Carbon Capture and Sequestration: Research, Development, and Demonstration at the U.S. Department of Energy

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Carbon Capture and Sequestration: Research,

Development, and Demonstration at the U.S.

Department of Energy

/name redacted/

Specialist in Energy and Natural Resources Policy

April 24, 2015

Congressional Research Service

7-....

www.crs.gov

R42496

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Summary

Carbon capture and sequestration (or storage)—known as CCS—is a physical process that

involves capturing manmade carbon dioxide (CO2) at its source and storing it before its release to

the atmosphere. The U.S. Department of Energy (DOE) has pursued research and development

(R&D) of aspects of the three main steps leading to an integrated CCS system since 1997.

Congress has appropriated nearly $7 billion in total since FY2008 for CCS research,

development, and demonstration (RD&D) at DOE’s Office of Fossil Energy: nearly $3.5 billion

in total annual appropriations (including FY2015) and $3.4 billion from the American Recovery

and Reinvestment Act (Recovery Act; P.L. 111-5). The large influx of Recovery Act funding for

industrial-scale CCS projects was intended to accelerate development and deployment of CCS in

the United States. Since enactment of the Recovery Act, DOE has shifted its RD&D emphasis to

the demonstration phase of carbon capture technology. To date, however, there are no commercial

ventures in the United States that capture, transport, and inject industrial-scale quantities of CO2

solely for the purpose of carbon sequestration.

The success of DOE CCS demonstration projects likely will influence the 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. One

project, the Kemper County Facility, has received $270 million from DOE under its Clean Coal

Power Initiative (CCPI) Round 2 program and is slated to begin commercial operation in 2016.

The 582 megawatt-capacity facility anticipates capturing 65% of its CO2 emissions, making it

equivalent to a new natural gas-fired combined cycle power plant. Cost and schedule overruns at

the Kemper Plant, however, have raised questions over the relative value of environmental

benefits from CCS technology compared with construction costs of the facility and its effect on

ratepayers.

In 2014, the U.S. Environmental Protection Agency (EPA) proposed emission standards for new

and existing fossil-fueled electric generating units under Section 111 of the Clean Air Act. New

natural gas-fired stationary power plants should be able to meet the proposed standard for new

plants without additional cost and without the need for add-on control technology. However, the

only apparent technical way for new coal-fired plants to meet the standard would be to install

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.

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. Debate has been mixed as to whether the rule

would spur development and deployment of CCS for new coal-fired power plants or have the

opposite effect. 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. In the 114th Congress, a bill has been introduced (S. 601) that would promote CCS for

coal-fired utilities by a combination of loan guarantees, tax credits, and supporting the DOE R&D

effort in its coal program, among other things. A similar bill was introduced in the 113th Congress

but was not enacted.

One issue is whether congressional oversight is needed of the CCS R&D program, particularly of

the results from the demonstration projects as they progress. Such a review could help Congress

evaluate whether DOE is on track to meet its goal of allowing for an advanced CCS technology

portfolio to be ready by 2020 for large-scale demonstration and deployment in the United States.

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Contents

Introduction...................................................................................................................................... 1

Issues for Congress .......................................................................................................................... 2

EPA Proposed Rule: Limiting CO2 Emissions from Power Plants ............................................ 2

New Power Plants ............................................................................................................... 2

Existing Power Plants.......................................................................................................... 3

Implications for CCS Research, Development, and Deployment ....................................... 3

FutureGen—A Special Case? .................................................................................................... 4

Lessons from FutureGen: A Similar Path for Other Demonstration Projects? .................... 6

Legislation ....................................................................................................................................... 7

114th Congress ........................................................................................................................... 7

113th Congress ........................................................................................................................... 7

CCS Research, Development, and Demonstration: Overall Goals .................................................. 8

Program Areas ........................................................................................................................... 9

Coal Program Areas ............................................................................................................ 9

Other Fossil Research and Development .......................................................................... 12

Evolution of Costs ............................................................................................................. 12

First U.S. Full-Scale Project? The Kemper County Energy Facility ....................................... 13

Canada’s Boundary Dam Project: The World’s First Commercial-Scale CCS Project ........... 15

Recovery Act Funding for CCS Projects: A Lynchpin for Success?.............................................. 15

CCS Demonstrations: Clean Coal Power Initiative and Industrial Carbon Capture and

Storage .................................................................................................................................. 16

Clean Coal Power Initiative .............................................................................................. 16

Industrial Carbon Capture and Storage Projects ............................................................... 19

Geologic Sequestration/Storage: DOE RD&D for the Last Step in CCS ...................................... 22

Brief History of DOE Geological Sequestration/Storage Activities ........................................ 23

Current Status and Challenges to Carbon Sequestration/Storage ............................................ 24

Outlook .......................................................................................................................................... 25

Figures

Figure 1. Typical Trend in Cost Estimates for a New Technology As It Develops

from a Research Concept to Commercial Maturity .................................................................... 13

Tables

Table 1. Funding for DOE Fossil Energy Research, Development, and Demonstration

Program Areas ............................................................................................................................ 10

Table 2. DOE CCPI Demonstration Round 3 Projects .................................................................. 17

Table 3. DOE Industrial Carbon Capture and Storage (ICCS) Projects ........................................ 20

Table 4. Regional Carbon Sequestration Partnerships ................................................................... 23

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Contacts

Author Contact Information........................................................................................................... 27

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Introduction

Carbon capture and sequestration (or storage)—known as CCS—is a physical process that

involves capturing manmade carbon dioxide (CO2) at its source and storing it before its release to

the atmosphere. CCS could reduce the amount of CO2 emitted to the atmosphere from the

continued use of fossil fuels at power plants and other large, industrial facilities. An integrated

CCS system would include three main steps: (1) capturing CO2 at its source and separating it

from other gases; (2) purifying, compressing, and transporting the captured CO2 to the

sequestration site; and (3) injecting the CO2 into subsurface geological reservoirs. Following its

injection into a subsurface reservoir, the CO2 would need to be monitored for leakage and to

verify that it remains in the target geological reservoir. Once injection operations cease, a

responsible party would need to take title to the injected CO2 and ensure that it stays underground

in perpetuity.

The U.S. Department of Energy (DOE) has pursued research and development of aspects of the

three main steps leading to an integrated CCS system since 1997.1 Congress has appropriated

nearly $7 billion in total since FY2008 for CCS research, development, and demonstration

(RD&D) at DOE’s Office of Fossil Energy: nearly $3.5 billion in total annual appropriations

(including FY2015) and $3.4 billion from the American Recovery and Reinvestment Act (P.L.

111-5; enacted February 17, 2009, hereinafter referred to as the Recovery Act).2

The large and rapid influx of funding for industrial-scale CCS projects from the Recovery Act

was intended to accelerate development and demonstration of CCS in the United States. The

Recovery Act funding also was likely intended to help DOE achieve its RD&D goals as outlined

in the department’s 2010 RD&D CCS Roadmap.3 (In part, the roadmap was intended to lay out a

path for rapid technological development of CCS so that the United States could continue to use

fossil fuels despite potential carbon restrictions.) 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 FutureGen project. FutureGen had experienced delays and multiple changes of scope and

design since its inception in 2003, and on February 3, 2015, DOE announced that it was

suspending the project. (For more details, see sections below on “FutureGen—A Special Case?”

and “Lessons from FutureGen: A Similar Path for Other Demonstration Projects?”)

