At Last: A First Step on GHGs
April 5th, 2012 by Ann Weeks, Senior Counsel and Legal DirectorThis posting originally appeared in the National Journal’s Energy and Environment Expert Blog.
Last week, the Administration took a bold step forward to curb greenhouse gas emissions. In a long-anticipated action, EPA proposed new source performance standards (NSPS) for fossil-fueled power plants that would limit emissions from new plants to a rate of 1,000 lbs. of CO2 per megawatt-hour, averaged annually. This level is comparable to the annual average emissions rate of the existing fleet of U.S. natural gas power plants. The rule levels the playing field between coal and gas on greenhouse gas emissions, so new coal and gas plants will compete on price. When finalized, the rule will provide a much-needed and long-overdue step on the path towards full decarbonization of all domestic coal and gas power plants.
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Enhanced Oil Recovery takes a big step forward
March 3rd, 2012 by Kurt Waltzer, Carbon Storage Development Coordinator
There was some rare bipartisan good news on the Hill this week, with the release of the National Enhanced Oil Recovery Initiative (NEORI) study and policy recommendations. Congressman Mike Conaway (R-TX) joined Senator Kent Conrad (D-ND) for the announcement in the Dirksen Senate Office Building, and three other Senators (Baucus, D-MT, Hoeven, R-ND and Lugar, R-IN) supplied written statements in support NEORI’s objective to significantly ramp up the use of enhanced oil recovery (EOR) in this country. If the report’s recommendations are implemented, the Initiative’s recommendations will significantly decrease our dependence on imported oil, reduce CO2 emissions, and will create good, permanent jobs in the U.S., while adding billions of additional dollars to the federal treasury without raising taxes. The initiative, convened by C2ES and the Great Plains Institute, has support from environmental groups, fossil energy companies, labor, and bioenergy companies – including Clean Air Task Force, NRDC, Southern Company, GE, the AFL-CIO, and Archer Daniels Midland. Seems too good to be true? Read on.
Enhanced Oil Recovery has been successfully utilized in West Texas since 1972, pumping pressurized CO2 deep underground into depleted oil fields to force up hundreds of millions of barrels of oil that would be otherwise not recoverable. During EOR, most CO2 is trapped in the rock., but because CO2 is both valuable and limited in supply, the CO2 that is not trapped returns to the surface mixed with the oil, and is separated, recycled and reused for additional EOR. Eventually, all the CO2 that is purchased by the EOR facility stays trapped in the micro-pores of the oil field, just as the oil was – deep below layers of impermeable caprock. Nearly a billion tons of CO2 have been safely injected since the practice of CO2 EOR began 40 years ago. EOR currently accounts for 281,000 barrels of oil per day, or 6% of our total domestic oil production. But, with next-generation technology, CO2 EOR could provide the U.S. with an additional 67 billion barrels of oil, and requiring 20 billion tons of CO2 to produce it – resulting in millions of additional barrels per day. Moreover, this figure could be much higher as new CO2 EOR oil reserves known as “residual oil zones” are proven. So what’s the holdup? Essentially, adequate supplies of CO2.
Meanwhile, abundant supplies of CO2 are being vented from industrial sources each year, trapping more and more heat in our atmosphere. For example, coal and gas power plants in the U.S. emit 2.4 billion tons to the atmosphere each year. And, according to a study last year by the National Energy Technology Laboratory, the EOR industry is facing 20 billion tons of unmet demand for CO2. If we could direct the CO2 from being emitted where it harms the climate to US oil fields, we would reduce CO2 emissions to the atmosphere while also reducing the amount of oil imported into the US. We would also begin broad deployment of a technology that is necessary for decarbonizing our energy system – carbon capture and sequestration (CCS). The potential scale of deployment for this technology will spur innovation and reduce costs.
