Energy

Markets & Implica5ons For

CCS Deployment

Michael E. Moore

VP Energy Commodi5es and Advisory Services
FearnOil Inc. a division of Astrup-Fearnleys

Execu5ve Director-North American Carbon Capture Storage Associa5on (NACCSA)

June 13th, 2016 Birmingham, AL

hSp://astrupfearnley.no/

The Astrup Fearnley group represents over a century of history, growth and excellence in the area of shipping
services. This fascina;ng legacy is a success story created by genera;on a=er genera;on of the Astrup Fearnley
family. We believe it is a story worth telling.
Fearnleys traces its history back to the year 1869 when its founder, Thomas Fearnley, established a shipbroking
and agency business in Chris;ania, as the city of Oslo was known in those days. The liGle company soon prospered
and engaged in, among others, the trade in lumber, wine, pitch and ice.
In connec;on with its trading ac;vi;es the company bought shares in vessels and chartered vessels. Although the
company began by chartering sailing vessels, by 1880 the age of the steamship had clearly begun. By 1881 the
partnership of Fearnley & Eger established the Chris;ania Steamship Company which contracted two newbuildings
at the the Kockums Shipyard in Malm, the 1235 deadweight Oslo and the 1215 deadweight Bygdy.
By the end of the 1880s the company had contracted a further six units. In the beginning of the 1900s Fearnley &
Eger became, more or less, a shipowning company and invested in ever larger units. The company engaged in both
liner and tramp ac;vi;es and survived the two world wars. In addi;on to these shipowning ac;vi;es, the rm
con;nued to engage in developing its skills in the area of shipping services and was engaged primarily in the area
of dry cargo shipbroking. As the tanker industry started to develop at the beginning of the 20th century, Fearnleys
became enthusias;cally involved in this new eld of endeavour. Later on, when the transporta;on of gas by sea
became an important area of commerce, Fearnleys developed a broking department which specialized in this new
commodity. All in all, the history of the company has been closely focused on the concept of innova;on; whenever
new ideas and new industries developed which required seaborne transporta;on, Fearnleys was quickly on the
scene.
As the 20th century progressed, the need for brokerage services for the transporta;on industry became so great
that Fearnleys began to develop these (along with related ancillary services) as its principal business area. Always
on the cu]ng edge of new trends, the company became involved in car carrier transporta;on in the 1960s,
oshore and rig broking in the 1970s, coinciding with the onset of the development of the Norwegian con;nental
shelf oshore oil elds, and energy trading and nancial services in the 1980s. Fearnleys was also a pioneer in the
development of transporta;on industry research and consultancy services, and has been involved in monitoring
and analysing shipping markets since the early 1960s when Fearnresearch was rst established. Now at the dawn
of the 21st century the liGle company which started in Chris;ania in 1869 is rmly established in every corner of
the world and assumes a global perspec;ve on transporta;on much to the benet of its worldwide customer base.

North American Carbon Capture

Storage Associa5on
www.naccsa.org

What does de-carboniza5on of energy (fossil fuels)

by 2050.. mean?
hGp://newsroom.unfccc.int/paris/

Today

Trifecta of very cheap fossil fuels

CO2
Carbon and Decarboniza5on
Inten5onally Le_ Blank

 Trifecta Of Very Cheap Fossil Fuels

US Coals Drama5c Change

www.marketwatch.com/story/jump-on-the-george-soros-coal-train-2015-10-02

Natgas (HH) Collapse

Historically, Natural gas reached an all 5me high of 15.39 in December of 2005 and a record low of 1.02 in
January of 1992.

www.tradingeconomics.com/commodity/natural-gas

LNG

hGps://twiGer.com/Global_LNG/status/742372317641244672/photo/1

WTI Crude Oil Working Higher..

hGp://www.tradingeconomics.com/commodity/crude-oil

India's GDP Seen Rising But Skep5cism

Remains-Up 7.3% Year On Year.

