carbon capture and storage – The Climate Post

March 1, 2018

Tax Credit Could Help Increase Carbon Capture and Storage, Some Say

The Nicholas Institute for Environmental Policy Solutions at Duke University

As part of the Bipartisan Budget Act of 2018, Congress gave a boost to carbon capture—a method for diverting emissions from crude production and coal- and gas-fired power plants—through the so-called 45Q tax credit. For every qualifying project, the boosted 45Q doubles a pre-existing tax credit to $50 per ton of carbon dioxide buried in underground storage and to $35 per ton that is used in a consumer product or to stimulate oil recovery.

“The act also expands the ‘EOR’ [enhanced oil recovery] credit to carbon oxides used for other industrial purposes, changes the definition of the entities to whom the credit applies, and sets capture thresholds for small facilities, electric generating facilities, and direct air capture facilities,” write Frederick R. Eames and David S. Lowman Jr. in Lexology.

Many see the potential for this credit to spur a renewed look at projects with carbon capture and storage and re-enliven policies around it.

“Now, with [the tax credit], the economics are looking very attractive,” said Roger Ballentine, a consultant and board member of 8 Rivers Capital, which is financing NET Power, a carbon capture project near Houston. “People are asking, should I do this. Before, those conversations weren’t even happening. Any major project like this will be a challenge. But the business case gets that much better with [the tax credit]. Once there is a business case, that’s why they happen.”

The nudge from the tax credit could help the technology to be more profitable.

“The reality of any technology development, particularly in the energy space, is it’s very difficult to move technologies into the marketplace without some sort of push,” said Walker Dimmig, spokesperson for NET Power. “The energy marketplace is incredibly competitive.”

Court Orders Enforcement of Methane Leak Rule

Last week, U.S. District Judge William Orrick issued a preliminary injunction blocking the Trump administration’s attempt to delay an Obama-era Bureau of Land Management (BLM) rule that sought to reduce venting, flaring and leakage of methane gas on public and tribal lands. The U.S. District Court for the Northern District of California ruled that BLM did not justify its decision to delay core provisions of its 2016 Methane and Waste Prevention Rule by one year.

“The BLM’s reasoning behind the Suspension Rule is untethered to evidence contradicting the reasons for implementing the Waste Prevention Rule, and so plaintiffs are likely to prevail on the merits,” Orrick wrote. “They have shown irreparable injury caused by the waste of publicly owned natural gas, increased air pollution and associated health impacts, and exacerbated climate impacts.”

In the lawsuit brought by environmental groups and two states—California and New Mexico—Orrick also denied a request to move the case to Wyoming where a similar case is pending.

The ruling was only on the BLM’s proposed one-year delay. It does not directly affect the BLM’s proposed repeal of several methane rule provisions announced earlier this month. That proposal removes at least seven elements introduced under Obama’s rule, including creation of waste minimization plans by companies and emissions reduction standards for well completion.

In announcing the changes to that portion of the rule, the BLM said that many of the former requirements were duplicative of state laws or had a higher cost or lower benefit than previously estimated. Once the BLM proposed repeal is published in the Federal Register, a 60-day public comment period will begin.

Reports Indicate Growth in Renewables in Cities

Worldwide, 101 cities are getting at least 70 percent of their total electricity supply from renewable energy—more than double the number since the 2015 signing of the Paris Agreement according to the Carbon Disclosure Project, which tracks climate-related commitments by corporations and governments.

The London-based Carbon Disclosure Project attributes the increase to the growing number of cities reporting to it (currently 570) and to a global shift to renewable energy. It reports that cities are investing $2.3 billion in 150 clean energy development projects and $52 billion in low-carbon urban infrastructure projects such as energy efficiency upgrades, electric transport networks and smart city programs.

“Cities are responsible for 70 percent of energy-related CO₂ [carbon dioxide] emissions and there is immense potential for them to lead on building a sustainable economy,” said Kyra Appleby, director of cities at the Carbon Disclosure Project.