This report aims to provide a snapshot of the DOE CCS program, including its current funding

levels, together with some discussion of the program’s achievements and prospects for success in

meeting its stated goals. Other CRS reports provide substantial detail on the technological and

policy aspects of CCS.4

U.S. Department of Energy, National Energy Technology Laboratory, Carbon Sequestration Program: Technology

Program Plan, Enhancing the Success of Carbon Capture and Storage Technologies, February 2011, p. 10,

http://www.netl.doe.gov/technologies/carbon_seq/refshelf/2011_Sequestration_Program_Plan.pdf.

U.S. Department of Energy annual budget justifications, FY2010 through FY2015.

U.S. Department of Energy, National Energy Technology Laboratory, DOE/NETL Carbon Dioxide Capture and

Storage RD&D Roadmap, December 2010. Hereinafter referred to as the DOE 2010 CCS Roadmap. See

http://www.netl.doe.gov/File%20Library/Research/Carbon%20Seq/Reference%20Shelf/CCSRoadmap.pdf.

See, for example, CRS Report R42532, Carbon Capture and Sequestration (CCS): A Primer; CRS Report R41325,

Carbon Capture: A Technology Assessment.

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Issues for Congress

U.S. Environmental Protection Agency (EPA) proposed rules and guidelines for reducing

greenhouse gas (GHG) emissions from new and existing coal-fired power plants have been a

focal point of discussion in Congress about CCS. How the demise of FutureGen will affect that

debate is yet to be seen. Legislation regarding CCS in the last Congress mainly focused on two

issues: stopping or slowing implementation of the EPA GHG rules and guidelines and providing

federal incentives to accelerate the demonstration and development of CCS at commercial scales.

EPA Proposed Rule: Limiting CO2 Emissions from Power Plants5

In 2014, EPA proposed emission standards for new and existing fossil-fueled electric generating

units under Section 111 of the Clean Air Act. EPA’s regulatory proposal stems from the Obama

Administration’s stated goal to take action on climate change in the absence of congressional

action to reduce GHG emissions through legislation. In June 2013, President Obama directed EPA

to propose standards for GHG emissions from new fossil-fueled power plants by September 20,

2013, and to propose guidelines for existing power plants by June 1, 2014.6 EPA met both

deadlines and may finalize the power plant rules by mid-summer 2015.7

New Power Plants

According to EPA, new natural gas-fired stationary power plants should be able to meet the

proposed standard without additional cost and without the need for add-on control technology.

However, the only apparent technical way for new coal-fired plants to meet the standard would be

to install CCS technology to capture about 40% of the CO2 they typically produce. The proposed

standard allows for a seven-year compliance period for coal-fired plants but would demand a

more stringent standard for those plants that comply over seven years; CO2 emissions for these

plants would be limited to an average of 1,000-1,050 pounds per megawatt-hour.8

The prospects for building new coal-fired electricity generating plants depend on many factors,

such as costs of competing fuel sources (e.g., natural gas), electricity demand, regulatory costs,

infrastructure (including rail), and electric grid development. However, the EPA proposed rule

clearly identifies CCS as the essential technology required if new coal-fired power plants are to

be built in the United States.9 The re-proposed standard places a new focus on DOE’s CCS

RD&D program—whether it will achieve its vision of “having an advanced CCS technology

portfolio ready by 2020 for large-scale CCS demonstration that provides for the safe, cost5

For a fuller discussion of the proposed rule and EPA standards for greenhouse gas (GHG) emissions from power

plants, see CRS Report R43127, EPA Standards for Greenhouse Gas Emissions from New Power Plants, by (name red

acted)

President Obama directed EPA to re-propose the standards for new power plants. The standards were first proposed in

2012. The re-proposed standards were published in the Federal Register, January 8, 2014, at 79 Federal Register 1430;

the guidelines for existing plants were published in the Federal Register, June 18, 2014, at 79 Federal Register 34830.

A broader and more detailed discussion of the EPA proposals and possible options for Congress can be found in CRS

Report R41212, EPA Regulation of Greenhouse Gases: Congressional Responses and Options, by (name redacted).

The proposal and background information is available at http://www2.epa.gov/carbon-pollution-standards/2013proposed-carbon-pollution-standard-new-power-plants.

Ibid.

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effective carbon management that will meet our Nation’s goals for reducing [greenhouse gas]

emissions.”10

Existing Power Plants

One analysis concluded that the debate over EPA’s proposed rule for new power plants is largely

symbolic and that its real significance is that without the promulgation of a rule for new sources,

EPA could not proceed to regulate existing power plants under the Clean Air Act.11 The proposed

guidelines for existing plants would establish different goals for each state based on four factors:

improved efficiency at coal-fired plants; substitution of natural gas combined cycle generation for

coal-fired power; zero-emission generation from renewables and nuclear power; and demand-side

efficiency.12 Although CCS was not specifically included as a factor, or as part of the four factors

listed above, the rule would not preclude CSS as an option for reducing emissions to help states

meet their emissions target.

Implications for CCS Research, Development, and Deployment

Given the pending EPA rule, congressional interest in the future of coal as a domestic energy

source also appears to be linked to the future of CCS. The debate has been mixed as to whether

the proposed rule for new plants would spur development and deployment of CCS for new coalfired power plants or have the opposite effect. Multiple analyses indicate that there will be

retirements of U.S. coal-fired capacity; however, virtually all analyses agree that coal will

continue to play a substantial role in electricity generation for decades. How many retirements

will take place and what role EPA regulations will play in causing them are matters of dispute.13

Part of the argument over the proposed rule for new plants has focused on whether CCS is the

best system of emissions reduction (BSER) for coal plants and whether it has been “adequately

demonstrated” as required under the Clean Air Act. In its re-proposed rule, EPA cites the

“existence and apparent ongoing viability” of several ongoing CCS demonstration projects as

examples that justify a separate determination of BSER for coal-fired plants and integrated

gasification combined-cycle plants. (The second BSER determination is for gas-fired power

plants.)14 EPA noted that these projects had reached advanced stages of construction and

development, “which suggests that proposing a separate standard for coal-fired units is

appropriate.”

DOE 2010 CCS Roadmap, p. 3.

See, for example, CRS Report R43127, EPA Standards for Greenhouse Gas Emissions from New Power Plants, by

(name redacted)

Ibid.

For a detailed discussion of the EPA’s regulation of coal, see CRS Report R41914, EPA’s Regulation of Coal-Fired

Power: Is a “Train Wreck” Coming?, by (name redacted) and (name redacted).

The projects cited in the re-proposed rule are the Southern Company Kemper County Energy Facility, the SaskPower

Boundary Dam CCS project, the Summit Power Texas Clean Energy Project, and the Hydrogen Energy California

Project. The Boundary Dam project is a Canadian venture; the other three projects are in the United States and are

receiving funding from DOE.

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The Natural Gas Alternative?

The huge increases in the U.S. domestic supply of natural gas in recent years, due largely to the

exploitation of unconventional shale gas reservoirs through the use of hydraulic fracturing, has

also led to a shift to natural gas for electricity production.15 The shift appears to be largely due to

the cheaper and increasingly abundant fuel—natural gas—compared to coal for electricity

production. The EPA re-proposed rule noted that “power companies often choose the lowest cost

form of generation when determining what type of new generation to build. Based on [Energy

Information Administration] modeling and utility [Integrated Resource Plans], there appears to be

a general acceptance that the lowest cost form of new power generation is [natural gas combinedcycle].” Cheap gas, due to the rapid increase in the domestic natural gas supply as an alternative

to coal, in combination with regulations that curtail CO2 emissions may lead electric power

producers to invest in natural gas-fired plants, which emit approximately half the amount of CO2

per unit of electricity produced compared to coal-fired plants. Regulations and abundant cheap

gas may raise questions about the rationale for funding CCS demonstration projects (e.g., see

“Lessons from FutureGen: A Similar Path for Other Demonstration Projects?”).

