Global Warming

Is It Time to Use Carbon Capture in the Global Warming Fight?

| by NRDC

By George Peridas

The press seems to cover Carbon Capture & Storage (CCS) as a
matter of routine these days - local, national and international. For
someone who hasn't looked at the technology in detail, it can be hard
to decipher its potential role, status and readiness. Things get even
more confusing when policy debates enter the picture. Fortunately,
reality is simpler.

Although it is often portrayed as a novel technology, few realize
that CCS is something that has been tried before. Nature stored CO2 and
other fluids in the subsurface well before we thought of it, often for
millions to hundreds of millions of years (the age of oil fields). We
have been operating a few CCS projects for a number of years now. Other
closely related industrial activities such as natural gas storage and
enhanced oil recovery have been ongoing for decades. The IPCC and MIT
completed comprehensive studies that summarize the status of the
technology a couple of years ago.

So where does it stand? The truth is that CCS technology is ready to
begin deployment at large, commercial?scale today. Why are there no
commercial coal-fired power?plants (the sector with the largest
emissions and in most urgent need of CCS, but certainly not the only
possible application) in operation today that capture and store their
carbon, you might ask? Well, "it's the economy, stupid"... It makes no
sense to invest in such a plant if there are no limits in carbon
emissions in place or a price associated with venting your CO2 to the
atmosphere. What muddies the waters sometimes is the reluctance of some
in the coal and electric utility industries to phase out construction
of conventional coal plants and replace them with plants that capture
and sequester their emissions. They have argued, conveniently, that the
technology is not proven and that, until it is, we should not cap
emissions as it would mean a blow to the coal sector and the hence the
economy. Other industry leaders, however,?have been saying for some
time now that the technology is available to reduce emissions today if
the economic and legal issues are rectified. Companies like BP,
Hydrogen Energy, NRG, and Tenaska have stated so clearly. They were
effectively joined in January by the entirety of the U.S. Climate
Action Partnership (USCAP), which included very specific
recommendations to address the barriers to CCS deployment and coal
plants. The bulk of those requirements have now been included in the
Waxman-Markey Energy & Climate discussion draft. Let's take a
closer look.

Sections 111-113 deal with the legal needs and barriers to CCS,
andfill regulatory and other gaps on the logistics of permitting CCS
projects. Section 111 calls for a study of legal and regulatory
barriers to CCS that could be addressed by Federal agencies in the
immediate term, so that these agencies can get going. Next, as you
might be aware, EPA is in the midst of a Safe Drinking Water Act rulemaking right
now for geologic sequestration of CO2 using underground wells for the
purposes of protecting underground sources of drinking water. Section
112 directs EPA to issue a unified regulatory framework for CCS that
safeguards human health and the environment, and also prevents
atmospheric releases from subsurface reservoirs including hydrocarbon
reservoirs. It also establishes authority for financial responsibility
provisions for injection sites, for which EPA has limited authority
currently. ?In other words, this section expands EPA's authority to
fill current gaps or ambiguities.?The next section, Section 113 calls
for a report to be produced by an EPA-convened?task force that studies
legal and statutory issues relating to CCS and produces consensus
recommendations if possible. DOE, with FERC's assistance,?is to produce
a study on CO2 pipeline needs and barriers.?

Then we move on to economic and technological issues. Section 114
mirrors a bill that Rep. Boucher introduced last year (the Carbon
Capture and Storage Early Deployment Act - see our testimony),
and?sets up a Carbon Storage Research Corporation that is tasked with
the research and development of new CCS technologies, as well as a
limited number of early demonstrations. The Corporation is funded
through a small "wires charge" on existing fossil generation. A 10-year
carbon assessment program is to be established to generate between
$1-1.1bn of revenue annually and used to fund early commercial scale
demonstrations of capture or storage.

