It is widely recognised that additional large–scale early mover projects are needed to advance CCS/CCUS. These projects will reduce CCS cost through ‘learning by doing’ and by serving as platforms to demonstrate emerging lower-cost technologies. They will also increase public confidence in the safety and efficacy of CCS. However, high capture costs and lack of incentives are discouraging new large–scale projects from entering the planning pipeline and making it difficult for existing projects to reach a financial investment decision. The National Enhanced Oil Recovery Initiative (NEORI) and the Coal Utilization Research Council (CURC) have each developed concepts for incentivising large–scale projects through a tax credit tied to the use of captured CO2 for enhanced oil recovery. Both organisations estimate that the government would recover its credit investment within 10 years from tax and royalty revenue received on additional oil production, and that the investment would become revenue positive for the government thereafter. A Global CCS Institute webinar was held on Wednesday 26th June where Patrick Falwell, Solutions Fellow for the Centre for Climate and Energy Solutions (C2ES), on behalf of Judi Greenwald, Vice President for Technology and Innovation at the Center for Climate and Energy Solutions (C2ES), discussed the NEORI concept. Patrick was joined by Ben Yamagata, Executive Director of CURC, who discussed the CURC concept.

1. Proposed government–provided incentives to promote the
capture and use of CO2 for EOR: Options for incentivising
large–scale CCS/CCUS projects in budget constrained times
Webinar – 26 June 2013, 0600 AEST

2. Judi Greenwald
Judi Greenwald is the Vice President for Technology and Innovation at the Center for Climate and
Energy Solutions. She oversees the analysis and promotion of innovation in the major sectors that
contribute to climate change, including transportation, electric power, buildings, and industry. Ms.
Greenwald focuses on technology, business, state, regional, and federal innovation. She is a member of
the Advisory Council of the Electric Power Research Institute and served on several National Academy
of Sciences panels studying vehicles and fuels. She also served on the Resource Panel for the
northeast Greenhouse Gas Initiative and the California Market Advisory Committee, and as a policy
advisor to the Western Climate Initiative and the Midwest Greenhouse Gas Accord Advisory Group. She
was previously the Vice President for Innovative Solutions at the Pew Center on Global Climate
Change, C2ES’s predecessor organization.
Ms. Greenwald has over 30 years of experience working on energy and environmental policy. Prior to
coming to the Pew Center, she worked as a consultant, focusing on innovative approaches to solving
environmental problems, including climate change. She also served as a senior advisor on the White
House Climate Change Task Force. As a member of the professional staff of the U.S. Congress Energy
and Commerce Committee, she worked on the 1990 Clean Air Act Amendments, the 1992 Energy
Policy Act, and a number of other energy and environmental statutes. She was also a Congressional
Fellow with then-Senate Majority Leader Robert C. Byrd, an environmental scientist with the U.S.
Nuclear Regulatory Commission, and an environmental engineer and policy analyst at the
Environmental Protection Agency.
Ms. Greenwald has a Bachelor of Science in Engineering, cum laude, from Princeton University, and an
M.A. in Science, Technology and Public Policy from George Washington University.

3. Patrick Falwell
Patrick Falwell is a Solutions Fellow for the Center for Climate and Energy Solutions, where he
reports to the Vice President for Technology and Innovation. Mr. Falwell analyzes clean energy
and climate change policy at the state and federal level. He also monitors nationwide clean
energy market developments and identifies opportunities to support clean energy growth.
Mr. Falwell holds a Masters of Arts in International Economics and Energy, Resources, and the
Environment from the Johns Hopkins School of Advanced International Studies and an
undergraduate degree from Georgetown University. He previously worked as a research analyst
for the U.S. Bureau of Labor Statistics (BLS) and the Consumer Price Index (CPI), where he
conducted analysis of consumer expenditure behavior and national inflation data.

