Regional Carbon Sequestration Partnerships…

1. Regional Carbon Sequestration Partnerships… “Pathways to Sustainable Use of Fossil Energy”

2. Portfolio Overview – FY2004 Non-CO2 Breakthrough Concepts • Diverse research portfolio • Strong industry support • ~ 36% cost share • Total portfolio ~ $140M MMV Regional Partnerships Sequestration Capture Budget (Million $) Fiscal Year

3. Regional Carbon Sequestration PartnershipsDeveloping Infrastructure for Wide-Scale Deployment • Baseline region for sources and sinks • Address regulatory, environmental, outreach issues • Establish monitoring and verification protocols These partnerships - 4 to 10 across the country, each made up of private industry, universities, and state and local governments - will become the centerpiece of our sequestration program. They will help us determine the technologies, regulations, and infrastructure that are best suited for specific regions of the country. Energy Secretary Spencer Abraham November 21, 2002 • Validating sequestration technology & infrastructure • Phase 1 – Planning • Phase 2 – Proof of Concepts • Determine benefits of sequestration to region

4. Partnerships Are Critical Program Component… Core R&D Measurement, Monitoring & Verification Capture of CO2 Infrastructure Regional Partnerships Non-CO2 GHG Mitigation Sequestration Break- through Concepts Integration FutureGen Integrated Sequestration and Hydrogen Initiative

5. Program Component Relationships in Time… FutureGen Project Development Operation Geologic Sink Oppor- tunities Permitting, Safety, Regulatory, Outreach Deploy- ment Oppor- tunities MMV Protocols MMV & Capture Technologies Phase 1 Phase 2 Regional Partnerships R&D Advances 2002 2006 2008 2010 2004 2012 CY

6. Major Sequestration Issues… • Health, safety, and environmental risks • Permanence and large-scale verification • Capacity evaluation • Infrastructure • Uncertain regulatory frameworks • Protocols for identifying amenable storage sites • Direct CO2 storage • Enhanced natural sinks

7. Requirements for Sequestration: • Environmentally acceptable • No legacy for future generations • Respect existing ecosystems • Safe • No sudden large-scale CO2 discharges • Verifiable • Ability to verify amount of CO2 sequestered • Economically viable

8. Sequestration Issues: • Health, safety, and environmental risks • Uncertain regulatory framework • Site selection Pathways: • Field experiments / demos • Protocols for identifying amenable storage sites • Capacity evaluation studies • Underlying science

9. Seven Regional PartnershipsNetwork of Partnerships to Determine Technologies, Regulations, Infrastructure Needs for Each Region Big Sky Plains West Coast Illinois Basin Midwest South- west • 40 States • 154 Organizations • 3 Indian Nations • 2 Provinces Southeast

10. Partnership Program has a Two-Phased Approach… Current Phase I (Planning) • 7 Projects • 18-24 months • ~$1.5 million per project • Overall ~ 40% cost share • 2 exceed 50% cost share Proposed Phase II (Proof-of-Concepts) - about 8 years duration - up to about $4 million/year-project - 20% cost share (minimum)

11. Phase I Outcomes… • Regional Carbon Sequestration Atlases • Regional Sequestration options, potential, and prioritization (direct and/or indirect) • Sources of CO2 • Existing infrastructure and requirements • Incorporate Regional Atlases into National Repository Courtesy of Tim Carr, KGS, MIDCARB (now NATCARB) Project

12. Phase I Outcomes… • Action Plan for Regulatory Compliance • Existing or future regulations that will impact sequestration program • Identify risk assessment and liability issues • Timeline for permitting regional projects • MMV and Reporting Requirements • Responsibilities • Action Plan for Public Outreach and Education • Methods to engage the public • Tools to educate stakeholders • Regulatory requirements for public outreach

13. Phase I Outcomes Form Basis of Phase II Concept… • Regional Project Implementation Plan(s) • Identify the most promising technologies/ approaches to sequester carbon directly or indirectly and/or capture carbon in the region • Cost/benefit analysis to support project • Public Education and Outreach Action Plan(s) • Regulatory Compliance Action Plan(s) • MMV Project Requirements

14. Phase II of Regional Partnerships NB: Details Still Under Development Tasks • Perform proof-of-concept field tests for technology & infrastructure concepts • Establish, implement, and refine: • Measurement, monitoring & verification protocols • Accounting, regulatory & liability action plans • Continue characterization efforts • Implement outreach mechanisms • Assessment of regional feasibility and integration of components Not a technology development program!

15. General Phase II Characteristics… • Scale: Dependent upon FY05 appropriations; current planning is for each selected Partnership to be funded at about $4M/year, but subject to actual appropriations and other programmatic considerations. • Cost Share: As the contractual instrument will most likely be Financial Assistance (Cooperative Agreement), there will be a cost share requirement as there was in Phase I; anticipated to be at least 20% but not finalized as of this time. • Duration: Expected to be on order of about 8 years; subject to budgets, programmatic needs, and other considerations. • Not a “more study” focus; Focus on implementing plans; drilling and other tangible efforts expected.

16. Draft Phase II RFP… At this point in time, the actual details of the RFP in terms of required tasks, specifications, and evaluation criteria have not been finalized; RFP is currently a work in progress… …having said that: • RFP anticipated to be issued January 2005 • Applications anticipated to be due to DOE-NETL in March-April 2005 timeframe • Selections and Awards are planned to be made by the end of FY05 (August-September 2005)

17. Details to FollowStay Tuned…

18. Visit the NETL Sequestration Website…www.netl.doe.gov/coal/Carbon%20Sequestration/

19. Carbon Sequestration E-mail Newsletter