricity.

SPEAKER_01: So again, it's very coming very straightforward from the oil and gas with certain, of course,

SPEAKER_01: characteristics.

SPEAKER_01: The rocks are different, the temperatures are different, but they are adapting.

SPEAKER_01: In this case, basically, you had a heat source close to the surface, but you didn't have

SPEAKER_01: water and you didn't have this permeability.

SPEAKER_01: So you engineered the system in order to be able to harness that heat.

SPEAKER_01: There is another big technology proposition for next generation geothermal, which is called

SPEAKER_01: advanced geothermal or closed loop, it's more usually referred.

SPEAKER_01: The idea is very nice because basically you just have either a single well or a loop of

SPEAKER_01: a well in which the fluid that harnesses heat is inside this well and is never in contact

SPEAKER_01: with the rock.

SPEAKER_01: So that makes it easier, you don't have to deal with corrosion issues, there are certain

SPEAKER_01: things that you have to deal and engineer, et cetera.

SPEAKER_01: But the problem is that the conduction in that system is very low.

SPEAKER_01: So in order for you to be able to harness a lot of heat and produce a lot of electricity

SPEAKER_01: from there, sometimes you have to end up drilling very long wells and the cost is not there

SPEAKER_01: yet.

SPEAKER_01: So that is one of the less advanced technologies.

SPEAKER_01: So if you can imagine what this engineering aspect goes, one thing that is important that

SPEAKER_01: also the oil and gas really collaborates to increase geothermal production is that all

SPEAKER_01: these drilling innovations allow you to drill deeper, faster, which means cheaper, so projects

SPEAKER_01: are more cost efficient.

SPEAKER_01: So if you can, in these maps of the U.S., you can see what is the temperatures estimated

SPEAKER_01: around five kilometers depth and the temperatures at 10 kilometers depth.

SPEAKER_01: So it's much hotter so then the efficiency will be higher and then on top of that you

SPEAKER_01: are making possible to extract geothermal in areas that before it was not possible.

SPEAKER_01: So EGS makes it one of the biggest promises that makes geothermal less geographically

SPEAKER_01: restricted.

SPEAKER_01: So the market potential, so I already mentioned this estimation of 800 GW globally, 15% by

SPEAKER_01: 2050.

SPEAKER_01: Drilling technologies are like what is actually moving the needle here to drill faster, cheaper

SPEAKER_01: and make these projects more commercially available.

SPEAKER_01: And then there is one also another big result.

SPEAKER_01: This is the holy trail of geothermal.

SPEAKER_01: I'm not going to touch much on this.

SPEAKER_01: But if you are actually able to go much deeper into places where the rock is at super critical

SPEAKER_01: conditions, the efficiency of the well or the geothermal system will be so much higher

SPEAKER_01: that it will solve the economic issue that is drilling so much there, right?

SPEAKER_01: That is what we are trying to advance today.

SPEAKER_01: So that's everything based on the fact that the heat is everywhere in the earth and the

SPEAKER_01: challenge here is to be able to access it at economic conditions.

Unknown: There are still key challenges.

SPEAKER_01: Some of them are technical.

SPEAKER_01: So one of the big parts of geothermal project is to actually discover the resource and confirm

SPEAKER_01: it.

SPEAKER_01: This is a part that is usually not very well known for the utility.

SPEAKER_01: The utilities are not used to deal with the subsurface.

SPEAKER_01: And that's where oil and gas experience is also very helpful because they are dealing

SPEAKER_01: with uncertainty in the subsurface for a long time and they have these risk processes in

SPEAKER_01: which they can advance this type of project.

SPEAKER_01: And AI, of course, is advancing a lot this area because then you can do a lot of take

SPEAKER_01: advantage of AI processes to understand indirect data to talk about the resource in the subsurface.

SPEAKER_01: Drilling cost and well performance is one of what I mentioned.

SPEAKER_01: That is also another that the industry is progressing a lot on that.

SPEAKER_01: Reservoir productivity is one of the big questions because I mentioned that there are a lot of

SPEAKER_01: these commercial projects going on right now and the big question is how it's going to

SPEAKER_01: be their performance in 20, 30 years, right?

SPEAKER_01: Of course that is not a show stopper in the sense that if they actually, the area that

SPEAKER_01: you're producing just thermal cools down faster than you expected, there is always a chance

SPEAKER_01: of drilling more and getting those areas that you haven't sweep the heat yet.

SPEAKER_01: So it's not going to cancel or stop the project.

SPEAKER_01: It might change the cost.

SPEAKER_01: But that is one concern that people are observing to see what's happening.

SPEAKER_01: Then the other issues has to be with financial.

SPEAKER_01: It's very difficult.

SPEAKER_01: It was very difficult to get loans or funding for this type of projects because you don't

SPEAKER_01: have a lot of history of this area's performing.

SPEAKER_01: So what is what you can do as a guarantee when you ask for a loan?

Unknown: But then, well, these commercial demonstrations, et cetera, are helping a lot and then this

SPEAKER_01: is where hyperscalers are also helping a lot as well because they are going for technologies

SPEAKER_01: that even though they are emerging, they are giving the signal and guarantee purchase of

SPEAKER_01: certain of these projects at a higher premium when the project is online and that helps

SPEAKER_01: the developers to actually say, yes, we have a buyer and it helps the cycle of financing,

SPEAKER_01: bankability, et cetera.

SPEAKER_01: So regularity approval was one of the also things that it was very difficult because

SPEAKER_01: projects were taking so long that it was very difficult for a utility to put it in the IRP

SPEAKER_01: process because they had to wait much longer than with other technologies.

SPEAKER_01: That is being expedited a lot and with this administration there were several categorical

SPEAKER_01: exclusions and things like that that are making some of these process much faster.

SPEAKER_01: But I'll talk about this in a minute.

SPEAKER_01: And then, of course, transmission and interconnection.

SPEAKER_01: If we start considering geothermal in early transmission planning and increase integrations

SPEAKER_01: with the utility resource planning process, that might help as well.

SPEAKER_01: And then community acceptance and seismicity.

SPEAKER_01: So public concern is an issue.

SPEAKER_01: A lot of the things are around water and induced seismicity.

SPEAKER_01: For all these, they've enhanced geothermal.

SPEAKER_01: For example, they are very water intensive but the water is not fresh water.

SPEAKER_01: You can get it from areas that it won't be an issue.

SPEAKER_01: But it's important to let the people know.

SPEAKER_01: And induced seismicity is an issue but there are a lot of protocols that industry is getting

SPEAKER_01: very well, very good at real time measurements and protocols in order to deal with these

SPEAKER_01: things.

SPEAKER_01: One of the important things with geothermal is that you are constantly injecting but also

SPEAKER_01: extracting fluids so you don't build up a lot of pressure in the subsurface.

SPEAKER_01: So regarding the economics, geothermal used to have this thing out.

SPEAKER_01: It's very expensive.

SPEAKER_01: And the reason is because you have to put a lot of cost at the beginning of the project,

SPEAKER_01: which is mostly drilling costs were like 30 to 75% of the total capex.

SPEAKER_01: But if you actually compare this, the cost of geothermal, the non-intermittent renewable

SPEAKER_01: and other technologies is actually quite competitive.

SPEAKER_01: So you have geothermal in the middle of the renewable generation.

SPEAKER_01: And then another important thing for geothermal is that it was also judged on base of LCOE.

SPEAKER_01: But that ignores a lot of other benefits of geothermal that you can have 24-7, dispatchability,

SPEAKER_01: clean, high availability, great reliability, and reduced needs for backup, power, storage,

SPEAKER_01: and transmission infrastructure.

SPEAKER_01: So in fact, at EPRI, we have a project right now funded by DOE looking at new metrics to

SPEAKER_01: understand the real value of geothermal because LCOE really doesn't represent that.

SPEAKER_01: So here is what I mentioned about the maturity and deployment timelines.

SPEAKER_01: This is just to compare.

SPEAKER_01: This was a publication from DOE three, four years back.

SPEAKER_01: So at that time, a total project time was around seven and 10 years, and they were proposing

SPEAKER_01: some measures in order to make this shorter, which was the proposed reduction was on the

SPEAKER_01: base for four to seven years.

SPEAKER_01: And actually, that was a lot at the beginning on the exploration part.

SPEAKER_01: And with all these categorical exclusions and then some timelines on how much environmental

SPEAKER_01: review process can happen, et cetera, is we are much closer to that time now.

SPEAKER_01: This is just to mention some of the companies that have done agreements with these new geothermal

SPEAKER_01: companies.

SPEAKER_01: Google, for example, they developed in partnership with Ferbo and with Nevada Energy.

SPEAKER_01: And the state of Nevada, they developed this study, they call it the Green Clean Tariff

SPEAKER_01: or something like that, in which basically Google made the commitment of why the global

Unknown: megawatts from Ferbo when Ferbo develops their project is going to be at a premium because

SPEAKER_01: it's like a lot of loads for the data centers.

SPEAKER_01: And then that is going to be true in Nevada Energy, and it's not going to affect the price

SPEAKER_01: of other consumers.

SPEAKER_01: So with that, they gave the signal that Ferbo has a customer and is ready to go with this.

SPEAKER_01: And also the confidence that Google has in this technology.

SPEAKER_01: Nevada has signed some agreements with some other companies.

SPEAKER_01: XGS is a closed loop and Sage is a hybrid company.

SPEAKER_01: They're going to, Meta is going to explore New Mexico with XGS, and Microsoft is exploring

SPEAKER_01: internationally with the utility scale power and then also for heating and cooling.

SPEAKER_01: One thing I didn't mention is that geothermal, you can use it for a lot of things, not only

SPEAKER_01: power, but we are focusing power in this presentation.

Unknown: A quick question.

SPEAKER_08: So it's the AI is driving and providing the money for all the big new developments, and

SPEAKER_08: are they using all the power, or is there power left over for others?

SPEAKER_01: So right now, my understanding is that they are not providing the money.

SPEAKER_01: They are providing the agreement to buy the power when the power is ready.

SPEAKER_01: So Ferbo is getting loans from other banks, but the banks, they have the guarantee of

SPEAKER_01: take.

SPEAKER_01: And then the guarantee of take for those megawatts are going to be at a premium only for Google,

SPEAKER_01: because it's for data centers.

SPEAKER_08: So is there going to be other off takers?

SPEAKER_01: So for the amount of megawatts that Google needs for this project, they are the only

SPEAKER_01: off takers.

SPEAKER_01: But the more projects there are, then the off takes could be anywhere.

SPEAKER_08: So that makes me think about the public sector getting involved in this before we, I mean,

SPEAKER_08: because I mean, if we want cost effective geothermal and the big companies are going

SPEAKER_08: after it and getting all of it right now, that's an interesting situation.

SPEAKER_01: But they are getting, so one perspective is that they are getting at it right now when

SPEAKER_01: it's not fully, like they are not tens of a ton.

SPEAKER_01: It's not commercial ready.

SPEAKER_01: It's not commercial.

SPEAKER_01: So they're kind of helping move it along.

SPEAKER_08: Exactly.

SPEAKER_08: Okay.

SPEAKER_08: Very good. Thank you.

SPEAKER_08: They are the riskiest for the rest of us.

SPEAKER_01: Yeah.

SPEAKER_01: Okay. Thank you.

SPEAKER_00: I wanted to ask, I don't know if I missed this earlier.

SPEAKER_00: I can't seem to get my computer to bring up the slides.

SPEAKER_00: But I remembered the map that you showed, which shows basically California is like a

SPEAKER_00: real hotbed for this.

SPEAKER_00: Does this involve fracking or, you know, how do we get to the geothermal power?

SPEAKER_00: So it depends on the technology that you choose.

SPEAKER_01: So California is a very hot spot and that's why we have the geysers, right?

SPEAKER_01: I mean, the geyser is just a conventional exploitation of geothermal.

SPEAKER_01: So if you want to go away of areas where you have all these fluid or rocks, you will have

SPEAKER_01: to do this fracking in order to connect horizontal wells in order to be able to recirculate the

SPEAKER_01: fluid that you inject.

SPEAKER_01: So California has a ban on fracking for oil and gas, but not for geothermal.

SPEAKER_01: So that is important.

SPEAKER_01: There is another complex, not complexity, but one thing to take into account is that

SPEAKER_01: California is also a seismic area, right?

SPEAKER_01: So when you do these fractureings, you really have to have the data in order to identify

SPEAKER_01: which, if there are any faults that is dangerous and then you don't do your developing there,

SPEAKER_01: right?

SPEAKER_01: So from your understanding, it would be possible to do fracking in numerous locations and get

SPEAKER_00: the geothermal power.

SPEAKER_00: And is there no concern about fracking?

SPEAKER_00: It seems like we've heard quite a bit about how that's not good for the planet.

SPEAKER_01: So you know, I want to, when you deal so much with this, technically you get used to

SPEAKER_01: and it's not the case, right?

SPEAKER_01: You have to really make sure that it's done properly.

SPEAKER_01: One thing to remember is that when you are doing the fracking for these type of geothermal,

SPEAKER_01: you are doing it at three kilometers down, right?

SPEAKER_01: So the likelihood of this fluid to actually getting up or getting to freshwater or to

SPEAKER_01: any contaminants is really, really low.

SPEAKER_01: I wouldn't say impossible, nothing is impossible, right?

SPEAKER_01: Scientists cannot say 100% guarantee.

SPEAKER_01: But yeah, it's very, very unlikely that that will happen.

SPEAKER_01: With the fracking in California, what you just want to make sure is that you are not

SPEAKER_01: next to a big active fault, right?

SPEAKER_01: So that is more a concern.

