Advocates of a long-elusive and expensive technology that captures carbon dioxide emissions from power plants and stores it underground are confident more projects will be built after Congress recently extended and expanded a key tax credit.
Few carbon capture and storage projects have been developed to date, mostly because of high costs.
But members of a new coalition supporting carbon capture and storage (CCS) say that will change after Congress this month extended and expanded an existing tax credit to help fund the projects.
“Now, with [the tax credit], the economics are looking very attractive,” said Roger Ballentine, a consultant and board member of 8 Rivers Capital, which is financing a carbon capture project near Houston. “People are asking, should I do this. Before, those conversations weren’t even happening. Any major project like this will be a challenge. But the business case gets that much better with [the tax credit]. Once there is a business case, that’s why they happen.”
Companies, trade organizations, and interest groups came together in Washington Friday to announce a broad coalition aiming to transform the preferential tax status for carbon capture and storage into actual projects.
The Carbon Capture Coalition is a rebranded and larger version of the six-year-old National Enhanced Oil Recovery Initiative that focused on projects that capture carbon to extract crude oil from wells.
The coalition features 12 new members, bringing the total to 48, with additions including the Bipartisan Policy Center, ClearPath Foundation, Shell, Mitsubishi Heavy Industries America and the National Farmers Union.
It will have a bigger focus on promoting technology that captures carbon emissions from not just power-sector sources, such as coal and natural gas plants, but also industrial facilities.
Carbon capture can be used at facilities from refineries to iron and steel plants, and industrial sources make-up about one-fifth of U.S. carbon emissions. Many scientists blame greenhouse gas emissions from burning fossil fuels for driving man-made climate change.
Carbon capture and storage will be key to fulfilling the goal of the Paris climate change agreement to limit global warming to “well below” 2 degrees Celsius, or 3.6 degrees Fahrenheit, the limit at which many scientists say the world would see irreversible effects of climate change.
The United Nations’ scientific body determined in 2014 that if carbon capture isn’t widely deployed, keeping global temperatures below the 2-degree Celsius threshold over the next century would be 138 percent more expensive.
“We are very unlikely to meet our emissions goals unless we have carbon capture, and that is reason enough for us to support these technologies,” said Ryan Fitzpatrick, deputy director of the Clean Energy Program at Third Way, a centrist Washington think tank.
CCS technology removes carbon dioxide from a power plant’s exhaust, so as to not release it into the atmosphere. The carbon can be cooled and injected as a liquid underground. Some technologies can use the captured carbon for other energy uses.
For example, the Petra Nova plant outside Houston, America’s only successfully running carbon capture facility, sends the carbon dioxide via pipeline to nearby oil fields, where it is used to assist in the extraction of crude oil. The sale of carbon dioxide as a commodity helps to offset the cost of the CCS technology.
Chris Romans, senior manager of government relations at Mitsubishi Heavy Industries, said Friday the Petra Nova plant last year prevented 1 million tons of carbon dioxide from going into the atmosphere, the equivalent of taking more than 200,000 cars off the road.
Mitsubishi Heavy Industries developed the project with NRG Energy.
Industry supporters of carbon capture said Friday that progress is happening.
Technology firm NET Power, partially owned by 8 Rivers Capital, is building a small natural gas-fired power plant in La Porte, Texas, that would emit no greenhouse gases. It’s only a demonstration project, but Ballentine of 8 Rivers Capital said the expanded tax credit is a “major wind on our back” to commercialize the project.
The coalition also hopes to amplify its success with extending the tax credit by having a voice in the upcoming debate over President Trump’s $2 billion infrastructure spending plan.
It aims to support funding for pipelines that can transport captured carbon emissions for commercial use.
“The [tax credit] legislation passed two weeks ago, and by that afternoon I was getting calls from companies talking about projects they were thinking about taking off the shelf,” said Brad Crabtree, a vice president at the think tank Great Plains Institute. “There is a ferment out there now that the tax credit passed, and developers have that financial certainty. That is the point of a policy like this, to motivate developers and investors to seek out these opportunities.”
