Karen Frantz
GHG Monitor
3/07/2014
Two Democratic Senators questioned why industry hasn’t done more to advance carbon capture and storage technology at a coal technology symposium held in Washington this week. Sens. Joe Manchin (W.V.) and Mark Warner (Va.) said that furthering CCS is vital to keeping fossil fuel—and particularly coal—viable in a carbon-constrained world. But they appeared disappointed with the progress that has been made to date, with Manchin wondering why it seems industry has not “stepped up to the plate” with new technology, pointing to $8 billion in loan authority for fossil energy from the Department of Energy that he says has not been put out into the field. “Why haven’t you gone after this money?” he said. Warner also called on industry to do more, saying, “There’s a little bit of viewing both sides as the enemy, and there needs to be some collaboration here. I think the industry has spent an awful lot of time on legislative and regulatory fights rather than trying to say how they can further engage on research.”
The symposium was organized by Manchin and Warner, as well as Sens. Heidi Heitkamp (D-N.D.) and Joe Donnelly (D-Ind.), and it addressed CCS technologies currently on the market and under development and how and when commercially scalable CCS will be realized. And it became clear through several panels at the symposium that although progress is being made at some high-profile CCS demonstration projects, costs are still daunting for first-movers. Jeff Phillips, Senior Project Manager at Electric Power Research Institute, said that the costs of CCS projects are significant, pointing to high costs at the Kemper County and Boundary Dam projects. “Without government support, those projects probably would not be economic,” he said. “That answers the question that the Senators posed. … Why isn’t industry stepping up and taking the $8 billion in loan guarantees? The fact of the matter is that the argument [against taking the loan is], I’m not going to take it if it means I’m going to have a business that loses a lot of money.”
Next-Gen Projects and EOR
Although panelists said that first-generation CCS projects are expensive, some said the next-gen projects would reap the benefits from the experience obtained from first-movers. Mike Monea, President of Carbon Capture and Storage Initiatives at Saskpower, which is constructing a 110 MW post-combustion retrofit project in Canada known as Boundary Dam, said the company is confident that its next CCS rebuild projects could be built for 30 percent cheaper. “There isn’t three days that have gone by that I haven’t had an engineer come to me and say, my god, we should have figured this out this way, let’s implement this new process,” he said.
One of the largest improvements that could be realized with the next plants would be on the capture side, Monea said. Boundary Dam’s absorber is about 40 percent over capacity “because we don’t know the absorption rate on the CO2,” he said, and added that once Saskpower determines whether it overbuilt or under-built, it can figure out how to better fine-tune the next plants, “or we can simply put more CO2 through the system.” He said that the next plant “will not only be commercial, it will be … developed without a subsidy from our government, and that is hugely important.”
Other panelists said that CO2-driven enhance oil recovery is a crucial economic driver for CCS projects—particularly among the first-movers. Julio Friedmann, Deputy Assistant Secretary for Clean Coal at the Department of Energy’s Office of Fossil Energy, said that EOR can be a “critical bridge” with many near-term benefits, including a revenue stream for the first round of projects. He also said that the additional barrels of oil that could be garnered “come with additional tax revenues. … That opportunity space is real and we’re crazy not to pursue it aggressively.” But Sasha Mackler, Vice President of Summit Carbon Capture at the Summit Power Group, which is heading the 340 MW Texas Clean Energy gasification project, said that although EOR is vital in the near-term to help make the economics work commercially, he hopes there will be a time in the future when projects will be able to work without EOR.
Advances Needed in Capture and Storage
Phillips outlined specific areas where CCS needs to be advanced in order to make the technology more efficient and less costly. He said on the capture side, the best commercial technologies out today use two-and-a-half to three times the theoretical minimum amount of energy that’s necessary to capture and compress CO2. “And so there’s a lot of room for improvement,” he said. He added he believed that through DOE-funded early-stage research, those energy needs might be reduced to two times the theoretical minimum or possibly a bit less. “How low can we go? I don’t know, but if we don’t do the research we’ll never know,” he said.
Phillips also said that more work needs to be done on the storage-end to make it less costly and less time-consuming to find sites for geologic sequestration, and that industry needed to prove that storage is permanent and safe. “We don’t know a whole lot about these reservoirs,” he said. “The DOE to their credit has done an enormous effort with their Regional Sequestration Partnerships and their CO2 Atlas and doing their initial scouting, and say there are a lot of promising areas where they’re seeing formations all around the United States.” But he warned that there were still hurdles to clear, pointing to the experience of ZeroGen, an Australian CCS project in which the scouting for CO2 storage cost $50 million over three years only to have geologists discover that the saline formations studied could not store the CO2. “The reality is that those power companies are not going to spend $50 million in three years on a bet that they might come up with a solution to find a place to store CO2,” Phillips said. “They will build a natural gas combined cycle plant every time.”
He also said that more work could be done to make power generation technology itself more efficient and less costly by developing materials that will allow plants to operate at higher speeds, pressures and temperatures. He said that DOE has been funding an effort to develop ways to amp steam up 300 degrees to 1,400 degrees Fahrenheit, which would result in a 30 percent reduction in CO2 emissions compared to the average.
Is CCS Currently Commercially Available?
Many panelists addressed a controversial aspect of CCS: whether the technology is commercially available. Although many detractors of the Environmental Protection Agency’s efforts to require CCS for new-build coal-fired power plants have argued that the technology has not been adequately demonstrated, many panelists said that what is truly novel is the application of established technologies, not the technologies themselves. Mackler said that all the pieces of equipment in the Texas Clean Energy Project are out in the marketplace today. “And the question is around the integration, the performance, the risk management, of all these pieces of equipment, and can the economics work in these new markets that we’re going to be applying these technologies to? And that’s what we’re proving out here with TCEP.” He added that for early projects there will still need to be government support. “But we’re certainly at a point now in the marketplace where commercial-scale CCS we think is quite viable,” he said.
But Ben Yamagata, Executive Director of the Coal Utilization Research Council, said that even partial CCS is 86 percent more costly than natural gas. “We’re doing this, but it’s too costly and we’re not ready for prime time,” he said. And Brian Toth, Climate and Renewable Strategy Manager at Southern Company, which is building Kemper County, a 582 MW integrated gasification combined cycle plant in Mississippi, said that the project has unique advantages that would not necessarily be available to other plants, and thus it does not demonstrate that CCS is available right now. “We need many more projects in diverse locations before we as an industry can say CCS is ready for prime time and available everywhere,” he said.
