WASHINGTON, Dec. 6, 2016 - CCS (carbon capture and storage) is becoming an essential tool in the large toolbox needed for reversing climate change and perhaps pumping new life into the ailing coal industry.
That’s the message from the energy and climate experts interviewed by Agri-Pulse for this article. One by one, they voice a recurring theme: That thanks to technology advances and new investment, CCS is becoming increasingly cost competitive with other approaches to reducing greenhouse gas emissions.
More CCS investment arrived last week when the Department of Energy (DOE) provided an additional $44 million for CO2 storage projects. In announcing the matching grants, Under Secretary for Science and Energy Lynn Orr predicted that CCS will play a very important role “as the world moves toward a lower-carbon economy” and that the U.S. must continue a leadership role in the development and deployment of CO2 storage technologies “as a key element of a diversified energy economy.” Orr said the new matching grants, through DOE’s CarbonSAFE initiative, “will help to address technical barriers to commercial-scale carbon storage as worldwide demand for these types of clean energy solutions continues to rise.”
DOE’s CCS funding is specifically designed not only to combat climate change by reducing greenhouse gas emissions but also to “further the sustainable use of the nation’s fossil resources.” Last week’s $44 million is in addition to $68.4 million for cost-shared research and development CCS projects announced in June. DOE’s deadline for submitting new applications for CCS funding is Dec. 1, 2017.
Congress and state governors are also busy promoting CCS. On Dec. 2, Wyoming Gov. Matt Mead, a Republican, and Montana Gov. Steve Bullock, a Democrat, jointly released an 84-page report on CCS: State and Federal Policy Drivers for Growing America’s Carbon Capture and CO2-EOR Industry. The report details progress in capturing carbon dioxide for use in enhanced oil recovery (CO2-EOR) with geologic storage. It includes policy recommendations drawn up by the State CO2-EOR Deployment Work Group representing 14 states, private sector stakeholders, and CO2-EOR experts. The group’s job-creating goals include:
- Expansion of CO2 capture from power plants and industrial facilities;
- Buildout of pipeline infrastructure to transport that CO2; and
- Use of CO2 in oil production, along with its safe and permanent storage.
The report on injecting CO2 to release more oil from underground formations concludes that this enhanced oil recovery (EOR) process already compares cost-effectively with other emissions reduction options. Great Plains Institute VP for Fossil Energy Brad Crabtree predicts that implementing the report’s recommendations for new state and federal tax credits for CCS “will help ensure that CO2-EOR becomes an integral part of our future energy system.” Wyoming’s Gov. Mead said Friday that “Efforts to capture CO2 in the enhanced oil recovery process are seen as a key to providing a long-term, low-carbon path to the production of fossil energy resources.”
In Congress, Sen. Heidi Heitkamp, D-N.D., (apparently under consideration for energy or agriculture secretary in a Trump administration), has introduced bipartisan CCS legislation. With 19 co-sponsors, including Majority Leader Mitch McConnell, R-Ky., and climate expert Sheldon Whitehouse, D-R.I., Heitkamp’s Carbon Capture Utilization and Storage Act (S. 3179) proposes to “extend and expand tax credits to encourage investment and innovation in carbon capture utilization and storage, reducing carbon emissions.” The bill promises to accelerate the development of CCS technology and “transform carbon pollution into useable products.”
The related House bill, the bipartisan Carbon Capture Act (H.R. 4622) introduced by Agriculture Committee Chair Mike Conaway, R-Texas, (another possible Trump cabinet pick) has 47 co-sponsors including 32 Republicans and 15 Democrats.
By providing permanent, more generous tax credits for carbon sequestration, the bills would make it easier and cheaper to secure financing for CCS projects.
The experts that Agri-Pulse interviewed emphasize that both red states and blue states can expect significant benefits from CCS, as proven by the solid bipartisan support that the Heitkamp and Conaway bills have attracted in Congress and by the broad backing for CCS from industry and environmental groups.
For conservative Republicans in coal-producing states from West Virginia to Wyoming, capturing carbon and turning this emissions problem into saleable CO2 offers a profit opportunity and an extension of their threatened coal mining operations and jobs. So it’s no surprise that Wyoming’s Sen. John Barrasso and West Virginia’s Shelley Moore Capito are S. 3179 co-sponsors.
For liberal Democrats from Massachusetts to California, the CCS selling point is that capturing carbon before it’s emitted into today’s CO2-laden atmosphere could become the quickest and cheapest way to begin reversing global warming before it becomes irreversible. Rhode Island’s Sen. Whitehouse said in supporting the CCS legislation, “Preventing the worst of climate change will mean deploying a broad range of technologies to reduce carbon emissions. This bill would provide a boost for entrepreneurs in Rhode Island and across the country who turn harmful carbon pollution into useful products. That incentive will spur economic growth and help protect our environment and public health.”