Notably, more than 40 of the cities identified in the report are powered entirely by renewables, including Burlington, Vermont, which gets its electricity from wind, solar, hydro and biomass. Although only a few of the 100-plus U.S. cities that report their energy mix to the project have achieved 70 percent or greater renewables generation, another 58 U.S. cities, including Atlanta and San Diego, are planning to hit the 100 percent renewables target within 20 years.

Meanwhile, two new studies shed light on renewables potential and actual deployment in the United States.

In one, scientists at the University of California at Irvine, the California Institute of Technology, and the Carnegie Institution for Science revealed that the country could reliably meet about 80 percent of its electricity demand with solar and wind power generation “by building either a continental-scale transmission network or facilities that could store 12 hours’ worth of the nation’s electricity demand.” Both options would entail huge—but not inconceivable—investments, they said.

A study by Southern Alliance for Clean Energy revealed that solar deployment is growing in some southern states, including North Carolina, where the solar market, one of the nation’s largest, is driven by favorable implementation of federal laws requiring renewable energy procurement, a state tax credit, and a renewable energy mandate. South Carolina, Florida, and Georgia are also emerging as significant state markets.

Globally, falling costs are playing a role in renewables uptake. According to data released by the World Economic Forum, unsubsidized renewables were the cheapest source of electricity in 30 countries in 2017, and they are expected to be consistently more cost effective than fossil fuels globally by 2020.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

February 2, 2017

Clean Air Act, Other Environmental Regulations Potentially Targeted by New Executive Order

On Monday, President Donald Trump signed an order that will require federal agencies to cut two existing regulations for every new rule and that will set an annual cap on the cost of new regulations with the exceptions of military and national security regulations. For fiscal year 2017, the cap will require that the cost of new regulations be completely offset by the rescinding of existing rules. Starting in 2018, the order directs the White House Office of Management and Budget head to give each agency a budget for increasing or decreasing regulatory costs.

Yet, legal experts suggest that the executive order could be impossible to implement because many regulations are required by laws written by Congress.

“It should be noted that no [executive order] can change underlying statutes adopted in the regular order by Congress and signed by the president,” Scott Segal, an industry lawyer at Bracewell LLP, told ClimateWire (subscription).

The new order comes on the heels of a Congressional Research Service study finding that the Clean Air Act’s regulatory structure “faces an unusual degree of uncertainty” this year, with one or more branches of government poised to weigh in on key existing EPA rules. Those rules include the Clean Power Plan, methane rules for new or substantially modified oil and gas operations, and EPA’s latest ambient air quality standards for ozone. Yet other rules could be vulnerable under the Congressional Review Act, which allows Congress 60 legislative working days from the time a federal regulation is finalized to pass a “joint resolution of disapproval” on the rule.

The House passed two bills on Wednesday invoking the seldom used Congressional Review Act to attempt to roll back the Stream Protection Rule and the Securities and Exchange Commission rule requiring oil, gas and mining companies to reveal payments made to foreign governments. The rules were among five Obama administration regulations, including the Bureau of Land Management’s restrictions on methane emissions from flaring and venting during oil and gas operations on public and tribal lands, being targeted for reversal.

Trump has targeted specific regulations he believes hamper job growth, including the Waters of the U.S. Rule and the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan, which aims to limit carbon pollution from existing power plants but is under a Supreme Court stay.

Trump Nominates Supreme Court Justice; Some Cabinet Appointees Move Forward

President Donald Trump on Tuesday appointed 10th Circuit Judge Neil Gorsuch as his nominee to fill the Supreme Court seat left vacant last February by the death of Justice Antonin Scalia. The decision, which has implications for environmental policy, comes as Trump promised—within two weeks of taking office.

Gorsuch’s parallels to Scalia were described by SCOTUSBlog writer Eric Citron as “eerie.”

