Budget Priorities Will Adjust to Technology -- DOE Official

Expect the Department of Energy's budget priorities for coal and fossil energy research to change based on new technologies, said DOE clean coal chief Julio Friedmann last week in advance of tomorrow's fiscal White House 2015 budget release.

Friedmann, who did not go into specifics, said Obama administration budget proposals for the coming years would reflect a focus on changing priorities, including advanced combustion technology for more efficient ways to harness a fuel's energy.

Carbon capture, utilization and sequestration from power plants will remain a top focus for DOE, Friedmann said. The technology has been the focus of increased controversy amid a U.S. EPA proposal to mandate it for all new coal-fired power plants.

Friedmann, speaking at a Global CCS Institute event at the Canadian Embassy in Washington, D.C., said DOE's "No. 1 priority is get large projects up."

Friedmann said the DOE-backed Southern Co.'s Kemper County, Miss., coal plant, which will capture its CO2 for enhanced oil recovery nearby, "is on track to be running at the end of this year."

"The deployment is the thing that matters," Friedmann told a room of power experts, executives and advocates. "That's what gets me up in the morning."

Friedman said the second-generation demonstration projects, which aim to reduce the cost and increase the commercial viability of CCS, must have a clear pathway to markets.

He dismissed future funding for carbon capture projects at labs, for example, that were not associated with a commercial venture.

Earlier this month, Friedmann made news before a congressional subcommittee when he spoke about the current cost of capturing CO2 emissions from a coal-fired power plant (E&E Daily, Feb. 12).

Friedmann said research on clean coal and other fossil energy is not a hard sell at DOE under Secretary Ernest Moniz. "The secretary truly, truly believes this," Friedmann said about the need for an all-of-the-above energy strategy.

Friedmann also said the department is "staffing up" in a search for workers who can help with the administration's research, development and commercialization efforts. Again, he did not go into details.

Previous Obama administration budgets have already included tweaks in fossil energy funding depending on priorities. Last year, for example, the president proposed a $25 million prize for the first combined-cycle natural gas power plant able to integrate carbon capture.

This year's omnibus spending bill that Congress passed scrapped that proposal but allowed DOE to delve into carbon capture research related to natural gas as long as it doesn't affect coal-related efforts.

Friedmann said DOE leaders are still trying to figure out "what's in bounds and what's not in bounds." He stressed that a carbon-constrained future will likely include capturing CO2 emissions from natural gas plants plus steel mills, refineries and other polluters.

Last year, the Obama administration asked for $266 million for carbon capture research and development. The omnibus provided $390 million, a boost from current levels and evidence of how important the issue is for many lawmakers.

About the new budget, Friedmann said, "It will be out soon. We'll all find out" what's in it.

Challenges

At least some environmental groups, most notably the Sierra Club, have opposed utilities and ratepayers funding new technologies for coal-fired power plants. They argue instead for using the money for cleaner, renewable power.

But DOE officials, plus advocates at groups like the Clean Air Task Force and the World Resources Institute, repeated the need for deploying carbon capture as a means of limiting emissions enough to meet climate benchmarks.

Conference participants last week largely strayed away from the ongoing controversy over whether an EPA CCS mandate for all new coal-fired power plants will hurt or incentivize the widespread deployment of the technology.

"I have no opinion on the adequacy of demonstration" as EPA describes it, Friedmann told reporters. Other administration officials have said the technology is ready for the mandate.

Global CCS Institute CEO Brad Page also skirted the controversial issue. "We won't dwell there too much," he said during his remarks.

It has long been conventional wisdom that the lack of a high price on carbon emissions and relatively lax global emissions standards, plus cheap natural gas in the United States, have disincentivized the expensive building of coal plants with carbon capture.

This year, however, advocates outlined a list of challenges that stretch beyond the fact that Congress has yet to create a strong climate policy.

Economics is, of course, a main factor. But CCS advocates say the numbers would be more in their favor if the technology were incentivized and categorized among other low-carbon power sources like wind and solar.

John Thompson, director of the Clean Air Task Force's fossil energy transition project, spoke of a case in which natural gas with carbon capture was more economical but was not compared with subsidized renewables.

"Somehow, we need to align our policies," he said, noting the importance of the low-cost mandate for many state public service commissions.

When it comes to the public service and public utility commissions, plus the public at large, CCS advocates pressed for more education and outreach.

Richard Esposito, a Southern Co. executive, said he tried to get ahead of commissioners' questions. Page said, "We've got to do a lot more to promote our industry."

EPA guidance, earthquakes

Another obstacle, advocates say, is not emissions regulations but the uncertain government oversight of capturing CO2 and storing it underground forever.

Last year, EPA finalized regulations to exempt the underground storage of greenhouse gas emissions from hazardous waste scrutiny under the Underground Injection Control Program's Class VI well designation, which is tailored for CCS.

EPA also floated a draft guidance meant to clarify the relationship between underground injection for enhanced oil recovery -- a long-standing practice -- and underground storage (Greenwire, Dec. 20, 2013). Comments were due Saturday.

But despite EPA's efforts to promote CCS, advocates like Kipp Coddington, an attorney for Kazmarek Mowrey Cloud Laseter LLP, see EPA as muddying the waters between enhanced oil recovery and underground sequestration.

"I believe that has created unfortunate commercial uncertainty," Coddington said about the guidance, also noting that the agency has yet to issue any Class VI storage permits.

Coddington, speaking for himself and not his clients, said liability concerns remain an obstacle for underground storage. "I would have a liability transfer mechanism" to a government entity, he said. "You walk away, and you're done."

Advocates have expressed concern about people confusing enhanced oil recovery, using CO2 to stimulate wells, with hydraulic fracturing. And when it comes to CO2 below ground, people are increasingly worried about induced seismicity.

Floyd Wist, an energy regulator for the provincial government in Saskatchewan, Canada, said, "If you properly select your site, you're probably not going to be inducing any quakes that anybody is going to notice."

DOE's Friedmann also weighed in, calling the risk of earthquakes from storing CO2 underground "overblown."

Manuel Quiñones, E&E reporter

Republished from GreenWire with permission. GreenWire covers the energy and environmental policy news. Click here for a free trial

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