Martin Schneider
GHG Monitor
3/14/2014
The current and future viability of carbon capture and sequestration technology again took center stage at a House hearing this week, with lawmakers on the Science, Space and Technology Committee taking aim at the Environmental Protection Agency’s New Source Performance Standards as well as regulation of carbon dioxide used in enhanced oil recovery. The opposition of Republicans to the EPA’s proposed standards is nothing new and has already been the subject of hearings this year in the House. However, the March 12 hearing jointly convened by the panel’s Energy and Environment subcommittees brought the issue into a new level of detail, with the marathon three-and-a-half-hour hearing probing deeply into EPA’s justification for finding CCS technology to be adequately demonstrated with acting Assistant Administrator for Air and Radiation Janet McCabe as well as examining industry and interest group perspectives on a separate panel. “At home on my desk I have the first generation iridium phone … with a little plaque on it that says, ‘Just because you can engineer it, doesn’t mean you should do it,’ ” Environment Subcommittee Chairman David Schweikert (R-Ariz.) said, drawing the comparison to CCS technology. “We have much of the scientific capability, at least theoretically, but have we stressed it? Do we truly understand the unintended consequences?”
The New Source Performance Standards rule will set separate CO2 emissions standards for coal and gas units and provides incentives for plant developers to install carbon capture and storage technology. Depending on whether plant operators decide to measure CO2 emissions over a 12- or 84-month operating period, individual coal units would have to cap emissions at between 1,000 and 1,100 lbs CO2/MWh and gas-fired turbines, depending on their size, must also meet a CO2 emissions limit of between 1,000 and 1,100 lbs MWh over a 12 month period. The rule also identifies the “partial” capture and storage of roughly 30 to 50 percent of a plant’s emissions as the “best system of emission reduction” technology for coal plants.
The ‘Basic Technology Works,’ But is it Adequately Demonstrated?
The question of whether CCS has been “adequately demonstrated,” was again a key topic for House lawmakers at the hearing, with McCabe pushing back against assertions from several witnesses and Republicans on the panel that the technology has not met the standard. “We do believe the proposal we put forward meets the requirements of the Clean Air Act for determining technology that’s appropriate. … We believe if you look across all the information and data that’s available, that there is adequate and robust data showing that the various components that we based that standard on are in use, have been in use and will be ready,” McCabe said. But Schweikert strongly questioned EPA’s approach, which he said “twists the clear language of the Clean Air Act and allows the EPA to require energy producers to use unproven technology.” He added later in the hearing, “Almost all the other Clean Air Act technologies had actually been around for years in some type of full scale before it actually hit Clean Air rule sets.”
Robert Hilton, vice president, power technologies for government affairs at Alstom, emphasized that while “the basic technology works,” his company would “challenge EPA on the argument” that CCS is adequately demonstrated. “Based on facts in the public domain I’m aware of no CCS projects that would be considered cost competitive in today’s energy economy,” he said. “The five carbon capture and sequestration projects cited in the NSPS proposal as examples for having met the cost criteria in the NSPS rule all either rely on EOR or by-product revenue, federal subsidy, or they will not economically dispatch. We would suggest that in setting economic criteria for technology, EPA consider the” typical commercial power plant which will not have federal subsidies and will likely not have access to chemical or EOR revenue. EPA needs to recognize that both chemicals and EOR are niche opportunities and not available to most power plants.” He noted that integration, not just existence of applicable component technologies, is the key to commercialization. “EPA indicates it has done literature searches and reviewed other sources of information to determine that all the components of CCS are available,” he said. “However, an important point EPA misses is that the true risk in any complex multi-stage process such as CCS is the scale-up and integration of the components.”
McCabe, for her part, emphasized the difference between the idea of a technology that’s commercially available and the standard required in the law. “The Clean Air Act does not use the term commercially available. It uses the term adequately demonstrated. … It’s clear Congress intended for this provision to put the United States on the forefront of developing technologies,” she said. “It is not an expectation that a technology be in widespread use and that’s been clearly demonstrated over the years.” David Hawkins, director of climate change programs at the Natural Resources Defense Council, agreed. “The difference between commercial availability and adequate demonstration is very specific to the sector that’s being looked at,” he said. “So commercial availability asks the question, is there a commercial vendor that’s willing to provide a commercial product for a particular type of industrial source, and if there is no market for it, the answer is often no. Actually in this case, there are vendors who provide commercial carbon capture systems for power plants. So in this case, there is commercial availability, there just isn’t commercial use because there just isn’t any reason for power plant operators to use it.”
Environment Subcommittee Ranking Member Suzanne Bonamici (D-Ore.) sought to counteract what she viewed as “mixing” of the standards of adequately demonstrated and commercially available. Citing a DC Circuit Court decision, Bonamici noted that courts interpreted adequately demonstrated to be “technically feasible, stating that the section looks toward what may fairly be projected in the regulated future rather than the state-of-the-art at present.”
Lack of NETL Input Questioned
Rep. Randy Hultgren (R-Ill.) repeatedly pressed EPA’s McCabe on its lack of collaboration with the Department of Energy’s National Energy Technology Laboratory in assessing the state of CCS technology. In particular, Hultgren focused on the Technology Readiness Level, a scale of assessment from one to nine, with the numbers getting higher as a technology gets closer to commercial deployment. “As of December 2012, in the NETL report on the technology readiness for clean coal research programs, NETL had 295 projects underway developing technologies related to CCS. Only one project had a Technology Readiness Level above 6. Seventy-seven percent of the projects were at 4 or below. The only project that was above a 6 was a regional carbon sequestration project that is not widely applicable across the United States. … How did EPA reconcile the obvious differences between what you’re calling adequately demonstrated and what the Administrative agency charged with developing the technology has clearly defined as being at 5 percent or less of final scale?” he asked McCabe. She responded that “there was consultation and much discussion with them about the kinds of technologies that are out there, and scientific and technical discussions about them but the determination within the law is EPA’s to make.”