4. Ben Yamagata
Ben Yamagata is a Partner at the Van Ness Feldman Law Firm and the Executive Director of
the Coal Utilization Research Council – a coalition of industry and educational institutions with
an interest in promoting clean coal technology.
Mr. Yamagata’s practice encompasses federal and state legislative and administrative issues in
the areas of energy, environment, natural resources, international trade (technology transfer
and independent power project development), and transportation-related matters.
Mr. Yamagata represents clients before the Departments of Energy, Commerce, Transportation,
Defense and State, as well as the Office of Management and Budget and the Environmental
Protection Agency, on both project-specific and programmatic issues that relate particularly to
technology research, development, demonstration, and deployment relating to the use of coal
and other fossil and renewable energy resources. Mr. Yamagata has advised clients on energy
and environmental technology projects as well as provided counsel and representation in the
structuring and advocacy for government programs such as the Department of Energy’s clean
coal technology development and demonstration programs and financial incentive programs
(e.g., loan guarantees and clean coal tax credits) that were authorized as part of the Energy
Policy Act of 2005.
Mr. Yamagata is a graduate of Harvard College and the George Washington University National
Law Center University.

5. QUESTIONS
 We will collect questions
during the presentation.
 Your MC will pose these
question to the presenters
after the presentation.
 Please submit your questions
directly into the GoToWebinar
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6. A Diverse Coalition Recommends Incentives to Accelerate Commercial
Deployment of EOR Using Captured CO2
Webinar for the Global Carbon Capture and Storage Institute
June 25, 2013
Presenter:
Judi Greenwald, Vice President for Technology & Innovation
Center for Climate and Energy Solutions

7. Overview of presentation
• What is CO2-EOR?
• What is NEORI?
• What does NEORI recommend?

8. How does CO2-EOR work?

9. Commercial CO2 use in enhanced oil recovery is happening now,
and it’s bigger than most people realize.
Background on CO2-EOR
• The CO2-EOR industry has 40
years of commercial
operational experience
(beginning at significant scale
in West Texas in 1972).
• Today, CO2-EOR produces
nearly 300,000 barrels of oil
per day (100 million barrels
annually), or about 6 percent
of U.S. domestic production. Source: Melzer, 2012

10. 10
Map of Current U.S. CO2-EOR Activity

11. Why is CO2-EOR so important?
• Energy Security
oCan at least double U.S. reserves (20 billion barrels)
o27 to 62 billion barrels with existing technology, 67 to 137
billion barrels with next generation techniques
• Economic Opportunity
oJob creation, increased tax revenues, reduced U.S. trade
deficit (cumulatively) by $600 billion by 2030
• Environmental Protection
oReduce U.S. GHG emissions by 10-20 billion tons
oDrive innovation in carbon capture and storage technology
oProduce oil with less environmental impact

12. Project Participants & Observers
Coal and Coal-Based Generation
• Arch Coal
• Basin Electric Power Cooperative
• Summit Power Group
• Tenaska Energy
Industrial Suppliers of CO2/Technology Vendors
• Air Products
• Alstom
• Archer Daniels Midland
• C12
• GE Energy
• Jupiter Oxygen
• Linde
• Praxair
Project Developers
• Leucadia Energy
Environmental NGOs
• Clean Air Task Force
• Natural Resources Defense Council
• Ohio Environmental Council
• Wyoming Outdoor Council
Labor
• AFL-CIO
• United Transportation Union
State Officials
• Illinois, Indiana, Michigan, Mississippi, Montana, New
Mexico, Texas and West Virginia
Academic Institutions
• Enhanced Oil Recovery Institute (University of WY)
Observers
• Oil and Gas
– Chaparral Energy
– Core Energy
– Tellus Operating Group
• Associations
– Interstate Oil and Gas Compact Commission

13. 1. Recommend and advocate for incentives and other
policies to support commercial CO2-EOR deployment
that are self-financing through revenues from
additional incremental oil production.
2. Prepare key analyses to inform and support incentive
policies for anthropogenic CO2-EOR
And…
NEORI’s Three-Part Agenda

14. 3. Increase policy-
maker, media, and
public awareness of
CO2-EOR, its benefits
and the need for
deployment incentives.
NEORI’s Three-Part Agenda
“We have endorsed, for example, the
National Enhanced Oil Recovery
Initiative’s recommendation that
Congress create a production tax credit
for power companies that capture CO2
from power plants and send it to oil
companies to use to free trapped crude
from underground rock formations.”
- October 17, 2012