SPEAKER_01: And then one thing that I mentioned is that when you are doing these hydro fractures,

SPEAKER_01: the pressure that you are putting is very high for a very short period of time, but

SPEAKER_01: you are not injecting so much water that you are pressurizing a whole area and making it

SPEAKER_01: much more difficult.

SPEAKER_01: So it's part of the engineering process which exists, you know, like what you need to understand

SPEAKER_01: before doing it, what are the processes if there was something that you didn't see, how

SPEAKER_01: to stop it and how to remediate it.

SPEAKER_01: Thank you.

Unknown: I'm going to ask you to be a chemist as well.

SPEAKER_06: When fracking for oil and gas, part of the issue was the material that you were actually

SPEAKER_06: injecting to fracture the rock was toxic or if it got into the aquifer, it's bad.

SPEAKER_06: Does this necessarily require the same material or can you use something that's a little more

SPEAKER_06: benign?

SPEAKER_06: And I think what you just said, it's also fracking for geothermal, you're at a much

SPEAKER_06: deeper level than typically you would be for oil and gas.

Unknown: Well, the oil and gas depending on your area, right?

SPEAKER_01: But when we are here, we are talking about two, three kilometers and that's deep enough

SPEAKER_01: for any contamination.

SPEAKER_01: In principle, most of the water that you inject is brackish water that you get from a formation

Unknown: way below the freshwater.

SPEAKER_01: There might be some chemical propants or things like that to keep the fracture open, but this

SPEAKER_01: could be, I mean, I'm not an expert on that, but basically if there are really, you know,

Unknown: the regulation of what you cannot put inside there, then it shouldn't be dangerous.

SPEAKER_01: And that type of, they don't use the same chemicals or things like that in the oil and

SPEAKER_01: gas.

SPEAKER_01: But again, I'm not an expert.

SPEAKER_06: Thank you.

Unknown: I know that in Oklahoma and other states, they've had houses moved off their foundation because

SPEAKER_08: they were doing fracking for oil and gas and it literally caused the earth to move and

SPEAKER_08: created earthquakes.

SPEAKER_08: So that's why you're talking about the fault, right?

SPEAKER_01: Yes, but so the Oklahoma part is actually the earthquakes.

SPEAKER_01: If this is the same that we are talking about, the big earthquake storm in that area was

SPEAKER_01: not because of the fracking.

SPEAKER_01: It was because of shell gas.

SPEAKER_01: They do the fracking.

SPEAKER_01: They extract the gas, but they also extract a lot of water brines and they re-inject the

SPEAKER_01: brine in other formations in order not to leave it in the surface.

SPEAKER_01: And that brine is what pressurized a bigger area and created the earthquakes.

SPEAKER_01: Not the fracking itself, but the brine of water.

SPEAKER_08: Thank you.

SPEAKER_08: It's very interesting.

SPEAKER_08: It's a lot going on when you go down that deep.

Unknown: Okay, I think that's it for questions.

SPEAKER_08: You can keep going.

Unknown: Okay, sorry.

Unknown: I had the last one that it was kind of the key takeaways.

SPEAKER_01: So you know, just really offers 24 seven carbon free firm capacity that can support

SPEAKER_01: reliability and resource adequacy.

SPEAKER_01: Next generation to thermal significantly expands the potential for this resource availability

SPEAKER_01: beyond this niche traditional just thermal commercial.

SPEAKER_01: That deployment is underway supported by major technology companies and a private investment.

SPEAKER_01: The cost remain uncertain, but in those early commercial projects, the drilling costs are

SPEAKER_01: decreasing considerably and that is very good news for the cost of geothermal.

SPEAKER_01: And then we think that just I'm a really could become an important component of diversified

SPEAKER_01: clean energy portfolio.

Unknown: Excellent.

Unknown: Any other questions?

SPEAKER_08: Questions?

SPEAKER_08: Yeah, go right in.

SPEAKER_08: It's interesting.

SPEAKER_08: In the last slide, you used the term the next generation and then the other terms that you

SPEAKER_09: mentioned were enhanced geothermal which is fracking and then this idea of advanced

SPEAKER_09: geothermal which was closed.

SPEAKER_09: So I think what I'm most curious about is this next generation.

SPEAKER_09: It wasn't clear is the alphabet, meta and Microsoft projects focus on this next generation

SPEAKER_09: deep, deep, deep drilling?

Unknown: Yes, and I went very fast through that.

SPEAKER_01: So I apologize.

SPEAKER_01: So basically you have the conventional geothermal or hydrothermal and then you have the next

SPEAKER_01: generation.

SPEAKER_01: The next generation is an umbrella.

SPEAKER_01: And inside the next generation you have the EGS, the enhanced geothermal.

SPEAKER_01: That's what Ferbo is developing and then Google is what I mentioned.

SPEAKER_01: You have the closed loop which is what XGS for example and partially SAGE or Ebor.

SPEAKER_01: Ebor is famous also one.

SPEAKER_01: I don't know if you know that they did something in Europe, in Germany that they could drill

SPEAKER_01: kilometer long wells.

SPEAKER_01: So that's another closed loop.

SPEAKER_01: So and there are hybrid technologies.

SPEAKER_01: SAGE is making a hybrid technology.

SPEAKER_01: Green Fire is also doing hybrid technology.

SPEAKER_01: So when you talk about all these that is not the traditional or conventional geothermal

SPEAKER_01: is when you use the next generation.

SPEAKER_09: Because I look at the, when we looked at that map of California I would note it was green

SPEAKER_09: even at 10 kilometers under the central valley where we are.

SPEAKER_09: But there's a lot of potential in surrounding areas especially like the desert.

SPEAKER_09: So I guess I'm sort of curious.

SPEAKER_09: What is, I've read a handful of articles.

SPEAKER_09: I think it's one of the reasons why we asked for this presentation some time back.

SPEAKER_09: What progress are we seeing on that deep well drilling technology?

SPEAKER_09: What are some of the technologies being used and is that, is it really coming for real

SPEAKER_09: or is it?

SPEAKER_01: The very deep one, the super hot rock geothermal that I mentioned.

SPEAKER_01: Getting down below that three kilometers into that five range.

SPEAKER_09: So commercial wells you can do it up to five, seven kilometers but it's not economic right now.

SPEAKER_01: So going faster and getting stronger beats to go there.

SPEAKER_01: That's something that is happening right now every time, every day almost.

SPEAKER_01: So then when we talk about super hot rock geothermal that you can go really deep.

SPEAKER_01: There are several challenges really because we don't have a real test.

SPEAKER_01: But one of the technologies that they are being investigated is energy drilling.

SPEAKER_01: So plasma, so from nuclear technology and geotron technology and that one.

SPEAKER_01: So there is one thing actually.

SPEAKER_01: So super hot rock in general you can say that you can go very deep.

SPEAKER_01: But right now the site is gonna try that and test is the Oregon volcano.

SPEAKER_01: Because there you have the super critical conditions but

SPEAKER_01: like two, three kilometers from the surface, right?

SPEAKER_01: Because it's a volcano.

SPEAKER_01: And there is this company Quays that is very, has done a lot of noise or waves.

SPEAKER_01: Testing this energy drilling and they already, I mean they have tested around several hundred meters.

SPEAKER_01: I think they did it already and they are gonna test it at new variable car.

SPEAKER_01: Because I guess like it's interesting right, the big tech companies are doing, have signed the PPAs, right?

SPEAKER_09: To allow some of this exploration, this sort of next generation.

SPEAKER_09: But I think sort of and then there is a little bit of dabbling in this extreme drilling technology.

SPEAKER_09: But it comes with all kinds of technical challenges.

SPEAKER_09: It also expands, it's all about what was the number, 600 terawatts of technical potential.

SPEAKER_09: And it maps which is pretty astounding.

SPEAKER_09: The numbers are like can't ignore that.

Unknown: Yeah, some people compare it to fusion, you know?

SPEAKER_01: So it's either one or the other one.

SPEAKER_01: I mean whoever gets there faster or earlier.

Unknown: I think it's the lowest TRL of everything, right?

SPEAKER_01: So the proponents, they say that you don't need technical breakthroughs just engineering advancements.

SPEAKER_01: That we have almost everything.

SPEAKER_01: But the materials have to be different.

SPEAKER_01: You have to generate a power plant that can, I mean we have super critical conditions and other type of power plants.

SPEAKER_01: But this one is gonna come with a lot of chemistry from the subsurface.

SPEAKER_01: So there are all these situations.

SPEAKER_01: Is your rock gonna be so hard that you can fracture it like you do with EGS?

SPEAKER_01: Or because it's so hot, it's gonna be a little bit more soft and then you have to find another way.

SPEAKER_01: So there are challenges as a lowest TRL.

SPEAKER_01: But there are companies that are investing in that.

SPEAKER_01: I'm curious.

SPEAKER_09: I know with our Petua project, right, the actual geothermal never panned out, right?

SPEAKER_09: It is always the risk, right?

SPEAKER_09: You don't know until you start drilling what you're gonna find.

SPEAKER_09: But I think the idea of using sort of machine learning AI tap to give you a better understanding

SPEAKER_09: and reading the ground more effectively so you at least can minimize that risk.

SPEAKER_09: Yeah, definitely.

SPEAKER_09: Seems like definitely a very viable pathway.

SPEAKER_09: We'll see how the drilling to five or 10 miles down goes, right?

SPEAKER_09: There's certainly challenges with that.

SPEAKER_09: Okay, that's all my questions.

SPEAKER_09: Thank you so much.

SPEAKER_09: Okay.

SPEAKER_08: Gwyneth?

SPEAKER_08: Great.

SPEAKER_08: Thank you so much.

SPEAKER_08: We should probably move on to our next speaker.

SPEAKER_08: Thank you.

Unknown: Okay, so.

Unknown: She's looking at the way of GIS.

SPEAKER_08: You're now gonna talk carbon capture, correct?

SPEAKER_08: Yes.

SPEAKER_03: Yes.

SPEAKER_03: I just press a button.

Unknown: Yep.

SPEAKER_03: So thank you again.

SPEAKER_03: My name is Poitje Bau.

SPEAKER_03: I'm the program manager for what's called Advanced Generation and CCS.

SPEAKER_03: And Laura and I work together at EPRI's Palo Alto office.

SPEAKER_03: So thank you again for having us.

SPEAKER_03: So I'm gonna be talking about carbon capture and storage.

SPEAKER_03: We'll have the next speakers talk a lot more about storage, of course.

SPEAKER_03: So most of my talk will focus on capture.

SPEAKER_03: Or the entire chain, I should say.

SPEAKER_03: So carbon capture actually can involve a variety of processes.

SPEAKER_03: The first one you see on the top is post-combustion,

SPEAKER_03: in which you typically just take a fossil fuel or any kind of carbonaceous fuel.

SPEAKER_03: It could be a biofuel even.

SPEAKER_03: And you just combust it as you do in any power plant.

SPEAKER_03: And then you do a gas separation.

SPEAKER_03: The gas separation here is you separate CO2 from nitrogen.

SPEAKER_03: And then you take the CO2 out.

SPEAKER_03: And we'll talk about how you do that.

SPEAKER_03: And then you can send the CO2 for compression and dehydration.

SPEAKER_03: Another option is that you don't really do post-combustion.

SPEAKER_03: You actually do what's called pre-combustion, in which you partially oxidize.

SPEAKER_03: Essentially, you take the carbon and you go to carbon monoxide.

SPEAKER_03: And then you can do another reaction called water-gas-shift reaction to produce hydrogen.

SPEAKER_03: And then you take the hydrogen and you combust that with air.

SPEAKER_03: And that'll give you power and heat.

SPEAKER_03: And the CO2 is essentially separated from the hydrogen.

SPEAKER_03: So the second option is looking at a hydrogen CO2 gas separation step.

SPEAKER_03: Another option is to do what's called oxyfuel combustion.

SPEAKER_03: And you should take air and you separate out the CO2.

SPEAKER_03: Oh, sorry.

SPEAKER_03: You separate out the oxygen-nitrogen that way, an air separation unit,

SPEAKER_03: and into the oxygen you combust it with the carbon.

SPEAKER_03: So in all these cases, you're actually producing CO2,

SPEAKER_03: which has been separated in some form from another gas.

SPEAKER_03: And that gas separation step is what's expensive.

SPEAKER_03: It takes energy and it takes capital.

Unknown: But most of the fossil fuels today are combusted in the post-combustion process.

SPEAKER_03: And so that's what most of the attention is focused on for CCS.

SPEAKER_03: There's a lot of research going on in the other areas at EPRI and other places

SPEAKER_03: that will focus mostly on post-combustion.

SPEAKER_03: The project which you're potentially involved with, with CalPine,

SPEAKER_03: is one example of looking at post-combustion capture.

Unknown: Fuel cells are another option, certainly.

SPEAKER_03: In the fuel cell case, there's different kinds of fuel cells.

SPEAKER_03: There's proton exchange membranes.

SPEAKER_03: And then there's also things like solid oxide fuel cells.

SPEAKER_03: Some of them are more mature than the other ones are.

SPEAKER_03: But in generally speaking, the separation step

SPEAKER_03: happens within the fuel cell itself.

SPEAKER_03: It's not free.

SPEAKER_03: It's not magic.

SPEAKER_03: But it just adds additional cost and complexity.

SPEAKER_03: So depending on which options people have in mind,

SPEAKER_03: all these options are available.

SPEAKER_03: As I mentioned, we'll focus primarily on, at least in this talk,

SPEAKER_03: I'm happy to answer questions.

SPEAKER_03: And the other one, certainly, looking at post-combustion CO2 capture

SPEAKER_03: from natural gas power plants.