“He is an ardent textualist (like Scalia); he believes criminal laws should be clear and interpreted in favor of defendants even if that hurts government prosecutions (like Scalia); he is skeptical of efforts to purge religious expression from public spaces (like Scalia); he is highly dubious of legislative history (like Scalia); and he is less than enamored of the dormant commerce clause (like Scalia),” Citron wrote.

Although Gorsuch hasn’t ruled on many environmental matters, Inside EPA reports that he has called for limiting the discretion of the EPA and other agencies to interpret their own authority. Last year, in Gutierrez-Brizuelo v. Lynch, Gorsuch indicated he was fine without Chevron deference, the legal doctrine granting government agencies interpretation of ambiguous statutes unless their interpretation of a statute is unreasonable.

“We managed to live with the administrative state before Chevron. We could do it again,” wrote Gorsuch in the majority opinion.

In that opinion, Gorsuch argued that the meaning of the law is for judges, not federal bureaucrats, to decide.

“Where in all this does a court interpret the law and say what it is?” Gorsuch said. “When does a court independently decide what the statute means and whether it has or has not vested a legal right in a person? Where Chevron applies that job seems to have gone extinct.”

Also this week, several of Trump’s cabinet picks—Department of Energy Secretary nominee Rick Perry, U.S. Attorney General nominee Jeff Sessions and Department of the Interior nominee Ryan Zinke—gained committee approval and now move forward for consideration by the full Senate.

All 10 Democrats on the Senate Environment and Public Works Committee, which is tasked with considering whether to move Scott Pruitt’s nomination to lead the EPA to the full Senate, opted to boycott the Wednesday meeting. They said Pruitt failed to provide substantive answers to questions about rules governing air pollution, toxic chemicals and lead in gasoline. But today, Republicans on the committee advanced Pruitt’s nomination on a party line vote after suspending committee rules because of the boycott.

Rex Tillerson, the former chairman and chief executive of Exxon Mobil, was confirmed by the Senate as the next Secretary of State by a 56-43 vote and was sworn in Wednesday evening. At his confirmation hearing, he acknowledged that the climate is changing but said that he believes science is not conclusive on the issue of how rising greenhouse gas emissions will affect life on Earth. He expanded on his views when providing written responses to questions posed by two senators.

“I agree with the consensus view that combustion of fossil fuels is a leading cause for increased concentrations of greenhouse gases in the atmosphere,” he wrote to Senator Ben Cardin of Maryland. “I understand these gases to be a factor in rising temperature, but I do not believe the scientific consensus supports their characterization as the ‘key’ factor.”

Study Says Carbon Capture Necessary to Meet Paris Agreement Goal

The global climate can survive the possible withdrawal of the United States from the Paris Agreement, said the authors of a study published this week in the journal Nature Climate Change. The bigger threat, they said, is a world without widespread deployment of carbon capture and storage (CCS) technologies. Absent those technologies, achieving the climate treaty’s goal to limit warming to “well below” 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit that increase to 1.5 degrees Celsius could be impossible.

The authors reached that conclusion by reviewing past energy trends and examining nearly 150 countries’ pledged carbon reduction targets in the context of more than 100 climate simulations indicating how changes in energy production and use through 2040 could meet the 2 degrees Celsuis goal. To deal with the mix of targets—among them, straight emissions reductions (for example, 30 percent by 2030), lowered emissions intensity (emissions per unit of GDP), and technology deployment (for example, expansion of renewables)—the study used the Kaya Identity method, which breaks the carbon dioxide emissions rate into the human factors that affect it—broad factors such as GDP and more specific ones such as quantity of deployed renewables.

The study paints a good news-bad news picture of progress toward the 2 degrees Celsius goal. It indicates that the rate of global emissions has leveled off over the last few years due to a reduction in coal burning by China, a shift from coal to gas and renewables plus increased industrial energy efficiency in the United States, rapid expansion of renewables in the European Union, and slowed GDP growth in the U.S., EU and China. But sustaining this trend of decreasing carbon intensity of energy will not be easy. Although renewables development is keeping pace with 2 degree Celsius scenarios, nuclear power is lagging and CCS is barely past the starting gate. Only a few CCS facilities are operational, and only a couple of dozen are in construction.