15. Consensus recommendations
released February 2012
• Incentives to use captured
CO2 in EOR
o Federal
• Reform of existing Section 45Q
tax credit
• Expanded 45Q program with
added provisions
o State
• Model state incentives
NEORI report available at: neori.org

16. – A bipartisan group of Members of
Congress welcomed NEORI’s
recommendations
– This translated into the Conrad (D-
ND)-Enzi (R-WY)-Rockefeller (D-WV)
bill incorporating NEORI’s 45Q
reform recommendations
– Proposed improving functionality
and transparency of existing
program; helpful for obtaining
private financing
– Renewed bipartisan interest in the
new Congress
Conrad-Enzi-Rockefeller bill (S. 3581)
introduced September 2012 on 45Q Reform

17. NEORI recommends an expansion
of the 45Q program with new provisions
• Bridge the cost gap between what CO2-EOR operators are willing to pay
and the cost of capture
• Credit goes to those who capture, but only once the CO2 is used for EOR
• More than pays for itself because:
– CO2 captured with incentive incremental oil production
new sales revenue new tax revenue (under existing tax treatment)
• No change in existing tax treatment for oil
• Combine federal incentive with CO2 market price

18. Proposed 45Q expansion
provisions
• Credits allocated for 10 years per project
• $/ton of CO2 used in EOR
• Two design objectives
– Minimize costs
– Drive innovation
• Competitive bidding/reverse auction
• Divided into tranches and sub-tranches for different CO2
sources
• Provision to adjust annual tax credit value based on
changes in the price of oil

19. Tranche structure of 45Q expansion
• Tranches and sub-tranches
– Pioneer (first mover)
• Power
• Industrial
– Power
– Industrial
• Low cost industrial
• High cost industrial

20. 20
More anthropogenic CO2 can become available at higher prices . . .
(Illustration with EIA 2011 data)
Power plant CO2
supply potentially
larger

21. 21
More anthropogenic CO2 can become available at higher prices . . .
(Illustration with EIA 2011 data)
Power plant CO2
supply potentially
larger

22. 22
Incentives are needed to cover the “cost gap” between EOR operator willingness to pay and the cost
to capture and transport CO2, especially for the larger man-made sources of CO2 . . .
Core Scenario +
Transp. Costs
CO2 Market Price
(*Starting 2013,
Willingness To Pay)
Representative EOR
Incentive (for
illustration purpose)
(A) (B) (A-B)
Power Plant Tranche ($/tonne) ($/tonne) ($/tonne)
Pioneer - First of a Kind Projects $70 $33 $37
Projects #2-#5 $60 $33 $27
Nth of a Kind (Projects #6-onward) $55 $33 $22
Industrial - Low Cost Tranche ($/tonne) ($/tonne) ($/tonne)
Pioneer- First of a Kind Projects $38 $33 $5
Projects #2-#5 $38 $33 $5
Nth of a Kind (Projects #6-onward) $38 $33 $5
Industrial - High Cost Tranche ($/tonne) ($/tonne) ($/tonne)
Pioneer- First of a Kind Projects $65 $33 $32
Projects #2-#5 $55 $33 $22
Nth of a Kind (Projects #6-onward) $45 $33 $12

23. Analytical Study
• “Cost gap” analysis
– Determine difference between willingness to pay by EOR
operators and cost of carbon capture, storage and transportation
• “Revenue neutrality” analysis
– Compare cost of new CO2-EOR incentives with new federal
revenues directly resulting from incremental new CO2-EOR
production in the form of royalties on Federal lands plus
severance and corporate income taxes.
Analysis suggests “revenue neutrality” within 10-year window
and significant net positive revenues over long term

24. Program revenues
greatly exceed costs over time…

25. State-level Recommendations
Model complementary policies to federal incentives
• Severance tax reduction and/or extension of existing
severance tax reduction for oil produced with CO2 from
anthropogenic sources.
• Cost recovery approval for regulated entities.
• Off-take agreements.
• Tax credits, exemptions, or abatements for CO2 capture
• State-level bonding of CO2 pipeline projects and/or capture
and compression facilities.
• Inclusion of CCS with EOR in electricity portfolio standards.
See full report to see examples from specific states