Alternatively, and despite increasingly abundant domestic natural gas supplies, EPA regulations

could provide the necessary incentives for the industry to accelerate CCS development and

deployment for coal-fired power plants. As part of its re-proposed ruling for new power plants,

EPA cited technology as one of four factors that it considers in making a BSER determination.16

Specifically, EPA stated that it “considers whether the system promotes the implementation and

further development of technology,” in this case referring to CCS technology. It appears that EPA

asserted that its rule would likely promote CCS development and deployment rather than hinder

it. Those arguing against the re-proposed rule do so on the basis that CCS technology has not

been adequately demonstrated, and that it violates provisions in P.L. 109-58, the Energy Policy

Act of 2005, that prohibit EPA from setting a performance standard based on the use of

technology from certain DOE-funded projects, such as the three projects cited in the EPA reproposal, among other reasons.17

FutureGen—A Special Case?

On February 27, 2003, President George W. Bush proposed a 10-year, $1 billion project known as

FutureGen to build a coal-fired power plant that would integrate carbon sequestration and

hydrogen production at a 275 megawatt-capacity plant, enough to power about 150,000 average

U.S. homes. As originally conceived, the plant would have been a coal-gasification facility and

would have produced and sequestered between 1 million and 2 million tons of CO2 annually. On

January 30, 2008, DOE announced that it was “restructuring” the FutureGen program away from

a single, state-of-the-art “living laboratory” of integrated R&D technologies—a single plant—to

For a detailed discussion of how natural gas is affecting electric power generation, see CRS Report R42814, Natural

Gas in the U.S. Economy: Opportunities for Growth , by (name redacted) and (name redacted).

The other three are feasibility, cost, and size of emission reductions.

See for example, the November 15, 2013, letter to EPA Administrator Gina McCarthy from Representative Fred

Upton, chair of the House Committee on Energy and Commerce, http://www.eenews.net/assets/2013/11/22/

document_daily_03.pdf; and the December 19, 2013, letter to Administrator McCarthy from Representative Lamar

Smith, chair of the House Committee on Science, Space, and Technology, http://science.house.gov/sites/

republicans.science.house.gov/files/documents/Letters/121913_mccarthy.pdf.

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pursue instead a new strategy of multiple commercial demonstration projects.18 In the restructured

program, DOE announced that it would support up to two or three demonstration projects of at

least 300 megawatts that would sequester at least 1 million tons of CO2 per year.19

In the Bush Administration’s FY2009 budget, DOE requested $156 million for the restructured

FutureGen program and specified that the federal cost share would cover only the CCS portions

of the demonstration projects, not the entire power system. However, after the Recovery Act was

enacted on February 17, 2009, Secretary of Energy Chu announced an agreement with the

FutureGen Alliance—an industry consortium—to advance construction of the FutureGen plant

built in Mattoon, Illinois, the site selected by the FutureGen Alliance in 2007.20 Further, DOE

anticipated that $1 billion of funding from the Recovery Act would be used to support the

project.21

On August 5, 2010, Secretary Chu announced the $1 billion award, from Recovery Act funds, to

the FutureGen Alliance, Ameren Energy Resources, Babcock & Wilcox, and Air Liquide Process

& Construction, Inc., to build FutureGen 2.0.22 FutureGen 2.0 differed from the original concept

for the plant because it aimed to retrofit Ameren’s existing power plant in Meridosia, Illinois,

with oxy-combustion technology at a 202 megawatt oil-fired unit,23 rather than build a new, stateof-the-art plant in Mattoon.

On February 3, 2015, DOE announced it was canceling funding for the FutureGen project.24 The

most pressing reason for the program’s suspension is the September 30, 2015, deadline for

spending the Recovery Act funding and the likelihood that the FutureGen Alliance would not be

able to commit the funds by that date, which, in turn, led to uncertainty about the alliance’s ability

to secure private-sector funding to make up the rest of the project costs after Recovery Act

funding was exhausted. The FutureGen Alliance had spent approximately $200 million of the

nearly $1 billion in Recovery Act funding appropriated and allocated to FutureGen. Other factors

also may have played a role in DOE’s decision.25

See http://www.fossil.energy.gov/news/techlines/2008/08003-DOE_Announces_Restructured_FutureG.html.

For more information on FutureGen, see CRS Report R43028, The FutureGen Carbon Capture and Sequestration

Project: A Brief History and Issues for Congress, by (name redacted).

Before DOE first announced it would restructure the program in 2008, the FutureGen Alliance announced on

December 18, 2007, that it had selected Mattoon, IL, as the host site from a set of four finalists. The four were Mattoon,

IL; Tuscola, IL; Heart of Brazos (near Jewett, TX); and Odessa, TX.

See DOE announcement on June 12, 2009, http://www.fossil.energy.gov/news/techlines/2009/09037DOE_Announces_FutureGen_Agreement.html.

See DOE Techline, http://www.netl.doe.gov/publications/press/2010/10033Secretary_Chu_Announces_FutureGen_.html.

Ameren had planned to replace the oil-fired boiler with a coal-fired boiler using oxy-combustion technology to allow

carbon capture. See http://www.futuregenalliance.org/pdf/FutureGen%20FAQ-General%20042711.pdf.

As reported in Manuel Quinones, “Lawmakers Likely to Scrutinize DOE Closeout of FutureGen Project,”

Environment & Energy Daily, February 4, 2015, http://www.eenews.net/eedaily/stories/1060012838/search?keyword=

futuregen.

See, for example, Thomas Overton, “DOE Pulls The Plug on FutureGen,” Power, February 4, 2015,

http://www.powermag.com/doe-pulls-the-plug-on-futuregen/.

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Lessons from FutureGen: A Similar Path for Other Demonstration Projects?

Following the announcement that DOE was suspending the FutureGen project, one question for

Congress is whether FutureGen represented a unique case of a first mover in a complex,

expensive, and technically challenging endeavor. Another is whether some of the challenges that

ultimately stopped FutureGen also apply to other large DOE-funded CCS demonstration projects

once they move past the planning stage. DOE committed approximately $3.3 billion of Recovery

Act funding to large demonstration projects (approximately $800 million less now, with the

demise of FutureGen). One rationale for committing such a substantial level of funding was to

scale up and quicken the pace of CCS RD&D.

Some argue that FutureGen was unique from its original conception. None of the other large-scale

demonstration projects in the United States share the same original ambitious vision to create a

new, one-of-a-kind, near-zero emission CCS plant from the ground up. Even though the

individual components of FutureGen as it was originally conceived were not themselves new

innovations, combining the capture, transportation, and storage components into a 250-megawatt

functioning power plant could be considered unprecedented and therefore likely to experience

delays at each step in development.