SPEAKER_03: And the right figure shows you three different options.

SPEAKER_03: And there are certainly more.

SPEAKER_03: The most prominent option is solvent-based,

SPEAKER_03: in which you take flue gas, which contains CO2, and nitrogen,

SPEAKER_03: and other things.

SPEAKER_03: And you react the CO2 with a chemical solvent.

SPEAKER_03: And what that chemical solvent does is that it selectively reacts with CO2.

SPEAKER_03: And it grabs it from the flue gas stream.

SPEAKER_03: And then it actually just flows down a column.

SPEAKER_03: And you take that captured CO2 solvent solution.

SPEAKER_03: You put it into another column, which is called a stripper,

SPEAKER_03: or it's called a regenerator.

SPEAKER_03: And you apply heat.

SPEAKER_03: And that heat liberates the CO2.

SPEAKER_03: And then you put the solvent back into the absorber column.

SPEAKER_03: So the solvent actually does a circulation loop,

SPEAKER_03: grabbing CO2 in one column and releasing the other.

SPEAKER_03: And the other column is where you put in heat.

SPEAKER_03: You can do the same thing, not with a solvent, but with a solid particle.

SPEAKER_03: You can imagine you can have little beads, which react with CO2.

SPEAKER_03: So that's a slightly different process.

SPEAKER_03: But it involves the same kind of idea.

SPEAKER_03: You grab the CO2 in one container, and you release it in the other container

SPEAKER_03: by applying heat.

SPEAKER_03: And then you have things like membranes.

SPEAKER_03: And we should really apply heat to it.

SPEAKER_03: You apply a pressure.

SPEAKER_03: You can apply a vacuum, or you can apply some kind of pressure

SPEAKER_03: to separate the CO2, provided the membrane is selective for CO2.

SPEAKER_03: So those are different ways to do this.

SPEAKER_03: There's other approaches as well, including things like cryogenics,

SPEAKER_03: where you cool everything down, and you precipitate out the CO2.

SPEAKER_08: I'm sorry.

SPEAKER_08: I couldn't understand that last bit.

SPEAKER_08: Cryogenics?

SPEAKER_03: Cryogenic means that you cool things down enough

SPEAKER_03: that the CO2 precipitates out.

SPEAKER_03: So you literally operate at negative temperatures that way.

SPEAKER_08: Could you describe what are the solvents you're talking about?

SPEAKER_08: What kind of chemical solvents are pulling the CO2 out?

SPEAKER_03: Yeah.

SPEAKER_03: So most of the chemical solvents are what's called aqueous amines.

SPEAKER_03: So they're water-based amine solvents.

SPEAKER_03: Amines are essentially they have a nitrogen group and some other groups

SPEAKER_03: to it, which makes it slightly basic.

SPEAKER_03: And I think you're a chemist.

SPEAKER_03: And so the CO2 is slightly acidic.

SPEAKER_03: So there's an acid-based reaction.

SPEAKER_03: And it's weak enough that it absorbs it.

SPEAKER_03: And then you can regenerate it that way.

SPEAKER_03: And different companies have different flavors for amines.

SPEAKER_03: And that's what kind of separates one from the other.

SPEAKER_03: They have intellectual property around them.

SPEAKER_03: Thank you.

SPEAKER_03: There's certainly an entire class of next-generation solvents

SPEAKER_03: being developed, sort of like when next generation geothermal is.

SPEAKER_03: But those solvent chemistries are further behind than aqueous amines.

Unknown: Because sometimes some people hear the word solvent.

SPEAKER_08: They think it's highly caustic and dangerous.

SPEAKER_08: So I just wanted to make sure people knew.

SPEAKER_03: No, but I do want to point out that there are emissions associated with them.

SPEAKER_03: So you do have to look at carefully those things with it as well.

SPEAKER_03: And so, yeah, they're not, I'm not going to say they're like water.

SPEAKER_03: But they're water-based.

SPEAKER_03: But there's chemical solvents there which do the reaction.

SPEAKER_03: So you have to look at the health and environmental impacts as well.

SPEAKER_02: Thank you.

Unknown: Sure.

SPEAKER_09: Just like, I got a thing from the past.

SPEAKER_09: I think I'm really sort of curious about how,

SPEAKER_09: what is the status of the research on these solvents?

SPEAKER_09: And is it, I mean, we've known how to capture these things chemically for a long time.

SPEAKER_09: But is that research moving forward into scalability and cost-effectiveness?

SPEAKER_09: Or is the technology largely sort of developed and stagnant?

SPEAKER_03: Let me, we're going to talk a little bit more about this.

SPEAKER_03: But the biggest challenge is really not a technology problem.

SPEAKER_03: The biggest challenge is a mechanism to make it commercial.

SPEAKER_03: And you'll see costs later on.

SPEAKER_03: But these are expensive.

SPEAKER_03: And there's really no market mechanism today to kind of get those costs back,

SPEAKER_03: largely speaking.

SPEAKER_03: And there's very little regulatory drivers as well.

SPEAKER_03: So the technology is really not the problem.

SPEAKER_03: It's really the problem of market mechanisms to enable it.

SPEAKER_03: And there's a few installations out there in the world.

SPEAKER_03: And we'll talk about those.

SPEAKER_03: In terms of the research going on, there's certainly a lot of active research at EPRI

SPEAKER_03: and other places as well, developing new solvents.

SPEAKER_03: But actually, after a while, they become stagnant primarily

SPEAKER_03: because the investments needed to move them up.

SPEAKER_03: There's really no driver for it, especially currently.

SPEAKER_03: The US Department of Energy has taken a different approach,

SPEAKER_03: as you all no doubt know.

SPEAKER_03: And a lot of those research projects have been canceled, including many of ours.

SPEAKER_03: So some of the things which people should consider for initial factors for CCS.

SPEAKER_03: On the capture side, there's things like how much flue gas do you have?

SPEAKER_03: What's the CO2 concentration?

SPEAKER_03: Typically, it's around 3% to 4% for natural gas combined cycle.

SPEAKER_03: Impurities, if there's any kind of land area available.

SPEAKER_03: These are important factors.

SPEAKER_03: Cooling, certainly.

SPEAKER_03: Capture technology, maturity of technology.

SPEAKER_03: And there's a whole laundry list to consider for looking at CCS.

SPEAKER_03: On the transport and storage side, we'll certainly hear more from Carmen Terevald.

SPEAKER_03: But things like how far is the distance between the transport,

SPEAKER_03: sorry, between the reservoir and the source, the power plant?

SPEAKER_03: What kind of transport makes sense?

SPEAKER_03: Pipelines usually are the ones that make sense for large-scale emitters.

SPEAKER_03: But certainly inside Europe, there's also ship transport as well.

SPEAKER_03: Obviously, things like rights of ways and the reservoir characteristics, capacity,

SPEAKER_03: permeability, porosity, and so on.

SPEAKER_03: And long-term liability, what happens to the CO2 long-term?

SPEAKER_03: And generally, community acceptance is a bigger issue on the transport and

SPEAKER_03: storage than it is on the capture side.

Unknown: I do want to point out that the capture tends to dominate the cost for CCS.

SPEAKER_03: And so that's really where a lot of the R&D is happening for reducing costs.

Unknown: Okay?

Unknown: Globally, this is a plot from the Global CCS Institute.

SPEAKER_03: This is showing essentially all kinds of CCS, not just for power.

SPEAKER_03: Well, power is actually very, very small.

SPEAKER_03: CCS has been around for at least a century.

SPEAKER_03: It's widely practiced in the natural gas processing industry.

SPEAKER_03: Natural gas coming out of the ground often has CO2 in it,

SPEAKER_03: along with other contaminants.

SPEAKER_03: So use the same chemistry, the same kind of process to take out CO2.

SPEAKER_03: And then you sell the natural gas and you put the CO2 away.

SPEAKER_03: The advantage for natural gas processing is that the natural gas is already at very

SPEAKER_03: high pressure.

SPEAKER_03: So that separation is much easier to do than it is for a power plant,

SPEAKER_03: where the flue gas is at atmospheric pressure.

SPEAKER_03: So the green bars there at the very bottom are commercial operating today.

SPEAKER_03: The next several go up and sink at various levels of development.

SPEAKER_03: And so generally speaking, you'll see the green bars going slowly up over time,

SPEAKER_03: and the other ones are much higher.

SPEAKER_03: So a fraction of those usually convert, and a lot depends again on the markets

SPEAKER_03: needed.

SPEAKER_03: I do want to stress again that this is all types of CCS,

SPEAKER_03: and really for industrial and natural gas processing, very low on power.

SPEAKER_03: And I'll show you some examples here.

SPEAKER_03: But it is a mature technology.

SPEAKER_03: It's been out there for at least 100 years.

SPEAKER_09: So what is this graph showing us on the, I can't read the accuracy.

SPEAKER_09: What's going on?

SPEAKER_09: Yeah, sorry.

SPEAKER_03: The y-axis is the amount of metric tons per year of CO2 being captured and stored.

SPEAKER_03: And the x-axis is the year.

SPEAKER_03: And I think that goes to 2025 or 2024.

SPEAKER_09: So basically saying storage has gone way, way up in the last five years.

SPEAKER_09: No.

SPEAKER_03: Well, again, the green ones are the ones which are operating.

SPEAKER_03: The green bars are the ones which are operating.

SPEAKER_03: So I'd say it's been growing slowly.

SPEAKER_03: But certainly the amount of work in terms of analysis and so on,

SPEAKER_03: that's the rest of the multiples.

SPEAKER_09: So there's a lot planned and in progress.

SPEAKER_09: There's a lot planned and in progress.

SPEAKER_09: Yeah.

SPEAKER_09: The green bar hasn't changed a whole lot.

Unknown: Right.

Unknown: Correct.

SPEAKER_09: Relatively.

SPEAKER_03: That's correct.

SPEAKER_03: So some of those we'll convert over and many of them will not.

SPEAKER_05: Thank you.

SPEAKER_03: Yep.

Unknown: When you take a look at what's actually happening on power plants,

SPEAKER_03: these are the post-commission ones.

SPEAKER_03: There's actually three on coal.

SPEAKER_03: Actually, there should be one more fourth on coal.

SPEAKER_03: The first one in the world was done in Canada, a Saskatchewan.

SPEAKER_03: It's about 115 megawatts.

SPEAKER_03: It's been running for about 10 years, maybe 12 years or so.

SPEAKER_03: And the fate of the CO2, if you will, is enhanced oil recovery.

SPEAKER_03: So in this case, you actually inject CO2 into oil reservoirs to get more oil out.

SPEAKER_03: And that helps pay for some of the costs for capture.

SPEAKER_03: These are first of a kind, if you will.

SPEAKER_03: So you have to kind of do financing in this way.

SPEAKER_03: EOR is not a permanent solution for CO2.

SPEAKER_03: The volume is enhanced oil recovery.

SPEAKER_03: Actually, I should also clarify here, which I'm sure Carbon-Terrifold will speak on, California

SPEAKER_03: does not allow captured CO2 to be used for enhanced oil recovery.

SPEAKER_03: So for California, that's not an option.

SPEAKER_03: The other option, sorry, the other large facility is again on coal that was in Texas.

SPEAKER_03: It's a company called Inos Xlora.

SPEAKER_03: And that's outside of Houston.

SPEAKER_03: It's about twice the size of Boundary Dam.

SPEAKER_03: It's been running again for about 10 years or so, also EOR.

SPEAKER_03: And then there's two coal plants.

SPEAKER_03: I just listed one in China.

SPEAKER_03: One of them is in Longdong.

SPEAKER_03: And then that's just started up.

SPEAKER_03: And it's going to scale up pretty quickly.

SPEAKER_03: They're also using EOR for it or some other use for CO2.

SPEAKER_03: The only gas one, which is currently being planned, or even in commercial operations,

SPEAKER_03: there's nothing in commercial for gas today.

SPEAKER_03: So this is being built right now.

SPEAKER_03: It should be ready by 2028.

SPEAKER_03: And this is a project called T-SIDE.

SPEAKER_03: And it's got BP and Equinor and several other partners inside of it.

SPEAKER_03: That's going to be hopefully completed in 2028.

SPEAKER_03: And then the fate of the CO2 there is actually offshore geological storage up in the North

SPEAKER_03: Sea.

SPEAKER_03: And this is the extent of power.

SPEAKER_03: Again, there's one missing from China.

SPEAKER_03: But that's also in coal.

Unknown: These are some of the costs for essentially new build.

SPEAKER_03: So if you're building a new power plant with CCS on it, these numbers are from the US Department

SPEAKER_03: of Energy.

SPEAKER_03: They're fairly widely cited.

SPEAKER_03: So I kind of repeated them here.

SPEAKER_03: The left three bars are looking at coal, which we won't pay much attention to, if you will.

SPEAKER_03: The right three bars are looking at an F-class and GCC.

SPEAKER_03: The lowest one of those is looking at no capture.

SPEAKER_03: And the Y-axis is LCOE.

SPEAKER_03: It's the levelized cost of electricity.

SPEAKER_03: So in the case of no cost, sorry, that's kind of your baseline plant.

SPEAKER_03: So the LCOE is around $47 per megawatt hour.

SPEAKER_03: And then the next two bars are looking at carbon capture at 90 percent capture and 95

SPEAKER_03: percent capture.

Unknown: So you'll see that the cost actually goes up.

SPEAKER_03: And it goes up around 80 percent or so when you add carbon capture to it.

SPEAKER_03: And then the table on the right, if you will, shows you some other numbers.

SPEAKER_03: I do want to point out that the efficiency reduction there with CCS is about 11 percent.

