HYDROGEN PRODUCTION - STEAM METHANE REFORMING (SMR) & CARBON CAPTURE STORAGE (CCS)
This analysis is for information and educational purposes only and is not intended to be read as investment advice.
Steam Methane Reforming (SMR) is the predominant method for producing hydrogen, especially for industrial applications. Blue Hydrogen is usually hydrogen produced by SMR but with a percentage of the carbon dioxide captured via Carbon Capture and Storage (CCS). This page outlines the efficiency of this process, the emissions generated, and the energy required for the hydrogen generation with and without CCS.
The first step is a detailed breakdown of the energy consumption and efficiency of the SMR process:
OVERALL ENERGY EFFICIENCY: The overall thermal efficiency of SMR typically ranges between 65% and 75%. This means that 65-75% of the energy content in the methane is converted into hydrogen, while the remainder is lost as heat or used within the process itself. (Hydrogen Insights 2023- Hydrogen Council)
ENERGY INPUT:
Natural Gas Consumption: Natural gas serves as both the feedstock and the energy source for the SMR process. Producing 1 kilogram of hydrogen generally requires about 3.5 to 4.0 kilograms of methane.
Steam Production: High-temperature steam is required for the reforming reaction. Producing this steam consumes additional energy, typically sourced from burning natural gas.
PROCESS DESCRIPTION:
Endothermic Reaction: The SMR reaction is endothermic, requiring a significant amount of heat. The primary reaction is:
CH4 + H2O à CO + 3H2
This reaction occurs at temperatures between 700°C and 1,000°C and requires a substantial heat input.
Water-Gas Shift Reaction: The produced carbon monoxide reacts with more steam in a secondary reaction, known as the water-gas shift reaction, to produce additional hydrogen and carbon dioxide:
CO + H2O à CO2 + H2
ENERGY EFFICIENCY:
The efficiency of converting the feedstock energy into hydrogen energy can vary. Typically, the energy efficiency of SMR processes is around 65% to 75%. This efficiency metric considers the total energy input (from natural gas and any other energy sources) compared to the energy content of the produced hydrogen.
Example Calculation For every kilogram of hydrogen produced, approximately 50-55 kWh of energy is required. This includes the energy content of the methane, and the additional energy needed to produce steam and drive the reactions. 1 kg of hydrogen contains 33.3 kWh of energy.
ENVIRONMENTAL CONSIDERATIONS
CO2 in Methane Production
Combusting 1 kilogram of methane produces approximately 2.74 kilograms of carbon dioxide. This calculation is based on the molecular weights and the stoichiometry of the combustion reaction of methane.
CH4 + 2O2 ® CO2 + 2H2O
Step-by-Step Calculation
1. Molecular Weights:
Methane (CH4): Carbon (C) = 12.01 g/mol, Hydrogen (H) = 1.01 g/mol.
Molecular weight of CH4 = 12.01 + (4 x 1.01) = 16.05 g/mol
Carbon Dioxide (CO2): Carbon (C) = 12.01 g/mol, Oxygen (O) = 16.00 g/mol.
Molecular weight of CO2 = 12.01 + (2 x 16.00) = 44.01 g/mol
2. Stoichiometric Ratio:
From the balanced chemical equation, one mole of CH4 produces one mole of CO2.
3. Weight Ratio:
The ratio of the weights of CH4 to CO2 can be determined from their molecular weights.
4. Mass Calculation: The CO2 produced from 1 kilogram of CH4 is calculated from the weight ratio.
1 kg CH4 x 2.74 = 2.74 kg CO2
Carbon Emissions: SMR is associated with significant CO2 emissions. For every kilogram of hydrogen produced, approximately 9-12 kilograms of CO2 are emitted, depending on the efficiency of the process and any carbon capture technologies employed. (Hydrogen Insights 2023- Hydrogen Council)
CARBON CAPTURE & STORAGE (CCS) – BLUE HYDROGEN PROCESS
Overview of Blue Hydrogen
Blue hydrogen is produced by steam methane reforming (SMR) of natural gas, with the carbon dioxide (CO2) emissions captured and stored through Carbon Capture and Storage (CCS) technology. The process aims to provide a lower-carbon alternative to traditional hydrogen production by reducing greenhouse gas emissions, a halfway house between Grey Hydrogen and Green Hydrogen.