November 30, 2015 hGp://www.cnbc.com/2015/11/30/

Growth in Asia's third-largest economy likely picked up pace during the JulySeptember period but don't cheer just yet, economists warn.
India's real gross domes;c product (GDP) is expected to expand 7.3 percent on
year, up from 7 percent in the April-June quarter, on the back of improved
consump;on and rising industrial produc;on, according to widespread es;mates
from private sector economists.

Discre;onary consumer spending has been holding up beGer, reected by a 9.5

percent annual rise in September car sales, Morgan Stanley pointed out in a
Monday report. Meanwhile, posi;ve factory produc;on is another bright spot,
with annual industrial output expanding 4.2 percent in July, 6.3 percent in August
and 3.6 percent in September.

The upshot is ul;mately buoyed growth, but it's s;ll far from full-throGle, said
Vishnu Varathan, senior economist at Mizuho Bank.

India Poised To Replace China As The

Worlds Center Of Oil-demand
Growth

3-7-16 India seen sejng oil-demand growth pace

India is poised to replace China as the worlds center of oil-demand growth, according to authors of
a study published by the Oxford Ins;tute for Energy Studies.
As growth of Chinese oil demand slows, Indias is increasing, note Amrita Sen, chief oil analyst of
Energy Aspects, and Anupama Sen, senior research fellow at the Oxford Ins;tute.
And Indias development has characteris;cs similar to those of China 10-15 years ago, the analysts
say.
A demand surge comparable to Chinas of the early 2000s would strengthen an oil market now
struggling with surplus.
Demand trends
Chinese oil-demand growth has retreated to below 300,000 b/d/year from an average exceeding
500,000 b/d/year in the 10 years prior to 2015. In response to governmental eorts to rebalance
the economy, Chinas economic growth has slowed.
Indian oil demand, meanwhile, grew by 300,000 b/d last year a=er rising by 100,000-150,000 b/d/
year in the previous decade.
This jump in demand reects a number of underlying dynamics at play, which indicate that Indias
oil demand may be on the verge of taking o, write the authors.
They add, Indian oil demand is demonstra;ng trends that were visible in China around a decade or
a decade and a half ago during the countrys industrializa;on boom.
The pace of growth in Indian demand for oil products, especially gasoline, is rapidly approaching
that of China just before that countrys rapid expansion.
And Indias car ownership as a func;on of popula;on has reached the Chinese level of a decade
ago while its per-capita income on a purchasing power parity basis has breached the threshold
beyond which motoriza;on rapidly ensues.

www.ogj.com/ar;cles/2016/03/india-seen-se]ng-oil-demand-growth-pace.html?cmpid=EnlDailyMarch72016

IEA Sees Smaller Global Oil Surplus As

India Drives Demand Gains

hGp://www.bloomberg.com/news/ar;cles/2016-05-12/iea-sees-smaller-global-oil-surplus-as-india-drives-demand-gains

China Expects To Lay O 1.8 Million

Workers In Coal, Steel Sectors

2-29-16 China said on Monday it expects to lay o 1.8 million workers in the coal and steel
industries, or about 15 percent of the workforce, as part of eorts to reduce industrial
overcapacity, but no ;meframe was given.
It was the rst ;me China has given gures that underline the magnitude of its task in dealing with
slowing growth and bloated state enterprises. Yin Weimin, the minister for human resources and
social security, told a news conference that 1.3 million workers in the coal sector could lose jobs,
plus 500,000 from the steel sector.
China's coal and steel sectors employ about 12 million workers, according to data published by the
Na;onal Bureau of Sta;s;cs. "This involves the reseGlement of a total of 1.8 million workers. This
task will be very dicult, but we are s;ll very condent," Yin said. For China's stability-obsessed
government, keeping a lid on unemployment and any possible unrest that may follow has been a
top priority.
DOWNWARD PRESSURE
The world's second-largest economy grew 6.9 percent in 2015, the weakest in 25 years, and the
government aims to achieve economic growth of 6.5-7 percent in 2016. "The economy faces
rela;vely big downward pressures and some rms face dicul;es in produc;on and opera;on,
which would lead to insucient employment," Yin said, adding that increasing graduates this year
would also add pressure in the job market.