26. Adjusting annual tax credit values
based on oil price changes
• NEORI recently adopted a mechanism to adjust annual tax credit values
based on oil price changes
• When oil prices rise, the tax credit value falls
– Reduces the federal support when market conditions are more favorable
• When oil prices fall, the tax credit value rises
– Ensures that a project developer receives a sufficient incentive when CO2
sales revenue falls
• If legislative scorekeepers assume oil prices will rise over time, this
provision could help with scoring

27. Adjusting annual tax credit values
based on oil price changes

28. • The 113th Congress could consider 45Q
expansion in the context of tax reform
• Many states can act
• You can help
Prognosis

29. CONTACTS:
Judi Greenwald, C2ES
(703) 516-4146
greenwaldj@c2es.org
Brad Crabtree, GPI
(701) 647-2041
bcrabtree@gpisd.net
www.neori.org

30. BACK-UP SLIDES

31. U.S. Department of Energy (2011), Improving Domestic Energy Security and Lowering CO2 Emissions with “Next
Generation” CO2-Enhanced Oil Recovery (CO2-EOR), DOE/NETL-2011/1504, citing Advanced Resources International
(2011). 31
Source Type (Location)
CO2 Supply (Mt/year)
Natural Anthropogenic
Colorado, New Mexico (Geologic) 33 -
Texas (Gas Processing) - 6.4
Wyoming (Gas Processing) - 6.6
Mississippi (Geologic) 22 -
Oklahoma (Fertilizer Plant) - 0.7
Michigan (Gas Processing) - 0.3
North Dakota (Coal Gasification) - 3
Total 55 17
Current CO2 Supply for EOR
• Some CO2 for EOR already comes from industrial sources
• Today, the U.S. EOR industry uses 72 million tonnes of CO2 per year
— profitably and without serious reported injuries, accidents or
environmental harm.

32. CO2-EOR production doubles
within 20 years…

33. NEORI Analysis suggests
significant oil production and
revenues over time…
Time Phase
Cumulative
Incremental CO2-EOR
Oil Production
(Barrels)
Cumulative Net
Present Value ($)
Cumulative
CO2 Storage
(tonnes)
2013-2022 400 million $2 billion
~4 billion
2023-2032 2.5 billion $31 billion
2033-2042 6 billion $73 billion
2043-2052 9 billion $100 billion

34. Oil production potential from CO2-EOR is vast…
Source: U.S. Department of Energy (2011), Improving Domestic Energy Security and Lowering CO2 Emissions with
“Next Generation” CO2-Enhanced Oil Recovery (CO2-EOR), DOE/NETL-2011/1504.
34
Incremental Technically Recoverable
Oil
(Billion Barrels)
Incremental Economically Recoverable
Oil
(Billion Barrels)
Best Practices Next Generation Best Practices Next Generation
Lower 48 Onshore 55.7 104.4 24.3 60.3
Total 61.5 136.6 29.6 67.2
Projected CO2-
EOR Resources:
• An additional 26-61 billion barrels of oil could economically be recovered with
today’s EOR technologies, potentially more than doubling current U.S. proven
reserves.
• Moreover, “next generation” EOR technology could yield substantially greater gains,
potentially increasing recoverable domestic oil from EOR to 67-137 billion barrels,
and storing 20-45 billion metric tons of CO2 that would otherwise be released into
the atmosphere in the long term.

