Tamar Hallerman
GHG Monitor
3/29/13
Carbon capture and storage industry stakeholders said this week that the natural gas capture prize recently announced by the White House will likely do little to spur the development of new technology. Instead, during a March 27 panel discussion held by Duke University’s Nicholas School of the Environment, several industry officials said that if the Obama Administration truly wants to incentivize new CCS technologies it must instead focus on fully funding federal RD&D programs. Panelists were referring to the new $25 million prize the White House announced earlier this month for the first to develop a natural gas combined cycle (NGCC) plant integrated with CCS technology. Industry speakers said that while the prize could be beneficial in drawing much-needed public attention toward the technology, they agreed the prize money being offered is not enough to encourage real investments in CCS development. “To win a $25 million prize, [companies] would need to spend upwards of $100 million” to develop the technology, said Bob Hilton, vice president of Power Technologies for Government Affairs at Alstom, who said he was previously unaware of the prize. “It doesn’t seem like good economics to me. I wonder if they’ve thought through how much of an incentive the $25 million actually is.”
The Obama Administration said earlier this month that it plans to introduce the NGCC-CCS prize in its upcoming Fiscal Year 2014 budget request to Congress, now scheduled for April 10, two months behind schedule. Ben Yamagata, executive director of the industry advocacy group the Coal Utilization Research Council, said the White House needs to get “realistic” about the “enormous amount of capital, time and research and development” it takes to develop such a technology. “I’m glad the $25 million is going to be out there—I think we haven’t touched the ingenuity in this country and so those kinds of things will be helpful—but they need to be more than a period at the end of a statement, given the amount of effort that’s going to be required,” he said.
More R&D Funding Needed, Reps Say
Instead, the industry representatives said the Administration’s proposed FY2014 budget for the Department of Energy’s Fossil Energy R&D program will have more of an impact on the future of second generation capture technologies like NGCC-CCS than any prize. “We don’t know where the administration is going in the R&D space, and that’s what we’re most concerned about,” said Hilton. Several of Alstom’s technologies are being demonstrated in projects funded by the Fossil Energy R&D program and could lose big if federal coffers are shrunk. “Now’s not the time to cut R&D funding,” he added. Most speakers at the event indicated that the program budget for Fossil Energy R&D will likely be slashed given the sequester, the push for deficit reduction in Congress and previous Administration energy priorities.
Yamagata said he is not sure whether the White House understands what is needed to commercialize CCS technologies. “Our preliminary information is that the funding level for Fossil Energy R&D is going down, which is really in the opposite direction of where it needs to go,” Yamagata said. “We can’t get the job done to develop carbon capture, utilization and storage without [adequate] dollars and time, and we’re not getting that kind of enthusiasm, it seems to me, from this White House.”
‘The Norwegians Have Already Won’
Hilton noted that other countries have already moved ahead of the U.S. in the development of NGCC-CCS technology. He pointed to Norway’s Technology Centre Mongstad, which has had two test units running for nearly a year that are capturing CO2 from a natural gas plant slipstream. “The Norwegians have already won in terms of CO2 capture on gas,” he said. Hilton also pointed to the U.K. government’s selection of a natural gas-CCS retrofit in Scotland as a “preferred” project under its £1 billion ($1.52 billion) CCS demonstration competition last week.
The following article was revised on 4/2/13 to clarify Hilton’s comments.
