Research & development into promising carbon capture and storage (CCS) applications – with specific attention to natural gas CCS -- should be encouraged by Congress and policymakers. CCS is a valuable addition to the arsenal of approaches to global carbon reduction and appears particularly well-suited for capturing emissions from a single significant source such as a power plant.

Although CCS research and development has inaccurately become synonymous with coal-fired power plants in the mind of the public, it’s critical that lawmakers provide equal opportunities for the funding of CCS with natural gas power plants. In fact, the use of CCS at natural gas power plants produces more affordable electricity than using CCS with any other fossil fuel power plant – and that’s assuming $6 natural gas. To put this price in context, government forecasters are projecting that the average price for natural gas in 2009 will be well below $4 and this week it is hovering below $2.40.

Not only is natural gas CCS more affordable, it also captures carbon more efficiently and requires the use of less water compared with other fossil fuels. The deployment of CCS in association with some natural gas operations has already proven extremely effective, illustrated by the reality that of the five existing commercial-sized CCS projects in the world, four capture and store carbon from natural gas production.

Any legislation that promotes CCS must very clearly recognize the potential of natural gas CCS to achieve clean electricity at a reasonable cost to consumers. Policymakers should acknowledge and reward natural gas CCS for its potential to contribute to an energy and climate solution.

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Q: Who should be liable if the sequestration project harms local groundwater or if the carbon dioxide escapes from the ground?

A: That is a tough question given that the stored carbon dioxide might be there ad infinitum, and many of the companies that may store the carbon dioxide in the near future may not be around in the very long run.

Normally there would be geological, seismological and other testing of the areas where the carbon dioxide goes. The firms who do these tests would have to hold some of the liability if something happens, if they are still around.

A major problem here is trying to figure out short to medium term liability for a very long term problem. Possibly the government could set up a liability bank to share some of the risk. But who is to know what government will be here in 2,000 years? The liability issues on this are a real sticking point in the implementation of especially very large scale projects.

Q: Should Congress or the states allow companies to store carbon dioxide gases deep underground without first getting permission from citizens who own the land above those storage caverns?

No.

Q: Which federal agency should regulate the underground storage sites and the transportation of pollution from the power plants to the caverns?

There will be a mixture of many departments given that there will be overlapping responsibilities and jurisdictions at the federal, state and local levels. There may even be international issues involved a times. Even with the overlapping responsibilities and jurisdictions there has to be a place where “the buck stops”. Without that there could be continuous circles of suits and countersuits, and multiple crops of excuse making and blame giving across many groups. It would also be best for the companies, governments and communities involved to have a one-stop shop to go to that could connect them with the multiple groups that will be stake holders, but in a logical and understandable way.

Q: Should Congress advocate legislation and money for capturing greenhouse gas emissions from fossil fuel plants and storing them underground? Is it worth the effort?

The development of further pilot projects may be worth it. However, there needs to be more thinking about how else we could deal with the carbon dioxide. Piping it underground seems very dicey legally in many circumstance, and it also analogous to sweeping the dust under the rug in order to clean the house. A lot more inventiveness, clever thinking and more will be required. Sequestration is a paltry answer to a huge problem. This is not to say that the carbon dioxide is not useful. Of course it is. It can be used in industrial processes, enhanced oil recovery, feeding algae and other alternative fuel sources, etc. We need to think about more sustainable ways of solving the carbon dioxide problem. Surely there are huge caverns, old gas and oil fields, and more that could take hundreds of gigatons of carbon dioxide. But just having the vacant space is not an argument for using it without trying to figure out better ways of doing things. Would you want a few billion tons of carbon dioxide under your neighborhood?

The government needs to fund and incentivize better thinking on these issues than just sweeping the problem into the ground. We need to phase in toward a very different way of dealing with our energy issues: not with planning with necessarily set goals, but with some intelligently directed searching by both the government and the private sectors, and with some international cooperation.

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Finding a way to safely and cost-effectively sequester greenhouse gases is in the best interest of our country, our customers and our company. Sequestration is essential to ensuring that coal-fueled generation can continue to be an important part of the mix of resources utilities use to keep electricity reliable and affordable for customers. A plentiful, available domestic resource such as coal in our fuel mix reduces our dependence on imported oil and protects customers from price volatility.

Aggressive funding for technology research, development and deployment as well as appropriate public policies will help ensure sequestration becomes a reality. At Progress Energy, we have already invested more than $2 billion in our largest coal-fired plants to reduce emissions dramatically. Individual companies’ progress in the area of reducing emissions are vital to addressing climate change, but any significant technological advancement will only be feasible if it is developed and implemented on an industry scale. That is why we have continued to support the measure put forth by Congressman Boucher, parts of which are included in the Waxman-Markey bill, to accelerate the development and early deployment of systems for the capture and storage of CO2 emissions from fossil-fueled electric generation facilities.

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It’s Too Late To Pave The Way

We’ve been pumping CO2 underground for 36 years. We’ve been capturing it from coal at full scale since 2000. We pipe it through 3,600 miles of pipe into 100 different storage areas. No one has been injured by the CO2 that we’ve been storing. And all of this happens at a profit – and without subsidies.

There are two problems with carbon capture and storage (CCS): misinformation and cost.

You will be told that no full-scale CCS power plant has ever been built. But we could have done so any time we wanted in the last 23 years simply by installing a gas-fired power plant next to the Great Plains Synfuels Plant and using its gas to generate electricity instead of using it to cook and heat. That coal plant produces enough synthetic natural gas to generate the electricity of two full-size 500 MW coal-fired power plants. North Dakota’s quite proud of their plant and will send you a full color 170 page book for free. You can see Jimmy Carter and Ronald Reagan helping them out, and see a picture of the ground-breaking in 1963—ten years before OPEC’s embargo. This is old technology.

