Energy Secretary Ernest Moniz said yesterday that his department "perhaps could do more" to boost carbon capture and storage (CCS) development but emphasized that the "technology is ready" to meet U.S. EPA's proposed greenhouse gas standard.
Moniz made his remarks at the annual Carbon Sequestration Leadership Forum in Washington, D.C., where energy ministers from around the world pledged via a new communiqué to continue pushing for carbon capture development via research, new incentives and multinational cooperation.
"Our common goal is to ensure that the conditions are right for all CCS projects currently under construction or in advanced stages of planning to be completed, and we must increase the number of new large CCS demonstrations by 2020," the communiqué states.
The forum's 23 members include the world's largest emitters, like China and the United States, as well as developing countries.
Moniz and Tord Lien, Norway's minister of petroleum and energy, also announced that they were establishing a joint "network" of test centers for carbon capture technology, although they were still working out the details. Simultaneously, the Department of Energy also announced that it would invest $84 million in 18 carbon capture projects aimed at testing various solvents and technologies that could dramatically lower costs.
"We must pursue all of our energy options for a low-carbon world. Carbon capture utilization and sequestration has to be part of the portfolio," said Moniz. Because projections show that the world will continue to burn fossil fuels for a long time, particularly in developing countries, it is critical that research efforts move forward, he said.
Economics remain daunting
The challenge for CCS is that there currently are no coal-fired power plants using the technology, although there are operating projects on natural gas processing plants and a few industrial facilities. One of the two coal power plant projects under construction, Southern Co.'s Kemper Energy Facility in Mississippi, currently is approaching $5 billion, after a $150 million increase in costs announced this month (ClimateWire, Oct. 30).
To date, the Obama administration has invested $6 billion in clean coal technologies, in addition to offering an $8 billion loan guarantee program announced earlier this year. But considering the cost of projects like Kemper, there are questions about whether the department is spending enough to get the technology going beyond a few test projects.
At a Capitol Hill hearing last week, Charles McConnell, executive director of Rice University's Energy and Environment Initiative and a former assistant secretary of Energy, expressed concern that budget cuts to research and development dollars for carbon capture have been more severe than those to other Department of Energy programs.
Asked whether the department needed to spend more, considering the $1-billion-and-up costs of "clean" coal proposals, Moniz said the department is funding eight large demonstration projects in addition to capture research.
"So we could do more, perhaps, but we have multiple geologies. We have saline aquifers, we have EOR," said Moniz. The eight planned department demonstrations include capture projects on ethanol and hydrogen plants, as well as big coal electricity projects like FutureGen 2.0, a $1.65 billion planned project in Illinois.
Southern Co.'s project is 'replicable'
The secretary is planning a visit today to the Kemper facility, which would capture 65 percent of the carbon dioxide of a 582-megawatt coal plant when constructed.
"We believe this technology is replicable around the world," said Southern Co. CEO Tom Fanning yesterday.
This is especially so in overseas markets, where gas prices are not blocking coal projects in the same way they are in the United States, he said in a brief interview. He also said that an upcoming review of Kemper's financing before the Mississippi Public Service Commission next year would not add delays to the project, despite speculation.
"Reviews are common for any regulatory issue. It's not unusual," Fanning said.
Meanwhile, Moniz noted that there are currently about 300,000 barrels of oil produced daily via enhanced oil recovery using CO2. Typically, the greenhouse gas comes from natural sources. Considering that the potential for CO2 enhanced oil recovery could be around 3 million daily barrels, the main way to reach that potential is with captured CO2, he said.
"The cost of climate change will be dramatic and overwhelm any of the investment costs we have here," added U.K. Secretary of State for Energy and Climate Change Edward Davey at a joint press conference with Moniz. "We have to have a well-thought-out strategy," he said, as opposed to just throwing more money at projects.
In that regard, ministers and attendees of the forum said that there are various possibilities to boost the technology beyond the often out-of-reach option of a carbon price, as well as significant lessons to be learned from the construction process of projects like Kemper and SaskPower's Boundary Dam, the only other CCS project under construction in the world on a coal-fired power plant.
Brad Page, CEO of the Global CCS Institute, said that it is important for countries with renewable portfolio standards, like Australia, to include CCS along with wind and solar incentives. "We just want to be on equal footing," he said.