The Obama administration is starting a last-ditch effort to make “clean coal” a climate change solution, despite its heavy focus on renewables and stiff rules to phase out fossil fuel.
But it’s a big gamble. Clean coal technology faces a number of woes in becoming commercial, especially from natural gas that is much more cost effective.
Despite the hurdles, the administration says that without the technology, meeting global climate change goals “will cost roughly 140 percent more than with it,” Energy Secretary Ernest Moniz said last week during a small gathering of industry officials at a meeting of the National Coal Council, a federal advisory group.
At the heart of the push is the technology, typically known as “carbon capture and storage,” or CCS for short. But Moniz and the industry like to refer to “carbon capture utilization and storage,” or CCUS, which is seen as the only version of the technology that can be made affordable enough to deploy.
When carbon capture was suggested more than a decade ago as an option for reducing the emissions of coal-fired power plants, it came across as a bit unbelievable due to its scale.
Imagine a power plant and its smoke stack. Now imagine the plume of smoke being emitted from that plant. A power plant with CCS would divert the carbon dioxide from that plume of smoke and inject it as a liquid deep underground, where it would hopefully stay indefinitely.
While that may sound like the stuff of science fiction, it has become the only option to make coal viable under any plan to reduce greenhouse gas emissions. Carbon capture utilization, an idea spurred on by China, seeks to create a market for carbon dioxide, including selling it to companies such as Exxon Mobil to use in oil drilling.
Climate experts say a massive number of power plants outfitted with the technology would be needed to reduce greenhouse gas emissions enough to offset the Earth’s temperature from rising above 2 degrees Celsius by the middle of the century.
That’s a big reason for the Obama administration’s interest in trying to commercialize carbon capture. The technology is crucial to meeting the goals of the climate deal agreed to by President Obama in Paris in December, as many scientists blame greenhouse gases for driving man-made global warming.
The problem is that the technology is not commercial. And it’s not clear when it will be.
“I think there has been a heightened interest in how we can pay for these projects,” Janet Gellici, executive vice president and chief operating officer of the National Coal Council, told the Washington Examiner. “I think there is interest in trying to get some of these projects moving at a faster pace.”
The coal council was just given new marching orders by Moniz in a bid to solve the economic woes facing the technology. Gellici said the administration’s commitment to December’s climate deal is a big factor in moving ahead, along with an international innovation partnership that has reinvigorated Moniz to try to push the ball forward.
She said Moniz wants the council to develop a report that identifies new markets for carbon dioxide to generate revenue, which would help to offset the tremendous cost of the technology.
Gellici said identifying markets not dependent on oil are of particular interest to Moniz, because not all power plants, or industrial facilities, using the technology would be in the oil patch. For example, Moniz wants the report to look at using carbon dioxide in “enhanced water recovery” projects.
Water supply issues present an opportunity to use carbon to push the brine water out of reservoirs and reserves. And when combined with desalination, it could be a solution to drought problems globally.
“Water is our next challenge,” she said.
Moniz also wants the council to look at marketing carbon dioxide as an agent for extracting coal-bed methane, which is the natural gas deposits found in coal. The process could help struggling coal regions use coal for electricity, while simultaneously producing natural gas that can be sold to the chemical industry.
The council also will be looking at marketing carbon dioxide as an agent to produce valuable minerals. The report is slated to be delivered to Moniz by Aug. 30.
Industry experts suggest the administration’s focus on non-oil markets stems from the price of crude oil plunging to below $50 from $110 a barrel two years ago. And although some are optimistic that the technology eventually will work, the economics are almost insurmountable.
“The collapse in gas and oil prices has obviously discouraged investment and testing and deployment of CCS,” says Luke Popovich, vice president for external communications with the National Mining Association. “Demonstration plants have been discontinued or have seen costs balloon far beyond original estimates.”
When carbon capture was first examined, natural gas cost $10 per unit, so it made sense, said Dan Byers, vice president for federal affairs at the U.S. Chamber of Commerce’s Institute for 21st Century Energy. But with natural gas prices hovering around $2 per unit and the country becoming a major producer of gas, “it’s hard for us to envision [CCS] is economic under these low gas prices.”
Byers said Southern Co.’s carbon capture project in Kemper County, Miss., in many ways has everything going for it, but it has suffered from several cost overruns. “That project is almost a dream project,” he said. “If it’s having that difficult a time under those situations, it’s only going to get tougher.”
Jeff Shepard, spokesman for Southern’s subsidiary Mississippi Power, said the Kemper plant is expected to cost $6.7 billion when completed, more than double the original price estimate of $3 billion. The facility is slated to be fully operational in August.
Meanwhile, both Democrats and Republicans in Congress don’t know how to move forward. Some such as Sen. Rob Portman, R-Ohio, are pushing for legislation for financing, such as private activity bonds. The bill hasn’t gone anywhere. Moniz says the administration is negotiating with lawmakers to get tax credits for the technology based on recommendations made by the coal council.
Democratic Sen. Joe Manchin, from the coal-mining state of West Virginia, isn’t convinced. He said many of the power plant projects that the administration has used to justify its far-reaching climate rules are nowhere near commercial scale, and Obama hasn’t taken carbon capture utilization and storage seriously.
“Forcing new coal-fired plants to meet standards when experts know that the required technology is not sustainably operational on a commercial scale makes absolutely no sense,” Manchin said in a letter scolding the head of the EPA in November. His office told the Washington Examiner that nothing has changed since he sent the letter.
“His concerns regarding the EPA’s use of the technology for its carbon regulations stand because it has not been adequately demonstrated,” said spokeswoman Katey McCutcheon.
She said the administration hasn’t truly committed to funding research and development for carbon capture utilization and storage. “Fossil fuels will continue to be a part of this country’s energy mix for years to come. Carbon capture utilization and storage must be a critical part of that,” she said.