The Great Plains plant sells 9,000 tons of CO2 per day, shipping it 204 miles by pipeline up to the Weyburn oil field in Saskatchewan where it’s injected to enhance oil recovery in an old oil field.

Now misinformation from environmentalists may well kill CCS, and that might be a good thing. Who knows? But that’s the point. We don’t know and they don’t know, and it’s time we all stopped pretending to know things we have no idea about. We are likely up against one very tough problem and it’s just plain wrong to shut off options before we know how to fix the climate.

Now some people “know” the answer is “wind” and will tell you wind power is growing 6.4 times faster than coal power, and they’re right about the 6.4. But it’s also true that coal power is growing 6.7 times faster than wind power. One is the wind-industry’s feel-good percentage-based number, that other is the actual megawatt-hour number—the one that matters to Mother Nature.

The Department of energy predicts that, in spite of phenomenal wind-power growth, coal power will still be growing globally five times faster than wind in 2030. The question of CCS is not at all the question of keeping coal-fired electricity alive. I wish it were. The question is, Can we tame the coal problem a bit? CCS is one possibility.

It’s not a great possibility, but if we get desperate—and we may well—we will wish we had checked it out, and that takes about 15 years. I just reviewed a soon-to-be-released report from Australia’s Global Carbon Capture and Storage Institute and one point stood out. We need a little bit of government money to search for good storage geology right away. Geologists think there are a lot of good places, but a few of them need to be proven or no one is going to get serious about building CCS power plants.

And even though CCS can be done with old technology, we need cheaper technology or not much will be done. We especially need cheap technology to make this happen in China, which is where most new coal is coming on line, and will be for decades. Just a few years ago everyone was betting on gasification technology, as is used in North Dakota. But now Oxy-combustion is taking the lead. That’s burning the coal in oxygen and CO2 instead of oxygen and nitrogen (air). That solves the problem of separating CO2 out of the smokestack and it can be applied to existing plants because the O2-CO2 combination burns just like air. Even better, a new process for separating oxygen from air looks very promising at half the cost. (The old way is to freeze out the oxygen.) A small oxygen plant using the new ITM (ion transport membrane) technology has been operating since 2006.

The GCCSI report has preliminary estimates that China could capture carbon for about $40 a ton with this new technology. That’s expensive, but with DOE predicting carbon allowance prices of $65 a tonne in 2030 under the Waxman bill, I would not want to be the one to take CCS off the table.

Once again there’s a simple answer to this conundrum. Have the government do what we need it to do, and let the market do what the market is good at. The government should check on safety and regulate pipelines, as always. And the government should help fund advanced urgent research. The market should decide whether wind, solar, natural gas, CCS or conservation is the cheapest way to go. Likely, it will choose a smart but complex mix of all five. What we don’t need is for politicians to decide the dangers of CO2 a mile underground. And yes, a gas can stay underground. The gas you cook with was down there for 100 million years.

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Some level of carbon capture and storage is almost inevitable. There is a strong correlation between growth in GDP and power generation which reflects the shift to a service economy and population growth. Those trends will continue so the question becomes what are the sources of increased electric power, if not coal and gas?

The high cost and low contribution of wind and solar combined with the continued resistance to increased nuclear power mean that coal and gas will continue to be the primary fuels for power generation. Accounting for almost 70% today, it will take decades to significantly reduce that percentage. Coal accounts for almost half of our power generation and the abundance of coal reserves and lack of viable alternatives mean that we should be seeking to find ways that allow us to continue to use coal while also meeting realistic emission control objectives.

Energy and economic realities mean that carbon capture and storage will have to be used to manage CO2 emissions from coal until some other technology is commercialized. At this time, it is the only technology that looks promising but at best it is probably only a bridge technology. But, it is not without its own challenges. The best geology may not be where the power generation stations are located and the cost to employ it is not trivial. Transporting CO2 to better geological formations would raise its cost more. Current cost estimates suggest that the marginal cost of adding capture and storage to power generation is higher than what most economists believe is an appropriate carbon tax.

The technology for injecting CO2 into geological formations is proven. The petroleum industry uses it routinely for enhanced recovery projects but much more research and testing is needed before it can be used on the scale contemplated for power plant emissions.

In the meantime, it is prudent to explore a range of options for reducing CO2 emissions from fuel combustion. It is rare that silver bullets are found and equally rare that surprises don’t disrupt the best of plans.

In terms of the four questions raised:

• The firm that injects CO2 into a formation should be liable for groundwater damage. If sites are properly selected, significant, accidental releases to the atmosphere should not be a problem.

• Property rights should be respected and neither Congress nor states should abrogate those rights so that CO2 can be injected into formations below the surface on someone’s land.

• Federal responsibility for underground sites and transportation of CO2 to them would probably best be assigned to DOT and the Interior Department because of their existing expertise with minerals management and pipeline issues.

• The issue of carbon capture and storage has little to do with keeping natural gas and coal fired electricity alive. Energy and economic realities will keep them alive. The abundance of coal, the potential abundance of unconventional gas, the lack of economically viable alternatives and the slow turnover of the utility capital stock make it an almost certainty that coal and gas will remain the dominant source of electricity for decades to come. Given that reality, the focus should be on ways to economically minimize CO2 emissions from their use.

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