To increase US EOR production and drive the deployment of low carbon energy technology, the NEORI study recommends a number of federal and state incentives, including tax breaks for CO2 capturers, such as power plant operators, and for transporters, including pipeline operators, to jumpstart the fledgling CO2 industry in this country. The recommendations include the development of a new tax incentive that would provide a tax credit for the first ten years for CO2 emitters who become CO2 suppliers to the EOR industry. This tax incentive more than pays for itself through additional revenue from federal taxes on the incremental additional oil that is produced. In other words, the cost of the incentive is smaller than the additional revenue that would be generated by the additional production and sale of new domestic oil. And this incremental new oil (and taxes) can’t be produced without the CO2, so it’s new, real money to help with our federal balance sheet problems. NEORI estimates this program would add a net present value of $100 billion to the US treasury over a 40-year period. NEORI also offers recommendations for modifying the existing Section 45Q Federal Tax Credit for Carbon Dioxide Sequestration, and suggests a number of model state policies including tax credits, exemptions or abatements, and the inclusion of CCS in electricity portfolio standards, among others.
All the supporters of this effort may not share a common view about fossil fuels or climate change, but they all understand this is indeed a win-win-win. Are there risks? Sure, if oil prices dropped substantially and stayed there, then the incentive might not pay for itself. An even bigger challenge is that the atmosphere in Washington may be so toxic that even a no-brainer like this idea won’t move forward. But if there was ever a chance for a big idea to succeed in our current political climate – EOR is it.
Decarbonization: The Nuclear Option
February 14th, 2012 by Mike Fowler, Director, Advanced Technology, and Armond Cohen, Executive DirectorThis posting originally appeared in the National Journal’s Energy & Environment Experts blog.
Three years ago, MIT’s Richard Lester published a simple analysis of what would be required to meet President Obama’s 83%-by-2050 greenhouse gas emission reduction target. The results were stark: Even if energy efficiency were to improve at rates 50% better than historical averages, and biofuels were able to meaningfully reduce transportation emissions in the near term (a proposition with which we disagree), meeting Obama’s goal would require retrofitting every existing coal plant in the country with carbon capture and sequestration (CCS), building twice again that much fossil capacity with CCS, building close to 3,000 wind farms the size of Massachusetts’ Cape Wind, and building nearly 4,000 solar farms the size of California’s Ivanpah. And, having done all that, increasing the amount of nuclear power we generate by a factor of five.
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Zero Emissions from Natural Gas?
January 17th, 2012 by Armond Cohen, Executive DirectorThis posting originally appeared in the National Journal’s Energy and Environment Expert Blog.
With the global explosion of unconventional gas production, reports of the death of the fossil fuel economy are, to paraphrase Mark Twain, greatly exaggerated. Gas may not stay at its current extraordinarily low price, but the market landscape seems to be altered for quite some time.
The explosion of low-cost shale gas reserves is a two-edged climate sword. Generating electricity with gas is 30 to 50 percent less carbon-intensive than coal when leaks and releases of methane, the main component of natural gas, are accounted for. (For other uses like vehicle fuel, we haven’t seen any evidence that gas is better than other fossil fuels, and if vehicles leak even a small amount, natural gas could be worse than gasoline). But even for electricity, gas is still a high-carbon fuel: replacing all coal-fired generation with gas would get us only part of the way to the 80 percent CO2 reduction needed by mid-century. Moreover, new gas plants are more likely to displace new zero-carbon generation sources than to displace existing cheap coal plants. Carbon dioxide emitted to the atmosphere stays there, causing warming, for many centuries. By some estimates, the amount of CO2 already emitted has committed the world to warming in excess of 2 degrees Celsius, which is well outside human experience; to hold the increase to 3-4 degrees might well require zeroing out carbon emissions by mid-century.
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Underground Coal Gasification – Coming Soon to Wyoming?
November 2nd, 2011 by Mike Fowler, Director, Advanced TechnologyAfter years of talk, things are starting to get real: developers are looking at pioneering underground coal gasification (“UCG”) projects in Wyoming. Some may see these projects as first steps to finally producing truly clean energy from coal, while others may perceive them as unnecessary, risky experiments. What’s the truth? Let’s explore the issues.
First, some unpleasant facts. Fossil fuel use has increased dramatically across the globe (China’s coal power plant fleet, most of it built in the last 10 years, is now more than twice the size of ours in the US) and appears likely to continue to mushroom (in South Asia alone there are 600 million people – roughly twice the population of the US – waiting for access to electricity). Even in the center of Europe, Germany, in its rush to move away from nuclear power, is considering building more coal power instead. And in the US, where coal usage has declined slightly, another plain fossil fuel – natural gas – has taken up the slack, with limited greenhouse gas advantages.
