Can coal, the nation's most abundant generator of electricity, continue to play an active role in the United States' energy policy if caps on emissions are mandated? A new Massachusetts Institute of Technology report, "The Future of Coal: Options for a Carbon Constrained World," seeks to answer this question and provide guidance for policymakers. During today's OnPoint, Ernest Moniz, professor of physics and engineering systems at the Massachusetts Institute of Technology, former undersecretary at the Department of Energy and co-chair of the MIT report, discusses various technological options for clean coal and urges the United States to focus on more than one clean coal technology. Moniz discusses how Congress should approach this issue, how much more funding should be appropriated, and he comments on the Bush administration's FutureGen project.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Dr. Ernest Moniz, professor of physics and engineering systems at the Massachusetts Institute of Technology and former undersecretary at the Department of Energy. Dr. Moniz is co-chair of the newly released report, "The Future of Coal: Options for a Carbon Constrained World." Dr Moniz, thanks for coming on the show.
Ernest Moniz: Thank you, Monica.
Monica Trauzzi: MIT just released its much-anticipated report on clean coal. Explain why you and your colleagues were compelled to put this report together.
Ernest Moniz: We started a few years ago to do a series of studies, this is the second, on technologies that we think are key for addressing a world where climate change is being addressed in a significant way. So the questions that we are asking is what steps should be taken, especially by the American policymaker based upon hard, technical data and analysis, steps taken in the next few years to enable this technology to be a serious contributor in a world of climate risk mitigation?
Monica Trauzzi: And getting to the core of what the report says, which clean coal technologies should the United States be focusing on right now?
Ernest Moniz: Well, number one is carbon sequestration, so carbon dioxide sequestration, particularly in deep geological formations, because this cuts across all of the generation technologies. If you cannot sequester carbon than the discussion about which coal technology you want to use is a bit moot. We feel that the current programs, in the United States and elsewhere in the world, are not being pursued with the urgency and with the system design that will really provide practical information to the private sector to understand how we can go forward with very large scale carbon dioxide sequestration. We're talking eventually reaching billions of tons per year. How can we establish that technology as a safe way to go forward to, of course, avoid the emission of CO2 to the atmosphere?
Monica Trauzzi: And the report says, "It is critical that the government, our D&D program, not fall into the trap of picking a technology winner, especially at a time when there is a great coal combustion and conversion development activity underway in the private sector, in both the U.S. and abroad." But it seems like there's been a big emphasis among lawmakers for IGCC, on IGCC technology. Why has that technology been pushed so hard?
Ernest Moniz: Well, gasification technology or IGCC, today, with what we see today and assuming a bit more experience with IGCC, we see that today as looking like the most economic option for using coal and capturing the CO2 for sequestration. Our point is that there are several reasons why other technologies may in fact be competitive down the road. First of all, you could think of many research directions, which, with success, could remove that advantage or, frankly, could reinforce it. We just don't know, which of course is why one shouldn't pick a winner. I'll give you one example of that. If there were a significant reduction in our ability to separate oxygen from the air we could actually remove or even reverse potentially the advantage of IGCC. I'm not predicting it; I'm just saying these options. But in addition, a very important fact is that coal is a highly variable quality. Usually the discussions are focusing on so-called bituminous or Eastern coals, but, of course, we have a lot of Western coal. We have a lot of lignite in Texas and other places, other countries. India has coal with 45 percent ash content and we just believe that it's very likely that we will need different technologies in various situations to use those kinds of coals.
Monica Trauzzi: So are you suggesting that funding for coal technology should be divvied up amongst all these different technologies and R&D for these technologies?
Ernest Moniz: Right. So for example, we support strongly the idea of public funding for demonstrating IGCC with capture and sequestration. So we're all for that. It makes sense given its current role as the most economic. However, we need to be investing in these other technologies and I could name you, oxygen separation, CO2 separation, advanced materials, advanced gasifiers, new capture processes. These are research areas that can dramatically lower the cost in the future. So the IGCC and other technologies, like using oxygen for pulverized coal, new concepts, things called chemical looping and other things, these are technologies that may have a more immediate impact. We need to also be investing in these new breakthrough areas that could dramatically improve performance and lower costs in the future.
Monica Trauzzi: What are your thoughts on FutureGen?
Ernest Moniz: FutureGen, well, FutureGen is, first of all, the project that would do this IGCC integrated demonstration with carbon capture and sequestration. As I've just said, the idea of public support for such a project we think is entirely appropriate. We would have some differences with the implementation of the program, and most specifically we believe the project should be actually focused on providing commercial demonstration of this technology. It's not an appropriate research platform. It's a commercial demonstration platform in our view. And that, in turn, implies certain approaches to how one would manage a project to get the maximum information of value to the, for example, to the investment community, the people who will have to ultimately make decisions about investing a billion dollars in a large plant. So it's more of an implementation question that we would raise.
Monica Trauzzi: And how far off are we from a solution? When can we expect clean coal to actually be implemented?
Ernest Moniz: Well, I trust the solution we're talking about is to the climate change risks.
Monica Trauzzi: Um-hmm.