hGp://nance.yahoo.com/news/china-expects-lay-o-1-023140846.html?mkt_tok=3RkMMJWWfF9wsRoguajLdO
%2FhmjTEU5z17ukkWqW3g4kz2EFye%2BLIHETpodcMSMpgM7vYDBceEJhqyQJxPr3FJNANysRuRhDgCw%3D%3D

Japan Environment Ministry's Coal Plant

Reversal Casts Doubt On CO2 Pledge

2-22-16 The environment ministry issued rare objec;ons to ve new coal-red sta;ons last year
but has been pushed by the powerful industry ministry to accept voluntary steps by power
companies to curb emissions.

As Japan gets ready to open up its power retail market in April, companies are rushing to build 43
coal-red plants or 20.5 gigawaA of capacity in coming years, about a 50 percent increase.

"Global opinion is increasingly shi=ing away from coal but Japan's environmental ministry is
switching sides to approve new coal power plants. This runs counter to the global ac;on," said
Kimiko Hirata interna;onal director of lobby group Kiko Network.
As part of the agreement, the Ministry of Economy, Trade and Industry is set to ;ghten its rules
over coal-red power sta;ons from April 1, including issuing new non-binding requirements on the
heat eciency of new and exis;ng plants to curb emissions.
Coal is aAracDve because it is the cheapest fossil fuel source and prices have slumped in recent
years. Japan has turned to the energy source in record amounts since the Fukushima disaster in
2011 led to the shutdown of reactors.
A group of 36 power companies, which supply 99 percent of the country's electricity, have also
formed a new body to take measures to trim emissions and meet the industry's voluntary goal to
cut emissions by 35 percent in 2030, compared with 2013.
www.reuters.com/ar;cle/us-japan-emissions-idUSKCN0VW0EV

IMF: The Price Of Oil And The Price Of

Carbon
hGp://blog-imfdirect.imf.org/2015/12/02/the-price-of-oil-and-the-price-of-carbon/

The human inuence on the climate system is clear and is evident from
the increasing greenhouse gas concentra;ons in the atmosphere, posi;ve
radia;ve forcing, observed warming, and understanding of the climate
system. Intergovernmental Panel on Climate Change, Fi=h Assessment
Report
Fossil fuel prices are likely to stay low for long. Notwithstanding
important recent progress in developing renewable fuel sources, low fossil
fuel prices could discourage further innova;on in and adop;on of cleaner
energy technologies. The result would be higher emissions of carbon
dioxide and other greenhouse gases.
Policymakers should not allow low energy prices to derail the clean
energy transiDon. AcDon to restore appropriate price incenDves, notably
through correcDve carbon pricing, is urgently needed to lower the risk of
irreversible and potenDally devastaDng eects of climate change.

US President Proposes $10 Barrel Oil Tax

BBC February 9th, 2016 hGp://www.bbc.com/news/business-35535385

President Obama has released the nal budget proposal of his presidency, a $4.1tn
(2.8tn) programme that includes a $10.25 per barrel tax on oil.

The Republican-controlled Congress is expected to reject it.

The leaders of the House and Senate budget commiGees jointly announced they
would not invite Mr. Obama's budget director to tes;fy before them.

Despite the setbacks, the White House has said the budget s;cks to a bipar;san
agenda reached last autumn.

The budget is for the 2017 scal year and would not take eect un;l 1 October
2016.

The tax on oil would raise $319bn over 10 years. The US Treasury said that the tax
would apply to both imported and domes;cally-produced oil, but would not be
collected on US oil shipped overseas

CO2

Fossil Fuels, CCUS And Commodity CO2 For

U5liza5on And EOR
CO2 u;liza;on as a commodity feedstock
Conven;onal mature MPZ CO2-EOR
CO2-EOR in ROZ under MPZ and green eld
fairways
CO2-EOR in Shale

Physical CO2: A Valuable Commodity

Source: www.netl.doe.gov/research/coal/carbon-storage/research-and-development/co2-u;liza;on

The Global CO2 Ini5a5ve

www.co2sciences.org/

The Global CO2 Ini;a;ve was created to realize the ambi;ous goal
of capturing 10% of global CO2 emissions and transforming it into
valuable products.