35. Enhancements to 45Q Tax Credit
To avoid stalling important commercial CO2 capture projects under
development, there is an urgent need to improve the functionality and
financial certainty of the 45Q federal incentive. Key Elements:
• Designate the owner of the CO2 capture facility as the primary
taxpayer;
• Establish a registration, credit allocation, and certification process;
• Change the recapture provision to ensure that any regulations issued
after the disposal or use of CO2 shall not enable the federal
government to recapture credits that were awarded based on
regulations that existed at that time; and
• Authorize limited transferability of the credit within the CO2 chain of
custody, from the primary taxpayer to the entity responsible for
disposing of the CO2

36. Existing state-level policies to support CO2-EOR/CCS

37. Proposed Government-Provided
Incentives to Promote the Capture
and Use of CO2 for EOR
GCCS Institute Webinar - June 25, 2013
Ben Yamagata
Coal Utilization Research Council
(CURC)

38.  ADA-Environmental Solutions
 Air Products and Chemicals
 Alpha Natural Resources
 Alstom Power, Inc.
 American Coal Council
 American Coalition for Clean CoalElectricity
 American Electric Power**
 Anglo American Thermal Coal
 Arch Coal, Inc.*
 The Babcock & Wilcox Company
 Battelle/Pacific Northwest National Laboratory
 Caterpillar Global Mining
 Center for Coal Technology Research
 Cloud Peak Energy**
 CONSOL Energy, Inc.
 Duke Energy Services
 Edison Electric Institute (EEI)
 Electric Power Research Institute (EPRI)
 Energy Industries of Ohio
 FutureGen Industrial Alliance
 Global CCS Institute
 General Electric Company
 The Greater Pittsburgh Chamber of Commerce
 Illinois Coal Association
 Illinois Department of Commerce and Economic
Opportunity
 Kentucky Coal Association
 Kentucky Office of Energy Policy
 LG&E Energy
 Mitsubishi Heavy Industries America
 Lehigh University
 The Linde Group
 National Rural Electric Cooperative Association
 Ohio State University
 Peabody Energy
 Pennsylvania Coal Alliance
 Penn State University
 Praxair, Inc.
 Pratt & Whitney Rocketdyne
 Schlumberger Carbon Services
 Southern Company*
 Southern Illinois University
 State of Ohio, Air Quality Development Authority
 Tenaska, Inc.
 Tri-State Generation & Transmission Association
 United Mine Workers of America
 University of Kentucky
 University of North Dakota’s Energy &
Environmental Research Center
 University of Texas @ Austin
 University of Utah
 University of Wyoming
 West Virginia Coal Association
 West Virginia University
 Western Research Institute
 Wyoming Mining Association
Who Are CURC’s Members?
Companies in red indicate 2013 Steering Committee Members
* CURC 2013 Co-chairs
** CURC 2013 Vice-Chairs

39. Over time the electricity mix shifts toward
natural gas and renewables, but coal remains
the largest fuel source
Realities --
• Coal provides reliable, affordable power to the US population and economy
• Abundant and inexpensive natural gas, stringent and expensive
environmental regulations, and projected tepid growth in demand is
resulting in retirements/idling of coal and replacement, if any, with natural
gas
• A requirement to reduce CO2 emissions from existing units may mean more
retirements
Why the 3-Part Program --
Coal – a primary energy resource -- is essential to the US economy. This
proposal defines the application of technology as the way to insure the
use of coal

40. Based on DOE/EIA AEO 2013er

41. CURC’sThreePartTechnologyProgram
Address efficiency, reliability,
flexibility of the existing coal
fleet; improve/apply CO2 &
other criteria pollutant
mitigation measures
Near term program –
Existing coal fleet
Financial incentives program to
encourage coal-fueled facilities (CTL,
SNG, chemicals, electricity) to capture
and use CO2 to recover crude oil
Through accelerated permitting and
regulatory clarification incentivize the
construction of advanced coal power
plants that will install CCS when
commercially available
RD&D program to improve today’s coal-use
technologies (“evolutionary” technologies)
Initiate R&D programs for transformational
technologies (“revolutionary” technologies)
Long term program–
Technologies
for the future
A 3-Part Technology Program to take
Coal from 2013 to 2050 & Beyond
2013 2025 2050
Mid term program –
Encourage new coal
builds using state-of-the-art
technologies

