Carbon Capture and Sequestration

On March 27, 2012, the U.S. Environmental Protection Agency (EPA) proposed a new rule that would limit emissions to no more than 1,000 pounds of carbon dioxide (CO2) per megawatt-hour of production from new fossil-fuel power plants with a capacity of 25 megawatts or larger. EPA proposed the rule under Section 111 of the Clean Air Act. According to EPA, new natural gas fired combined-cycle power plants should be able to meet the proposed standards without additional cost. However, new coal-fired plants would only be able to meet the standards by installing carbon capture and sequestration (CCS) technology. The proposed rule has sparked increased scrutiny of the future of CCS as a viable technology for reducing CO2 emissions from coal-fired power plants. The proposed rule also places a new focus on whether the U.S. Department of Energy's (DOE's) CCS research, development, and demonstration (RD&D) program will achieve its vision of developing an advanced CCS technology portfolio ready by 2020 for large-scale CCS deployment. Congress has appropriated nearly $6 billion since FY2008 for CCS RD&D at DOE's Office of Fossil Energy: approximately $2.3 billion from annual appropriations and $3.4 billion from the American Recovery and Reinvestment Act (or Recovery Act). The large and rapid influx of funding for industrial-scale CCS projects from the Recovery Act may accelerate development and deployment of CCS in the United States. However, the future deployment of CCS may take a different course if the major components of the DOE program follow a path similar to DOE's flagship CCS demonstration project, FutureGen, which has experienced delays and multiple changes of scope and design since its inception in 2003. A question for Congress is whether FutureGen represents a unique case of a first mover in a complex, expensive, and technically challenging endeavor, or whether it indicates the likely path for all large CCS demonstration projects once they move past the planning stage. Since enactment of the Recovery Act, DOE has shifted its RD&D emphasis to the demonstration phase of carbon capture technology. The shift appears to heed recommendations from many experts who called for large, industrial-scale carbon capture demonstration projects (e.g., 1 million tons of CO2 captured per year). Funding from the Recovery Act for large-scale demonstration projects was 40% of the total amount of DOE funding for all CCS RD&D from FY2008 through FY2012. To date, there are no commercial ventures in the United States that capture, transport, and inject industrial-scale quantities of CO2 solely for the purposes of carbon sequestration. However, CCS RD&D in 2012 is just now embarking on commercial-scale demonstration projects for CO2 capture, injection, and storage. The success of these projects will likely bear heavily on the future outlook for widespread deployment of CCS technologies as a strategy for preventing large quantities of CO2 from reaching the atmosphere while U.S. power plants continue to burn fossil fuels, mainly coal. Given the pending EPA rule, congressional interest in the future of coal as a domestic energy source appears directly linked to the future of CCS. In the short term, congressional support for building new coal-fired power plants could be expressed through legislative action to modify or block the proposed EPA rule. Alternatively, congressional oversight of the CCS RD&D program could help inform decisions about the level of support for the program and help Congress gauge whether it is on track to meet its goals.