CO2 Sciences, Inc., our innova;on pla~orm, is designed to

aggressively catalyze innova;ve research in carbon capture and
reuse by gran;ng $100 million per year for ten years to scien;c
research.
In parallel, the Global CO2 Ini;a;ve will accelerate the
commercializa;on of carbon capture and transforma;on products
and services. We will partner with investment funds, joint ventures
and corpora;ons to invest in companies to enable them to grow
market demand for carbon-based products.

In order to achieve these ambi;ous goals, we have brought

together a mul;disciplinary group of the worlds leading scien;sts
and business leaders

Skyonic
www.skyonic.com/

Skyonics three primary technologies

include: SkyMine, SkyScraper, and
SkyCycle. These processes require less
energy to remove harmful pollutants
and safer ways to store carbon.

Capitol SkyMine Plant -- Located in San Antonio, Texas, Capitol SkyMine is expected to capture 75,000 tons annually
of otherwise-emiGed CO2 from the coal-red Capitol Aggregates Cement plant, and oset another 225,000 tons of
annual US CO2 emissions by shipping CO2-nega;ve chemicals to market and displacing CO2-intensive products. Our
process also removes mercury, metals, sulfur dioxide, nitrogen oxides and par;culate and returns clean air and clean
water.

Capitol SkyMine produces commercially saleable products of hydrochloric acid, baking soda (sodium bicarbonate) and
bleach, which can be sold through chemical o-take contracts, and generate annual revenue even without an ac;ve
CO2 credit market. The project is tradi;onally debt-nanced, xed-price, performance bonded, and on-;me and onbudget.

The SkyMine process requires 30% less energy use to remove CO2 than the more common amine-based CO2 capture
technology, which led to the US Department of Energy awards (2009-2010) of $28 million to develop this rst
commercial CO2-benecial reuse SkyMine commercial project. It was the largest grant of six carbon-reuse projects
funded through the American Recovery and Reinvestment Act and the only one completed. The Capitol SkyMine plant
created more than 250 jobs during design and construc;on of the plant. During opera;on, there are permanent jobs at
the plant and another 200+ permanent jobs in the general US economy. Of the permanent on-site posi;ons,
approximately 1/3rd are engineers, 1/3rd opera;onal technicians, and 1/3rd a combina;on of professional
management and engineershigh-paying technical jobs.

CO2 U5liza5on Work At Saudi Aramco

www.cslforum.org/mee;ngs/riyadh2015/index.html

www.cslforum.org/publica;ons/documents/riyadh2015/MeshariSaudiArabiaCCSOverview-TG-Riyadh1115.pdf

Using a a patented thermodynamic cycle called the Allam Cycle, NET Power is able to generate
lower-cost power from fossil fuels than exis;ng power plants while elimina;ng all air emissions,
including carbon dioxide.
Addi;onally, the CO2 that NET Power plants generate from burning fuel is produced as a highpressure, high-quality byproduct, ready for pipeline transporta;on and storage. In many places,
this CO2 can be sold for use in enhanced oil recovery (EOR), permanently sequestering the CO2 and
providing signicant added value for NET Power plant owners.
NET Power plants have several key features that enable them to inherently eliminate all air
emissions. This means no carbon dioxide, par;culate maGer, mercury, SOX or NOX is released to
the atmosphere. A NET Power plants only major byproducts are liquid water and a high-pressure,
high-purity stream of carbon dioxide that is sent into a pipeline for sequestra;on or u;liza;on in
industrial processes.
Power plants are tradi;onally huge consumers of water. NET Power plants dont use steam for
power produc;on, so they can actually eliminate water consump;on for only a slight reduc;on in
plant eciency.
hGps://netpower.com/

Exper5se/Developers Exists For CCUS

CO2-EOR Development

Residual Oil Zone (ROZ) Four Coun5es

>100 billion Bbls Oil In Place

DOE sponsored four county

assessment indicates that over
100 billion barrels of oil in-place
in the ROZ Fairway.
Work is required to establish its
recoverability, economic
feasibility and CO2 requirements.
(Four county study released in
December 2014)
Follow on study of addi;onal 10
coun;es ini;ated.
So far ROZ also present in:
Australia, North Sea, Wyoming..
The catch-CO2 is needed to
produce the oil.