“The greatest challenge is the slower-than-expected rollout of technologies to capture and permanently store carbon from fossil fuel and bioenergy combustion,” said study co-author Robbie Andrew of the Centre for International Climate and Environmental Research (CICERO). “Most scenarios suggest the need for thousands of facilities with carbon capture and storage by 2030, and this compares with the tens currently proposed.”

Thus far, high up-front costs have stymied development of commercial-scale CCS plants. If they don’t materialize, the world faces a harsh reality, suggests lead author Glen Peters of CICERO.

“If we don’t have CCS, then we will need to reduce use of fossil fuels much faster and in a much more disruptive way,” he said.

Study co-author Robert Jackson of Stanford University noted that CCS technology will prove even more crucial if President Donald Trump makes good on his pledge to revive the nation’s limping coal industry.

“There’s no way to reduce the carbon emissions associated with coal without carbon capture and storage,” Jackson said.

We may find out soon whether Trump will follow through on his pledge to remove the U.S. from the Paris climate deal when he issues an expected review of the U.S.’s involvement in multinational treaties. InsideEPA lays out mechanisms through which the administration could do so (subscription).

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

January 8, 2015

EPA Delays Release of Carbon Emissions Rules for Power Plants

The Environmental Protection Agency (EPA) is delaying the release of carbon emissions rules for all power plants and will publish them for new as well as existing plants at the same time mid-summer.

“It’s become clear to us … that there are cross-cutting topics that affect the standards for new sources, for modified sources and for existing sources, and we believe it’s essential to consider these overlapping issues in a coordinated fashion,” said Janet McCabe, the EPA’s acting administrator for air quality.

McCabe also announced that the EPA will begin drafting a “model rule” for states that do not submit individual plans to meet emissions reduction targets in the existing power plant regulations.

Under the proposed regulations for new sources, the EPA has functionally required new coal power plants to include carbon-capture technology, which critics of the emissions rules say lack proof of efficacy on a large scale and have a high cost to implement. In 2011, the American Electric Power Company reported that including carbon-storing processes at a West Virginia plant would cost an estimated $668 million.

California Cap-and-Trade System Includes Oil and Gas Sector

California’s cap-and-trade program—the country’s first multi-sector carbon emissions trading program—now requires gasoline and diesel producers to supply lower-carbon fuels or to buy carbon allowances—pollution permits—for the greenhouse gases emitted when those fuels are burned.

Key program stakeholders, industry leaders, public officials and environmental advocates agree that consumers will see a rise in gas prices, but the amount remains uncertain.

“There’s a very large universe of variables which could affect gas prices on a daily basis, and we don’t set fuel prices,” said California Air Resources Board spokesperson Dave Clegern. He added, “We don’t see them going up more than a dime, at the most, based on any current cap-and-trade compliance costs.”

It is estimated that 25 percent of secured funds from the emissions trading program will be allotted to the state’s high-speed rail project.

California’s program includes an allowance reserve initially proposed by Nicholas Institute and Duke University researchers that prevents carbon allowance prices from reaching levels beyond the scope of purchasers.

Congress Prepare to Vote on Keystone XL Pipeline

The Senate Energy and Natural Resources Committee has cleared legislation to approve the Keystone XL pipeline, which would deliver some 830,000 barrels of oil a day from Canada’s oil sands to Gulf Coast refineries. But White House press secretary Josh Earnest, citing the Obama administration’s “well-established” review process, said, “If this bill passes this Congress, the president wouldn’t sign it.”

The pipeline has become a flash point in the debate over climate change and economic growth.

In a December 19 press conference, the president said, “I want to make sure that if in fact this project goes forward, that it’s not adding to the problem of climate change, which I think is very serious and does impose serious costs on the American people, some of them long term, but significant costs nonetheless.”