42. CURC’sThreePartTechnologyProgram
Address efficiency, reliability,
flexibility of the existing coal
fleet; improve/apply CO2 &
other criteria pollutant
mitigation measures
Near term program –
Existing coal fleet
Financial incentives program to
encourage coal-fueled facilities (CTL,
SNG, chemicals, electricity) to capture
and use CO2 to recover crude oil
Through accelerated permitting and
regulatory clarification incentivize the
construction of advanced coal power
plants that will install CCS when
commercially available
RD&D program to improve today’s coal-use
technologies (“evolutionary” technologies)
Initiate R&D programs for transformational
technologies (“revolutionary” technologies)
Long term program–
Technologies
for the future
The Mid-term Program for CO2 recovery
2013 2025 2050
Mid term program –
Encourage new coal
builds using state-of-the-art
technologies

43. The CO2 Benefit from Improved Plant
Efficiency
43
Each one percent Improvement yields two percent less CO2 emitted
Note: the “supercritical” units at 39% to 40% net efficiency up to 42% are also often defined as “ultra supercritical” units;
A-USC are “advanced ultra supercritical”
Source of chart: Babcock Power
10 GW ultra supercritical program

44. 10 GW Advanced Coal Power Plant Projects
with Subsequent CO2 Capture Installation
Key Objectives of the Advanced Coal Power
Plant Program:
• Facilitate the early construction and
operation of advanced coal plants that
achieve ultra supercritical
temperature & pressure conditions
(40+% conversion efficiency)
• Equip with advanced pollution controls
to achieve near zero emissions (fitted
with advanced clean coal technologies)
• Committed to installing carbon capture
systems when such technology is
deemed commercially available
Mechanisms that could be authorized
to provide incentives for the
construction of ultra supercritical
power plants:
• “safe harbor” for qualifying
advanced coal plants so that once
constructed they are not subject to
additional regulatory requirements
• accelerated permitting and
mechanisms to minimize regulatory
delays
• tax incentives granted if carbon
capture system is installed on the
new unit at time of initial
construction

45. How Does the Program
Work?
The tax receipts and other
royalty revenues received by
the federal government for the
crude oil recovered by use of
coal-derived CO2 is sufficient
to help offset the financial
incentive that would be
provided to the CO2 capture
entity participating in this
program.
The CURC Accelerated CO2/EOR Program
What is the CO2-EOR Program?
It is a coal-based demonstration program (5-10
GW(e)) that provides financial assistance for
carbon dioxide capture from existing or new coal
fueled facilities for sale and use in domestic
enhanced oil recovery (EOR) operations.

46. Today – Capture Costs Greatly Exceed the Price Oil Producers Can Pay
46
Source: DOE/NETL CO2 Capture and Storage RD&D Roadmap, December 2010.
PROBLEM: $20-40/ton payment for CO2 by EOR
producer does not cover $70-100 capture cost
Key Features of the Accelerated
CO2/EOR Program
• 10 years and 5 to 10 GW(e) of facilities using coal
• Can be used to support on-going CCS
demonstrations, next set of plants using current
CCS technology & new technology from the
CURC/ERPI Roadmap
• Focused only on new & existing coal (and pet coke)
projects that capture CO2 for EOR
• Qualifying projects receive assistance for 15 years
• Limited to the CO2 capture system-only for retrofit or
greenfield projects
• Injection wells classified as Class II EOR wells
for purposes of a UIC permit under the SDWA
• Tax receipts/revenues and royalties identified to
support (“pay for”) the CO2 subsidy – no added
taxes
o Cumulative federal taxes and royalties received
will “pay back” incentives provided in about 10
years for retrofit and 5-6 years for greenfield
cases (initial federal funding required)
o Cumulative federal revenues are 3-5 times the
cumulative subsidy in nominal dollars after 30
years

47. Captured CO2 Sold for EOR
for Energy and Jobs
Domestic Oil Supplies and CO2 Demand (Storage) Volumes from
“Next Generation” CO2-EOR Technology
Benefits of CO2-EOR
• Improves Balance of Trade
$3.5 trillion over 60 years
• Promotes Energy Security
Reduces imports by 2 MMbpd1
• Increases Domestic Activity
$60 Billion/year (wages, royalties,
taxes, profits)1
• Creates Jobs
622,000 new jobs1
1 Source : NETL Report, “Improving Domestic
Energy Security and Lowering CO2 Emissions with
“Next Generation” CO2 EOR,” June 2011

