Will the US Lead on Carbon Capture?
As nations worldwide continue to fall short of emissions reductions goals, massive projects to suck carbon dioxide out of the Earth’s atmosphere will be needed by 2030 to minimize rises in temperature, according to a recent statement by scientists from Climate Analytics. In the past, carbon capture and storage (CCS), or “negative emissions” technologies, had been seen as too expensive to deploy on a scale large enough to have an impact on climate change. Yet, as it becomes increasingly clear that the world’s leaders will miss key 2015 climate targets and as the number of commercial CCS installations proliferates, leading scientists have called for the deployment of CCS “at scale” in a bid to limit global warming to 1.5 degrees Celsius above pre-industrial levels. As a result, the CCS market is becoming increasingly important, projected to grow from an estimated $4.25 billion in 2016 to $8.05 billion by 2021 at a compound annual growth rate of 13.6 percent.
It is still an open question, however, whether the U.S. has the foresight to grab a piece of the pie and help change the way the world fights global warming – and this has serious implications for America’s energy policy and economy.
In a world that stresses the use of low-carbon energy sources amid the rapidly shrinking costs of other energy projects, CCS may seem like a hard sell to many. Even so, exponential growth in global energy consumption and the rising demand for coal in developing countries makes carbon capture strategies an inevitable reality in the battle to curb emissions.
Currently, most new CCS projects are in Europe. Driven by the Paris climate accord, Norway’s Statoil, France’s Total and Anglo-Dutch oil giant Royal Dutch Shell have all reached agreements to develop facilities to capture and store carbon dioxide emanating from Norwegian industrial sites. Aiming to capture 1.5 million tons of carbon dioxide annually, the agreement is on track to become the first international commercial storage project for CO2 from industrial sites. After the project’s first phase, plans are now in place to expand its storage capacity in a bid to spur investments in future projects – this particular contract has been valued at around $3.9 million, but this value may be scaled up as high as $1.5 billion by 2022.
In the Netherlands, the Rotterdam Port Authority has also launched a similar project to capture carbon dioxide emissions. With the region accounting for 20 percent of Dutch carbon emissions, the authority is inviting firms to sign on to discharge their emissions into the bed of the North Sea using a single pipeline. State firms Gasunie and Energiebeheer Nederland are said to be considering a stake in the project. And in the U.K., the government has launched several drives to attract bids for the design and construction of CCS plants; the public accounts committee is now calling for these plans to be put into action. All the while, the U.S. appears to be in no rush to compete for first-mover advantage.
One of the few exceptions is in Wyoming, where a new Integrated Test Center is allowing scientists to test ways to repurpose carbon dioxide using coal-based flue gas from the Dry Fork Station near Gillette. The state made further progress last month with the announcement of a new five-year strategic partnership with the Center for Carbon Removal to test carbon capture, utilization and sequestration technologies in a move that may shift carbon dioxide from waste product to lucrative resource. In Houston, Texas, the Petra Nova facility remains the only U.S. power plant with CCS technology, having begun capture operations in January of this year following a $190 million government grant.
Investment in high-potential CCS technology could prove to be a boon for economies worldwide. With the capacity to spur innovation, create new jobs and boost domestic consumption, the sector represents a well of untapped potential for U.S. policymakers. There is also a critical opportunity to export CCS expertise abroad, particularly to countries, such as India, that are desperate to increase power capacity and minimize emissions but are blocked from accessing development financing for coal projects. However, in July of this year, the U.S. Treasury issued new guidance on promoting clean coal technology using World Bank funding, a sharp turnaround from Obama-era opposition and, hopefully, a sign of things of come.
In another small sign of progress, the Trump administration announced on October 17 that up to $26 million in federal assistance will go to CCS research and development projects. Under the scheme, selected projects will facilitate the Department of Energy’s Carbon Capture Program to reduce cost and energy barriers in CCS implementation, focusing on CO2 transformation research and the development of technologies to improve carbon capture methods. Even so, previous threats to slash departments researching CCS expose a weak hand when it comes to bolstering the industry. More deliberate efforts are imperative if policymakers are serious about ensuring the U.S. is a trailblazer in this emerging field. The head of the International Energy Agency himself said he would like to see the U.S. fill what he says is a “global leadership void” in the development of carbon capture, storage and utilization technology.
Meanwhile, as Trump administration officials scramble to save coal-fired plants, such as the Navajo Generating Station in Arizona, it is clear that the administration has its priorities amiss. Rather than focusing on resuscitating existing plants that use outdated technology, the administration should instead be investing in ways to transform the way we burn coal itself.
Eliot Bakker is a strategic consultant and political commentator based in Brussels, where he works for a variety of American firms navigating the European regulatory environment.