Blue Hydrogen will be used in the short to medium time frame to create a hydrogen network and infrastructure that will be replaced by Green Hydrogen as we reach 2050. At least that is the narrative being used by those that produce Blue Hydrogen.
Below are some important, yet often overlooked, factors that must be carefully evaluated before retrofitting an existing Steam Methane Reforming (SMR) facility with Carbon Capture and Storage (CCS) technology. These considerations include the overall cost of implementing CCS, the impact on efficiency, the additional requirements for natural gas and land, as well as the long-term storage solutions for safely captured CO₂ and determining who bears the financial responsibility for these processes.
CARBON CAPTURE AND STORAGE (CCS)
CCS is implemented to capture the CO2 generated during hydrogen production. This involves several steps:
ENERGY REQUIREMENTS FOR CCS
Implementing CCS in blue hydrogen production requires additional energy beyond the base SMR process. This energy is primarily used for:
Overall Energy Penalty: The energy required for CCS leads to an increase in energy consumption by about 20-30% compared to hydrogen production without CCS, simply put this means that production of fossil fuels, namely natural gas increases by 30% for blue hydrogen.
In addition to the increased demand for fossil fuel there is an increase in the land required for the carbon capture equipment installation. The area required can be an extra 30%-50% of land space compared to the existing plant size.
CARBON CAPTURE EFFICIENCY
The efficiency of the CCS process is measured by the percentage of CO2 captured from the total emissions generated during hydrogen production. Current CCS technologies used in blue hydrogen production can achieve:
Capture Rates: 85-95% of the CO2 produced during SMR can be captured.
ENERGY AND EMISSION ANALYSIS
1. Energy Analysis:
o Hydrogen Production (without CCS): 1 kg of hydrogen typically requires around 55 kWh of energy.
o Additional Energy for CCS: Approximately 16 kWh is required for CCS processes per kg of hydrogen, totalling 71 kWh per kg H2.
2. Emission Reduction:
o Without CCS: Producing 1 kg of hydrogen through SMR emits around 9-12 kg of CO2.
o With CCS: With a capture efficiency of 90%, equating to 1-2 kg of CO2 per kg of hydrogen is released into the atmosphere.
SMR requires significant improvements in efficiency and integrate carbon capture and storage (CCS) technologies to be considered viable for the hydrogen production of the future and to meet the NET-Zero targets.
The integration of CCS into blue hydrogen production significantly reduces CO2 emissions, in theory capturing up to 95% of emissions but with a 30% increase in energy consumption and a similar increase in required land space. The efficiency of the CCS process and the additional energy required (71kW per kg/H2 compared to approximately 40kW per kg/H2 for the HFI green hydrogen) and must be carefully considered when evaluating the overall environmental and economic viability of blue hydrogen as a low-carbon energy source.
CO2 STORAGE
Now that you have captured the CO2 what do you do next? When selecting a site for CO₂ storage as part of a carbon capture and storage (CCS) strategy, several technical, environmental, regulatory, and economic factors must be considered. Below is a detailed overview of the considerations, regulations, storage depth, duration, responsibilities, and associated costs.
Considerations for Selecting a CO₂ Storage Site
1. Geological Suitability
o Reservoir Type: The site must have suitable geological formations, such as depleted oil and gas fields, deep saline aquifers, or un-mineable coal seams, that can securely store CO₂. These formations need to have sufficient porosity and permeability to hold the CO₂ and a reliable cap rock (an impermeable layer) to prevent leakage.
o Depth: Ideally the CO₂ storage sites are located at depths of 800 metres (about 2,600 feet) or deeper. At this depth, CO₂ can be injected in a supercritical state, where it is dense like a liquid but can spread through the pores of the rock like a gas. This state maximises storage efficiency and ensures stability.
o Storage Capacity: The formation must have enough capacity to store the intended amount of CO₂ over the long term. This requires thorough geological surveys and modelling to estimate the volume of CO₂ that can be safely stored.
The storage capacity will dictate how many years of production is possible before looking for the next storage site.
o Seismic Stability: The site must be in an area with low seismic activity to reduce the risk of induced earthquakes that could compromise the integrity of the storage formation or cap rock, leading to potential leakage.
o Location: Sites closer to CO₂ emission sources, such as power plants or industrial facilities, are preferred to minimise transportation costs and risks. The cost and feasibility of building pipelines or transport infrastructure to the site are also important considerations. Distance = $.
o Protection of Groundwater: The storage site must be located far below any potable water sources to prevent contamination. Monitoring plans must be in place to detect and mitigate any potential leaks.
o Ecosystem Impact: The potential impact on local ecosystems and biodiversity must be assessed and minimised. This includes evaluating the risks of CO₂ leakage to surface environments.