48. Alternative to a Fixed Subsidy or Tax
related incentive: A Variable Subsidy
 CO2 prices are linked contractually to oil prices
 Uncertainty in future oil prices (and, thus, CO2
revenue) affects financing, increasing cost of capital for
these capital-intensive projects
 Fixed subsidy could over- or under-subsidize project
depending on future oil prices
 Variable subsidy reduces CO2 price risk and facilitates
project financing, thus reducing capture cost and
required subsidy
 Potential for direct payment to government in addition
to “income tax and royalty” revenue
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

49. Structure of Bid
 Applicant bids on a subsidy for CO2 capture for EOR
 Bid consists of two elements which are known to the
project developer
• CO2 strike price based on the project’s revenue
requirement for CO2 capture
• Rate (CO2 price as a function of oil price) used to
calculate a CO2 market price based on a publicly
available oil price index (e.g., West Texas
Intermediate (WTI) crude)
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

50. Subsidy/Repayment Mechanism
 At a calculated market CO2 price below the strike
price, the project receives a subsidy based on the
difference between the strike price and the
market price
 At a calculated market CO2 price above the strike
price, the project pays the government an
amount based on the difference between the
market price and the strike price
 Subsidy/repayment would be reconciled over
some period (annually?)
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

51.  Conclude discussions within the CURC
membership about the form and substance of
the legislative provisions that could be
considered to effectuate the 3 Part Program
 Continue discussions with interested
Members of Congress and staff to determine
potential support for some, or all, of the
3 Part Program
Next Steps for the CURC 3 Part
Program & the CO2/EOR programs

52. Thank you
Contact information:
Ben Yamagata
202-298-1800
www.coal.org

53.  Examples of how the Variable Subsidy would
work
Attachments

54. Example: Case 1
CO2 Strike Price Bid, $/tonne $60
CO2/Oil Price Rate Bid*, % 2.00%
Oil Price Index,
$/bbl
Calculated CO2
market price,
$/tonne
Subsidy /
Repayment,
$/tonne CO2
60 $23 $37
80 $30 $30
100 $38 $22
120 $45 $15
140 $53 $7
160 $61 ($1)
180 $68 ($8)
* In the CO2/Oil price ratio, the CO2 price is in units of $/MCF and
the oil price is in units of $/bbl. If oil is $100/bbl, for example,
the CO2 price in this example is $2/MCF, or $38/tonne.
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

55. Example: Case 2
CO2 Strike Price Bid, $/tonne $50
CO2/Oil Price Rate Bid, % 2.5%
Oil Price Index,
$/bbl
Calculated CO2
market price,
$/tonne
Subsidy /
Repayment,
$/tonne CO2
60 $28 $22
80 $38 $12
100 $47 $3
120 $57 ($7)
140 $66 ($16)
160 $76 ($26)
180 $85 ($35)
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

56. Example: Case 3
CO2 Strike Price Bid, $/tonne $60
CO2/Oil Price Rate Bid, % $0.5 + 2.5%
Oil Price Index,
$/bbl
Calculated CO2
market price,
$/tonne
Subsidy /
Repayment,
$/tonne CO2
60 $38 $22
80 $47 $13
100 $57 $3
120 $66 ($6)
140 $76 ($16)
160 $85 ($25)
180 $95 ($35)
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

57. Comparison of Bids
Case 1 2 3
CO2 Strike Price Bid, $/tonne $60 $50 $60
CO2/Oil Price Rate Bid, % 2.00% 2.50% $0.5 + 2.50%
Oil Price Index, $/bbl Subsidy / Repayment, $/tonne CO2
60 $37.27 $21.59 $22.12
80 $29.70 $12.12 $12.65
100 $22.12 $2.65 $3.18
120 $14.55 ($6.82) ($6.29)
140 $6.97 ($16.29) ($15.76)
160 ($0.61) ($25.76) ($25.23)
180 ($8.18) ($35.23) ($34.70)
CURC Accelerated CO2/EOR Program jointly developed by CURC and CONSOL Energy (Dr. Frank Burke)

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