Scholars have described the stages of technological change in different schemes, such as

•

invention, innovation, adoption, diffusion;26 or

•

technology readiness levels (TRLs) ranging from TRL 1 (basic technology

research) to TRL 9 (system test, launch, and operations);27 or

•

conceptual design, laboratory/bench scale, pilot plant scale, full-scale

demonstration plant, and commercial process.28

FutureGen was difficult to categorize within these schemes, in part because the project spanned a

range of technology development levels irrespective of the particular scheme. The original

conception of the FutureGen project arguably had aspects of conceptual design through

commercial processes—all five components of the scheme listed as the third bullet above—which

meant the project was intended to march through all stages in a linear fashion. As some scholars

have noted, however, the stages of technological change are highly interactive, requiring learning

by doing and learning by using, once the project progresses past its innovative stage into largerscale demonstration and deployment.29 The task of tackling all the stages of technology

development in one project—the original FutureGen—might have been too daunting and, in

addition to other factors, contributed to the project’s erratic progress since 2003. It remains to be

seen whether the remaining large-scale demonstration projects funded by DOE under the Clean

E. S. Rubin, “The Government Role in Technology Innovation: Lessons for the Climate Change Policy Agenda,”

Institute of Transportation Studies, 10th Biennial Conference on Transportation Energy and Environmental Policy,

University of California, Davis, CA (August 2005).

National Aeronautics and Space Administration, “Definition of Technology Readiness Levels,” at

http://esto.nasa.gov/files/TRL_definitions.pdf.

For a more thorough discussion of different schemes describing stages of technology development, see chapter 4 of

CRS Report R41325, Carbon Capture: A Technology Assessment, by (name redacted).

E. S. Rubin, “The Government Role in Technology Innovation: Lessons for the Climate Change Policy Agenda,”

Institute of Transportation Studies, 10th Biennial Conference on Transportation Energy and Environmental Policy,

University of California, Davis, CA (August 2005).

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Coal Power Initiative (CCPI) Round 3 follow the path of FutureGen or achieve their

technological development goals on time and within their current budgets. Presumably, lessons

learned during the planning, construction, and operation of these demonstration projects will be

shared with the broader electric power industry.30

Legislation

Although DOE has pursued aspects of CCS RD&D since 1997, the Energy Policy Act of 2005

(P.L. 109-58) provided a 10-year authorization for the basic framework of CCS research and

development at DOE.31 The Energy Independence and Security Act of 2007 (EISA, P.L. 110140) amended the Energy Policy Act of 2005 to include, among other provisions, authorization

for seven large-scale CCS demonstration projects (in addition to FutureGen) that would integrate

the carbon capture, transportation, and sequestration steps.32 (Large-scale demonstration programs

and their potential significance are discussed below.) It can be argued that, since enactment of

EISA, the focus and funding within the CCS RD&D program has shifted toward large-scale

capture technology development through these and other demonstration projects.

In addition to the annual appropriations provided for CCS RD&D, the Recovery Act (P.L. 111-5)

has been the most significant legislation that promotes and supports federal CCS RD&D program

activities since passage of EISA. As discussed below, $3.4 billion in funding from the Recovery

Act was intended to expand and accelerate the commercial deployment of CCS technologies to

allow for commercial-scale demonstration in both new and retrofitted power plants and industrial

facilities by 2020.

114th Congress

On February 26, 2015, Senators Heitkamp and Kaine introduced S. 601, the Advanced Clean

Technology Investment in Our Nation Act of 2015, which would promote CCS for coal-fired

utilities by a combination of loan guarantees, tax credits, and support for the DOE R&D effort in

its coal program, among other things. The bill closely resembles legislation introduced by Senator

Heitkamp in the 113th Congress, S. 2152 (discussed below).

113th Congress

More than a dozen bills introduced in the 113th Congress would have addressed the proposed EPA

rules and guidelines for reducing GHG emissions from new and existing coal-fired power plants.

H.R. 3826, the Electricity Security and Affordability Act, would have set requirements EPA must

meet before the agency could issue GHG emission regulations under Section 111 of the Clean Air

Act. The bill would have, in part, prohibited EPA from promulgating or implementing GHG

Another possible source of uncertainty for large industrial CCS projects is cost recovery during the operating phase

of the plant after the construction phase and initial capital investments are made. “Learning by doing” should increase

operating efficiency, but it is unclear by how much and over what time span. For more discussion on cost trajectories

and expected efficiency gains, see CRS Report R41325, Carbon Capture: A Technology Assessment, by (name redacted).

P.L. 109-58, Title IX, Subtitle F, §963; 42 U.S.C. 16293.

P.L. 110-140, Title VII, Subtitles A and B.

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emissions standards for fossil-fueled power plants until at least six power plants representative of

the operating characteristics of electric generation units at different locations across the United

States had demonstrated compliance with proposed emission limits for a continuous period of 12

months on a commercial basis. Companion legislation, S. 1905, was referred to the Senate

Committee on Environment and Public Works.

Several bills introduced in the 113th Congress would have provided federal incentives for

accelerating the RD&D of CCS. For example, S. 2152 would have increased DOE CCS research

and development, allowed for loan guarantees to qualified CCS projects, provided an investment

tax credit for certain CCS facilities, and created a clean energy coal bond, among other things.

Two related bills would have dealt with tax credits and loan guarantees. S. 2287 would have

revised part of the tax code that allows a tax credit for CCS and would have amended EPAct to

broaden the loan guarantee program for CCS, among other things. S. 2288 would have amended

the tax code to expand the tax credits for CCS. S. 2776 would have established a fund for DOE to

administer in establishing at least 10 commercial-scale CCS projects over 10 years. Several other

bills introduced in the 113th Congress would have touched on CCS-related issues.

CCS Research, Development, and Demonstration:

Overall Goals

The U.S. Department of Energy states that the mission for the DOE Office of Fossil Energy is “to

ensure the availability of ultra-clean (near-zero emissions), abundant, low-cost domestic energy

from coal to fuel economic prosperity, strengthen energy security, and enhance environmental

quality.”33 Over the past several years, the DOE Fossil Energy Research and Development

Program has increasingly shifted activities performed under its Coal Program toward

emphasizing CCS as the main focus.34 The Coal Program represented between 68% and 70% of

total Fossil Energy Research and Development appropriations from FY2012 to FY2015,35

indicating that CCS has come to dominate coal R&D at DOE. This reflects DOE’s view that

“there is a growing consensus that steps must be taken to significantly reduce [greenhouse gas]

emissions from energy use throughout the world at a pace consistent to stabilize atmospheric

concentrations of CO2, and that CCS is a promising option for addressing this challenge.”36 The

FY2016 President’s budget request, however, would reduce the total funding for the Coal

Program compared with the previous two fiscal years. In the FY2016 request, the coal program

would represent 66% of the total Fossil Energy R&D appropriation.

DOE acknowledges that the cost of deploying currently available CCS technologies is very high

and that to be effective as a technology for mitigating GHG emissions from power plants, the

costs for CCS must be reduced. For example, in 2010 DOE stated that the cost of deploying

available CCS post-combustion technology on a supercritical pulverized coal-fired power plant

would increase the cost of electricity by 80%.37 The challenge of reducing the costs of CCS

DOE 2010 CCS Roadmap, p. 2.

The Coal Program contains CCS RD&D activities and is within DOE’s Office of Fossil Energy, Fossil Energy

Research and Development, as listed in DOE detailed budget justifications for each fiscal year.

U.S. Department of Energy, FY2013, FY2014, and FY2015 Congressional Budget Requests.

DOE 2010 CCS Roadmap, p. 3.

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

technology is difficult to quantify. The Boundary Dam Plant in Canada is the only commercialscale coal-fired power plant equipped with CCS, and it has been operating for less than one year.

