Abby L. Harvey
GHG Monitor
12/19/2014
While the United States is well poised for the eventual wide-scale deployment of carbon capture and storage technology, that option may not be the best for some developing countries, Julio Friedmann, Deputy Assistant Secretary of Energy for Clean Coal, said this week during an event hosted by the Center for Strategic and International Studies. “If you’re in a developing country, without enhanced oil recovery options, CCS may not be the best option for your country,” Friedmann said. “We’re not technology shoving. … Those countries have to determine on their own what makes sense.”
While a lack of potential in EOR will make developing an initial economic case for the technology difficult, as a technology matures the cost goes down, which leaves the responsibility of maturing the technology in the hands of nations like the United States, Friedmann said. “I think a good role for developed countries, in particular industrialized countries like the United States and Japan, like China and members of the [European Union] is how can we ratchet down those costs through demonstration to create a wider optionality for more countries, because if we can get the cost down to a place where more countries want to adopt it, that gives them an option that they can consider,” he said.
Even within the United States, differences between regions make CCS more viable in some places than others, Friedmann said. “In some markets coal with CCS is the cheap option. Not everywhere, maybe not in California, maybe not in Arizona but in a whole bunch of markets and a whole bunch of places in the country and around the world, CCS with coal is the cheapest option for deep abatement and if you get rid of that cheapest option you have to replace it with something more costly or less efficient,” he said.
Financing Difficulties Remain Obstacle
Because CCS is in its first generation of demonstration, the price of the projects remain high, but with each subsequent project, prices fall as with most any technology. The difficulty is financing the early generation projects, Friedmann said. “That’s really the issue, is how do you finance these things. Many options which are open to other clean energy technologies are not open to carbon capture and storage today,” he said. “These include things like investment tax credits and production tax credits renewable portfolio standards, which allow you rate recovery, tax exempt debt financing, utilities that will provide that service. I absolutely want to be clear on this; I not have a dog in that hunt. I do not make or recommend policy, period. That’s not what I do. But, if you want to get the financing done, it’s worth asking what kind of policy choices are available to us.”