Carbon & Decarboniza5on

In 2013---Turning Point
November 7th 2013'Unburnable' carbon fuels
investment concerns-Investors group with 7.3
trillion of assets asks energy giants about their
exposure and response to the risk of falling
demand for oil and coal.
hGp://www.theguardian.com/sustainablebusiness/unburnable-carbon-investment-agenda

Norway Conrms $900bn Sovereign

Wealth Fund's Major Coal Divestment
May 27th, 2015

The decision to divest Norways $945m fund from coal assets was made on 27 May, when an agreement
between poli;cal par;es was reached. It was formally passed by a parliamentary vote on Friday. Svein
FlaaGen, of the governing Conserva;ve party, said coal investments were both a global warming risk and
nancial risk. A global deal to cut carbon emissions at a crunch UN summit in December could leave some
fossil fuel reserves unburnable and worthless.
Norways parliament has formally endorsed the move to sell o coal investments from its $900bn
sovereign wealth fund, the worlds biggest.
It is the largest fossil fuel divestment yet, aec;ng 122 companies across the world, and marking a new
success for the fast-growing and UN-backed climate change campaign.
A new analysis said the fund would sell o over $8bn (5bn) of coal-related investments as a result.
The biggest single sell-o from Norways fund will be the UK u;lity SSE, in which the fund holds $956m of
shares. The fund is also set to sell its $49m stake in Drax, which runs the UKs biggest coal-red power
sta;on.
Other major energy companies iden;ed in the analysis by German and Norwegian NGOs are Germanys
E.ON ($685m) and RWE ($320m) and the Danish company Dong ($30m), which is o=en associated with
wind energy but has a signicant coal business.
Swedens VaGenfall and Italys Enel are also set to be aected by the coal ban as are 35 groups in the US,
including Duke Energy ($434m). A dozen coal-related companies on China are set to lose their Norwegian
investment, as are eight in Japan and ve in Australia.
hGp://www.theguardian.com/environment/2015/jun/05/norways-pension-fund-to-divest-8bn-from-coala-new-analysis-shows

Ambi5ous Plan To Keep Fossil Fuels In

The Ground
By Carolyn Lochhead February 13, 2016
Rep. Jared Human of San Rafael introduced the House version of
the Keep It in the Ground Act on Thursday. In the Senate, the
legisla;on is co-sponsored by Sen. Barbara Boxer of California.
It would block all new leases for coal, oil, gas, oil shale and tar
sands on public land, including millions of acres the federal
government owns in the West.
The legisla;on would also slap a moratorium on new leases for
oshore drilling and end current leases that are not producing
fuel in the Pacic Ocean and the Gulf of Mexico, where the
na;ons oil and gas industry is centered. And it would prohibit all
oshore drilling in the Arc;c and along the en;re Atlan;c
seaboard.
hGp://www.sfgate.com/science/ar;cle/State-Dems-ambi;ous-plan-to-keep-fossil-fuels-6828872.php

Movement Against US Shale Gas

Segolene Royal told lawmakers May 10,
2016 she is willing to nd a legal way to
prevent the import of non-convenDonal US LNG
and asking French companies in contact with
Cheniere Energy to look for other sources of
supply producing only convenDonal gas.

hGp://www.naturalgaseurope.com/france-schilansky-ques;ons-ban-on-us-imports-proposed-byenergy-minister-29565?
utm_content=buer28cdc&utm_medium=social&utm_source=twiGer.com&utm_campaign=buer

Saudi Aramco and Mobile Sources CO2 Capture

Oil does not
emit CO2
But our
customers
customers do..
So we have
given them
the op;on to
capture their
CO2 if they
want to
www.cslforum.org/publica;ons/documents/riyadh2015/Meshari-SaudiArabiaCCSOverview-TG-Riyadh1115.pdf

