Carbon Capture, a Federal Spending Target, Has Much to Prove

 

 

By Benjamin J. Hulac

March 7, 2023 - As part of its economic recovery plan, the Obama administration in 2009 tried to invigorate a nascent form of technology known as "carbon capture and storage," or CCS.

The Energy Department invested $1.1 billion in 11 projects — eight coal facilities and three industrial sites — to show how the technology could trap and hold carbon dioxide emissions from existing plants. Seven of the eight projects were never built. Two of the three industrial locations began operating. And the CCS coal facility that did come online closed down in 2020.

All told, the department spent about $300 million more than planned on projects that were never built, according to a Government Accountability Office review.

That December 2021 report included a recommendation: "As DOE and Congress consider investing billions more in a new round of CCS demonstration projects, it is crucial that they take into account lessons learned from past projects in order to reduce risks to future projects' success and taxpayer funds."

Now, more than a decade after it tried to germinate a domestic fleet of power plants and industrial facilities outfitted with carbon-trapping hardware, the U.S. is setting aside billions of dollars to spur a new wave of the technology that leading climate scientists say is necessary but remains costly, rare and unproven at scale.

The infrastructure law of 2021 provided $62 billion, laid out over five years, for a suite of emissions-reduction programs at DOE, including more than $10 billion for carbon capture and other methods to limit emissions from industry.

Separately, the climate, health and tax law of 2022 contained a series of carbon capture incentives, including $2 billion for carbon dioxide removal — a related but distinct offshoot of carbon capture technology — plus an extension of a federal tax credit known as 45Q until 2033, lengthening that deadline from 2025. And the Council on Environmental Quality, a wing of the White House, issued new rules last year governing the use of carbon capture technology. 

Energy Secretary Jennifer Granholm has been a consistent proponent of carbon capture and storage technology during the Biden administration.

"Nearly every climate model makes clear that we need carbon management technology — especially in hard-to-decarbonize sectors and heavy industries such as steel and cement production — to tackle the climate crisis," Granholm said in September.

Bipartisan Backing

Carbon capture also has backers on Capitol Hill. Last week, Sens. Sheldon Whitehouse, D-R.I., and Bill Cassidy, R-La., and Reps. David Schweikert, R-Ariz., and Terri A. Sewell, D-Ala., introduced bills in both chambers to provide tax credits for companies that reuse carbon that has been already trapped to make other products, like chemicals or building materials. 

Nikki Haley, a candidate for the 2024 Republican presidential nomination and the former U.S. ambassador to the United Nations during the Trump administration, has said she supports carbon capture research. Lawmakers from oil-rich states, like Republican Sens. Kevin Cramer and John Hoeven of North Dakota, are steady proponents of carbon capture also.

"It’s not such a new technology," Jeffrey Rissman, industry program director at Energy Innovation, an nonpartisan research organization, said by phone. 

For decades, carbon capture has been used primarily in what is known as "enhanced oil recovery," a technique used to get more fossil energy out of the ground by injecting pressurized carbon dioxide beneath.

"That's not a climate solution because it produces more oil," Rissman said. Instead, carbon capture can be effective in trapping emissions from industrial processes, like the making of cement or steel.

Worldwide, the production of cement, the binding substance in concrete, is responsible for about 8 percent of emissions. By replacing cement with a byproduct of carbon that has been captured, those emissions could be slashed sharply.

Retrofitting blast furnaces used in steelmaking, another heavy-emissions activity, is another opportunity ripe for carbon capture technology, Rissman said. 

"The best opportunities are in the industrial sector, they're not in the electric power sector," he said, adding that coal-fired power plants in the U.S. are simply too expensive to compete against renewables. "Even without carbon capture, coal is not economical anymore."

The latest major report from the Intergovernmental Panel on Climate Change said a specific type of trapping carbon called "carbon dioxide removal," or CDR, will be vital to cut emissions from sectors of the economy difficult to unhitch from fossil fuels.

"The deployment of CDR to counterbalance hard-to-abate residual emissions is unavoidable if net zero CO2 or GHG emissions are to be achieved," the report said.

Because the world is on pace to overshoot the global goal, set at the Paris climate talks in 2015, of limiting temperatures from rising more than 1.5 C, experts say technology to remove emissions from the air will be needed to stave off the worst impacts of rapid climate change.

At a hearing last month, Rep. Bruce Westerman, R-Ark., endorsed the carbon removal technology, an even-more nascent offshoot of carbon capture and sequestration. 

"We talk about carbon capture, there's now technology to strip the carbon off of the carbon dioxide, release the oxygen, put the carbon in a slurry, inject it into the ground, and it solidifies into a rock," Westerman said. "That's real carbon capture and sequestration. And we should be pushing the innovation and pushing the permitting process to be able to get new technology like that online sooner than later."

Direct air capture, a type of carbon removal, essentially sucks carbon out of the atmosphere.

There is one such plant operating in the U.S., a site in Brisbane, Calif., where technicians trap carbon dioxide in concrete that is then used in buildings in northern California. There are 18 plants of that type worldwide, the International Energy Agency said.

'Save the Day'

Fossil fuel companies use carbon capture "as a way to avoid hard conversations about phasing out fossil fuels or actual emissions reductions," said Collin Rees, U.S. program manager at Oil Change International, a climate-action advocacy group. 

"The subtext is that it can allow business as usual, that it can allow us to not phase out fossil fuels by 2030," Rees said, "because CCS will save the day."

Emails the House Oversight and Accountability Committee obtained last year during its inquiry into climate disinformation by large oil companies show industry executives are wary of the public sense that carbon capture efforts are meant to extend the lifespan of fossil assets.

"We want to be careful to not talk about CCUS as prolonging the life of oil, gas or fossil fuels writ large," Marnie Funk, an adviser in Shell’s Washington, D.C., office wrote colleagues in 2019, when asked for advice before a meeting with environmentalists. "We want to proceed carefully in any conversation about expanding 45Q credits or getting [the] government to pay for CCUS."

An inspector general for the Treasury Department said in a 2020 report that companies that have received 45Q credits routinely did not meet EPA rules they were expected to in order to qualify.

"It's really hard for me to even tell this story because there's several different layers of grift and reasons this doesn't work," Rees said.

Widely seen for years as the most promising carbon capture project in America, Petra Nova, which trapped emissions from one of the four coal-fired units at a Texas power plant, began running in 2017.

It was the only project of the eight carbon capture efforts the Obama administration backed, but it shut down at the start of the pandemic, despite hundreds of millions of dollars in federal tax help. In Mississippi, the Kemper Power Plant spent $7.5 billion to affix carbon capture hardware to a coal plant during the past decade, before it was in part demolished in the fall of 2021. Meanwhile, Chevron’s Gorgon project in western Australia, the largest carbon capture project in the world, has faced fines after failing to perform as promised.

Rees said there's no indication that the federal money that has flowed to carbon capture products in recent years has led to substantial breakthroughs. "What we haven't seen is real progress towards making that happen at scale."

Rissman said the prospects of new investment and technologies to contain harmful emissions should not be reasons to rest easy.

"There are lots of really promising technologies," Rissman said. "Some people can try to use it as an excuse to delay action." But delaying swift action to rein in climate change will lead to burgeoning costs later, he said. "It will be much more difficult and much more expensive, and in the meanwhile, it will do much more damage to the climate." He added, "Carbon capture is a part of the pie but it's actually a fairly small part."