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Thursday, June 20, 2013

Carbon Capture and Sequestration: Research, Development, and Demonstration at the U.S. Department of Energy

Peter Folger
Specialist in Energy and Natural Resources Policy

In 2012 the U.S. Environmental Protection Agency (EPA) proposed a new rule that would limit emissions of carbon dioxide (CO2) to no more than 1,000 pounds per megawatt-hour of production from new fossil-fuel power plants with a capacity of 25 megawatts or larger. EPA proposed the rule under Section 111 of the Clean Air Act. According to EPA, new natural gasfired combined-cycle power plants should be able to meet the proposed standards without additional cost. However, new coal-fired plants would only be able to meet the standards by installing carbon capture and sequestration (CCS) technology. EPA missed its original deadline for issuing a final rule and has not indicated when it will publish the final rule.

The proposed rule sparked increased scrutiny of the future of CCS as a viable technology for reducing CO
2 emissions from coal-fired power plants. It also placed a new focus on whether the U.S. Department of Energy’s (DOE’s) CCS research, development, and demonstration (RD&D) program will achieve its vision of developing an advanced CCS technology portfolio ready by 2020 for large-scale CCS deployment.

Congress appropriated $3.4 billion from the American Recovery and Reinvestment Act (Recovery Act) for CCS RD&D at DOE’s Office of Fossil Energy in addition to annual appropriations for CCS. The large influx of funding for industrial-scale CCS projects may accelerate development and deployment of CCS in the United States. Since enactment of the Recovery Act, DOE has shifted its RD&D emphasis to the demonstration phase of carbon capture technology. However, the future deployment of CCS may take a different course if the major components of the DOE program follow a path similar to DOE’s flagship CCS demonstration project, FutureGen, which has experienced delays and multiple changes of scope and design since its inception in 2003.

To date, there are no commercial ventures in the United States that capture, transport, and inject industrial-scale quantities of CO
2 solely for the purposes of carbon sequestration. However, CCS RD&D has embarked on commercial-scale demonstration projects for CO2 capture, injection, and storage. The success of these projects will likely influence the future outlook for widespread deployment of CCS technologies as a strategy for preventing large quantities of CO2 from reaching the atmosphere while U.S. power plants continue to burn fossil fuels, mainly coal.

Given the pending EPA rule, congressional interest in the future of coal as a domestic energy source appears directly linked to the future of CCS. In the short term, congressional support for building new coal-fired power plants could be expressed through legislative action to modify or block the proposed EPA rule. One bill, H.R. 2127, would prohibit EPA from finalizing any rule limiting the emission of CO
2 from any existing or new source that is a fossil fuel-fired electric utility generating unit unless and until CCS becomes technologically and economically feasible. Congress has not yet acted on H.R. 2127.

Alternatively, congressional oversight of the CCS RD&D program could help inform decisions about the level of support for the program and help Congress gauge whether it is on track to meet its goals. A DOE Inspector General audit report identified several weaknesses in the DOE management of awards made under the Industrial Carbon Capture and Storage (ICCS) program funded by the Recovery Act. The audit report noted that addressing these management issues would be important to future management of the program, given that DOE had only obligated about $623 million of the $1.5 billion appropriated for the ICCS program under the Recovery Act as of February 2013.

Date of Report: June 10, 2013
Number of Pages: 25
Order Number: R42496
Price: $29.95

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