Technology options under consideration for reducing GHG emissions SUSTAINABLE ENERGY ROUNDTABLE SERIES: Next Steps Post-Kyoto: U.S. Options January 13, 2005 Jeff Williams Manager, Corporate Environmental Initiatives [email protected] Portfolio of Initiatives for Clean Energy Future Increase Efficiency IGCC / NGCC Reduce Line Losses DSM Reduce Carbon Intensity Renewables Nuclear H2 Storage Sequestration CC w Geologic Offsets Increase Efficiency IGCC w CCS 40-50% efficient Fuel Flexibility Clean Low Cost Carbon Capture Energy Security NGCC Energy Conservation 50 – 60% efficient Process Optimization Low capital cost Reduction of Line Loss Lower carbon fuel Appliance Standards Low Income Weatherization Customer Incentives Reduce Carbon Intensity Renewables – Wind Power opportunities in the Northeast, offshore, Western & Midwestern states; provides a hedge against fuel cost spikes and environmental control costs; Off-peak Hydrogen production for increased utilization Drivers for wind power – – – – – Declining wind cost Fuel price uncertainty Green power Federal & State policies Energy security Reduce Carbon Intensity - Nuclear • New “passive safe” plant designs reducing capital cost • Clean, non-emitting • Hedge against fuel price volatility & environmental costs •Proven technology with safe operating history EOR & Geologic Sequestration – The Vision CO2 captured from stack gases and injected into nearby geologic formations for enhanced oil recovery and ultimate geologic sequestration. 21- 27 billion barrels of economically recoverable domestic oil – 2 million bbl/day Early demonstration of advanced technologies will drive down costs, improve performance and impact willingness of stakeholders to accept carbon caps. Mandatory Carbon Caps with emissions trading and revenue neutral tax incentives are adopted that augment revenue streams for carbon capture & transport. Help energy security, increasing domestic supply Add jobs, royalties and tax revenues Geologic Storage in the Gulf Coast Near-term and long-term sources and sinks linked in a regional pipeline network Enhanced oil and gas production to offset development cost and speed implementation Very large volume storage in stacked brine formations beneath reservoir footprints (estimated 222 GT CO2 storage capacity in Gulf Coast Region) Why is Entergy interested in EOR and Geologic Sequestration? Provides a bridge to achieve CO2 reductions now while we build capacity for higher efficiency, lower carbon portfolio of generating assets in the future; Gives us a viable option for managing carbon risk and creating growth opportunities; Creates jobs, royalties and tax revenues that helps economic viability of our customer base; It helps us create the legacy we want to leave for future generations . What Needs to Be Done To Create Physical CO2 Markets? 1) Federal legislation establishing cap and trade system for greenhouse gases – monetizing ERC value; 2) Federal legislation creating a “Revenue Neutral” Tax Credit for Carbon Sequestration / Oil Production; 3) Conduct research to reduce cost of Carbon Capture technology by 25%; 4) Conduct research to demonstrate and understand performance and fate of geologically sequestered CO2; 5) Develop credible & efficient measurement, monitoring and verification methods for geologic sequestration; 6) Develop and obtain public acceptance of protocols for registering ERCs created from geologic sequestration; 7) Invest in regional pipeline backbone that allows efficient movement of CO2 from high volume sources to reservoirs. Questions? ?