HOUSTON -- Energy Secretary Steven Chu told participants at a major energy industry gathering here today that they need to accept a limit on carbon pollution and start finding ways to meet it.
"Let's get moving now," Chu told the conference sponsored by IHS Cambridge Energy Research Associates. "That will get the innovation machine moving. Time is running out, and the train is leaving the station."
Chu's remarks at CERAWeek fit the Obama administration's narrative -- that enacting rules to limit climate change won't cost jobs. Rather, the administration's story line goes, a lack of such rules is preventing the United States from joining a global "clean energy economy."
If the United States fails to impose rules that spur that innovation, administration officials say, China and European countries will continue building a lead in manufacturing and developing renewable products such as solar panels and wind turbines.
"Over the long haul, the cost of oil will rise. And we will live in a carbon-constrained world," Chu said here. "We need a long-term policy that says, 'There will be a cap on carbon.'"
Speaking before Chu, the head of Saudi Aramco warned that rushing into renewable energy could cause "green bubbles" akin to the "tech bubble" of the 1990s. A bursting green bubble, said Khalid Al-Falih, president and CEO of Saudi Aramco, would undermine the long-term prospects of solar and wind technology.
"The belief in an almost instantaneous transformation to alternative energy is worrisome to me," Al-Falih said. "If alternatives overpromise, but underdeliver, we may see the development of 'green bubbles.'
"Moreover, if the people in this room are convinced that the world will very shortly be getting a substantial portion of its energy from one or more alternative sources, then we are less likely to see the necessary investments in the true and true energy sources -- including oil -- that continue to underpin the global economy and our modern way of life."
Aramco, he said, has spent more than $62 billion during the last five years to increase oil production to 12 billion barrels a day and plans to invest another $90 billion in the next 10 years to expand production. But an increasingly large share of that will be in natural gas. The company is also planning to put $80 million into downstream joint ventures during the same time period.
Grant for Texas CCS project
Chu also used his speech to announce $154 million in funding -- some of it from the $787 billion stimulus law -- to boost a carbon capture and storage facility in Texas.
NRG Energy Inc.'s post-combustion capture and sequestration project in Thompsons, Texas, is intended to demonstrate advanced technology to reduce emissions of carbon dioxide and assist with enhanced oil recovery efforts from a nearby oil field.
The funding for the NRG project came available after Southern Co. pulled out of a carbon capture and sequestration project partnership with DOE in Alabama (E&ENews PM, March 1).
Southern was slated to receive $295 million through the Clean Coal Power Initiative for its project.
NRG is planning a six-year project to build a 60-megawatt carbon capture demonstration facility at the company's W.A. Parish Unit 7 in Thompsons. The six-year project will demonstrate an innovative integration of several important advances in carbon capture and sequestration technologies.
Reporter Katie Howell contributed.