EPA CHOSE TO REJECT CCS AS PERFORMANCE STANDARD FOR GAS UNITS

Tamar Hallerman
GHG Monitor
9/27/13

The Environmental Protection Agency named carbon capture and storage as the ‘best system of emission reduction’ (BSER) for new coal plants under its landmark performance standards unveiled last week; however, the agency passed up the chance to do the same for capture on natural gas. The agency’s Sept. 20 proposal requires new gas-fired turbines, depending on their size, to limit CO2 emissions to 1,000 to 1,100 lbs per MWh and names commonly-used natural gas combined cycle technology as BSER. However, the text of EPA’s draft rule elaborates that EPA did look at ‘full’ and ‘partial’ CCS as alternative BSER technologies during the rulemaking process but concluded that they were too expensive and unproven to mandate. “At this time, CCS has not been implemented for NGCC units, and we believe there is insufficient information to make a determination regarding the technical feasibility of implementing CCS at these types of units,” the text of the rulemaking states.

EPA said in its justification of the rulemaking that it was not aware of any CCS demonstrations on NGCC plants to the level that would “justify setting a national standard” and that mandating full or partial CCS on gas would have “significant adverse effects on national electricity prices, electricity supply and the structure of the power sector.” “Because virtually all new fossil fuel-fired power is projected to use NGCC technology, requiring CCS would have more of an impact on the price of electricity than the few projected coal plants with CCS and the number of projects would make it difficult to implement in the short term,” EPA said. “In addition, requiring CCS could lead some operators and developers to forego retiring older coal-fired plants and replacing them with new NGCC projects, and instead keep the older plants on line longer, which could have adverse emission impacts.” While the draft rulemaking acknowledges that mandating CCS technology for gas would have resulted in “significant” emissions reductions, it said natural gas on its own is a “low-emitting fuel.”

Gas-CCS Gaining Some Attention

The idea of capturing and storing carbon from natural gas systems has received increased attention in recent months as some in the private sector have moved ahead in investing in the technology. The U.K.-based Energy Technologies Institute issued a request for proposals last week for up to £20 million ($31.8 million) in funding for the design, construction and operation of a small natural gas-capture demonstration unit. Summit Power and the Linde Group forged a partnership in February to develop commercial-scale natural gas plants that capture up to 90 percent of CO2 emissions, while GE also announced similar plans to partner with the Norwegian technology development company Sargas AS.

Environmentalists have long argued that governments must also move forward with RD&D work for CCS on natural gas plants—in addition to coal units—if policymakers are serious about truly limiting global temperature increases to 2 degrees Celsius. But policymakers in Washington have been slow to catch up given the lack of a climate policy and the runaway popularity of natural gas. The Obama Administration’s pick to lead the Federal Energy Regulatory Commission, Ron Binz, was sharply questioned by senators during his confirmation hearing last week due to previous remarks he made that natural gas would be a “dead-end” fuel without CCS by 2035 under a carbon-constrained future.

Meanwhile, the White House has only recently begun looking at incentivizing the capture of emissions from natural gas plants. President Barack Obama’s FY2014 budget request for the Department of Energy notably recommended the creation of a new $25 million 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. That proposal, however, appears to be dead on Capitol Hill given that the House version of the FY 2014 Energy and Water Appropriations bill that passed earlier this summer does not include funding for the program. The Senate version of that bill also does not mention funding for natural gas capture projects.