Critics of Keystone have pointed to the carbon intensive production of the crude it will carry. In an op-ed in The Hill, the new president of the Natural Resources Defense Council, Rheh Suh, called production of oil from Canadian tar sands an “environmental disaster.”

Supporters argue that Keystone will be a source of economic stimulus. In a statement, Energy and Commerce Committee Chairman Fred Upton said, “After six years of foot-dragging, it’s time to finally say yes to jobs and yes to energy. It’s time to build [this pipeline].”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

September 1, 2011

Tar Sands Pipeline Gets Green Light in Environmental Review

Hundreds of protesters—including famed climate researcher James Hansen—have been arrested in protests in front of the White House over the past two weeks, in an attempt to stop the construction of a pipeline from Canada to Texas to carry diluted tar sands to Gulf Coast refineries, mainly over concerns about greenhouse gas emissions and risks of tainting a nearby water aquifer.

The U.S. State Department has been weighing whether to approve the pipeline, and under what conditions. In a major step last week, the State Department published its final environmental review, which said the pipeline would have “no significant impact to most resources” along its path, assuming “normal operation.”

U.S. Secretary of Energy Steven Chu said energy security concerns could help the pipeline win approval on the grounds that importing oil from Canada is preferable to imports from the Middle East—an argument echoed in a Washington Post editorial by veteran business reporter Robert Samuelson.

Shale Gas Shakedown

The Marcellus shale deposits—so far, the biggest site for hydraulic fracturing, or fracking— may contain far less gas than recently projected by the U.S. Energy Information Administration (EIA), according to a new assessment by the U.S. Geological Survey.

Although the new estimate is higher than the U.S. Geological Survey’s own 2002 estimate, it is much lower than an estimate EIA published earlier this year. In response, the EIA said it will downgrade their next estimate—perhaps by as much as 80 percent. But the Washington Post reports there may be more to these numbers.

In light of allegations that petroleum companies have overstated how much gas they could get out of shale deposits, the New York State Attorney’s Office is investigating whether companies “overbooked” reserves. Earlier this summer, federal lawmakers called on the Securities and Exchange Commission, the EIA and the Government Accountability Office to investigate industry estimates.

Rise and Fall of Solar, Wind

China achieved a meteoric rise in wind power over the past five years, and last year pulled ahead of the U.S. to become the country with the largest installed capacity of wind turbines.

At the same time, the growth of China’s wind industry is slowing down due to over capacity and withdrawal of subsidies, among other causes. And some of China’s largest wind turbine manufacturers reported falling profits due to fierce competition, as has been seen in the solar panel industry.

Solar manufacturers in the U.S. and Europe have been struggling to compete with panels from Asia, China especially. Two weeks ago, Evergreen declared bankruptcy, followed by Solyndra this week. Both companies had been touted by the Obama administration and local officials as models for the green economy. New York-based SpectraWatt, a solar spin-out from computer chip manufacturer Intel, also filed for bankruptcy.

Meanwhile, China is pushing ahead with plans to greatly expand their installations of solar power, doubling their targeted installations over the next decade. By 2015, they aim to have 3 gigawatts installed—10 times as much as they had last year—and by 2020, 50 gigawatts.

Despite such difficulties in the market, the United States’ net exports of solar power products more than doubled in 2010 compared with the year before, reaching $1.8 billion. Total U.S. exports of solar products rose 83 percent, to $5.6 billion, in part because Asia is importing equipment for manufacturing solar panels.

Burying the Problem

The first industrial-scale carbon capture and storage (CCS) plant in the U.S. broke ground in Illinois, with the aim of capturing emissions from a large corn ethanol plant. Work on the plant began just after a U.S. utility canceled its plan for CCS on a West Virginia coal plant.

In Canada, a CCS plant for capturing emissions from tar sands processing may move ahead after Canada’s government recently agreed to underwrite two-thirds of the $1.35-billion project’s cost.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.