SPEAKER_03: So if you're going to add CCS to your NGCC power plant, expect about an 11 percent, maybe

SPEAKER_03: 12 percent efficiency reduction.

Unknown: And that happens because you're taking away energy from the power plant to heat up the

SPEAKER_03: solvent.

SPEAKER_03: And that takes up.

SPEAKER_03: That takes away steam from the turbines.

SPEAKER_03: That puts into the carbon capture process.

SPEAKER_08: Give us the average because we've heard there's a big parasitic load for this.

SPEAKER_08: What is that?

SPEAKER_08: Is it like a quarter of what the power plant is producing?

SPEAKER_08: A quarter is about true for coal, but not for natural gas.

SPEAKER_03: Natural gas is going to be around 11, 12 percent.

SPEAKER_08: 11, 12 percent.

SPEAKER_08: Okay, thank you.

Unknown: Mm-hmm.

Unknown: But there's hardware involved.

SPEAKER_03: The hardware is pretty expensive.

SPEAKER_03: In fact, it's on the same order magnitude as the power plant.

SPEAKER_03: So yeah, so that's the other cost factor to consider.

SPEAKER_03: And you look at everything, the LCOE increases by about 80 percent or so.

SPEAKER_03: Obviously, there's a lot of R&D going on to reduce these costs.

SPEAKER_03: If you look at very early stage technologies, there's a lot of optimism.

SPEAKER_03: But having done this for close to 20 years now, as technologies scale up, all kinds of

SPEAKER_03: challenges, realistic things happen, and all kinds of stuff happens.

SPEAKER_03: So I think these are, I'd say, typical numbers from the U.S. Department of Energy.

SPEAKER_03: There's a lot of site-specific examples which are in the same ballpark, and I'll show you

SPEAKER_03: some of those.

SPEAKER_03: The DOE funded several feed studies, funded engineering design studies, probably so far

SPEAKER_03: maybe about 20 of them, maybe perhaps.

SPEAKER_03: They forget the coal ones again, but look at the right side ones.

SPEAKER_03: These are the natural gas combined cycle.

SPEAKER_03: And these are retrofits.

SPEAKER_03: These are all for existing power plants.

SPEAKER_03: There was one which we did with CRC, a few years ago, maybe four or five years ago.

Unknown: And on the bottom, you'll see the capital cost involved at that time was about $750

SPEAKER_03: million in the same order of magnitude at that time as a power plant, and cost has certainly

SPEAKER_03: escalated since then.

SPEAKER_03: All of these are using aqueous amines.

SPEAKER_03: These different companies had used different flavors of the aqueous amines working with

SPEAKER_03: different vendors.

SPEAKER_03: And so they're in the same kind of ballpark range for it.

Unknown: So the previous slide for this one, can you give me a minute to digest it?

SPEAKER_03: Sure.

SPEAKER_09: Sorry, a second minute to digest it.

SPEAKER_09: So on the 2230F class, which is combined cycle natural gas, the two have this levelized

SPEAKER_09: cost of $82.84, and so the one in the middle is $47.

SPEAKER_09: Is that flowing into the next slide?

SPEAKER_09: These are, so like why is one black box half the cost than the other, I guess?

SPEAKER_09: I'm sorry, that's the question.

SPEAKER_09: Why is it one so much less, the one that says $47?

SPEAKER_09: Oh, that's the base plan.

SPEAKER_03: There is no CCS on it.

SPEAKER_03: Okay.

SPEAKER_09: So we should be looking at the blue bar.

SPEAKER_09: Is that the cost of the carbon gas?

SPEAKER_09: You can just come up here.

Unknown: Yeah, yeah.

SPEAKER_03: So this is the base plan, the CCS on it.

SPEAKER_03: So the first cost is $47.

SPEAKER_03: Okay.

SPEAKER_03: And with the CCS, it jumps.

SPEAKER_09: Right.

SPEAKER_09: It's the 90% capture, and this is the 90%.

SPEAKER_03: Okay, okay.

SPEAKER_09: Sorry, all right.

SPEAKER_09: We need you to stay with the microphone so the public can hear me.

SPEAKER_08: Sorry, sorry, sorry.

SPEAKER_09: I'm getting in trouble.

SPEAKER_03: Yeah, so let me just repeat that.

SPEAKER_03: So the lowest graph is no capture case.

SPEAKER_03: It's the base plan.

SPEAKER_03: The one immediately to the right is that 90% capture, and then the one to the right of

SPEAKER_03: that is 95% capture.

SPEAKER_09: And then we have the percentage on the right.

SPEAKER_09: That makes sense.

SPEAKER_03: Right.

SPEAKER_03: And one thing I forgot to mention here is the cost for capture.

SPEAKER_03: It's around $85 a ton.

SPEAKER_03: Again, base case, design basis for USDOE.

Unknown: Okay.

Unknown: Yeah, that one's a really tough under-age.

SPEAKER_08: A lot of numbers are there, but I do want to kind of re-emphasize this.

SPEAKER_03: About 85 dollars a ton, about 11%, 12% parasitic load, and the LCV will go up by about 80%.

Unknown: Okay.

Unknown: Okay.

SPEAKER_09: That is consistent with our previous sort of sessions on carbon capture in previous

SPEAKER_09: years though, for sure, if not a little bit lower than some of the numbers we were given.

SPEAKER_03: I gave one a while ago, so hopefully you get a different perspective.

SPEAKER_03: But these numbers are from DOE.

SPEAKER_03: I'd have to figure it out for a few minutes to find the old presentations.

SPEAKER_09: Okay.

SPEAKER_09: Go ahead.

Unknown: Keep going.

Unknown: Thank you.

SPEAKER_03: Have we talked about this slide?

Unknown: Mm-hmm.

Unknown: One thing is that there's been some discussion around this capture percentage.

SPEAKER_03: Most people think that 90% capture or 95% capture is somehow the limit, and the 5% or

SPEAKER_03: 10% is let go.

SPEAKER_03: There's really no technical reason to do that.

SPEAKER_03: You can actually ramp up the capture rate to be very, very high.

SPEAKER_03: So we did this piece of work.

SPEAKER_03: Again, it's a paper study for us.

SPEAKER_03: Looking at essentially pushing the capture rates up to essentially 100%, so whatever

SPEAKER_03: combustion area you're putting in, 425 ppm from the atmosphere of CO2, is basically what

SPEAKER_03: you get out of the power plant.

SPEAKER_03: So you push the capture rates up to be 99-plus percentage, and the question was, what do

SPEAKER_03: we see?

Unknown: All right.

Unknown: So again, on the bar graphs there, this is the cost for capture at different percentage

SPEAKER_03: capture rates.

SPEAKER_03: And don't worry about the different colors.

SPEAKER_03: Those are different process configurations with it.

SPEAKER_03: But you'll see that it is possible to go up to 99.8%, 99.7% capture.

SPEAKER_03: The zero emission case right there, this is for NGCC, is about 97.7% capture.

SPEAKER_03: What that means is that whatever CO2 you're putting into the atmosphere from your combustion

SPEAKER_03: is basically what's coming out.

SPEAKER_03: So all the fossil CO2 is being captured.

SPEAKER_03: And then you can actually push it higher.

SPEAKER_03: You can go into negative emissions, if you will.

Unknown: It sounds crazy, but that's the reality.

SPEAKER_03: And again, we've done some testing.

SPEAKER_03: We and others have done testing at some pilot plants, both in Alabama as well as in Norway.

SPEAKER_03: And they're consistently showing that not just with one solvent, you can do that with

SPEAKER_03: many solvents or other systems as well.

SPEAKER_03: This is important because many people think that at 90, 95% or so, you're going to have

SPEAKER_03: to let the CO2 go and then use something else, like direct air capture or something else

SPEAKER_03: with it.

SPEAKER_03: Direct air capture turns out to be more expensive.

SPEAKER_03: So increase in the capture rate may be the better option here.

SPEAKER_03: This is my last slide.

SPEAKER_03: I just want to point out that there's obviously federal tax credits available.

SPEAKER_03: Right now, it's at $85 a ton from point sources.

SPEAKER_03: The fate of the CO2 does not matter anymore.

SPEAKER_03: In the OBBA, the laws were changed so that it doesn't matter if you sell the CO2, if

SPEAKER_03: you use it or just bury it with sequestration, it's going to be $85 a ton.

SPEAKER_03: You get $180 per ton from capture from the atmosphere.

SPEAKER_03: Tax must start by January 1, 2033, essentially in the 2032.

SPEAKER_03: And there's a 12-year tax credit after you start up.

SPEAKER_03: And the tax credits can be direct pay or they can be transferred to folks as well.

Unknown: Community engagement, I'm sure we'll hear more about this in the next speaker, but at

SPEAKER_03: least in our experience, interest in CCS is highly community dependent.

SPEAKER_03: Some are very much against transport and storage.

SPEAKER_03: Some are very much for it.

SPEAKER_03: So it really depends on the community.

SPEAKER_03: It's best, obviously, just like anything else, to be early, transparent, and have

SPEAKER_03: continuous engagement for it.

SPEAKER_03: And it's important that people understand everything, not just the transport and storage,

SPEAKER_03: but the capture, and includes benefits.

SPEAKER_03: There's also, obviously, this is a climate change mitigation technology primarily, but

SPEAKER_03: there's also risks involved, uncertainty, environmental impact, and so on.

SPEAKER_03: So a lot of things are also important inside the community engagement part.

SPEAKER_03: And with that, that's my end of my slides.

SPEAKER_03: Happy to take any more questions.

SPEAKER_06: Your slide indicates that the federal tax credit is $180 a ton for capturing from the

SPEAKER_06: atmosphere from air.

SPEAKER_06: Are there technologies that do that efficiently?

SPEAKER_03: Not at that price point.

SPEAKER_03: People will say it, but they're already staged.

SPEAKER_03: At least in our estimates, I'm going to go on a limb here, probably $500 a ton at the

SPEAKER_03: lower side today.

SPEAKER_03: But there's companies out there who are trying to design some things.

SPEAKER_03: Some even claim to be $100 per ton.

SPEAKER_03: But in our analysis, that's being very aggressive.

SPEAKER_03: Thank you.

SPEAKER_00: Thank you for your presentation.

SPEAKER_00: Would it be fair to say that because of the cost that geothermal stuff is more attractive

SPEAKER_00: than carbon capture?

SPEAKER_03: So if you take a look at the global situation, globally we, being society, emits about 37

SPEAKER_03: gigatons of CO2 annually.

SPEAKER_03: Probably most of that is from the power sector.

SPEAKER_03: Probably about 40, 50% or something like that.

SPEAKER_03: If you take a look at other technologies, which we do, EPRI does, I do as well, so there's

SPEAKER_03: certainly fusion, nuclear, all these other options out there.

SPEAKER_03: So you have to do this kind of integrated assessment models.

SPEAKER_03: They can be region specific, they can be global.

SPEAKER_03: And you kind of look at what technology is going to be the cheapest option in this model.

SPEAKER_03: And you do all kinds of analysis for assumptions, impacts, cost trajectories, whole bunch of

SPEAKER_03: assumptions going there.

SPEAKER_03: And then you see what scenarios play out.

SPEAKER_03: So at least globally, most models predict about maybe 15%, 12%, 15% will be CCS.

SPEAKER_03: The IPCC, the National Government Panel on Climate Change, that's basically done studies

SPEAKER_03: showing that if you remove CCS, and EPRI has done similar work, if you remove CCS as an

SPEAKER_03: option, the cost of decarbonized will probably double or triple.

SPEAKER_03: So it is a cost effective mechanism to do it.

SPEAKER_03: Certainly there's going to be cheaper options initially, but I think when you get to very

SPEAKER_03: deep decarbonization, I don't think there's a way to escape fossil fuels without CCS.

SPEAKER_03: You have to do CCS.

Unknown: And have to use a strong word, but at least according to models.

SPEAKER_09: Anybody else?

Unknown: A little bit more of a couple questions.

SPEAKER_09: One here, so it sounds like the federal, the 45Q tax credit will potentially cover the

SPEAKER_09: cost of it for at least those 12 years, how the project is assembled, its capital cost,

SPEAKER_09: and all those details would certainly matter.

SPEAKER_09: But it would cover at least part, a big chunk of your expenditures.

SPEAKER_09: Is that a fair, am I interpreting that correctly?

SPEAKER_03: A couple of things there.

SPEAKER_03: So one thing is this is a 12 year tax credit.

SPEAKER_03: It's not 30 years.

SPEAKER_03: It's not 2030, yeah.

SPEAKER_03: No.

SPEAKER_03: So that's one issue.

SPEAKER_03: Will it recover all the costs?

SPEAKER_03: At this point, I'd say probably not for most, otherwise you'd see a lot more of these projects

SPEAKER_03: out there.

SPEAKER_03: So there usually is some kind of agreement, obviously guys involved with some of them,

SPEAKER_03: or some other mechanism to pay for the difference with it.

SPEAKER_03: And just like Google and some of these other companies have announced projects for geothermal,

SPEAKER_03: both Meta and Google have announced projects for CCS as well on power.

SPEAKER_03: And there's a power purchase agreement with developers and so on.

SPEAKER_03: But it's all just starting.

SPEAKER_03: We'll see where it actually winds up.

SPEAKER_09: And I really asked a little earlier, in terms of the crystal ball and looking at the future,

SPEAKER_09: is there potential new technologies that would help reduce, or are there better widgets and

SPEAKER_09: gadgets?

SPEAKER_09: Because when you look at this, it's still almost 100% more than just the cost of generations.

SPEAKER_09: I'm sort of curious, trying to predict the future is impossible.