Ernest Moniz: Because we should recognize that in the last 30 years, since the Clean Air Act of 1970 actually, we have made and we should take credit for a lot of progress in cleaning up coal from the point of view of conventional pollutants if you like, sulfur and NOX and particulates and perhaps now mercury. But CO2 is one that we have not addressed. And in my view addressing climate change risk is the number one challenge for the energy environment issues going forward. So where are we? Well, first of all, we must get the sequestration demonstrated in a practical way for a very large scale. I would say that if we commit to that, we propose a roadmap for getting there, we would say it's about an eight to 10 year roadmap. So it's not a very long time, but we do need to structure the program properly. With regard to demonstrating technologies with capture like gasification and others, that's probably, again, going to be at least five, probably closer to ten, years to get the kinds of operational experience that will convince, again, the investment community that these are good places to put in funding. They must come together of course, we need the advanced technologies with carbon capture and we need the sequestration to have someplace to put the CO2 to work. So I think a decade or so. But I would also note that the problem is not purely technological. So, for example, on the sequestration side, there are clearly issues of science and how one designs an infrastructure for moving huge amounts of carbon dioxide around. But equally important, we need to start serious work on developing a regulatory regime. When we're talking about, after all, sequestering or injecting into deep saline aquifers millions of tons per year clearly the public is going to expect, quite rightly, a very sound regulatory regime based upon the science. We need to integrate our demonstration projects, how we instrument them, how we characterize the reservoirs with an eye towards how will we develop the regulatory regime? How will we assign liability for the long-term? These are unanswered questions that deserve also very, very urgent attention.
Monica Trauzzi: And how should Congress be approaching this to sort of help the process along?
Ernest Moniz: Well, we believe -- well, Congress has many roles. Of course, part of it is the power of the purse. And we believe that the current program is underfunded to accomplish all the goals that we need.
Monica Trauzzi: How much more is needed?
Ernest Moniz: We're talking about probably doubling the current program, probably an additional $300, $350 million per year. That's for the entire suite of advancing the basic research, advancing the sequestration demos, and advancing the technology demos. So that is one very, very important issue. But the Congress also clearly will play a very important role with the administration in terms of the regulatory regime. There are governance structure issues. For example, we believe that there can be considerable merit in advancing the large-scale demonstration projects through somewhat new mechanisms, like potentially quasi-public corporations. The reason being that if one has a focus on demonstrating commercial viability of these complex integrated systems you have to run the project in as nearly a commercial way as you can. Things like annual appropriations; things like federal procurement rules may degrade, if you lack the quality of the information. So we have also some governance suggestions that would very clearly be in the Congress' domain.
Monica Trauzzi: The report says, "Our hope is that the study will contribute to prompt adoption of a comprehensive U.S. policy on carbon emissions." Is there a particular piece of legislation that's been introduced so far that you would support as far as emissions go?
Ernest Moniz: Well, I'm not going to single out any particular piece of legislation. It is encouraging, first of all, that there are so many pieces of legislation and also movement by industry, the Climate Action Partnership, etc., that makes it look as though we are really moving to a carbon policy. And I might add also in our study, one part of our study, was continuing a set of polls we have done of the American public. And a very interesting result, in my view, is a dramatic change in just three years in our polls in terms of where the public, the American public, for example ranks climate change among a number of environmental issues. It literally went from the back of the pack to the front of the pack in three years. So I do believe that we are moving towards a carbon policy. My one issue is that while I feel optimistic that we will have a carbon policy put in place relatively soon, I am concerned that we don't limit the policy such that the pricing of carbon dioxide emissions is capped at a level for too long a time that would not actually encourage technology shifting. So that's what's critical. So, for example, in the coal sector in our report we say that a price on carbon dioxide emissions, whether through a tax or a cap and trade or some other mechanism, but effectively a price of around $30 a ton of carbon dioxide is where, with today's technology at least, we see a shift in technology to make an economic decision to capture and sequester the carbon dioxide. So how that trajectory of the carbon policy is set in Congress will be very, very critical.
Monica Trauzzi: And has the administration responded at all to the findings in this study?
Ernest Moniz: Well, the study is just coming out today. It has been discussed to a certain extent previously and I would say in the Department of Energy I think there seems to be general agreement with many of the conclusions and recommendations, certainly about the sequestration program, which is I would say, if anything, the highest priority. Now it's a question of implementation and we very much hope that we in the private sector and the administration and the Congress can work together to implement this roadmap towards the appropriate demonstration of large-scale sequestration.
Monica Trauzzi: We're almost out of time. I want to quickly get this last question in. Something that's been in the news lately is the TXU sell-off. How significant do you think the TXU takeover is for the overall push for clean coal technology?
Ernest Moniz: Well, I only see what I've read in the paper clearly and some move away from some pulverized coal plants to some gasification plants. However, I think the key, and this is not just TXU specific, the key is, and we say it in the report, I think it's very important that any new plants that are built, of any technology, first of all it should be understood and Congress should provide a signal that there should not be a grandfathering for when a carbon policy comes in place, so that we don't buy a huge mortgage for 50 years of the lifetime of these plants. So I think that's the key thing. And then we say when the Congress gives a clear signal about there being a policy then companies, TXU, Duke, all the other utilities, can begin to make their commercial decisions with the uncertainty of carbon policy reduced. And then it's up to them to choose what they believe is the best technology. Hopefully, emphasizing highest efficiency and ultimately carbon capture and sequestration.
Monica Trauzzi: All right. We'll end it right there. Thanks for coming on the show.
Ernest Moniz: Thank you Monica. Thank you.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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