Carbon Capture

Will coal's future shift under Trump?

How will the conversation on coal change once President-elect Donald Trump is inaugurated next year? Will carbon capture be a focus for the new administration? During today's OnPoint, Jeff Erikson, general manager at the Global CCS Institute, explains why he believes carbon capture is essential but not inevitable and talks about how his industry will shift its lobbying strategy as the new administration comes in.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Jeff Erikson, general manager of the Global CCS Institute. It's great to have you here.

Jeff Erikson: It's great to be here. Thank you.

Monica Trauzzi: So, Jeff, with President-Elect Donald Trump set to come into office in January and many promises made on the campaign trail relating to coal, how do you believe the conversation on coal will change with this new administration?

Jeff Erikson: That's the million-dollar question that everyone is asking certainly, but I see a lot of opportunity for carbon capture, both for coal and for other applications. Candidate Trump made a lot of promises with respect to bringing back the coal industry. I think carbon capture as a technology that addresses emissions from coal can only contribute to that. But in addition to applications for coal, there's a really significant opportunity in industrial applications, and I think those industrial applications also support a lot of Mr. Trump's priorities as well. So applications on things like iron and steel plants, cement plants, hydrogen processing plants and the economics for carbon capture on those facilities are actually pretty — are much better than they are on coal-fired power plants. So yes, I think that Mr. Trump's emphasis on coal will encourage more carbon capture and support the coal industry, but that's not the end of the story. I think there's plenty more to like about carbon capture even beyond coal.

Monica Trauzzi: You say that carbon capture's at a crossroads. It's essential but not inevitable. What does that mean?

Jeff Erikson: Well, it's certainly essential in order for the world to meet its aspirations on climate change and to keep climate change below dangerous levels, and that was — I've been using that term for a while, and that was the context in which I first started talking about it being essential. But I also think carbon capture is essential for other reasons that aren't related to climate change. There is a significant need for CO2 that the oil industry can use to actually enhance oil recovery. And so in order for us to utilize our domestic resources, I think there's an essentiality there as well. It's not inevitable because it doesn't have the broad base of support that other low-carbon technologies use, such as wind and solar, and the economics are challenging on a per-project basis as well. So there's a lot of work to be done to garner that political and public support. There's work to be done on reducing the cost. So we can't all go home happy and say it's going to happen. I think there's a lot of folks that need to continue to push all aspects of getting carbon capture to become more common and more cost-effective.

Monica Trauzzi: DOE's treatment and investment in CCS has certainly had its ups and downs over the years. What would a Trump DOE need to do in terms of investments on CCS?

Jeff Erikson: Well, I think the days of large investments in particular projects are over, and that was really a result of the Recovery Act. And DOE, even prior to the election, said that that's not likely a component of their work going forward. I think the most important thing the DOE can do is to continue to push on the research and development to continue to advance the technologies, which is going to result in lower cost, and there's a lot of really interesting things going on on the technology front. Carbon capture 10 years from now is not going to look like it does now. You know, the government has always played an important role in developing industries to accelerate the technology development, to accelerate the cost reductions. We see that same role as being essential for carbon capture, so I do hope that the R&D component of what DOE does continues as it has. I also think there's a very important role for them to be that spokesperson for the government to promote carbon capture as one of those technologies that are going to take us into the energy future.

Monica Trauzzi: What does the picture look like globally?

Jeff Erikson: Well, globally it's very interesting, and carbon capture has really gotten a strong start in the U.S. and in Canada over the last 10 years. Most of the projects that are currently in operation are here in the U.S. and in Canada. But globally there's a lot of activity that's occurring as well. Just about a week and a half ago, Emirates Steel in Abu Dhabi started a carbon capture project on the first steel plant in the world to have carbon capture. There's a big project in Australia called Gorgon, which is going to be capturing a significant amount of carbon dioxide on an annual basis. There's actually, even after a long period of little activity in Europe, there's signs that carbon capture is getting some increased interest and support in Europe as well. So — and then, of course, the big one is China, and probably the biggest trend that we're going to see, the biggest change over the next decade is that the projects that are coming online over the next five to seven years will occur in China. That's where the projects that are in the early stages of the pipeline are currently. China has a policy that is promoting carbon capture as well, so we'll see that activity advance there, and it'll be interesting to see if China does for carbon capture what it did for solar, where they decided it was a strategic comparative for them to kind of capture that market. They drove technology very rapidly, they drove the cost down, and it'll be interesting to see if they can do that as well for carbon capture.

Monica Trauzzi: Senator Barrasso of coal-heavy Wyoming will be the new chair of the Senate EPW Committee and, of course, Majority Leader Mitch McConnell is from Kentucky. Would you expect a greater congressional focus on coal, and then how could that trickle down to the conversation on CCS? What would you look for on the policy standpoint?

Jeff Erikson: I think there's a few things going on there. You know, coal, from a market standpoint, is really challenged, particularly by natural gas. And so there's market forces that are — that the coal industry is facing now that aren't going to change because of who's in the White House. But Senator McConnell, for example, has been a co-sponsor to a bill that's working its way through Congress now that is supportive of carbon capture. And so I do think that with Republicans probably continue to be prominently driving action in Congress, I expect that coal will be a more important part of their agenda, and I think that's good for carbon capture, and I also think that it's not the answer either. As I said, I think there's a lot of market forces that are still really challenging the industry.

Monica Trauzzi: All right. We will end it there. Thank you so much for coming on the show.

Jeff Erikson: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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