Commercial Structures for Integrated CCS-EOR Projects
In this paper, we evaluate alternate commercial structures for an integrated CCS-EOR project where the source of CO[subscript 2] is a coal-fired power plant, and the CO[subscript 2] is transported via a dedicated pipeline to an oil field where the CO[subscript 2] is injected for EOR. We evaluate alt...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Elsevier
2015
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| Online Access: | http://hdl.handle.net/1721.1/95928 https://orcid.org/0000-0001-9313-4865 |
| _version_ | 1826208673713618944 |
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| author | Agarwal, Anna Parsons, John E. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Agarwal, Anna Parsons, John E. |
| author_sort | Agarwal, Anna |
| collection | MIT |
| description | In this paper, we evaluate alternate commercial structures for an integrated CCS-EOR project where the source of CO[subscript 2] is a coal-fired power plant, and the CO[subscript 2] is transported via a dedicated pipeline to an oil field where the CO[subscript 2] is injected for EOR. We evaluate alternative contract types that link the involved entities in light of exogenous market risks, such as the fluctuating price of oil recovered. The choice of the contract type determines who would bear the risks along the value chain, and the incentives that the risk allocation produces fixes the total project value. We see that the fixed price contracts have weaknesses in terms of ex-post insolvencies and poor incentive structures that result in a sub-optimal decision-making by the involved entities. The risk-sharing offered by the indexed price contracts reduces the likelihood of ex-post insolvency and provides incentives to each entity to optimize the total project value. |
| first_indexed | 2024-09-23T14:09:47Z |
| format | Article |
| id | mit-1721.1/95928 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T14:09:47Z |
| publishDate | 2015 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | mit-1721.1/959282022-09-28T18:56:39Z Commercial Structures for Integrated CCS-EOR Projects Agarwal, Anna Parsons, John E. Sloan School of Management Parsons, John E. Agarwal, Anna In this paper, we evaluate alternate commercial structures for an integrated CCS-EOR project where the source of CO[subscript 2] is a coal-fired power plant, and the CO[subscript 2] is transported via a dedicated pipeline to an oil field where the CO[subscript 2] is injected for EOR. We evaluate alternative contract types that link the involved entities in light of exogenous market risks, such as the fluctuating price of oil recovered. The choice of the contract type determines who would bear the risks along the value chain, and the incentives that the risk allocation produces fixes the total project value. We see that the fixed price contracts have weaknesses in terms of ex-post insolvencies and poor incentive structures that result in a sub-optimal decision-making by the involved entities. The risk-sharing offered by the indexed price contracts reduces the likelihood of ex-post insolvency and provides incentives to each entity to optimize the total project value. 2015-03-10T16:19:53Z 2015-03-10T16:19:53Z 2011-04 Article http://purl.org/eprint/type/JournalArticle 18766102 http://hdl.handle.net/1721.1/95928 Agarwal, Anna, and John Parsons. “Commercial Structures for Integrated CCS-EOR Projects.” Energy Procedia 4 (2011): 5786–5793. https://orcid.org/0000-0001-9313-4865 en_US http://dx.doi.org/10.1016/j.egypro.2011.02.575 Energy Procedia Creative Commons Attribution http://creativecommons.org/licenses/by-nc-nd/3.0/ application/pdf Elsevier Elsevier |
| spellingShingle | Agarwal, Anna Parsons, John E. Commercial Structures for Integrated CCS-EOR Projects |
| title | Commercial Structures for Integrated CCS-EOR Projects |
| title_full | Commercial Structures for Integrated CCS-EOR Projects |
| title_fullStr | Commercial Structures for Integrated CCS-EOR Projects |
| title_full_unstemmed | Commercial Structures for Integrated CCS-EOR Projects |
| title_short | Commercial Structures for Integrated CCS-EOR Projects |
| title_sort | commercial structures for integrated ccs eor projects |
| url | http://hdl.handle.net/1721.1/95928 https://orcid.org/0000-0001-9313-4865 |
| work_keys_str_mv | AT agarwalanna commercialstructuresforintegratedccseorprojects AT parsonsjohne commercialstructuresforintegratedccseorprojects |