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Rethinking The Clean Energy “Race”
October 26th, 2011 by Armond Cohen, Executive DirectorThis posting originally appeared in the National Journal’s Energy and Environment Expert Blog.
For the last five years, the Clean Air Task Force has been working with companies in China and the United States on joint ventures to develop and market clean energy technologies in both countries and around the world. Based on that experience, we believe that the metaphor of a zero-sum China-US race on clean energy is misplaced and drives us to the wrong conclusions. Here are some perspectives that may make for a more productive discussion:
China is a critical ally in moving forward low-carbon energy development. CATF is working in China not only because it is the world’s largest carbon-emitting country, set to double its emissions by 2050, but also because China is a can’t-miss place to demonstrate new clean technologies at scale. Why?
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Making Sense of Gas vs. Coal and Climate: A Look at the Recent Paper by Tom Wigley
September 14th, 2011 by David McCabe, Atmospheric Scientist
The last few months have seen a flurry of academic papers investigating whether using natural gas for power generation creates more global warming than using coal for power generation. A few have reached the startling conclusion that using gas for power is just as bad, or worse, than coal. The most recent of these is by Tom Wigley, a global leader in climate science, and therefore bears special examination. As we’ll argue below, natural gas is no climate panacea, especially over the time scales that Wigley examines. We need zero-carbon energy. But it is also important to consider how we get to that future, and natural gas – coupled with carbon capture and storage and tight controls on methane leaks – will likely have a big role to play there in the next few decades. It is critical that we accurately account for the climate impacts of gas, and we don’t agree with Wigley’s approach in two key areas.
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No More Fossil Energy Without Carbon Capture
July 19th, 2011 by Kurt Waltzer, Carbon Storage Development Coordinator, and Conrad Schneider, Advocacy DirectorThis posting originally appeared in the National Journal’s Energy and Environment Experts blog.
We have no choice but to develop low carbon coal technology. By 2015 China will have more than 950GW of coal power – three times the level in the U.S. Unlike plants in the U.S. though, the vast majority of the Chinese coal plants are brand new and will likely be around for half a century or more. India is right behind. If these new coal plants do not capture and store their carbon emissions, it’s game over for having any hope of fighting climate change.
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Natural Gas: Palliative, Not a Cure
April 29th, 2011 by Armond Cohen, Executive DirectorPlentiful and cheap natural gas is the Prozac of American energy policy. It may take the edge off of some of our worst symptoms in the near term. But it can also dull us to solving key long term and chronic problems, especially regarding climate change. And, as with any medication, there can also be some negative side-effects – some clearly remediable (methane leaks), and some (water and air contamination impacts from fracturing – or “fracking” – of shale to yield gas) still to be managed with sufficient rigor and transparency.
On the positive side, there is little doubt that cheap natural gas can help provide some environmental relief in the short term by lowering the cost of displacing older coal-fired electric generation. Natural gas power plants emit less than half of the CO2 per kilowatt-hour as do those powered by coal; the emissions reduction gains are even greater for conventional pollutants like smog and soot and for air toxics like mercury. True, upstream leaks of methane (a far more potent global warmer than CO2) are a source of greenhouse gas pollution that cuts into the climate advantages of burning natural gas. But these leaks can be virtually eliminated, and the gas industry needs to focus a lot more on fixing them, and less on insisting that we should only consider climate impacts over a full century (which de-emphasizes the importance of the methane leaks, relative to the CO2 advantages of gas over coal, because CO2 lasts longer in the atmosphere).
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Hard Energy Paths
March 7th, 2011 by Armond Cohen, Executive DirectorThis posting originally appeared in the National Journal’s Energy and Environment Expert Blog.
What will America’s energy mix look like thirty years from now? Thirty years is a long time, except that it isn’t. Energy is a big, inertial, capital-intensive system, and change comes slowly – even when government policy gets very serious, or technology and markets achieve step changes. For example, it took policy-driven nuclear power and the market-driven combined cycle gas turbine 30 years each to achieve 20% of US electricity supply.
In this context, then, there are three broad energy path types one can imagine.
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