SPEAKER_03: So again, I've been at EPRI for close to 20 years, and I pretty much focused only on CCS.

SPEAKER_03: So I can come at this with a longer term view.

SPEAKER_03: The thermodynamics of the process, that gas separation step, there's some fundamental

SPEAKER_03: energy requirements, which there's no escaping it.

SPEAKER_03: So when you look at that separation step, and then you add in costs for hardware and

SPEAKER_03: so on, right now I can tell you we're within a factor of two of the thermodynamic floor

SPEAKER_03: for energy consumption.

SPEAKER_03: So when you look at capture and compression, within a factor of two for thermodynamic minimum.

SPEAKER_03: So right now I'm showing you 11% for NGCC.

SPEAKER_03: The absolute minimum you need is about 5.5%.

SPEAKER_03: So maybe you could drop that down slightly.

SPEAKER_03: I don't think you'll drop it down that dramatically.

SPEAKER_03: The rest of the cost is really just hardware.

SPEAKER_03: That's steel construction.

SPEAKER_03: There's really no difference than anything else.

SPEAKER_03: There's a lot of refineries, same process.

SPEAKER_03: So I think-

SPEAKER_09: A lot of sensitivity is the reality.

SPEAKER_09: I think we're- yeah, we've been able to save a little bit here and there, but it's going

SPEAKER_03: to be harder and harder to do.

SPEAKER_03: And we've done a lot of research on this from very academic studies all the way to potted

SPEAKER_03: plants.

SPEAKER_03: Early ones look promising, but as I mentioned earlier, as you kind of scale things up, even

SPEAKER_03: a little bit realistic things come in and it becomes harder and harder to get to this

SPEAKER_03: cost target.

SPEAKER_03: So I think we're probably approaching some kind of-

SPEAKER_03: Okay.

SPEAKER_03: And then you're talking- you mentioned at the beginning, right, you have the fuel cell

SPEAKER_09: sequestration pathway, which has popped up in the discussion a lot more than last, I

SPEAKER_09: would say six to 12 months.

SPEAKER_09: Do you have any- it looks like most of these numbers that we've talked about is a CCS from

SPEAKER_09: either from a coal or natural gas, big plants.

SPEAKER_09: Do you have any commentary about that potential of a fuel cell?

SPEAKER_03: Sure.

SPEAKER_03: So I just want to mention, I think I did in all these slides here, that the right side

SPEAKER_03: there shows the kinds of fuel cells.

SPEAKER_03: There's proton exchange membranes.

SPEAKER_03: And these are typical of companies, like Bloom Energy, for instance, is one.

SPEAKER_03: There's several different pen fuel cells out there.

SPEAKER_03: The fuel cell itself is a way to produce electricity, and it does not really do- it kind of produces

SPEAKER_03: CO2 in the process.

SPEAKER_03: It's really not a capture step separate from that.

SPEAKER_03: So it's inherently, let's say, built into it.

SPEAKER_03: It is an expensive way to generate power, but there are commercial operations out there

SPEAKER_03: that actually do it.

SPEAKER_03: The solid oxide fuel cells are another option, which is a little bit behind in TRL, and those

SPEAKER_03: are being developed by a company called Fuel Cell Energy, which has been collaborating

SPEAKER_03: with ExxonMobil, for instance.

SPEAKER_03: Interesting chemistry, but again, it's the same thing that it's using a relatively expensive

SPEAKER_03: approach to do it.

SPEAKER_03: So generally speaking, those are further behind in scale and readiness level, but they're

SPEAKER_03: certainly within the mix.

SPEAKER_03: So we'll see how those things develop over time.

SPEAKER_09: Cost numbers sort of in the same ballpark, I would assume.

SPEAKER_09: It's going to be higher.

SPEAKER_03: Because right now, they're kind of small scale.

Unknown: The only other thing- okay, that's awesome.

SPEAKER_09: In terms of the list of facilities under development, I know it had the Petronova slide.

SPEAKER_09: Sorry, the Petronova was on the slide, sorry.

SPEAKER_09: And I just- in the back of my mind, it's been a long time now, but I remember there was

SPEAKER_09: just some bad press around it.

SPEAKER_09: And so I guess the highest level question is, is that facility the same basic technology

SPEAKER_09: of using the flue gas through a solvent?

SPEAKER_09: Yes, it is the same one.

SPEAKER_03: One of the challenges, and Petronova's- the prime example, probably the only example there,

SPEAKER_03: that during the pandemic, the price of oil plummeted, as you all recall, it actually

SPEAKER_03: went negative.

SPEAKER_03: And so the EOR portion of it didn't really do anything to pay for that service.

SPEAKER_03: There's been some challenges on running the oil field with the produced CO2.

SPEAKER_03: So if you don't use the CO2, you don't get the contracts.

SPEAKER_03: I don't have access to those contracts, obviously.

SPEAKER_03: But yeah, most of the challenges happen to be with the subsurface side of EOR and generating

SPEAKER_03: the oil as opposed to the capture technology.

SPEAKER_03: I was just at Petronova about maybe a year ago, and yeah, it's up and running fine.

SPEAKER_03: The process itself is fine.

Unknown: Thank you.

Unknown: I've talked a lot.

Unknown: It's really awesome.

SPEAKER_08: One more quick question for me.

SPEAKER_08: How much water does it take to process the CO2 out?

SPEAKER_03: It's actually a very good question.

SPEAKER_03: So the way to think about this is that it'll take about half of the condenser, because

SPEAKER_03: what's happening is that since you're not really condensing the steam, you're sending

SPEAKER_03: the steam to the carbon capture unit.

SPEAKER_03: So some of the condenser duty will go down.

Unknown: But at the same time, you've got to condense that steam out eventually.

SPEAKER_03: So the water consumption goes up from that side, but it decreases in the power plant.

SPEAKER_03: So about maybe 30, 40% increase overall is what happens.

SPEAKER_08: Also for a metric against how much CO2 you're capturing.

SPEAKER_08: So for a ton of carbon capture, how much water?

Unknown: That I don't know on top of my head.

SPEAKER_03: Well, water's big for California in many states, so that would be something to know.

SPEAKER_03: And so there's different options available.

SPEAKER_03: You could use dry cooling, for instance, but dry cooling is expensive.

SPEAKER_03: And we actually are doing evaluation.

SPEAKER_03: We did the one in Elkhills, for instance, where we used a combination of water and other

SPEAKER_03: cooling technologies to design that unit.

SPEAKER_03: We're currently doing some work in California where water is not an option, so we're looking

SPEAKER_03: at dry cooling options.

SPEAKER_08: Doing it without water?

Unknown: Yeah.

SPEAKER_08: Okay.

SPEAKER_08: But it'll be expensive.

SPEAKER_03: The capital cost goes up.

SPEAKER_03: We just don't know the numbers yet.

Unknown: Okay.

SPEAKER_08: And I'll just say, I just find it fascinating that human beings have worked so hard to dig

SPEAKER_08: carbon off out of the ground that was millions of years being put in the crust of the earth.

SPEAKER_08: And now we're spending all this time and money trying to figure out how to put it back in

SPEAKER_08: the ground.

SPEAKER_03: Well, you're 100% correct.

SPEAKER_03: So the way one, at least I kind of would like to mention, is that you're taking carbon out

SPEAKER_03: of the ground and you want to put it back in.

SPEAKER_03: Yep.

Unknown: There's a lot of danger when it's up in the atmosphere.

SPEAKER_08: Thank you so much.

SPEAKER_08: Thank you.

SPEAKER_08: And last presenter of the evening, I believe, which is Joe.

SPEAKER_08: And he's going to be speaking to us on storage.

SPEAKER_08: Or both, Joe?

Unknown: Did we get both?

SPEAKER_08: We did?

SPEAKER_05: You get both of us.

SPEAKER_05: We're both named Joe, so it's really easy.

SPEAKER_05: So Joe Ashley, I'm a senior director of governmental and regulatory affairs for Carbon TeraVault.

SPEAKER_05: Carbon TeraVault is wholly owned subsidiary, same company, as California Resources Corporation.

SPEAKER_05: And we are the largest oil and gas producer in the state of California.

SPEAKER_05: Produce about 10% overall of the hydrocarbons used in California.

SPEAKER_05: Or produced in California, we're down much lower than that when you talk about what we

SPEAKER_05: actually use in California on a daily basis.

SPEAKER_05: So we're happy and proud to do that.

SPEAKER_05: We're uniquely here in California.

SPEAKER_05: That has just changed recently as we made an acquisition of Barry Petroleum.

SPEAKER_05: And they had a few assets over in southern Utah.

SPEAKER_05: We're in the process of figuring out what we're going to do with that.

SPEAKER_05: But my main point for bringing that up is we're a California company.

SPEAKER_05: And we don't have the option to pick up our toys and move them somewhere else.

SPEAKER_05: That would be a heck of a lot easier.

SPEAKER_05: A lot of land use conflicts and public conflicts will be taken away.

SPEAKER_05: But we're not able to do that.

SPEAKER_05: But we are committed to being here.

SPEAKER_05: We're an energy consumptive society.

SPEAKER_05: And we are committed to providing the cleanest and best energy we possibly can for California.

SPEAKER_05: And we look forward to continuing to do that.

SPEAKER_05: We can also read the room.

SPEAKER_05: And that is that something has to change.

SPEAKER_05: And conventional status quo is not going to work into the future.

SPEAKER_05: And so we have embraced the opportunities for carbon capture for multiple reasons.

SPEAKER_05: And so as we go through our presentation, we're going to talk about our company.

SPEAKER_05: We're going to talk about the storage options that we have.

SPEAKER_05: Joe and I will share that presentation kind of ping-pong back and forth.

SPEAKER_05: So I will turn it over to him to talk a little bit more about our storage opportunities.

Unknown: And I'll be back.

Unknown: Thank you.

SPEAKER_04: My name is Joe Jefferson.

SPEAKER_04: I work for Carbon TeraVault, subsidiary of CRC, as a storage development manager for

SPEAKER_04: developing CO2 sequestration reservoirs in the state of California.

SPEAKER_04: And we're going to talk a little bit about that portfolio.

SPEAKER_04: But just related to some of the previous discussions and what Joe mentioned, I am a

SPEAKER_04: petroleum workforce person who has transitioned into carbon management.

SPEAKER_04: And we're solving the problems of the day, not only to help try to decarbonize our energy

SPEAKER_04: that we need on a daily basis, how to do it safely, how to do it with community involvement.

SPEAKER_04: And so those are some of the fun technical challenges that I get to work on.

SPEAKER_04: My background is in engineering, well-engineering specifically.

SPEAKER_04: So I study and understand how fluids move through the subsurface.

SPEAKER_04: And we design the plumbing that allows the injection and production of those fluids,

SPEAKER_04: whether that's extraction for production of hydrocarbons, injection for CO2.

SPEAKER_04: And so I bring a technical experience to our business and the ability to help kind of

SPEAKER_04: design these projects safely to ensure that the CO2 stays in the ground as intended.

SPEAKER_04: And I'm going to talk a little bit about that with an example project that's in your backyard.

SPEAKER_04: So first, just in 2021, CRC created Carbon TeraVault to look at two things,

SPEAKER_04: to look at decarbonizing the energy that CRC produces, as well as to look at how we can

SPEAKER_04: deploy our expertise in subsurface engineering and project development and operations

SPEAKER_04: to provide storage of CO2 as a service to the state of California.

SPEAKER_04: And so on the right-hand side, you see some big numbers in terms of total addressable market

SPEAKER_04: in kind of northern and southern California, totaling about 90 million metric tons per annum, MMTPA.

Unknown: And so to abate those emissions, we would have to inject 90 million tons of captured CO2,

SPEAKER_04: captured like was spoken about previously, then goes transported to storage sites,

SPEAKER_04: injected deep in the subsurface below confining layers that have impermeable barriers

SPEAKER_04: that will hold the CO2 in place.

SPEAKER_04: The way that we've built our portfolio, starting with and leading with storage, is twofold.

SPEAKER_04: So we've looked at our existing oil and gas assets that are suitable for repurposing.

SPEAKER_04: By assets, I mean the subsurface reservoirs that we can inject CO2 into,

SPEAKER_04: as well as saline aquifer sequestration, which is basically the regional hydrogelogic systems

SPEAKER_04: that contain non-protected water, so saline, brackish water.

Unknown: So what you see here is a mix of nine projects across northern and central California,

SPEAKER_04: a mix of oil and gas reservoirs and saline projects that can sequester CO2.

SPEAKER_04: Beginning in 2021, we started submitting permits.

SPEAKER_04: We feel like the way to lead is to show that we have an asset where we can take CO2

SPEAKER_04: so that we can engage counterparties and have something to give.

SPEAKER_04: And so we've led with designing and permitting storage projects, nine in total.

SPEAKER_04: Permitting process is arduous.

SPEAKER_04: That's what the EPA, Region 9 is the region that oversees California.

SPEAKER_04: And the program, and the UIC program, is a Class 6 well categorization.

SPEAKER_04: So it's a Class 6 EPA permit for geologic sequestration of CO2.

SPEAKER_04: And that's what we're talking about when we talk about storage.

SPEAKER_04: The nine projects here, you can see some stats.

SPEAKER_04: They total about 350 million metric tons of storage capacity in these nine reservoirs.

SPEAKER_04: And that's a drop in the bucket compared to 90 million tons per annum year after year after year.

SPEAKER_04: So we're just getting started.

SPEAKER_04: What I would say is this Central Valley and Sacramento Valley is pristine storage,

SPEAKER_04: some of the best in the U.S.

