Renewable Natural Gas Growth and CO2 Emission Reduction Strategies
CCUS Economics are Improving but Remain Challenged
CURRENT ESTIMATED U.S. CARBON CAPTURE COST $/tonne
$140
$120
Additional technological advancements
& government policy could advance
CCUS economics for other facilities
$100
$80
Given 45Q credits, CCUS
could be economical for
ethanol production, natural
$60
gas processing, and natural
gas treating facilities
$40
$20
ethanol
production
facility
large
natural gas
processing
& treating
facilities
Current $50/tonne 45Q tax credit for sequestration
Current $35/tonne 45Q tax credit for EOR
small
natural gas
processing
& treating
facilities
coal fired
ammonia
power plant production
facility
cement hydrogen
production production
facility facility
natural gas
fired power
plant
Source: KM analysis, National Energy Technology Laboratory.
Note: Estimated costs are based on 20% BFIT IRR at capture unit tailgate, no tax credits, and at pressure ready for pipeline.
KINDER MORGAN
45Q TAX CREDITS
Capturer controls the tax credit
Industry still contemplating economics across the value
chain
Proposed direct pay option could be a catalyst for CCUS
SEQUESTRATION
$50/tonne deductible tax credit starting in 2027 ($85/tonne
proposed in Inflation Reduction Act)
Lengthy EPA permitting process; only 5 Class VI well
permits issued
States are applying for regulatory primacy to shorten
permitting process, including Texas
EOR
$35/tonne tax credit (beginning in 2027) is lower than for
sequestration, but can be a quicker solution for a
transaction today or a potential bridge ($60/tonne
proposed in Inflation Reduction Act)
Our 1.5 bcfd Cortez pipeline delivers -80% of the CO2
used for Permian EOR
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