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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Texirish   😊 😞
Number: of 19823 
Subject: Re: OXY CEO to retire
Date: 03/27/26 1:48 PM
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Well, at least Vicke won't be around to see how her widely publicized predictions of a bright future based on recovering CO2 from air and converting it to low carbon oil works out. She had predicted 75-100 commercial plants in operation by 2035. And, using mostly "other people's money" builds a half-scale demonstration plant in West Texas. She also received government money for another demonstration plant in Texas.

Meanwhile, the half-scale demonstration plant is now trying to start up later this year - some two years behind schedule. That will be the first plant beyond a one-ton/day pilot plant that ran intermentaly during this process development.

The commercial plant design is basically a brute force linking together multiple process steps that have been used independently in other operations. And I think the people that designed and developed the OXY process - OXY bought their company - have tried to do a good job in process development. I've studied their paper. I think the engineers have been honest and straight - forward. Any hype came from OXY management.

I have some background in process development from pilot plants to commercial plants from my early days in XOM. These initial commercial plants almost always disclose operating issues that didn't show up in the pilot plant stage.

The process itself consists of several different process operations.

o Air is blown through a modified cooling tower design where it contacts a solution of KOH - potassium hydroxide. The very low concentration of CO2 in the air, being acidic, reacts with the basic KOH, forming potassium carbonate. This builds up in the cooling tower solution until a certain concentration is reached.

o This solution is pumped to a "pellet plant", a vertical reactor containing water. Fine pellets of potassium carbonate are dropped into the top if the plant, serving as a "start point" for additional potassium carbonate to form on them. This build up larger pellets, which drop to the bottom of the reactor tower. If all goes well, these are filtered out, and sent through a drying process to produce large dry pellets.

o These are sent into what is basically the front end of a cement plant. Where they are preheated, and then reacted with pure oxygen from a separate plant at circa 2650 F (yep!). Oxygen is used to avoid introducing nitrogen from air, which would dilute the gas being produced by thermal breakdown of the potassium carbonate. So a stream of high concentration CO2 gas is produced, cooled, and sent to a conventional CO2 recovery step if needed. That is how the CO2 is recovered from air. (Some ask why not energy from wind and solar? You can't reach cement plant temperatures using electricity.)

o Meanwhile very hot pellets of potassium oxide, basically a form of "quicklime" which is the calcium oxide version used to produce cement is cooled and reacted with water to reform KOH - this reaction generates a lot of heat. This solution is cooled and recycled to the cooling tower as needed to restart the whole process. This step is basically the same as that used to "slak" quicklime to calcium hydroxide.

This overall process requires a lot of steps at different temperatures and consumes a lot of energy. So various heat exchange steps are used to reuse the heat from the cement plant and the resulting slaking process if the economics are to work. It also requires a lot of processing gases, liquids, and solids. And they also have to work smoothly together if the plant is to have a high percent of online operability. Otherwise, the capex required to recover a given amount of CO2 in high concentration kills the process economics.

My view is that this is all going to be very difficult to keep operating in typical oil field locations where Vickie planned to use the CO2 in EOR operations. Otherwise transportation costs also hurt the economics. I might note that oil from CO2 EOR consumes about a half-ton of CO2 per barrel of oil. So this is going to be expensive oil to produce unless the CO2 is pretty low cost.

Each step of the foregoing has been done commercially for many years for other uses, including the pellet tower in waste water treatment. That's why I call it a brute force approach.

OXY estimated CO2 costs per ton to be circa $400 in the half-size initial commercial plant. And they anticipated getting this down to $100 per ton with process improvements over "n" plant, "n" being undefined. That's going to require a LOT of process breakthroughs. They also claimed some credits from using OXYCHEM products - now sold to BRK.

OXY pre-sold CO2 "credits" and "low carbon" products to companies willing to pay high costs in the name of climate control. That and government support is why I called it a mostly OPM operation - other people's money. Vickie was smart in that sense. And her initial claims before anything was proven created a lot of positive climate control publicity for OXY early on. We don't hear that much from her anymore.

I wouldn't want to be the executive who had to steward how all these claims and tests actually worked out. Vickie won't be around when the results are known.



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