Saudi Arabia To Sell Part Of Aramco--

Shi_ From OilUS $2 Trillion Valua5on
The World Today business editor Peter Ryan- 26 Apr
2016
hGp://www.abc.net.au/news/2016-04-26/saudiarabia-to-sell-part-of-aramco-as-part-of-shi=-from-oil/
7360388
Deputy crown prince Mohammed bin Salman - second
in line to the Saudi throne - has described the oil
reliance as "an addic;on" as he announced major
plans to overhaul the economy.
Part of the "Vision 2030" blueprint would see just
under 5 per cent of the state-owned oil company Saudi
Aramco sold through an ini;al public oering which
values the company at more than $US2 trillion.

Beyond Coal, Oil and Natgas

April 19th, 2016 Mark Hand SNL S&P Global Market Intelligence spoke with
Lena MoD of Sierra Club
hAps://www.snl.com/InteracDveX/arDcleabstract.aspx?
id=36149158&KPLT=8
The Sierra Club's top priority in recent years has been shubng down
coal-red power plants across the U.S. The group's Beyond Coal eort
has been described as "the most extensive, expensive and eecDve
campaign in the environmental group's 123-year history.

Hoping to build on the success of its Beyond Coal campaign, the Sierra
Club launched iniDaDves targeDng both oil and natural gas. In late 2014,
the Sierra Club decided to merge its Beyond Natural Gas and Beyond Oil
eorts into a campaign called Beyond Dirty Fuels.

We are doing everything we can to bring the same experDse that we
brought to taking down the coal industry and coal-red power in this
country to taking on gas in the same way. I look forward to seeing the
same success brought to taking down gas plants to ensure that we're
actually moving to a 100% clean energy future. That is the one Sierra
Club policy that we are all working toward: gebng us to 100% clean
energy, which, of course, would include no new gas.

Inten5onally Le_ Blank

Na5onal Coal Council Report

Leveling the Playing Field for Low
Carbon Coal
Na;onal Coal Council--A Federal Advisory CommiGee to the
U.S. Secretary of Energy. The NCC provides advice and
guidance on a con;nuing basis as requested by the
Secretary of Energy on the general policy maGers rela;ng
to coal
Report issued the Fall of 2015
Policy Parity
hGp://www.na;onalcoalcouncil.org/studies/2015/
Leveling-the-Playing-Field-for-Low-Carbon-CoalFall-2015.pdf

What does de-carboniza5on of energy (fossil fuels)

by 2050.. mean?
hGp://newsroom.unfccc.int/paris/

Ques5ons & Thank You!

Michael E. Moore
VP Energy Commodi5es and Advisory Services
FearnOil Inc. (a division of Astrup-Fearnleys)
hSp://astrupfearnley.no/
Execu5ve Director
North American Carbon Capture Storage Associa5on
www.naccsa.org

mmoore@fearnoil.com Tel: 281-759-0245

Addi5onal Slides

Mississippi Power Kemper IGCC Project

hGp://www.mississippipower.com/kemper/docs/Q4_2013KemperProgressReport.pdf

582-megawaG integrated gasica;on combined-cycle (IGCC) power plant in Kemper County

uses lignite
~98% complete-only commercial scale CCUS power project in the US
CO2 going for EOR and u;liza;on
Visited on January 22nd 2015 the power block was opera;onal and running delivering
power to the grid in Mississippi-full system up fall 2016

Norwegian Visit to Navajo Na5on

Dr. Jostein added that Norway
has a strong interest in working
with the Navajo NaDon and
hopes to aid in the
development of a more ecient
avenue of clean coal burning,...
One of those techniques is an
Integrated GasicaDon
Combine Cycle Power
GeneraDon Unit, which would
uDlize coal and preserve
remaining resources acquired
from the purchase of Navajo
Mine from BHP Billiton near
Farmington, NM.
Note: Captured CO2 would
move to the Permian Basin for
EOR.

Chinas NDRC and CO2-EOR/CCUS

CSLF Pre-Paris Mee5ng