4. Regulatory and Legal Considerations
o Sites must comply with local, regional, and national regulations governing CO₂ storage. This includes obtaining necessary permits and adhering to safety and environmental standards.
REGULATIONS AROUND CO₂ STORAGE
1. Regulatory Frameworks
o United States: The Environmental Protection Agency (EPA) regulates CO₂ storage under the Underground Injection Control (UIC) Program, specifically Class VI wells, designed for geological sequestration of CO₂. The regulations require permits, site characterisation, monitoring, well construction standards, and post-injection site care.
o European Union: The EU has established a comprehensive legal framework under the CCS Directive (Directive 2009/31/EC), which requires member states to regulate the exploration and use of storage sites, including permits, site monitoring, reporting, and liability.
o Australia: Like other regions, Australia has a regulatory framework that involves state and federal oversight, requiring permits for exploration and storage, environmental assessments, and ongoing monitoring and reporting.
o International Regulations: The London Protocol and the OSPAR Convention regulate the cross-border transport and sub-sea storage of CO₂ to prevent marine pollution.
2. Site Depth and Duration
o Depth: CO₂ is typically stored at depths greater than 800 metres to ensure it remains in a supercritical state. This depth also ensures that CO₂ is well below the fresh groundwater zones.
o Duration: CO₂ must remain securely stored for hundreds to thousands of years to effectively mitigate climate change. Regulatory frameworks often require monitoring for several decades after injection ceases, but the goal is for storage to be permanent.
3. Long-Term Monitoring and Liability
o Monitoring Requirements: Regulations often require extensive monitoring before, during, and after CO₂ injection to ensure the integrity of the storage site and detect any potential leaks. This includes monitoring of CO₂ concentrations, pressure, and the behaviour of the geological formation.
o Liability: The operator is generally responsible for the site during the injection and monitoring period. After a defined post-injection period (often decades), responsibility may transfer to the state or government agency, depending on local regulations.
Responsibility for Site Selection and Management
COSTS RELATED TO CO₂ STORAGE
1. Site Surveys and Assessment
o Geological Surveys: Detailed geological surveys are required to assess the suitability of a site, including 2D and 3D seismic surveys, core sampling, and petrophysical studies. These can cost anywhere from $5 million to $10 million or more, depending on the site's complexity and location.
o Environmental Assessments: Environmental impact assessments (EIAs) are required to evaluate the potential impacts on local ecosystems and communities. These studies can add $1 million to $5 million to project costs.
2. Land Acquisition and Leasing
o Cost of Land: The cost to acquire or lease land for CO₂ storage can vary widely depending on location, local land values, and negotiations with landowners. In some cases, the land may already be owned by the operator, particularly if the storage site is a depleted oil or gas field.
o Long-Term Leases: For sites that require long-term leases, such as saline aquifers, costs will depend on the agreement with landowners and the anticipated duration of the storage project.
3. Infrastructure and Well Drilling
o Injection Wells: Drilling costs for CO₂ injection wells can range from $5 million to $20 million per well, depending on depth, location, and geological conditions. A typical project may require multiple wells for injection and monitoring.
o Monitoring Equipment: Installing and maintaining monitoring equipment for long-term site management can add $1 million to $3 million per site.
4. Operational and Maintenance Costs
o Ongoing Monitoring: Continuous monitoring and maintenance costs can be significant, particularly for ensuring compliance with regulatory requirements. These costs could range from $500,000 to $2 million per year per site, depending on the level of monitoring required.
5. Post-Closure Costs
o Site Closure and Long-Term Monitoring: Even after injection ends, costs are incurred for plugging wells, decommissioning equipment, and conducting long-term monitoring and maintenance. These post-closure costs could range from $1 million to $10 million or more, depending on the duration of monitoring and site-specific requirements.
Selecting a CO₂ storage site involves comprehensive geological, environmental, regulatory, and economic assessments to ensure the safe and long-term storage of carbon dioxide. Regulations vary by region but generally require stringent site assessments, monitoring, and long-term liability provisions. The costs associated with surveys, land acquisition, infrastructure, and long-term site management can be substantial, reflecting the complexity and importance of securely storing CO₂ underground to mitigate climate change.