Nor is it easy to predict when lower-cost CCS technology will be available for widespread

deployment in the United States. Nevertheless, DOE observes that “the United States can no

longer afford the luxury of conventional long-lead times for RD&D to bear results.”38 Thus the

coal RD&D program is focused on achieving results that would allow for an advanced CCS

technology portfolio to be ready by 2020 for large-scale demonstration.

The following section describes the components of the CCS activities within DOE’s coal R&D

program and their funding history since FY2012. This report focuses on this time period because

during that time DOE obligated Recovery Act funding for its CCS programs, greatly expanding

the CCS R&D portfolio. This was expected to accelerate the transition of CCS technology to

industry for deployment and commercialization.39 In addition, one remaining active project in the

CCPI program that received funding in Round 2, prior to enactment of the Recovery Act—the

Kemper County Energy Facility—also is discussed. Lastly, the Boundary Dam Project is

described briefly, although it is a Canadian venture, because of its unique status as the only

currently operating commercial-scale coal-fired power plant with CCS in the world.

Program Areas

The 2010 RD&D CCS Roadmap described 10 different program areas pursued by DOE’s Coal

Program within the Office of Fossil Energy: (1) Innovations for Existing Plants (IEP); (2)

Advanced Integrated Gasification Combined Cycle (IGCC); (3) Advanced Turbines; (4) Carbon

Sequestration; (5) Solid State Energy Conversion Fuel Cells; (6) Fuels; (7) Advanced Research;

(8) CCPI; (9) FutureGen; and (10) Industrial Carbon Capture and Storage Projects (ICCS).40

Coal Program Areas

DOE changed the program structure for coal after FY2010, renaming and consolidating program

areas. The program areas are divided into two main categories: (1) CCS Demonstration Programs

and (2) CSS and Power Systems. Table 1 shows the current program structure and indicates

which programs received Recovery Act funding. In its FY2016 budget justification, DOE states

that the CCS and Power Systems R&D program

supports secure, affordable, and environmentally acceptable near-zero emissions fossil energy

technologies through research, development, and demonstration (RD&D) to improve the

performance of advanced CCS technologies.41

Some programs are directly focused on one or more of the three steps of CCS: capture,

transportation, and storage. For example, the carbon capture program supports R&D on postcombustion, pre-combustion, and natural gas capture. The carbon storage program supports the

DOE 2010 CCS Roadmap, p. 3.

DOE 2010 CCS Roadmap, p. 2.

DOE 2010 CCS Roadmap, p. 11.

U.S. Department of Energy, FY2016 Congressional Budget Request, volume 3, Fossil Energy Research and

Development, p. 569.

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regional carbon sequestration partnerships, geological storage technologies, and other aspects of

permanently sequestering CO2 underground. In contrast, FutureGen from the outset was

envisioned as combining all three steps: a zero-emission fossil fuel plant that would capture its

emissions and sequester them in a geologic reservoir.

Table 1. Funding for DOE Fossil Energy Research, Development, and Demonstration

Program Areas

(funding in nominal dollars [thousands], FY2012-FY2016, including Recovery Act)

Fossil Energy

Research and

Development

Coal Program

Areas

CCS

Demonstrations

Carbon

Capture and

Storage, and

Power Systems

Program

Recovery

Act

FY2012

FY2013

FY2014

FY2015

FY2016

Request

FutureGen 2.0a

1,000,000

Clean Coal

Power Initiative

(CCPI)

800,000

Industrial

Carbon Capture

and Storage

Projects (ICCS)

1,520,000

Site

Characterization,

Training,

Program

Direction

80,000

Carbon Capture

—

66,986

63,725

92,000

88,000

116,631

Carbon Storage

—

112,208

106,745

108,766

100,000

108,768

Advanced Energy

Systems

—

97,169

92,438

99,500

103,000

39,385

Cross Cutting

Research

—

47,946

45,618

41,925

49,000

51,242

Supercritical

CO2 Technology

—

10,000

19,300

NETL Coal

Research and

Development

—

35,011

33,338

50,011

50,000

34,031

3,400,000

359,320

341,864

392,202

400,000

369,357

Natural Gas

Technologies

—

14,991

13,865

20,600

25,121

44,000

Unconventional

Fossil

—

4,997

4,621

15,000

4,500

Program

Direction

—

119,929

114,201

120,000

119,000

114,202

Subtotal Coal

Other Fossil

Energy R&D

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Fossil Energy

Research and

Development

Coal Program

Areas

Recovery

Act

FY2012

FY2013

FY2014

FY2015

FY2016

Request

Plant & Capital

—

16,794

15,982

16,032

15,782

18,044

Env. Restoration

—

7,897

7,515

5,897

8,197

Supercomputer

—

5,500

Special

Recruitment

—

700

667

700

—

165,308

156,851

178,229

171,000

190,643

3,400,000

524,628

498,715

570,431

571,000

560,000

Program

Subtotal Other

Fossil R&D

Total Fossil

Energy R&D

Sources: U.S. Department of Energy, FY2016. Congressional Budget Request, volume 3, Fossil Energy Research

and Development, http://energy.gov/sites/prod/files/2015/02/f19/FY2016BudgetVolume3_7.pdf. Other sources

include the U.S. DOE Congressional Budget Requests for FY2015, FY2014, and FY2013.

Notes: FY2012-FY2015 numbers denote enacted funding except for FY2013, which denotes the FY2013

continuing resolution annualized to a full year per P.L. 112-175. NETL = National Energy Technology Laboratory.

a. On February 3, 2015, DOE announced that it was canceling the FutureGen program. Statement by DOE

spokesman Bill Gibbons, reported by Manuel Quinones, in Environment & Energy Daily, February 4, 2015,

http://www.eenews.net/eedaily/stories/1060012838/search?keyword=futuregen.

Within the CCS Demonstrations Program Area, RD&D is also divided among different industrial

sectors. The Clean Coal Power Initiative (CCPI) program area originally provided federal support

to new coal technologies that helped power plants cut sulfur, nitrogen, and mercury pollutants. As

CCS became the focus of coal RD&D, the CCPI program shifted to reducing GHG emissions by

boosting plant efficiencies and capturing CO2.42 In contrast, the ICCS program area demonstrates

carbon capture technology for the non-power plant industrial sector.43 Both these program areas

focus on the demonstration component of RD&D, and account for $2.3 billion of the $3.4 billion

appropriated for CCS RD&D in the Recovery Act in FY2009. From the budgetary perspective,

the Recovery Act funding shifted the emphasis of CCS RD&D to large, industrial demonstration

projects for carbon capture. The CCPI and ICCS program areas are discussed in more detail

below.

This shift in emphasis to the demonstration phase of carbon capture technology is not surprising,

and appears to heed recommendations from many experts who have called for large, industrialscale carbon capture demonstration projects.44 Primarily, the call for large-scale CCS

U.S. Department of Energy, FY2015 Congressional Budget Request, volume 3, Fossil Energy Research and

Development, p. 551.

DOE 2010 CCS Roadmap, p. 12.

See, for example, the presentations given by Edward Rubin of Carnegie Mellon University, Howard Herzog of the

Massachusetts Institute of Technology, and Jeff Phillips of the Electric Power Research Institute, at the CRS seminar

Capturing Carbon for Climate Control: What’s in the Toolbox and What’s Missing, November 18, 2009. (Presentations

available from (name redacted) at 7-.....) Rubin stated that at least 10 full-scale demonstration projects would be needed

to establish the reliability and true cost of CCS in power plant applications. Herzog also called for at least 10

demonstration plants worldwide that capture and sequester a million metric tons of CO2 per year. In his presentation,

Phillips stated that large-scale demonstrations are critical to building confidence among power plant owners.