Section 115, however,?goes a step further and contains a funding
mechanism for commercial CCS plants, which are unlikely to be
economical under the lower carbon prices in the early years of a carbon
cap. The section?establishes a program for the?broad commercial
deployment of CCS-equipped power plants and certain other industrial
sources.?85% of funds are reserved for power plants above 250MW that
derive at least 50% of fuel input from coal and/or pet coke. 15% of
funds are reserved for industrial sources emitting over 250,000 tons of
CO2 per year and excludes producers of?fossil-based transportation
fuel. Payments are awarded according to a declining fixed feed in
approach, based on tons of CO2 captured, that rewards higher payments
for higher rates of capture as determined by EPA (payment rates yet to
be determined but to be set based on reduced cost of compliance,
capture technology, and other factors). The payment period is not yet
specified, nor is the total capacity deployed. This mechanism avoids
the risk involved in handing out allowances whose value would vary,
thus making the incentive?more bankable and predictable. If the funding
levels are set right, this section would address the biggest stumbling
block for CCS plants and bridge the economic gap. What about
safeguarding against new conventional coal, though?

This where Section 116 comes in, which sets performance standards
for new coal-fired power plants, effective from January 1st 2009 for
facilities that have not received their permits. Those plants have to
emit less than 1,100 pounds of CO2 per MWh if permitted after 2015, 800
pounds of CO2 per MWh or lower (if EPA so determines) if permitted
after 2020. For plants permitted between 2009-2015 they will have to
comply with?1,100 pounds of CO2 per MWh (just over the emissions rate
of a modern natural gas plant)?within 4 years if modest amounts of CCS
plants are operational in the U.S. and internationally (2.5GW or 5 mn
tons sequestered per year in the U.S.; or 5GW and 10mn tons sequestered
globally per year, provided there are 2mn tons at least sequestered in
the U.S.). This section therefore ensures that we do not continue on
the dangerous path of constructing new coal plants that do not capture
and sequester their emissions.

The Waxman-Markey draft therefore ensures the phase out of the most
serious threat to meeting emission reduction limits - conventional
coal-fired power?plants - and provides a financial mechanism to move us
to the next generation of plants that capture and dispose of their
carbon. It also addresses outstanding legal issues and barriers. For
those who claim that CCS needs another 15 years of research before it
can be deployed, the race is on. The incentives will flow to those who
are ready to claim them first, and our assessment is that major
contracts would be signed within months of enactment.

What remains? Important details (such as the exact funding levels)
need to be filled in of course. There is also work to be done on the
issue of subsurface (pore) property rights to clarify ownership and
dominance of estates - but states have to do that. Federal and State
regulators also have to build staff and expertise on CCS, which means
being appropriately funded. Overall though, the draft seems poised to
finally break the deadlock in CCS and setting the stage for deployment
at a scale that would make a meaningful dent in CO2 emissions. Chairmen
Waxman and Markey deserve praise for their thoughtful treatment of the
subject.

 Now, there are a number of "FAQs" that arise around a topic like
this. Each deserves a blog of its own, but let me at least provide some
links and initial thoughts here.

If you are concerned about the safety of CCS, I urge you to read the
IPCC and MIT reports that I mention above, as well as a series of other
publications by the IEA and others. A bibliography can be found here, along with powerpoints from two public workshops that we co-hosted on the subject a few weeks ago.

If you are wondering why we need CCS when cleaner, truly sustainable
solutions such as energy efficiency and renewables are available, the
answer is urgency of action on climate change, the dominant role of
coal in our electricity production today (close to 50% of supply) and
politics. We simply cannot afford to take low carbon options off the
table if we are to reduce emissions sufficiently in time to prevent
dangerous climate change. Yes, other solutions are preferable to CCS,
and should exploited first. NRDC has steadily advocated this, and the
draft bill contains provisions that ensure the deployment of those
technologies too (see David Doniger's blog).

Finally, CCS does not legitimize coal use nor does it make coal
"clean". It simply disposes of its CO2 when otherwise it would have
been emitted to the atmosphere. Despite millions of dollars being spent
by industry outfits to perpetuate the myth of "clean" coal, we are far
from it on a number of fronts: dangerous, abusive?and poorly regulated
mining practices, coal combustion waste management (the coal ash spill
in Tennessee is still fresh in our memories) and emission of
conventional pollutants like SOx and NOx and mercury from smokestacks.
The toll from coal is heavy. And CO2 scrubbing is no absolution. But it
is a necessity if we are to stop global warming. (For an analysis of
these issues, read David Hawkins' recent Congressional testimony)

Is global warming a crisis? See the Opposing Views debate.