DOE FY14 BUDGET JUSTIFICATION SHOWS CARBON CAPTURE EMPHASIS

Senators Criticize Proposed Cuts to Fossil Energy R&D Program

Tamar Hallerman
GHG Monitor
4/19/13

Program-level budget justifications unveiled by the Department of Energy late this week provide a closer look at the Obama Administration’s carbon capture and storage-related priorities, highlighting a greater focus on post-combustion and natural gas capture technologies and less of an emphasis on carbon storage-related research for Fiscal Year 2014. DOE released the details of its budget proposal for its applied energy programs April 18, more than a week after the Obama Administration released its top-line figures for federal agencies. That request proposes a 25 percent budget cut for the Office of Fossil Energy’s CCS and Power Systems program compared to FY 2013 funding levels (see chart). The details of that proposal, though, indicate that the Department’s priorities for the upcoming year focus squarely on carbon capture moving forward—at the expense of most other Fossil Energy R&D programs. 

Carbon Capture Program Sees Big Boost…

The justification shows that the White House hopes to expand the scope of the Fossil Energy R&D’s Carbon Capture program. Requesting an additional $45 million for the program above its FY 2012 budget of $67 million, the Administration said in its justification that it wants to increase funding particularly for post-combustion technologies, where it hopes to transition and scale-up multiple CO2 capture technologies that were developed through DOE’s Advanced Research Projects Agency-Energy (ARPA-E) and Energy Frontier Research Center programs between 2009 and 2013. The request says those technologies would be chosen through a competitive solicitation. DOE said the remaining funding in the post-combustion capture line item should focus on developing second generation technologies that can capture CO2 from new and existing plants for $40 per tonne or less.

The document proposes slightly trimming FE’s pre-combustion capture program budget from $13 million to $12 million, saying that the proposed funding level is “sufficient to maintain focus on the current scope of activities.” The focus of that program, DOE said, will also be on developing second generation technologies—mainly integrated gasification combined cycle facilities—with a capture rate of $40 per tonne or less. “Significant improvements are required to reduce parasitic energy load and cost, and many technologies that are available in the near-term have not been scale up or applied to fossil fuel-power generation systems,” the budget request states.

DOE also proposes creating a new line item within the Carbon Capture program—which accounts for more than half of the proposed budget increase—under ‘Natural Gas Capture.’ That proposed $25 million program would go exclusively toward the creation of a competitive inducement prize for the first to develop a commercial natural gas combined cycle plant that also captures and stores at least 75 percent of its CO2 emissions. The White House briefly announced the prize last month ahead of the President’s visit to Argonne National Lab. While some CCS stakeholders have praised the idea of a prize in order to bring public visibility to the technology, many have noted that the award money is not high enough to warrant significant investments in CCS by the private sector.

… At the Expense of the Carbon Storage Program

In order to pay for the bump in Carbon Capture research, DOE’s aims to dig deep into FE’s Carbon Storage program, requesting slightly more than $61 million for FY 2014, a 48 percent decrease from current FY 2013 funding levels. The justification says the request for the program “maintains a minimum level of funding for current activities and focuses budgetary resources on advancements in carbon capture.” Within that program, the Administration requests halving FE’s Regional Carbon Sequestration Partnership program—asking for $40.5 million for FY 2014. “The requested FY2014 funding level focuses resources on large volume development tests of sequestration technologies, injection techniques and monitoring at selected geologic sequestration site locations,” the request states. It also recommends cutting funding from nearly all of its research areas within the Carbon Storage program, including geological storage technologies; monitoring, verification, accounting and assessment, as well as carbon use and reuse.

The budget proposes even deeper cuts to FE’s Advanced Energy Systems and Cross-Cutting Research programs, calling for 52 percent and 59 percent cuts, respectively. For the Advanced Energy Systems program, the Obama Administration said that it aims to focus its resources on activities related to pressurized oxy-boiler and chemical looping combustion. It also proposed zeroing out the Coal and Coal-Biomass to Liquids budget since it is a “low priority.” The $20.5 million funding request for Cross-Cutting Research, the White House said, “reflects the shift in focus toward sensor technologies that have potential benefits to maximize plant efficiencies and reduce emissions to both existing and new fossil-fueled power plants.” 

Senators Question Cuts to Fossil Energy R&D Account

Meanwhile, senators this week criticized DOE for its proposed cuts to the Fossil Energy R&D program. During an April 18 hearing on DOE’s proposed FY 2014 budget, some members of the Senate Energy and Natural Resources Committee told Deputy Secretary of Energy Daniel Poneman that they were not happy with the proposed cuts to the account. However, most focused on the fact that the proposed budget for Fossil Energy R&D does not make unconventional natural gas and oil research much of a priority for FY 2014. “I do think it is important to ask for explanations about why the DOE budget has such dramatic reductions in Fossil Energy and Nuclear Energy, and to a lesser extent in water power and fuel cells,” Committee Chairman Ron Wyden (D-Ore.) said. “These are technologies that the private sector is anxious to move on quickly. Our competitors around the world are ramping up their investments in these areas. Despite that, this year appears to be no exception to what clearly are misguided cuts.” Wyden added that DOE is “playing a bad hand” by cutting Fossil Energy R&D. “If you all don’t do this research, I don’t think it’s going to get done,” Wyden said.

Ranking Member Lisa Murkowski (R-Alaska) criticized the Fossil Energy R&D program’s focus on CCS. She instead suggested that more attention be paid to unconventional fossil sources like methane hydrates. “The Administration has said repeatedly that it supports an all-of-the-above energy policy. But I don’t necessarily see that reflected in this budget here. Instead, it would appear that there are still the favorites … The Fossil R&D budget remains almost exclusively focused on CCS and a fracking safety initiative. New supply from unconventional resources like methane hydrates [seems] like a distant afterthought, if it’s even a though at all,” Murkowski said. “If we’re really going to move out and advance some of these breakthroughs, we need to show that support by way of the budget.” Poneman responded that even within the CCS budget, unconventional oil plays a prominent role via enhanced oil recovery.

Manchin Slams Lack of Coal Funding

At the hearing, Sen. Joe Manchin (D-W.Va.) slammed DOE’s proposed budget for its lack of coal funding. Manchin said he was “dismayed” by the lack of coal R&D funding due to the fuel source’s share of the energy mix. “Wouldn’t you think that if we invested a little bit more [in coal] with the amount of consumption the world has right now that we could find the technologies to use the resource we’re going to depend on for a long time and maybe help other countries clean up what they have?” Manchin asked Poneman. “I’m just asking for a little bit of balance here. This is a little bit out of balance.” Poneman responded by listing recent project milestones achieved over the last year within the Department’s CCS project portfolio. “Coal is and will be a very fundamentally important part of our power generation and globally,” he said.