McCabe added that, “There is a lot of information available about the technologies we are talking about here and in fact the Secretary of Energy has indicated on many occasions that he is comfortable that this technology is available and ready for use. … These are all the kinds of discussions we have with technical experts in and outside of government to make a determination about adequately demonstrated.”
Hultgren, in comments directed to Alstom’s Hilton, noted that the company’s chemical looping prototype was assessed at a Technology Readiness Level of 5 in that December 2012 NETL report, pointing out that Alstom had been working on that technology since the 1990s. Hilton said that Alstom expects the technology to be commercial in the 2020s. When asked what readiness level would be put on a technology that has been adequately demonstrated, Hilton responded: “Essentially trending toward the upper level of 9. That’s when you know things work and that’s when you build something that’s large enough to say that this could be applied.”
When Does the Clean Air Act Drive Technology Development?
EPA’s McCabe repeatedly asserted that historical precedent showed the Clean Air Act has been effective in driving technology application in the power sector. “Technology will move and innovate when there is a requirement to do so. … There are many examples going back through time where Section 111 was the mechanism that took emerging technologies and brought them into the main stream,” she said. NRDC’s Hawkins noted that “regulations and money” are the essential ingredients for technological advances. “If you don’t have money, then you need standards,” he said, adding: “The coal industry and the power industry tout in ads how much of a reduction in conventional pollution has been achieved—and they’re correct. But what they don’t say is that it all came about because of regulations. It came about because of regulations requiring scrubbers. It came about because of regulations requiring baghouses for particulate matter. It came about because of regulations requiring nitrogen oxide controls and most recently mercury and other toxics controls. The same process will happen as we turn to carbon dioxide. Carbon dioxide is just another chemical. There are industrial processes for separating it just as there have been for conventional pollutants.”
Hilton, though, argued that just the opposite would happen. “This regulation will essentially stop the development of CCS,” he said in his written testimony. “Without new coal plants, it is unlikely technology developers will continue to invest in CCS development. Since the proposed regulation provides a significantly lower cost alternative (NGCC without controls) to the application of CCS to coal, there is unlikely to be a market for at least 10 years, and most R&D cannot be sustained for that period. Industry bases R&D on market potential and return on investment. With no market in sight, investment will stop.” He emphasized that, “this is the first time where we are dealing with something where we have nothing out there to show. We’re running down a path where Europe is not pushing this issue, China is not pushing this issue—we’re alone out here and so the technology has got to be developed here.”
McCabe said she took issue with comments that all prior technologies mandated under Section 111 of the Clean Air Act had been around for years before they were required. “That’s really not the case,” she said. “One example I could cite for you is catalytic reduction technology which is a NOX reduction technology and it had been used in one type of application but it had never been used in industrial boilers.” Chairman Schweikert, though, jumped in to note that, “actually the catalytic reduction technology has been around for a century … The basic technology had been around for decades and decades.” McCabe responded: “Similarly hear we have technology that’s been around for decades and decades and been around in a variety of applications. The law requires that we look at technology that’s in use and make a judgment based on whether that is feasible and available for the particular sector that the rule covers.”
Republicans Take Aim at Changes for EOR Well Regs
Beyond the discussion of the readiness of CCS technology, the possibilities for CO2 in enhanced oil recovery were lauded by both lawmakers and NRDC’s Hawkins. But Republicans raised concerns that increased regulation of EOR would undercut any benefits to CCS. “My advice to members of Congress who are interested in creating space for coal to play a continuing role in the American economy would be to reject these efforts to hamstring EPA and instead support efforts that could enjoy bipartisan support,” he said. “Provide financial incentives for CCS to support enhanced oil recovery, for example. NRDC is on record supporting those kinds of initiatives.” He went on to state: “EOR is a great win-win-win opportunity for energy security and climate protection and, I would argue, for other environmental protection. We have lots of oil that’s stranded in existing oil fields and it’s not economic to get it out. It could be gotten out starting tomorrow if the CO2 were available. The CO2 isn’t available because it’s all going up into the air from uncontrolled industrial sources. We have an easy fix which is to find a way to work the economics so that we put carbon capture on these power plants and then we use these pipeline networks and expand the pipeline networks. The pipelining of this is easy—it’s being done today.”
However, several Republicans on the panel roundly criticized the EPA for recent guidance that directs when Class II wells—in which CO2 is injected for the purpose of EOR—must be re-permitted as Class VI wells—in which CO2 is injected for the purpose of geologic sequestration. The industry has been critical of the guidance, arguing that it provides unnecessary regulatory burden to an industry that’s already heavily regulated. “We keep having the discussions that EOR make actually be one of the financing mechanisms for carbon capture, but at the same time … we have the Class VI well regulations. Doesn’t this discussion dramatically change the economics of EOR?” Schweikert asked, adding he’s concerned that “we end up in this new regulatory environment and we’ve just destroyed the economics.” Similarly, Rep. Jim Bridenstine (R-Okla.) asked Hawkins, “So on one hand we need EOR to make the market for CO2 viable; on the other hand we want to severely limit EOR for the extraction of oil? Is that correct?” Hawkins responded: “No it is not correct, sir. Requiring companies to do reasonable monitoring and reporting will increase confidence in the public that this is in fact a secure solution and that the operators are behaving responsibly.” Bridenstine, though, emphasized that “if you limit EOR it cannot be used to off-set the cost of carbon capture and storage.”