Purdue University Agricultural Economist Wallace Tyner isn’t entirely convinced. He tells Agri-Pulse that “If we want to meet our commitments under the Paris accord, we either have to drastically diminish coal or use CCS.” He adds, however, that while CCS “generally” works, “CCS has not proved economic with near-term projected technology performance.”
Tyner concludes that although “CCS could be close to economic” in particular situations and although he expects DOE to continue funding CCS projects, CCS remains an expensive option.
However, CCS is clearly an attractive option for some sectors, including agriculture. With support from DOE funding, Archer Daniels Midland is capturing and storing CO2 generated from the fermentation process in its ethanol plant in Decatur, Illinois. The process is part of a separate CCS segment called BECCS (Bioenergy with Carbon Capture and Storage).
CCS experts point out that two ag-related facilities – ethanol plants and ammonia plants producing fertilizers – generate the purest form of CO2. As a result, because these operations can boost profits by investing in CCS, these operations are the most likely candidates for launching the new infrastructure of pipelines, hubs, enhanced oil recovery, and storage systems needed to turn a CO2 emissions problem into new jobs and profitable income streams for these ag plants and their rural communities.
Jeff Erikson, the non-profit Global CCS Institute’s general manager for the Americas, tells Agri-Pulse that the ag sector in particular should welcome CCS. Not only does it offer new jobs, income streams, and the opportunity to export CCS technology, he says, but CCS can help avoid the worst climate change impacts. He said these include weather extremes, shifting precipitation patterns, and a higher-temperature future that means “we won’t be able to grow the same crops in the same way in the same place.”
Erikson supports nuclear, solar, wind, hydro, geothermal, and energy efficiency as needed zero-carbon energy sources. But he warns that “if you take carbon capture off the table” as one of the options, then the cost of addressing climate change will go up. He adds that CCS certainly is an option that a President Trump should support since along with creating jobs, CCS will “utilize domestic resources” by giving the coal industry a reprieve and boosting oil production with CO2 enhanced oil recovery.
Non-profit Great Plains Institute Vice President Brendan Jordan agrees on cost projections. Calling CCS “an absolutely essential part of any credible strategy for reducing greenhouse gas emissions,” he tells Agri-Pulse that international research studies show that “you can reach greenhouse gas targets much more cheaply if you have CCS.”
For Jordan, ethanol and fertilizer plants offer the best opportunity for rapidly expanding CCS. He explains that while CCS is needed to reduce emissions from coal and natural gas plants, the greatest opportunity is that “if you’re capturing carbon from a bioenergy facility, you can actually get not just zero carbon but a carbon-negative energy system.” In addition, he says that with help from policies such as tax credits and California’s low-carbon fuel standard, “An ethanol plant can capture CO2 at a cost of about $45 per ton but the revenue would be between $75 and $140 per ton, so in today’s market, the value proposition is clear.”
Jordan concludes that for high-emissions industrial facilities such as steel mills and cement plants, “you end up with a choice between shutting industries down or capturing their carbon.” He says the good news is that just as wind and solar costs have plunged thanks to new technology and economies of scale, “CCS technology is moving ahead rapidly,” bringing costs down.
CCS, he says, has the potential to attract broad support. Blue states like it because it’s a “climate strategy,” while it attracts fossil-energy-state interest “based on economic development and using the captured CO2 to increase oil production.”
John Thompson, director of the non-profit Clean Air Task Force’s Fossil Transition Project, tells Agri-Pulse that “if we are going to meet our climate objectives, avert the worst aspects of climate change, and zero out emissions from the electric sector globally sometime between 2050 and 2100, CCS on coal is going to play a major role.”
Thompson says that to avoid devastating climate impacts, all of the coal, natural gas and oil used in stationary sources including power plants and industrial facilities “is going to need to be scrubbed with carbon capture and storage.” As a result, today’s mature, proven, but relatively small CCS industry will be transformed into one of the world’s major industries. He predicts that if the improved tax incentives in the Heitkamp and Conaway bills are enacted, the Midwest’s ethanol and ammonia plants “are going to be the first plants in the nation to adopt CCS profitably” and that “the profitability of ethanol plants could increase dramatically.” He adds that with the right incentives, these ag plants will “end up driving an enormous amount of the initial pipelines and storage sites that are later used on more expensive sources like coal and natural gas power plants.
“Ethanol and the agriculture industry as a whole could end up being the economic driver that enables other industries to begin carbon capture and storage.” Thompson says. “If the ethanol and ammonia industries have built out these pipelines and storage sites, that de-risks CCS for more dilute sources like cement kilns, steel mills, refineries, and power plants.”
For more about CCS, download the Global CCS Institute’s 28-page Global Status of CCS 2016 report. Releasing the report Nov. 15 at the international climate meeting in Marrakech, Morocco, Global CCS Institute CEO Brad Page noted that although far more needs to be done, CCS is advancing.
“We are close to having 18 large-scale CCS facilities operational globally with a number of key facilities in the United States completing construction and in the final phases of commissioning,” he said. “This compares with less than 10 operational large-scale CCS facilities at the start of 2010.”
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