Design and Application of a Techno-Economic Model for CO2 Sequestration: A Case Study of the San Juan Basin

Abstract This study evaluates the feasibility and economic viability of CO2 sequestration in the San Juan Basin through a detailed case study of a large-scale CCS initiative. The Escalante Power Plant is undergoing conversion to hydrogen firing, incorporating an on-site blue hydrogen production facility using the steam-methane reforming (SMR) process. This facility will capture and store up to 2 million metric tons of CO2 annually for 30 years by transporting the compressed CO2 via pipeline to the Entrada Formation for secure geological storage. This initiative, led by the New Mexico Institute of Mining and Technology in collaboration with the U.S. Department of Energy, is one of the largest CCS projects in the region. A comprehensive financial assessment was conducted using a specialized software package developed to streamline CCS cost estimation. The software integrates geological and economic modeling to enhance financial planning and decision-making. It features a structured workflow encompassing key CCS phases, including transport, injection, monitoring, and long-term storage. The user-friendly interface allows stakeholders to input project-specific parameters, generating accurate cost estimates that aid in project feasibility assessment. Findings highlight the economic advantages of pipeline-based CO2 transport, the cost-effectiveness of electric compressors over gas alternatives, and the long-term benefits of strategic infrastructure investment. The total cost of the project, integrating capital expenditures (CAPEX) and operational expenditures (OPEX), is estimated at approximately $4.96 billion over the 30-year period, with the present value of total costs (PV Total) amounting to $1.43 billion when adjusted for inflation and discount rates. By leveraging advanced simulation techniques, this research contributes to the broader discourse on sustainable and cost-effective CCS deployment, providing valuable insights for stakeholders and policymakers.