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

demonstration projects that capture 1 million metric tons or more of CO2 per year reflects the

need to reduce the additional costs to the power plant or industrial facility associated with

capturing the CO2 before it is emitted to the atmosphere. The capture component of CCS is the

costliest component, according to most experts.45 The higher estimated costs to build and operate

power plants with CCS compared with plants without CCS, and the uncertainty in cost estimates,

results in part from a dearth of information about outstanding technical questions in carbon

capture technology at the industrial scale.46 Some cost data are emerging, however, now that the

Kemper County Energy Facility is close to completion and the Canadian Boundary Dam project

is operating (both discussed below).

Other Fossil Research and Development

The Administration requests approximately $191 million for FY2016 for other programs pursuing

fossil energy R&D and support activities. The largest activity is program direction ($114 million

requested), which provides for DOE headquarters support and for federal field and contractor

support of the overall fossil energy R&D programs. These activities would support CCS-related

activities directly and indirectly. The second-largest activity is natural gas technologies ($44

million), which supports collaborative research to foster safe and prudent development of shale

gas resources, the reduction of methane emissions from natural gas infrastructure, and research on

gas hydrates.47 The other activities listed in Table 1, plant and capital, environmental restoration,

and supercomputer, total approximately $33 million in the FY2016 request.48

Evolution of Costs

In comparative studies of cost estimates for other environmental technologies, such as for power

plant scrubbers that remove sulfur and nitrogen compounds from power plant emissions (SO2 and

NOx), some experts note that the farther away a technology is from commercial reality, the more

uncertain is its estimated cost. At the beginning of the RD&D process, initial cost estimates could

be low, but could typically increase through the demonstration phase before decreasing after

successful deployment and commercialization. Figure 1 shows a cost estimate curve of this type.

For example, an MIT report estimated that the costs of capture could be 80% or more of the total CCS costs. John

Deutsch et al., The Future of Coal, Massachusetts Institute of Technology, An Interdisciplinary MIT Study, 2007,

Executive Summary, p. xi.

The Future of Coal, p. 97.

U.S. Department of Energy, FY2016. Congressional Budget Request, volume 3, pp. 603-616.

Apart from Recovery Act funding, annual appropriations for the Office of Fossil Energy at DOE are provided in the

Energy and Water Development appropriations bill. For more information, see CRS Report R43567, Energy and Water

Development: FY2015 Appropriations, coordinated by (name redacted).

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Capital Cost per Unit of Capacity

Figure 1. Typical Trend in Cost Estimates for a New Technology As It Develops

from a Research Concept to Commercial Maturity

Research

Development Demonstration

Deployment

Mature Technology

Time or Cumulative Capacity

Source: Adapted from S. Dalton, “CO2 Capture at Coal Fired Power Plants—Status and Outlook,” 9th

International Conference on Greenhouse Gas Control Technologies, Washington, DC, November, 16-20, 2008.

Deploying commercial-scale CCS demonstration projects—an emphasis within the DOE CCS

RD&D program—would therefore provide cost estimates closer to operational conditions rather

than laboratory- or pilot-plant-scale projects. In the case of SO2 and NOx scrubbers, efforts

typically took two decades or more to bring new concepts (such as combined SO2 and NOx

capture systems) to the commercial stage. As Figure 1 indicates, costs for new technologies tend

to fall over time with successful deployment and commercialization. It would be reasonable to

expect a similar trend for CO2 capture costs if the technologies become widely deployed.49

First U.S. Full-Scale Project? The Kemper County Energy Facility

DOE awarded Southern Company Services a cooperative agreement under the CCPI Round 2

program, prior to enactment of the Recovery Act and the CCPI Round 3 awards, to develop

technology at the Kemper County Energy Facility in Kemper County, Mississippi. The $270

million award was aimed to provide direct financial support for the development and deployment

of a gasification technology called Transport Integrated Gasification (TRIGTM).50

The Kemper County Project is an integrated gasification combined-cycle (IGCC)51 power plant

that will be owned and operated by Mississippi Power Company, a subsidiary of Southern

Company, and which will use lignite as a fuel source. The plant is expected to have an estimated

peak net output capability of 582 megawatts, and is designed to capture 65% of the total CO2

For a fuller discussion of the relationship between costs of developing technologies analogous to CCS, such as SO2

and NOx scrubbers, see CRS Report R41325, Carbon Capture: A Technology Assessment, by (name redacted).

DOE, National Energy Technology Laboratory, CCS Demonstrations, CCPI Initiative, http://netl.doe.gov/research/

proj?k=FC26-06NT42391.

For more information on IGCC power plants and CCS, see CRS Report R41325, Carbon Capture: A Technology

Assessment, by (name redacted).

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emissions released from the plant.52 According to DOE, this would make the CO2 emissions from

the Kemper Project comparable to a natural gas-fired combined cycle power plant, and would

therefore emit less than the 1,100 pounds per megawatt-hour limit as required by the new EPA

proposed rule. The estimated 3 million tons of CO2 captured each year from the plant would be

transported via newly constructed pipeline for use in enhanced oil recovery operations at nearby

depleted oil fields in Mississippi.

Commercial operation of the Kemper County Project has been delayed several times since

construction began in 2010.53 According to a Mississippi Power timeline for the project,

commercial operation will begin sometime in 2016.54 The project also has cost far more than the

original estimate. The $270 million award under Round 2 of the CCPI program represented

approximately 10% of what DOE had reported as the overall cost to build the plant,

approximately $2.67 billion.55 However, in April 2013 the company announced that capital costs

would be closer to $3.4 billion, approximately $1 billion higher than original cost estimates for

the plant.56 In early April 2014, Mississippi Power released documents indicating that the project

was on schedule to begin operations in the last quarter of 2014 but that the total cost for the plant,

including the lignite mine, CO2 pipeline, land purchase, and all the other components of the full

project, had risen to approximately $5.2 billion.57 In late April 2014, Mississippi Power again

modified its cost and schedule estimates, adjusting costs upward by $61 million related to

construction issues and $135 million related to the extension of the start-up date into 2015.58

According to some reports, the overall cost of the plant may now exceed $6 billion when

complete and ready for commercial operation,59 and the schedule for start-up of commercial

operations has been pushed to 2016.60

It is likely that the plant will attract increased scrutiny in the wake of the EPA proposed rule on

CO2 emissions, and its cost and schedule overruns evaluated against the promised environmental

benefits due to CCS technology.61 As Figure 1 shows, costs for technologies tend to peak for

projects in the demonstration phase of development, such as the Kemper County Project. What

DOE, National Energy Technology Laboratory, CCS Demonstrations, CCPI Initiative, http://netl.doe.gov/research/

proj?k=FC26-06NT42391.

MIT Carbon Capture and Sequestration Technologies, CCS Project Database, Kemper County IGCC Fact Sheet:

Carbon Capture and Storage Project, http://sequestration.mit.edu/tools/projects/kemper.html.

See Mississippi Power, Kemper County IGCC Project, Facts-Project Timeline, http://www.mississippipower.com/

about-energy/plants/kemper-county-energy-facility/facts. Site accessed March 19, 2015.