SPEAKER_04: And there are studies that demonstrate that.

SPEAKER_04: The labs have looked at this.

SPEAKER_04: So we're in a spot where it's right to store CO2.

Unknown: Across these projects, I'll show you CTV4.

SPEAKER_04: So the Roman numerals here, this is the one that's the third from the bottom

SPEAKER_04: in the Northern California section.

SPEAKER_04: But what I'd like to talk about before we get into that is our first project,

SPEAKER_04: which is currently injecting CO2.

SPEAKER_04: This is at our 26R reservoir at CTV1, which is our Elkhil's oil field.

SPEAKER_04: CRC's flagship asset used to be a strategic petroleum reserve

SPEAKER_04: and was acquired one of the biggest privatizations of a government asset in 1998.

SPEAKER_04: And we are now transitioning that field through this project

SPEAKER_04: to demonstrate how a 100-year-old oil field can keep contributing

SPEAKER_04: to energy for society as well as decarbonization.

SPEAKER_04: We got the first EPA permit.

SPEAKER_04: The EPA has issued since one pilot project almost 10 years ago.

SPEAKER_04: This was issued by Region 9.

SPEAKER_04: We commissioned the project earlier this year, and we started injecting in May.

SPEAKER_04: And this was, again, the first active CO2 sequestration project under EPA,

SPEAKER_04: kind of modern EPA jurisdiction.

SPEAKER_04: So we have proven that we can get permits, that we can execute projects,

SPEAKER_04: that storage is a viable technology to complement capture in the CCS solution,

SPEAKER_04: which we feel is critical now to help decarbonize the existing energy assets

SPEAKER_04: that society relies on.

Unknown: I guess the last thing to say here is that the permitting process is long.

SPEAKER_04: You can see target permit dates.

SPEAKER_04: We've got a lot of permits that we submitted in 2022 and 2023,

SPEAKER_04: and we've been working, and we expect to see draft permit decisions later this year

SPEAKER_04: and early next year across this portfolio.

SPEAKER_04: We're continuing to build out that portfolio and looking to provide more storage opportunities

SPEAKER_04: in the appropriate locations.

Unknown: Anything else to add here, Joe?

SPEAKER_04: Okay.

Unknown: Can I ask you a stupid question because I know it.

SPEAKER_09: I don't know it.

SPEAKER_09: I don't exactly know what an EPA Class 6 permit entails.

SPEAKER_09: Can you just give me a very short summary of that world?

SPEAKER_09: Sure, sure.

SPEAKER_04: So EPA is responsible for enforcing the Clean Water Act,

SPEAKER_04: which is protection of USDW underground sources of drinking water.

SPEAKER_04: And so their underground injection control program, the UIC program,

SPEAKER_04: is what's used to regulate any injection into the subsurface, into or through USDW

SPEAKER_04: to ensure that USDW is not harmed.

SPEAKER_04: So there's different classes of injection.

SPEAKER_04: Most recently, Class 6 is the latest,

SPEAKER_04: and there are specific CFRs that are written to ensure protection of USDW

SPEAKER_04: and enforcement of the Clean Water Act.

SPEAKER_04: And so the EPA is tasked with enforcing and regulating Class 6 injection of CO2.

Unknown: And I would assume that that's the really strict standards around low risk and protection?

SPEAKER_09: It is.

SPEAKER_04: It's very strict.

SPEAKER_04: The regulations require – I'll get through some of what you'll see as I talk through the project.

SPEAKER_04: You're going to see quite a bit of monitoring, quite a bit of demonstrating through operations

SPEAKER_04: that the project is performing as expected.

SPEAKER_04: There's years of technical review that we go through,

SPEAKER_04: and we're currently in, in many of these projects,

SPEAKER_04: whereby we're demonstrating the integrity of the wells,

SPEAKER_04: such that there won't be leakage through the wells, demonstrating integrity of the geology

SPEAKER_04: and the cap rock that's going to confine the CO2,

SPEAKER_04: because there is a small repressurization with the injected CO2.

SPEAKER_04: It's important to know that, you know, this relative pressure increase is small.

SPEAKER_04: It's not exceeding the parting pressure of the rock to create fractures, to create earthquakes.

SPEAKER_04: But we're monitoring for those to ensure that, you know, that we're performing as expected.

Unknown: Quick question on permitting.

SPEAKER_08: Since I'm not familiar with this permit either, I mean, just curious,

SPEAKER_08: how long the Feds take to permit something like this?

Unknown: We're finding out.

SPEAKER_04: So our first project took about four years.

SPEAKER_04: I think, you know, there's a target to get this permitting kind of expedited,

SPEAKER_04: but projects are complex, and they're doing a good job working through all the details.

SPEAKER_04: Earlier projects are going to take longer.

SPEAKER_04: I think, you know, initially when we started,

SPEAKER_04: the target for EPA permitting was about two years,

SPEAKER_04: and it took us about four for the first project.

SPEAKER_04: We're on track for about, you know, four-ish for these projects as well.

SPEAKER_04: But EPA is looking to, you know, increase their process efficiency

SPEAKER_04: to look for opportunities to expedite permitting with the target of, you know, two years or less.

SPEAKER_04: And is there any other California permitting?

SPEAKER_08: And then, of course, you've got a slide on land use permitting.

SPEAKER_08: So I'm just thinking, what would be the total amount of time would it take

SPEAKER_08: to get something up and running from?

Unknown: Yeah, so...

SPEAKER_04: Are you talking a decade?

SPEAKER_08: No, it's not in series, and Joe is going to talk about this,

SPEAKER_04: and this is really his expertise.

SPEAKER_04: I have some experience working with the EPA.

SPEAKER_04: A lot of this is, you know, semi-parallel path.

SPEAKER_04: We're leading with permitting of storage first

SPEAKER_04: because it's hard to contemplate a project if you don't have a storage asset to talk about,

SPEAKER_04: to, you know, to work with.

SPEAKER_04: So in a way, it's our entry into the project development discussion.

SPEAKER_04: It's the asset that we bring.

SPEAKER_04: So, you know, of course, we can talk about it earlier, but, you know,

SPEAKER_04: nothing really happens until we have permit in hand

SPEAKER_04: in terms of counterparty commitment.

SPEAKER_04: And so that's why we're kind of leading with the classics permit.

SPEAKER_04: There is other land use permitting through the state.

SPEAKER_04: Joe's going to speak to that in a couple of seconds.

SPEAKER_04: You're a very brave company to do this here.

Unknown: Good to move on?

Unknown: Yeah.

Unknown: Okay.

Unknown: All right, so a busy slide here.

SPEAKER_04: I chose CTV4.

SPEAKER_04: This is a project that's, you know, in your backyard.

SPEAKER_04: This is located about halfway between the city of Galt and Elk Grove.

SPEAKER_04: And what you see on the left-hand side is, you know, kind of a map view of the,

SPEAKER_04: you know, the red boundary is the project area of review.

SPEAKER_04: This is a technical term that defines the project boundary within the CFRs and EPA's regulation.

SPEAKER_04: And that's the area that's impacted by either the presence of CO2

SPEAKER_04: or pressure increase as a result of the injection.

Unknown: And so this defines the area that we need to evaluate for containment,

SPEAKER_04: for other risks for geology, continuity, and trapping, and things like that.

Unknown: You can see inside the red circle is a blue circle.

SPEAKER_04: It doesn't stand out that well here.

SPEAKER_04: I apologize.

SPEAKER_04: That is the plume of CO2.

SPEAKER_04: So that's where the actual CO2 is when we inject it at the designed injection rate

SPEAKER_04: for the designed period of time.

SPEAKER_04: And so what you see is a larger pressure boundary, a smaller CO2 plume within that.

SPEAKER_04: And the green and orange dots represent injection wells and monitoring wells as well.

SPEAKER_04: I'm going to talk a little bit more about kind of the subsurface

SPEAKER_04: and give you a view of that in the next slide, how that's used.

SPEAKER_04: But this project, the plume size totals about 4,300 acres.

SPEAKER_04: And that acreage is capable of storing about 30, 33 to 34 million metric tons of CO2.

SPEAKER_04: We're permitting up to eight injection wells and four monitoring wells.

SPEAKER_04: The designed injection rate totals about 1.4 million metric tons per year.

Unknown: So this implies about a 24-year project life, injecting CO2, capturing off of some facility.

SPEAKER_04: That facility could be a natural gas combined cycle power plant adjacent to the area.

SPEAKER_04: It could be another solid oxide fuel cell plant that could be adjacent.

SPEAKER_04: It could be co-located.

SPEAKER_04: We're building optionality for developers who have assets

SPEAKER_04: or anticipate building assets that need to be decarbonized.

SPEAKER_04: In kind of the middle, I show a cross-section.

SPEAKER_04: And so on the map, you see the black line that kind of cuts across the red circle there.

Unknown: The figure to the right of that is kind of a vertical slice through the geology looking down.

SPEAKER_04: And what you see, the yellow and orange layers there, those are our target injection zones,

SPEAKER_04: Mokalumny River and Starkey Formation.

Unknown: The gray represents the impermeable containment barriers that are going to hold the CO2 in place.

SPEAKER_04: And the squiggly line in the middle is a well that was characterized that we use to help evaluate the geology.

SPEAKER_04: I'm not going to bring that up on the right-hand side.

SPEAKER_04: I'm not going to go through the details of what all this means.

SPEAKER_04: But I do, you know, the yellow on the left-hand track represents the sandstone that is the permeable formation.

SPEAKER_04: And the thin gray line represents the barriers.

SPEAKER_04: So we have two, an upper and lower injection zone.

SPEAKER_04: We have an upper confining layer, which is the trap that keeps the CO2 in place.

SPEAKER_04: And then we have an above zone monitoring interval.

SPEAKER_04: The upper calls out a dissipation zone.

SPEAKER_04: It's basically a secondary containment if there were leakage.

SPEAKER_04: And that's also not protected water.

SPEAKER_04: Right? That's non-USDW.

SPEAKER_04: So we would monitor that to look for, you know, any indication of leakage that we would then take some action on.

SPEAKER_04: And then above that is the base of USDW.

SPEAKER_04: And that's really what EPA is charged with protecting.

Unknown: It's basically saying, look, you have a confining zone and then an area, like a buffer zone,

SPEAKER_09: and then you have another confining zone on top.

SPEAKER_09: Right?

SPEAKER_09: So there's at least two, there's two geological formations, right, that are going to contain.

Unknown: In this particular example, there's two injection zones and then there's a barrier in between.

SPEAKER_04: Typically, we might target one single injection zone.

SPEAKER_04: And then we have the confining layer on top.

SPEAKER_04: And that can be, you know, 100, hundreds of feet thick, 1,000 feet thick, deep marine shales.

SPEAKER_04: The dissipation permeable zone above that is basically a spillover.

SPEAKER_04: If there were some leakage, how do we ensure that, you know, we detect it before it gets to USDW?

SPEAKER_04: And so that's kind of how we would use that above zone interval for monitoring as a secondary.

SPEAKER_09: Are there generally like two zones required in finding a good site?

SPEAKER_09: Are there at least two confining zones required?

SPEAKER_09: Or what's the other little commentary about that when you pick a site?

Unknown: Yeah, I think, you know, what you need is an adequate confining layer.

SPEAKER_04: And you really need one.

SPEAKER_04: Our dissipation zone typically would have another confining layer on top of that,

SPEAKER_04: such that, you know, any CO2 could dissipate into that zone and not migrate upward.

SPEAKER_04: So in a way, you could think of it as there is a secondary containment barrier there.

SPEAKER_04: The regulations require primary containment and monitoring above that containment.

SPEAKER_04: And, you know, that should be sufficient to contain the CO2.

SPEAKER_04: You know, the more barriers, the better, I guess.

SPEAKER_04: And in California and Central Valley, the geology is right for this.

SPEAKER_04: So I think, you know, how we monitor and how we measure and how we report and how we verify, MMRV.

SPEAKER_04: So these are different concepts and acronyms that are thrown around.

SPEAKER_04: But it's basically our demonstrated license to operate during the injection operation.

SPEAKER_04: And it's also the mechanism whereby we validate the injected CO2, we report the volumes in order to be eligible for the 45Q credits and other things.

SPEAKER_04: So combination of purposes that we're monitoring for here.

SPEAKER_04: But what I wanted to show in this slide is really, again, I'll start on the right-hand side, top monitoring zones.

SPEAKER_04: You see the USDW, you see the injection zone, confining zone, dissipation zone.

SPEAKER_04: We talked about that.

SPEAKER_04: If you move over to the left-hand side, again, this is another cross-section, so you're seeing, you know, top is surface, you know, bottom is deep.

SPEAKER_04: On the left-hand side, we define these monitoring domains as the things that we're going to pay attention to.

SPEAKER_04: And within the geologic, you know, stack and atmosphere, we're looking at surface, at soil, biosphere.

SPEAKER_04: We're looking at, you know, the hydrosphere, which is a water wet formation.

SPEAKER_04: And for the sake of this, we're kind of calling it hydrosphere the protected USDW.

SPEAKER_04: And then the geosphere would be the stuff below that.

SPEAKER_04: It may not be a scientifically correct terminology, but the geosphere would be the non-USDW.

SPEAKER_04: We're monitoring all of these zones with wells, with indirect techniques.

Unknown: We're monitoring for induced seismicity.

SPEAKER_04: So we want to make sure that when we're injecting, we're not stressing the region such that we create a critical stress and potential failure in the form of, you know, minor earthquakes or a build of pressure that could result in, you know, something larger.

SPEAKER_04: So we don't think that that's, you know, a scenario that's really feasible based on the way that we assess critical stress on faults.

