2. COAL: Industry: Sequestration may be ready by 2020 (ClimateWire, 05/07/2008)

Debra Kahn, ClimateWire reporter

PIITSBURGH -- Industry and government experts expressed confidence yesterday that carbon capture and sequestration (CCS) would be a major part of global efforts to combat climate change, with reminders that environmentalists' concerns about coal dependence must also be addressed.

The conference, sponsored by BP, Shell, General Electric, Alstom and other energy industry heavyweights, is intended to address such topics as retrofitting existing power plants, potential liabilities, regulatory frameworks and the importance of fossil fuels to national security.

Lori Perine of Alstom, a multinational energy company, gave promising projections for when sequestration would be ready for commercial deployment. Most aspects of the technology, including CO2 transport, storage and various forms of capture, will be ready between 2015 and 2020, she said.

Perine also pointed out that CCS was more accessible to developing countries as a climate mitigation tool than demand-side strategies like energy efficiency measures. "Demand reductions are valid for the U.S. and European Union, not really for emerging economies," she said. Also, early retirement of older coal-fired plants "is not necessarily for everyone."

And Shell's CO2 integration manager, Elizabeth Fleming, emphasized that the real obstacles to commercial deployment are bringing the technology up to scale and addressing public resistance, not technical barriers. And even technical issues like leakage are really matters of negotiation, she said.

"Some leakage ... is more than likely, but it's underground where it doesn't affect anything," she said. "The questions are, is a little OK, how much is too much? We need to discuss expectations."

Governments must have 'some skin in the game'

Energy companies were in agreement that more federal support is needed, however, particularly in the areas of infrastructure, liability issues and regulatory flexibility. "There has to be some skin in the game, some buy-in from governments," Fleming said. "We're willing to do our part, but one company can't do this alone."

Perine requested tax incentives and payments for production in order to mitigate the risk to early adopters of the technology.

Both agreed that there would need to be about 200 projects operating around the world before CCS could be defined as commercially feasible. And Perine said in order for sequestration to be cost-effective, a value on carbon dioxide of at least $20 per ton would need to be established. DOE says it currently costs about $150 per ton to capture CO2.

The head of Canada's Office of Energy Research and Development, Graham Campbell, outlined steps Canada has taken to pursue CCS, including C$380 million in recently announced projects in Alberta, Nova Scotia and Saskatchewan, and the formation of an Alberta CCS development group led by a former president of Syncrude. Campbell was particularly bullish on Alberta, which has huge reserves of oil sands that it would like to sell to the United States. Campbell pointed out that Alberta was the "first government in North America" to enact emissions-cutting targets, which he described as 50 percent below estimated 2050 levels by 2050 -- or 14 percent below 2005 levels.

"Each province has plans that fit its particular energy economy," Campbell said.

The proceedings were then interrupted by protesters from Greenpeace, which released a report yesterday arguing that CCS will not be commercially ready soon enough for purposes of climate change. The protesters released hundreds of black balloons reading 'Coal Is Dirty' and took the stage until police ushered them out.

DOE official: Another try at FutureGen 'very soon'

A top DOE official said the recently canceled FutureGen CCS and clean coal demonstration project would begin the grant process anew this year, with an eye to beginning commercial operations by 2015.

Energy Department Acting Deputy Secretary Jeffrey Kupfer said DOE's FutureGen project would be ready to announce a preliminary funding plan "very soon," with site selections to be made by January 2009. Compliance with federal environmental laws will mean the projects will come online by 2015, he said.

A Senate hearing tomorrow promises to explain more about what derailed the clean coal and carbon-capture-and-sequestration demonstration project, which suffered a serious blow in January when DOE abruptly announced it was "restructuring" the initial plan. Claiming the project was too expensive at $1.8 billion, DOE said it was changing the project from a single demonstration plant to multiple commercial projects for which the department would focus funds on the carbon capture-and-storage elements (E&E Daily, May 5).

Kupfer said yesterday that the change in plans was prompted by "market concerns."

"We are committed to a multiple commercial-scale coal plan," he said. "The difference is that it aims to support not just a single, not-quite-commercial project. ... It's an attempt to reflect changing market dynamics."

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