DOE Office of Fossil Energy, CCPI Round 2 Selections, http://energy.gov/fe/ccpi-round-2-selections.

Tamar Hallerman, “Miss. Power to Absorb $540M in Cost Increases from Kemper Plant,” GHG Reduction

Technologies Monitor, April 26, 2013, http://ghgnews.com/index.cfm/miss-power-to-absorb-540m-in-cost-increasesfrom-kemper-plant/. Other reports cite the total costs for the plant.

See Mississippi Power, Kemper County IGCC Project, Monthly Status Report Through February 2014,

http://www.eenews.net/assets/2014/04/03/document_cw_01.pdf.

See Mississippi Power, Kemper County IGCC Project, Monthly Status Report Through March 2014,

http://www.eenews.net/assets/2014/04/30/document_cw_01.pdf.

Daniel Cusack, “Kemper Plant Reaches Key Gasification Milestone, Despite Ballooning Costs,” Climate Wire,

March 13, 2015, http://www.eenews.net/climatewire/stories/1060014974/search?keyword=kemper.

Mississippi Power, Kemper County Energy Facility, “Facts,” Project Timeline, http://www.mississippipower.com/

about-energy/plants/kemper-county-energy-facility/facts, as of April 4, 2015.

See, for example, Mark Drajem, “Mississippi’s Kemper Coal Plant Overruns Show Risk of EPA Carbon Rule,”

Bloomberg News, SunHerald.com, September 19, 2013, http://www.sunherald.com/2013/09/19/4964367/kempercounty-coal-plant-overruns.html.

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the cost curve will look like, namely, how fast costs will decline and over what time period, is an

open question and will likely depend on if and how quickly CCS technology is deployed on new

and existing power plants.

Canada’s Boundary Dam Project: The World’s First CommercialScale CCS Project

The Boundary Dam Project, operated by SaskPower, is a Canadian venture, and it is the only

commercial-scale power plant with CCS operating in the world. Some of its published cost and

schedule data may be helpful to those trying to understand the financing and time requirements

for other commercial-scale CCS projects. The cost for the project was approximately $1.3 billion,

according to one source, of which $800 million was for building the CCS process, and the

remaining $500 million was for retrofitting the Boundary Dam Unit 3 coal-fired generating unit.62

The project also received $240 million from the Canadian federal government. Boundary Dam

started operating in October 2014, after a four-year construction and retrofit of the 150 megawatt

generating unit. The final project was smaller than earlier plans to build a 300 megawatt CCS

plant, but that plant may have cost as much as $3.8 billion. The larger-scale project was

discontinued because of the escalating costs.63

Like the Kemper Plant discussed above, Boundary Dam is a project that sells CO2 for enhanced

oil recovery, shipping 90% of the captured CO2 via a 41-mile pipeline to the Weyburn Field.

Unused CO2 will be stored in a deep saline aquifer about 2.1 miles underground. The nowoperating 110 megawatt (net) plant plans to capture at least 1 million tons of CO2 per year.

Recovery Act Funding for CCS Projects: A Lynchpin

for Success?

The bulk of Recovery Act funds for CCS ($3.32 billion, or 98%) was directed to three

subprograms organized under the CCS Demonstrations Programs: the Clean Coal Power

Initiative (CCPI), Industrial Carbon Capture and Storage projects (ICCS), and FutureGen (Table

1). Under the 2010 CCS Roadmap, and with the large infusion of funding from the Recovery Act,

DOE’s goal is to develop the technologies to allow for commercial-scale demonstration in both

new and retrofitted power plants and industrial facilities by 2020. The DOE 2011 Strategic Plan

sets a more specific target: to bring at least five commercial-scale CCS demonstration projects

online by 2016.64

MIT Carbon Capture & Sequestration Technologies, CCS Project Database, Boundary Dam Fact Sheet: Carbon

Capture and Storage Project, http://sequestration.mit.edu/tools/projects/boundary_dam.html. A SaskPower fact sheet

describes it as a $1.4 billion partnership between the government of Canada and SaskPower, http://saskpowerccs.com/

ccs-projects/boundary-dam-carbon-capture-project/7913%20CSS%20Factsheet-Boundary%20Dam-newtense.pdf.

MIT Carbon Capture & Sequestration Technologies, CCS Project Database, Boundary Dam Fact Sheet: Carbon

Capture and Storage Project.

U.S. Department of Energy, Strategic Plan, May 2011, p. 18, http://energy.gov/sites/prod/files/

2011_DOE_Strategic_Plan_.pdf.

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It could be argued that in its allocation of Recovery Act funding, DOE was heeding the

recommendations of some experts65 who identified commercial-scale demonstration projects as

the most important component, the lynchpin, for future development and deployment of CCS in

the United States. It could also be argued that much of the future success of CCS is riding on

these three programs. Accordingly, the following section provides a snapshot of the CCPI, ICCS,

and FutureGen programs, and a brief discussion of some of their accomplishments and

challenges.

CCS Demonstrations: Clean Coal Power Initiative and Industrial

Carbon Capture and Storage

Clean Coal Power Initiative

The Clean Coal Power Initiative was an ongoing program prior to the $800 million funding

increase from the Recovery Act. This funding now is being used to expand activities in this

program area for CCPI Round 3 beyond developing technologies to reduce sulfur, nitrogen, and

mercury pollutants from power plants.66 After enactment of the Recovery Act, DOE did not

request additional funding for CCPI under its Fossil Energy program in the annual appropriations

process (Table 1 shows zero dollars for FY2012-FY2015). Rather, in the FY2010 DOE budget

justification, DOE stated that funding for the these projects in CCPI Round 3 would be supported

through the Recovery Act, and as a result “DOE will make dramatic progress in demonstrating

CCS at commercial scale using these funds without the need for additional resources for

demonstration in 2010.”67

According to the 2010 DOE CCS Roadmap, Recovery Act funds have been used for these

demonstration projects to “allow researchers broader CCS commercial-scale experience by

expanding the range of technologies, applications, fuels, and geologic formations that are being

tested.”68 DOE selected six projects under CCPI Round 3 through two separate solicitations.69

The total DOE share of funding would have been $1.75 billion for the six projects in five states:

Alabama, California, North Dakota, Texas, and West Virginia (Table 2). However, the projects in

Alabama, North Dakota, and West Virginia withdrew from the program, and currently the DOE

share for the remaining three projects is approximately $1.03 billion (of a total of over $6 billion

See, for example, the presentations given by Edward Rubin of Carnegie Mellon University, Howard Herzog of the

Massachusetts Institute of Technology, and Jeff Phillips of the Electric Power Research Institute, at the CRS seminar

Capturing Carbon for Climate Control: What’s in the Toolbox and What’s Missing, November 18, 2009. (Presentations

available from (name redacted) at 7-.....) Rubin stated that at least 10 full-scale demonstration projects would be needed

to establish the reliability and true cost of CCS in power plant applications. Herzog also called for at least 10

demonstration plants worldwide that capture and sequester a million metric tons of CO2 per year. In his presentation,

Phillips stated that large-scale demonstrations are critical to building confidence among power plant owners.

DOE had solicited and awarded funding for CCPI projects in two previous rounds of funding: CCPI Round 1 and

Round 2. The Recovery Act funds were to be allocated in CCPI Round 3, focusing on projects that utilize CCS

technology and/or the beneficial reuse of CO2. For more details, see http://www.fossil.energy.gov/programs/

powersystems/cleancoal/.