SPEAKER_04: And we design projects to avoid, you know, over-pressurizing.

SPEAKER_04: Again, the pressure is maybe much less than other projects, other injection projects.

Unknown: But the point is that we monitor and we report on all these different domains.

SPEAKER_04: Additionally, we're looking at kind of operational domains that include injection operations, pressure and temperature, volume of what we're injecting to ensure that our simulations of the subsurface are accurate and are representative and can be used to demonstrate performance as expected.

SPEAKER_04: We're looking at monitoring of wells to ensure that the wells are not creating leakage paths.

SPEAKER_04: And all this is quarterly annual, you know, routine monitoring that's part of the project that's designed into our strategy to ensure safety.

SPEAKER_04: Pipeline integrity is another one very similar to wells.

SPEAKER_04: We're looking at, you know, rates and pressures, conditions under which, you know, we can minimize corrosion, so keeping the water out.

SPEAKER_04: The measurements that we make here on the bottom right, a few of them would highlight, you know, pressure and temperature are critical to understanding how the subsurface is behaving.

SPEAKER_04: We have simplifying models to represent very complex systems that we can't touch and we can't see every, you know, every grain, every rock.

SPEAKER_04: We take geochemical samples, so fluid samples to look at, you know, presence of CO2, where it's moving, how it's moving, when it's moving, things like that.

SPEAKER_04: Ensure that it's not present in the areas where we don't want it, right?

SPEAKER_04: Induced seismicity, I mentioned that.

SPEAKER_04: Injectate specification is a critical one because the impurities that are included with the CO2 can be, you know, very low in concentration, but in combination have the potential to create corrosive environments.

SPEAKER_04: So we need to minimize the water.

SPEAKER_04: We need to understand the presence of these impurities and how they interact with the wells.

SPEAKER_04: So those are the kind of problems where we're working to ensure integrity.

SPEAKER_04: You know, lastly, you know, whether it's a well, whether it's a pipeline, we have fiber optic monitoring, and this is both temperature and noise monitoring.

SPEAKER_04: And so you can think about this continuous along the well, continuous along the pipeline with alert systems and alarms to react in case, you know, there's an anomaly that's detected.

SPEAKER_02: Quick question. The vertical axis there is feet?

Unknown: Yes.

SPEAKER_04: Okay.

SPEAKER_04: On the kind of left-hand side, so from surface to approximately 8,000 feet.

SPEAKER_04: Okay, thanks.

SPEAKER_04: Yep.

Unknown: So just to put it in context, we talked about kilometers previously, geothermal, but we're typically injecting between, say, 3,000 and 10,000 feet below ground level, probably designing, you know, ideally, you know, 5,000, 6,000, 7,000 feet.

SPEAKER_04: There's a tradeoff between temperature, how the CO2 compresses, how efficiently we can store the CO2 in that space, and then also proximity to USDW.

Unknown: Good one.

Unknown: Globaler questions. It's not my area of expertise.

SPEAKER_09: How much of the science and understanding of how to operate these wells transfers into this CCS technology, and how much is being learned and developed as this progresses forward?

SPEAKER_09: That's a great question.

SPEAKER_04: This is a direct translation of, you know, petroleum industry's skill set for injection and extraction.

SPEAKER_04: So we inject water, we inject steam, we inject gas, we inject CO2, and we have for decades.

SPEAKER_04: And so, you know, our understanding is strong.

SPEAKER_04: We have complex simulation reservoir performance and historical performance in many reservoirs to help kind of, you know, understand.

SPEAKER_04: And I would say it's highly developed based on decades of experience.

SPEAKER_04: Real quick, I'm just trying to envision the actual physical process.

SPEAKER_06: Is it a physical containment of gas, or is it a chemical containment?

SPEAKER_06: Like, do the rocks actually absorb the carbon, or is it more like a balloon where you're creating a reservoir somehow?

SPEAKER_06: Yeah, another great question with a complicated answer.

SPEAKER_04: I'll try to explain it quickly.

SPEAKER_04: It's a pressure, you know, it's a container that is holding the CO2 initially.

SPEAKER_04: Over longer periods of time, different processes occur whereby the CO2 gets absorbed into the water.

SPEAKER_04: It mixes with the water and mineralizes, precipitates out.

SPEAKER_04: And so, actually, if you look at kind of the risk profile of injected CO2 after you stop injecting into a saline reservoir, the risk profile decreases.

SPEAKER_04: The pressure dissipates.

SPEAKER_04: The CO2 gets trapped by different trapping mechanisms like dissolution and mineralization.

SPEAKER_04: And so, you know, the stability of the CO2 increases with time.

SPEAKER_04: Initially, it's trapped by pressure containment, though.

Unknown: Okay. We can get back to your question now.

Unknown: Ideally, you run them concurrently.

SPEAKER_05: They can be parallel paths.

SPEAKER_05: Nothing can happen in terms of the injection of CO2 without both authorization.

SPEAKER_05: So EPA issues the Class 6 that make sure that USDW is protected.

SPEAKER_05: Oddly enough, and I have been permitting for a really long time, I can't explain why it's NEPA exempt.

SPEAKER_05: This is a federal process, but the National Environmental Policy Act does not apply.

Unknown: So what happens is the land use permit piece and in California, CEQA.

SPEAKER_05: And that's not something that exists somewhere else.

SPEAKER_05: And I've spoken a few times at different spots together, and you've heard me say this before.

SPEAKER_05: I think ultimately CEQA will be a competitive advantage in California because as we hear these fast-track permits in the middle of the U.S.

SPEAKER_05: and even down in Louisiana, where the states have primacy for Class 6 and they issue the permits on behalf of the EPA, lightning fast.

SPEAKER_05: You know, those permits happen really quickly.

SPEAKER_05: Then the backlash comes from the communities and from the public who says, what the hell is going on here, basically?

SPEAKER_05: And so, you know, CEQA helps us in that regard.

SPEAKER_05: It's painful, and you know, I don't think I'm telling tells out of school, but, you know, our management hates that.

SPEAKER_05: But the reality is it answers the questions that people want to have answered.

SPEAKER_05: And so I think ultimately it takes a little longer.

SPEAKER_05: But in the end, you have a process that has infinitely more transparency and public involvement in having some of these questions answered,

SPEAKER_05: most importantly, before CO2 goes into the ground and before projects are approved.

SPEAKER_05: Does that?

SPEAKER_05: Great answer to that.

SPEAKER_05: Okay.

SPEAKER_05: The questions are quite difficult.

SPEAKER_05: As I mentioned, two-part process.

SPEAKER_05: You know, the regulations, the industry, us, have kind of outrun the regulation on this.

SPEAKER_05: And in California, you know, the one that everybody heard a couple of years ago, Senator Caliaro introduced SB 905.

SPEAKER_05: And that said, hey, wait, you know, let's just figure this out a little bit before we start permitting projects.

SPEAKER_05: We, our business case, did not appreciate the unpredictability of that regulation.

SPEAKER_05: And so we approached two counties where we had planned potential operations.

SPEAKER_05: That was Kern County.

SPEAKER_05: That's where our home is.

SPEAKER_05: That's where our largest asset is.

SPEAKER_05: Great first trial run for depleted oil and gas reservoir storage.

SPEAKER_05: And so we approached the county saying, oddly enough, please regulate us.

SPEAKER_05: Please give us a permit for activities in the county.

SPEAKER_05: And that basically triggered CEQA at the county level and required the county then to do full, well, this is related to the regulation.

SPEAKER_05: No shortcuts.

SPEAKER_05: So, you know, CEQA has some off-ramps in the scoping process that allow you to say, oh, I could do a nag deck or mitigate a nag deck.

Unknown: Kern County said no.

SPEAKER_05: You're going full FAIRER you're going to address all the appendix GCEQA topics.

SPEAKER_05: And you're not going to scope out any of these.

SPEAKER_05: And they also limited where these things could occur.

SPEAKER_05: So you eliminated some of the land use conflicts by saying, look, areas of similar operations, agriculture, you got a lot of heavy equipment, you got really a lot of sometimes no people out there.

SPEAKER_05: And then you have the industrial zones, the medium and heavy industrial zones.

SPEAKER_05: So those are compatible uses up front.

SPEAKER_05: So we approached Kern County, asked them to create this ordinance, which they did, as well as San Joaquin County.

SPEAKER_05: CTV1, as Joe mentioned, is in Kern County.

SPEAKER_05: CTVs 2, 3, 4, and 5 are all in the Delta.

SPEAKER_05: So 2, 3, and 5 are in San Joaquin County.

SPEAKER_05: 4, as he mentioned, is in Sacramento County.

SPEAKER_05: Very, the ordinances are basically identical.

SPEAKER_05: You know, we shared amongst the two counties and said, hey, here's what we're doing here.

SPEAKER_05: And so they both adopted it.

SPEAKER_05: And we've gone through that process now, which is basically a conditional use permit.

SPEAKER_05: We did a full environmental impact.

SPEAKER_05: The first one that I know of in the U.S., looking at the impacts overall of carbon sequestration and storage.

SPEAKER_05: And it really made it a lot easier because it was on land that we owned entirely.

SPEAKER_05: Our field, as Joe mentioned, is our flagship.

SPEAKER_05: Seventy-five square miles, it's behind one fence.

SPEAKER_05: And it has gates with guards.

SPEAKER_05: And that was a military operation before.

SPEAKER_05: And so we maintain that security perimeter.

SPEAKER_05: And it's just a great place for serial number one.

SPEAKER_05: And we have learned a ton from that.

SPEAKER_05: So sorry to deviate there.

SPEAKER_05: The CUP, you guys know the kind of the way those work.

SPEAKER_05: The board ultimately approves them.

SPEAKER_05: It goes through Planning Commission, which makes a recommendation.

SPEAKER_05: It goes to the board for final approval.

SPEAKER_05: And then the ER is certified.

SPEAKER_05: There's a number of responsible agencies that were involved in this.

SPEAKER_05: Fish and Wildlife, Water Board, Air District, a number of others that also use the CEQA document to issue their permits that were relative to the project.

SPEAKER_05: 905 has continued to develop since we started this process.

SPEAKER_05: And now we're behind, I'd say, as a state in terms of the implementation required by the legislation.

SPEAKER_05: But there are some now guidelines that we know a bit more about.

SPEAKER_05: They're working on this unified permit structure.

SPEAKER_05: The moratorium on permitting is now lifted.

SPEAKER_05: And so the permits are moving forward.

SPEAKER_05: And for us, most importantly, it's the transportation piece.

SPEAKER_05: And so 905 had this certain clause that said you can't transport CO2, concentrated CO2 that's outside of your facility.

SPEAKER_05: Didn't really apply to CRO number one since we had all that with our one facility.

SPEAKER_05: But everything outside of that requires some sort of transportation to and from the source to the reservoir.

SPEAKER_05: We love the co-location idea.

SPEAKER_05: And in the very early days, this is why the permitting is asynchronous for some of these, is we really were trying to find other greenfield sources that we could co-locate with the reservoirs.

SPEAKER_05: But the reality is it's just not coming along that fast in terms of the capture technology.

SPEAKER_05: And quite honestly, it's the cost of deploying.

SPEAKER_05: Some industries are not really yet sure how long-term climate regulations are going to affect their operations.

SPEAKER_05: And so they're just reluctant to open their pocketbook and spend billions of dollars to make these things happen.

SPEAKER_05: It will mature.

SPEAKER_05: And I think our job is to basically give a safe, stable reservoir to put the CO2.

SPEAKER_05: And we will help them develop to get to that point where they're willing to spend money to do that.

Unknown: 905, although it gives a unified permitting kind of overarching framework, it's not intended to be a one-stop shop.

SPEAKER_05: Individual agencies are still going to have the jurisdictions that they have, all those agencies I mentioned before, and many others are going to have their normal roles.

SPEAKER_05: And, yeah, honestly, we'll see how it works out.

SPEAKER_05: For now, we're working in Kern and we're working in San Joaquin, soon to be working in Sacramento.

SPEAKER_05: And so we will follow at the pace necessary to do that safely and ultimately get the public involved so we can get feedback from them.

SPEAKER_05: Our projects can be designed and implemented with public concerns and comments addressed there.

Unknown: Questions, comments?

Unknown: Okay, community engagement piece.

SPEAKER_05: Some regulatory paths require that.

SPEAKER_05: Grant monies typically require that.

SPEAKER_05: We've secured a number of federal grants, which all promptly got erased with this new administration.

SPEAKER_05: But all of those have this component of community engagement.

SPEAKER_05: I'll just tell you that CRC does this as a regular course of business, and so much so that in our corporate structure, which is not gross and bloated, it's kind of a lean, mean machine, as Joe will tell you.

SPEAKER_05: And we believe in this enough that we have a vice president that does nothing but community engagement.

Unknown: Spends time in the community at rallies, at protests, you know, where the people are.

SPEAKER_05: We say we go to where they are, and we truly mean it.

SPEAKER_05: And I think the commitment of a vice president level person who deals with this is a testament to that.

SPEAKER_05: I have done personally a ton of work in the San Joaquin Delta, and one of the grants that we got was for a reservoir out in the Delta named Victoria Island, and that's our Carbon Terrevault III reservoir.

SPEAKER_05: We did receive a federal grant to do some test wells there, as Joe mentioned, to test the geology, figure out what injection rates.

SPEAKER_05: First of all, is the geology sufficient and an appropriate place to put it?

SPEAKER_05: But then well-designed injection rates, things like that, we were hoping to get money to do that well.

SPEAKER_05: As a course of that, the community benefits plan, or the community engagement piece of that grant application, we talked about forming a community body,

SPEAKER_05: a project advisory body that was made up of community members, which we brought inside the tent, and we show them everything.

