Martin Schneider
GHG Monitor
3/28/2014
Sen. Heidi Heitkamp (D-N.D.) introduced broad legislation this week aimed at accelerating the commercial deployment of carbon capture and sequestration through a combination of loan guarantees, tax credits, multi-year R&D funding and government-industry cost-share projects. The bill, the Advanced Clean Coal Technology for Our Nation (ACCTION) Act, “seeks to remedy one of the main impediments to the development of advanced clean coal technologies, in particular carbon capture and sequestration, CCS, by laying out concrete funding mechanisms to encourage investment, innovation, and collaboration between the Federal Government and companies looking to build the next generation of coal-fired power plants in this country,” Heitkamp said in introducing the bill on the Senate floor. “The Federal Government continues to put in place regulations that seek to further reduce emissions from our nation’s coal-fired power plants, yet they provide little to no incentive for utilities and other coal stakeholders to invest in and develop advanced clean coal technologies.”
Specifically, the bill directs the Secretary of Energy to carry out a program to demonstrate the integration of systems for the capture, transportation, and injection of carbon dioxide from industrial sources, either for the purpose of long term geological storage or enhanced oil recovery at a commercial scale. In carrying out the program, the Secretary may enter into cooperative agreements to provide financial and technical assistance to up to 10 large-scale geological storage or enhanced oil recovery projects. Not fewer than three of the 10 projects selected shall be large-scale projects that undertake site characterization and permitting to qualify the projects as ready for long-term saline storage sites. Notably, the bill authorizes the Secretary to indemnify projects that sign cooperative agreements with the Department under this program for up to $10 billion “in excess of the amount of liability covered by financial protection maintained by the recipient in accordance with the requirements of the UIC program.”
The bill authorizes billions of dollars in appropriations through 2035 for research, development and demonstration of technologies including: chemical looping, supercritical carbon dioxide power generation cycles, pressurized oxycombustion and other technologies. “In carrying out the program, the Secretary may enter into partnerships with private entities to share the costs of carrying out the program,” the bill states, authorizing $1.65 billion for FY 2015 through 2018, $5.283 billion for FY 2019 through 2025 and $3.3 billion for FY 2026 through 2035. In addition, the bill sets aside $2 billion of DOE’s loan guarantee authority for carbon capture and sequestration projects. “The ACCTION Act takes into account two very important realities and attempts to address the seemingly divergent points by looking for a solution,” Heitkamp said. “First, the climate is changing, and we need to recognize we will be functioning in a carbon constrained world moving forward. We will have to continue to innovate and look for new ways to reduce emissions while at the same time meeting our energy needs. Second, coal is not going anywhere. The Energy Information Administration has stated that coal will still be providing a third of our electricity decades into the future. If we continue to support and invest in advanced technologies, coal will remain in the energy mix for decades beyond that.”
In addition the bill:
- Increases the current tax credit for carbon sequestration from coal facilities to 30 percent and includes polygeneration facilities among the possible eligible projects.
- Creates variable price support for companies that capture CO2 to provide long-term certainty to the utilities that sell CO2 for enhanced oil and gas recovery, regardless of the price of oil.
- Creates clean energy coal bonds to provide tax credits for coal-powered facilities that sequester CO2 or meet efficiency targets relative to the current coal fleet; and
- Requires reports to Congress from the DOE on the economic and technical status of CCS research and projects, including an evaluation of CCS projects online in Canada and a recommendation of how the U.S. could undertake similar projects with public-private collaboration.
“Coal use continues to increase around the world, and if the United States wants to truly be a leader on emissions reduction and advanced energy technologies, then we must be fully committed in investing the necessary funding and resources to develop and implement clean coal technologies here and abroad,” Heitkamp said. “These efforts will come with significant costs, and will not happen overnight, but we must take the necessary steps now to further reduce emissions while providing a path-forward for coal-fired power.”