HOW MUCH DOES SMR & CCS COST?
The cost of Carbon Capture and Storage (CCS) with Steam Methane Reforming (SMR) per kilogram of CO2 captured varies depending on several factors, including the specific technology used for capture, the scale of the operation, regional economic conditions, and the integration with existing industrial processes. However, here are some general estimates and considerations:
COST OF CCS WITH SMR
1. Typical Cost Range:
o The cost of capturing CO2 from SMR processes typically ranges from $50 to $100 per metric ton of CO2 (or $0.05 to $0.10 per kilogram of CO2). This range can vary significantly based on the factors mentioned above. CCS will add approximately $1 kg of hydrogen.
2. Breakdown of Costs:
o Capture Costs: This is the largest component of CCS costs, accounting for about 70-80% of the total. It includes expenses related to the separation of CO2 from other gases. Advanced capture technologies or economies of scale may reduce these costs over time.
o Compression and Transport: Once captured, CO2 must be compressed to a supercritical state for transport, which adds to the cost. The transport cost is affected by the distance to the storage site and the infrastructure used (e.g., pipelines).
o Storage Costs: These costs depend on the geological characteristics of the storage site and include the expenses for injecting CO2 into underground reservoirs.
3. Factors Influencing Cost:
o Technology Choice: Different technologies (e.g., chemical absorption using amines, membrane separation) have varying efficiencies and costs.
o Plant Size and Design: Larger plants often benefit from economies of scale, which can reduce per-unit costs, providing that the space exists to expand.
o Energy Prices: The cost of energy required for capture and compression can significantly impact overall costs. CCS requires approximately 30% more energy to supply the same level of energy pre-carbon capture.
o Regulatory and Incentive Structures: Government policies, carbon pricing, and subsidies can influence the economic viability and cost structure of CCS projects.
o Increased Footprint for CCS Installation: The installation of the CCS equipment requires up to an additional 40% in land space over the existing site, so before commencing with plans to install a system you should check you have the room. If more land is required, then cost will need to be factored in.
o Permits & Timeframes: Finding a site that meets the regulations to stash the CO2 may take time, as does getting the permits once you do. The entity requiring the CO2 storage will be responsible for the related costs in testing areas to see if they comply, this can be expensive and take 2-3 years to complete.
4. Cost Trends and Improvements:
o Advances in capture technology and operational efficiencies are expected to reduce costs over time. The development of more efficient solvents, membranes, and other capture technologies is a focus of ongoing research and development efforts.
5. Economic Viability: o The economic feasibility of CCS depends on the price of carbon emissions and potential revenue from selling captured CO2 for enhanced oil recovery (EOR) or other uses. In regions with stringent carbon pricing or incentives for emissions reduction, CCS can be more economically attractive.
The cost of CCS with SMR varies widely based on technological, operational, and regional factors, with current estimates ranging from $0.05 to $0.10 per kilogram of CO2 captured. Ongoing improvements in capture technologies and potential regulatory changes may further influence these costs, making CCS a more viable option for reducing emissions in hydrogen production.
The largest CCS plants in operation today capture approximately 1 million tonnes of CO2 per year with a claimed efficiency of 90%. A report by the Institute for Energy Economics and Financial Analysis (IEEFA) on Carbon Capture and Storage claims that;
‘Carbon capture and storage (CCS) is an expensive and unproven technology that distracts from global decarbonization efforts while allowing the oil and gas industry to conduct business as usual.’ The report continues by saying that, ‘If its efficacy is questionable, its financial rationale is worse. Projects from Algeria to Texas demonstrate the technology’s troubled history of cost overruns and delays. Yet an IEEFA review of 16 projects finds that even though the industry claims a 95% capture rate is achievable, no existing project has consistently captured more than 80% of carbon.’ – IEEFA-2023
The global demand for clean hydrogen to meet the NET Zero targets are 150 million tonnes in 2030 and 520 million tonnes in 2050 (IEA Net Zero Roadmap). If these targets are to be achieved with blue hydrogen, then approximately 150 million tonnes to 1 billion tonnes of CO2 per year between those dates will enter the atmosphere.
At a cost of $50-$100 per metric tonne of CO2 captured via this process will add approximately $7.5 billion to $15 billion per year to the cost of hydrogen generation in 2030 and an eye watering $26 billion to $52 billion by 2050.
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