SPEAKER_05: They're involved in every piece of the project.

SPEAKER_05: The grant got canceled the day before I was supposed to have my first meeting with the project advisory body.

SPEAKER_05: So, you know, I kind of came up with this as principle, hashtag principle, not politics.

SPEAKER_05: And, you know, it's much more important for us to engage with the folks.

SPEAKER_05: If we ever hope to go forward with a project like this, you have to have buy-in, and we don't actually call it buy-in.

SPEAKER_05: That assumes that you've already made a decision.

SPEAKER_05: We build in.

SPEAKER_05: So when we're engaging with folks, we want them to be a part of that, because it's honestly a heck of a lot cheaper and easier to do it on the front end than it is redesign a project.

SPEAKER_05: We opened a satellite office in San Joaquin County, a brick and mortar that we're at, and staff, not every day.

SPEAKER_05: I'm there about once a week per month, and we meet with groups from Rotary Clubs, Kiwanis Clubs, churches.

SPEAKER_05: We go, again, where the people are to hear what their concerns are about our project and how can we make them better.

SPEAKER_05: And we've used that project advisory body to open up their networks and to take us into communities where we would otherwise not really have had an inroad.

SPEAKER_05: And so they take us into those sacred places of people's backyards and people's front porches to talk about things like this.

SPEAKER_05: And so I just can't stress it enough about how much time and effort should go into those kinds of things.

SPEAKER_05: And it shows we don't have the permit yet.

SPEAKER_05: We haven't started on the land use piece, which will take another two-plus years.

SPEAKER_05: Construction will take another two-plus years.

SPEAKER_05: So here we are backing up almost seven years, and we've been engaged with the public on a monthly basis about how this is going to work.

SPEAKER_05: We have existing, very public partnerships with San Joaquin Delta College, both labs, Improve Your Tomorrow, El Concilio, iHub, San Joaquin, lots and lots of folks, hundreds of folks, maybe even thousands that we've gone to and talked about our project and brought them into our fold.

SPEAKER_05: And finally, a huge deal, very much an anomaly for an oil and gas company, but we have the only project library agreement for an oil and gas producer in the state of California.

SPEAKER_05: So that brings another dynamic, I think, which is very positive to getting these projects properly executed.

Unknown: That's it.

SPEAKER_05: Great. Thank you.

SPEAKER_08: And just a quick question on the regulations.

SPEAKER_08: So CARB hasn't finished the regulations from the value act on the carbon.

SPEAKER_05: They're working on it.

SPEAKER_05: They just announced today a few more listening sessions, and so they're having, I think, starting in San Joaquin County a week after next, a 20-something, and then they're following up with statewide meetings, and they just released a couple more down in Long Beach today.

SPEAKER_05: So a little bit behind, there's progress.

SPEAKER_05: We're hopeful.

SPEAKER_05: These are first-of-a-kind things, and our management, again, jump up and down about it.

SPEAKER_05: It's not going fast enough, but the reality is, you know, number one takes a lot longer.

SPEAKER_05: They get better.

SPEAKER_05: So by the time we get through these nine that we have there, hopefully that process is a little bit more predictable and timely.

SPEAKER_08: But that bill requires it to all go through CARB basically, so it's more of a one-stop shop.

SPEAKER_08: Doesn't all have to.

SPEAKER_05: CARB does have a role in the overall permitting.

SPEAKER_05: So the one-stop shop piece is like who issues permits for certain things.

SPEAKER_05: Those agencies, that won't change.

SPEAKER_05: The idea of the framework, I believe, was setting, and I say that because there's some evidence for it, setting a minimal threshold for environmental compliance.

SPEAKER_05: I mean, there are places that would be financially incentivized to do these on an exemption or something like that,

SPEAKER_05: and I think part of this was setting an agency in a bar that says, you're not going to do that.

SPEAKER_05: That makes no sense.

SPEAKER_05: Yeah.

SPEAKER_06: Yeah, go ahead.

SPEAKER_06: You mentioned you have a project between Elk Grove and Gold.

SPEAKER_06: Yes, sir.

SPEAKER_06: Sacramento County.

SPEAKER_06: Yes, sir.

SPEAKER_06: We don't have one of the regulations.

SPEAKER_06: We're not one of the counties that has an existing regulation.

SPEAKER_06: So you just sort of fly in line there.

SPEAKER_06: Not really fly in line.

SPEAKER_05: We're just not to the land use permit part yet.

SPEAKER_05: So in this case, we're progressing the Class 6, and so we would get authorization from the EPA to do the injection project,

SPEAKER_05: but we have not started the land use project.

SPEAKER_05: We have started discussions with the county.

SPEAKER_05: I'm not sure yet if we'll ask them to do another separate ordinance and regulation.

SPEAKER_05: I think time won't tell as to – we know CEQA.

SPEAKER_05: We know that compliance with CEQA would be an obvious requirement,

SPEAKER_05: but if it's right for Sacramento to do full EIRs and things like that, that's what we're going to do.

SPEAKER_05: So you're working with the federal government to get the initial approval first.

SPEAKER_06: You'll still have to come back and do a CEQA process with the county,

SPEAKER_06: even though there's no existing framework under –

SPEAKER_06: I mean, flying blind is probably not the right term,

SPEAKER_06: but there's just no existing framework under which you can make that application.

SPEAKER_06: That's correct.

SPEAKER_05: That's correct.

SPEAKER_05: And that uncertainty just kills business, as you well know.

SPEAKER_05: And so any of those state agencies that issue a permit, if there's not someone closer to it,

SPEAKER_05: they're the CEQA lead agency, and they would have that obligation.

SPEAKER_05: Okay. Thank you.

Unknown: It's important to know that –

SPEAKER_04: Go ahead.

SPEAKER_04: It's important to understand that EPA authorization or permit issuance doesn't allow us to inject CO2

SPEAKER_04: without the proper land use permits that couple it.

SPEAKER_04: So there's no kind of working around that.

SPEAKER_04: No, but you have to get the EPA approval before you can even sort of start on the local stuff.

SPEAKER_06: Not necessarily.

SPEAKER_05: You could do them in any order.

SPEAKER_05: You could even do them parallel paths.

SPEAKER_05: You can't do either until they're both done, basically.

SPEAKER_05: You can't do any injection, or construction, actually.

Unknown: Thank you.

SPEAKER_02: Fascinating.

SPEAKER_02: So layers of sand under layers of shale.

Unknown: Okay.

Unknown: So what's the target price for, say, sequestering a ton of CO2?

Unknown: Is it too early to know?

Unknown: There's a wide range, and I don't know.

SPEAKER_05: You probably better to answer that question to me and keep us out of trouble for doing so.

Unknown: Yeah, I'd say you have to defer to our commercial groups on that.

SPEAKER_04: It's a range.

SPEAKER_04: It depends on – you know, there's economies of scale to the size of projects,

SPEAKER_04: the distance between source and sink, the complexity of the project,

SPEAKER_04: the impurities in the CO2, the design requirements of the well.

SPEAKER_04: There's a lot that goes into it.

Unknown: I think, you know, it becomes a commercial negotiation in terms of how the pricing structure works.

SPEAKER_04: And so I tend to kind of stay below ground in that area.

SPEAKER_04: So I don't know that I'm the right person to answer that.

Unknown: So we're not quite sure yet, or?

Unknown: I would say that when you look at the 45-Q price of $85 per ton,

SPEAKER_04: if CAPTURE kind of ends up costing about that,

SPEAKER_04: it doesn't leave much room to pay for transport and storage.

SPEAKER_04: And so the cost is not zero.

SPEAKER_04: It's something more than that.

SPEAKER_04: And so we need to look at other mechanisms to support project economics.

SPEAKER_04: I assume this would be in addition to the $85 storage.

SPEAKER_02: Yeah.

Unknown: Yeah, so, you know, the incentive for 45-Q is $85 per ton.

SPEAKER_04: There are other stackable kind of incentives in the state of California,

SPEAKER_04: like Japan Invest, CARB-L-CFS, other things.

SPEAKER_04: But, yeah, if CAPTURE is $85, I think that's kind of what you said,

SPEAKER_04: and it varies, it's expensive, it, you know, in general the initial CAPEX

SPEAKER_04: is probably 80% CAPTURE, 20% storage, if that puts you in ballpark.

SPEAKER_04: I wouldn't say the cost per ton is necessarily the same.

SPEAKER_04: I was trying to come up with sort of an educated guess on it.

SPEAKER_02: of about 2,500 kilowatt hours per ton of CO2, 85 bucks a ton, about three and a half cents

SPEAKER_02: would be the sort of the cost per kilowatt hour.

SPEAKER_02: So I was wondering how much we were going to add to that.

SPEAKER_04: I don't know that I have a number for you there.

SPEAKER_04: Okay.

SPEAKER_04: Yeah.

SPEAKER_04: You do that something we can get back.

SPEAKER_04: It's early.

SPEAKER_04: Thank you.

SPEAKER_02: Thank you very much.

SPEAKER_02: Fascinating.

SPEAKER_02: I'll have just one little question.

SPEAKER_09: In terms of have you done, have you looking at like your portfolio, have you been trying

SPEAKER_09: to co-locate them with these energy facilities?

SPEAKER_09: Or you know where the combined cycle plans are in California for us?

SPEAKER_05: We have a really good mapping of where the emissions are.

SPEAKER_05: And from an economy of scale perspective, and just common sense, makes sense to go for

SPEAKER_05: the heavy hitters first.

SPEAKER_05: If you look at the map of those, a heck of a lot of them are landlocked.

SPEAKER_05: And so that makes it almost 100% guaranteed that we're going to have to pipe CO2, move

SPEAKER_05: CO2 from one way or the other from the source to the sink.

SPEAKER_05: We really do a lot of work to try to map reservoirs with a proper source.

SPEAKER_05: I wouldn't say it always is logical if you look at a map and say this one's going to

SPEAKER_05: go here.

SPEAKER_05: There's other things that go into that behind the scenes for us.

SPEAKER_05: We've done a pretty good mapping of where those things are and kind of got in the sense

SPEAKER_05: about how we would abate those emissions if we could or have the opportunity.

SPEAKER_05: Have you seen much work being done on pipeline?

SPEAKER_09: We had the law change on our own side permitting.

SPEAKER_09: Are you seeing others in this field sort of progressing there, like assume the pipeline

SPEAKER_09: experts?

SPEAKER_05: In terms of permitting, constructability, materials, things like that.

SPEAKER_05: I think it's an enormous amount of work.

SPEAKER_09: It's an enormous amount of work.

SPEAKER_09: Figuring out what's under the ground and where can we put this safely, permanently.

SPEAKER_05: Yeah, and I think that has been a lot of our classics work as well as working iteratively

SPEAKER_05: with the EPA about appropriate materials for different uses.

SPEAKER_05: And so yeah, it's all progressing at the same rate.

SPEAKER_05: Maybe not at the same rate, but it certainly is moving forward pretty quickly, I would

SPEAKER_05: say.

Unknown: All right.

SPEAKER_09: That's lava.

SPEAKER_09: Thank you so much and thank you to the other vendors.

SPEAKER_09: Thanks for having us.

SPEAKER_09: Really wonderful.

SPEAKER_09: Smile.

Unknown: Well, yes, thank you for all that information.

SPEAKER_08: We rarely have meetings that go two hours, so you know we're geeks, energy geeks, and

SPEAKER_08: we'll sit here and enjoy all this.

SPEAKER_08: So thank you very much for all that.

SPEAKER_08: I did have a card from David Wright.

SPEAKER_08: I do not see him anymore.

SPEAKER_08: I am sure this went on longer than he had expected.

SPEAKER_08: So David, I apologize.

SPEAKER_08: But if you do email any questions, we will answer them later.

SPEAKER_08: And I can also ask, do we have any online commenters for questions?

SPEAKER_08: I do not see any hands raised, so no.

SPEAKER_08: Okay.

SPEAKER_08: All right.

SPEAKER_08: Well, with that, we will move on to our public comment for items that are not on the agenda,

SPEAKER_08: but we don't have – I don't see any hands.

SPEAKER_08: Okay.

SPEAKER_08: All right.

SPEAKER_08: Very good.

SPEAKER_08: So with that, we have not received any requests, so we'll go ahead and the last item is the

SPEAKER_08: summary of committee direction, but we didn't have any committee direction that I recall.

SPEAKER_08: I don't have anything.

Unknown: Yeah.

SPEAKER_08: And I do want to say for the public, you know, we asked for these informational discussions

SPEAKER_08: so that we get a lot more deeper understanding of what's coming up out there.

SPEAKER_08: And I think we got a lot of really good information today, but our staff are the technical detail

SPEAKER_08: people, and we trust them to give us good, you know, projects and information.

SPEAKER_08: But this for us is just trying to get a handle on what's going on out there because there

SPEAKER_08: is so much happening.

SPEAKER_08: So I hope everybody appreciated that.

SPEAKER_08: I know I did.

SPEAKER_08: And I do want to say I think this is the first committee meeting of our new CEO.

SPEAKER_08: So I do want to say welcome to our new CEO, Laura Angway, for her first meeting officially

SPEAKER_08: as our CEO, even though she's obviously been here for 22 years, and this is not her first

SPEAKER_08: meeting.

SPEAKER_08: So anyway, that's fun.

SPEAKER_08: And with that, I think we will go ahead and close the meeting.

SPEAKER_08: So I'll adjourn.

SPEAKER_08: And thank you all.

SPEAKER_08: Appreciate it.

SPEAKER_08: Have a good night.