U.S. Department of Energy, Detailed Budget Justifications FY2010, volume 7, Fossil Energy Research and

Development, p. 35, http://www.cfo.doe.gov/budget/10budget/Content/Volumes/Volume7.pdf.

DOE 2010 CCS Roadmap, p. 15.

The first solicitation closing date was January 20, 2009; the second solicitation closing date was August 24, 2009.

Thus the first set of project proposals were submitted prior to enactment of the Recovery Act. See

http://www.fossil.energy.gov/programs/powersystems/cleancoal/.

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for total expected costs). With the withdrawal of three CCPI Round 3 projects, DOE’s share of the

total program costs shrank from over 21% to approximately 15%.

Table 2. DOE CCPI Demonstration Round 3 Projects

Percent

DOE Share

Metric Tons of

CO2 Captured

Annually

(millions)

Project

Status

1,727

26%

2.2b

Active

408

4,028

10%

2.6

Active

Thompsons,

167

1,000

17%

1.4

Active

AEP Mountaineer

Project

New Haven,

334

668

50%

1.5

Withdrawn

July 2011

Southern

Company Project

Mobile, AL

295

665

44%

Withdrawn

February

2010

Basin Electric

Power Project

Beulah, ND

100

387

26%

0.9

Withdrawn

December

2010

Total

1,754

8,475

21.0%

9.6

Total, Active

Projectsa

1,025

6,755

15.2%

6.2

Location

DOE Share of

Funding

($ millions)

Total Project

Cost

($ millions)

Texas Clean

Energy Project

Penwell, TX

450

Hydrogen Energy

California Project

Kern County,

Petra Nova

Energy Project

Round 3

Project

Sources: DOE Fossil Energy Techline; Environment News Service (March 12, 2010), http://www.ensnewswire.com/ens/mar2010/2010-03-12-093.html; National Energy Technology Laboratory (NETL) Clean Coal

Power Initiative (CCPI) website, http://www.netl.doe.gov/technologies/coalpower/cctc/ccpi/index.html; NETL

Factsheet: Summit Texas Clean Energy, LLC, November 2014, http://www.netl.doe.gov/research/coal/majordemonstrations/clean-coal-power-initiative/ccpi-summit; NETL Factsheet Hydrogen Energy California Project,

November 2014, http://www.netl.doe.gov/research/coal/major-demonstrations/clean-coal-power-initiative/ccpiheca; NETL Factsheet Petra Nova Parish Holdings: W.A. Parish Post Combustion CO2 Capture and

Sequestration Project, November 2014, http://www.netl.doe.gov/research/coal/major-demonstrations/clean-coalpower-initiative/ccpi-petra-nova.

Notes: DOE funding for the Petra Nova (formerly NRG) Energy Project was initially announced as up to $154

million (see March 9, 2009, DOE Techline, http://www.fossil.energy.gov/news/techlines/2010/10005NRG_Energy_Selected_to_Receive_DOE.html). A May 2010 DOE fact sheet indicated that funding was $167

million (http://www.netl.doe.gov/publications/factsheets/project/FE0003311.pdf). A November 2014 DOE fact

sheet noted that the scale of the project was increased to $1.0 billion because the original 60 megawatt project

was too small to produce enough CO2 for significant enhanced oil production from CO2 injection.

Totals include amounts that were reallocated from withdrawn projects to active projects.

According to NETL, this amount would be a maximum amount per year. About 1.74 million metric tons

would be stored geologically annually; the remaining amount of captured CO2 would be used for urea

production.

Reasons for Withdrawal from the CCPI Program

Commercial sector partners identified a number of reasons for withdrawing from the CCPI

program, including finances, uncertainty regarding future regulations, and uncertainty regarding

the future national climate policy.

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Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Southern Company—Plant Barry 160 Megawatt Project: Southern Company withdrew its

Alabama Plant Barry project from the CCPI program on February 22, 2010, slightly more than

two months after DOE Secretary Chu announced $295 million in DOE funding for the 11-year,

$665 million project that would have captured up to 1 million tons of CO2 per year from a 160

megawatt coal-fired generation unit.70 According to some sources, Southern Company’s decision

was based on concern about the size of the company’s needed commitment (approximately $350

million) to the project, and its need for more time to perform due diligence on its financial

commitment, among other reasons.71 Southern Company continues work on a much smaller CCS

project that would capture CO2 from a 25 megawatt unit at Plant Barry.

Basin Electric Power—Antelope Valley 120 Megawatt Project: On July 1, 2009, Secretary

Chu announced $100 million in DOE funding for a project that would capture approximately 1

million tons of CO2 per year from a 120 megawatt electric-equivalent gas stream from the

Antelope Valley power station near Beulah, ND.72 In December 2010, the Basin Electric Power

Cooperative withdrew its project from the CCPI program, citing regulatory uncertainty with

regard to capturing CO2, uncertainty about the project’s cost (one source indicates that the

company estimated $500 million total cost; DOE estimated $387 million—see Table 2),73

uncertainty of environmental legislation, and lack of a long-term energy strategy for the country.74

The project would have supplied the captured CO2 to an existing pipeline that transports CO2

from the Great Plains Synfuels Plant near Beulah for enhanced oil recovery in Canada’s Weyburn

field approximately 200 miles north in Saskatchewan.

American Electric Power—Mountaineer 235 Megawatt Project: In July 2011 American

Electric Power (AEP) decided to halt its plans to build a carbon capture plant for a 235 megawatt

generation unit at its 1.3 gigawatt Mountaineer power plant in New Haven, WV. The project

represented Phase 2 of an ongoing CCPI project. Secretary Chu had earlier announced a $334

million award for the project on December 4, 2009.75 According to some sources, AEP dropped

the project because the company was not certain that state regulators would allow it to recover the

additional costs for the CCS project through rate increases charged to its customers.76 In addition,

company officials cited broader economic and policy conditions as reasons for cancelling the

project.77 Some commentators suggested that congressional inaction on setting limits on GHG

MIT Carbon Capture & Sequestration Technologies, Plant Barry Fact Sheet: Carbon Dioxide Capture and Storage

Project, http://sequestration.mit.edu/tools/projects/plant_barry.html.

Ibid.

U.S. DOE, Fossil Energy Techline, Secretary Chu Announces Two New Projects to Reduce Emissions from Coal

Plants, July 1, 2009, http://www.fossil.energy.gov/news/techlines/2009/09043-DOE_Announces_CCPI_Projects.html.

Lauren Donovan, “Basin Shelves Lignite’s First Carbon Capture Project,” Bismarck Tribune, December 17, 2010,

http://bismarcktribune.com/news/local/a5fb7ed8-0a1b-11e0-b0ea-001cc4c03286.html.

Daryl Hill and Tracie Bettenhausen, “Fresh Tech, Difficult Decisions: Basin Electric has a History of Trying New

Technology,” Basin Electric Power Cooperative newsletter, January-February 2011, http://www.basinelectric.com/

Miscellaneous/pdf/FeatureArticles/Fresh_Tech,_difficul.pdf.

U.S. DOE, Fossil Energy Techline, Secretary Chu Announces $3 Billion Investment for Carbon Capture and

Sequestration, December 4, 2009, http://www.fossil.energy.gov/news/techlines/2009/09081Secretary_Chu_Announces_CCS_Invest.html.

Matthew L. Wald and John M. Broder, “Utility Shelves Ambitious Plan to Limit Carbon,” New York Times, July 13,

2011, http://www.nytimes.com/2011/07/14/business/energy-environment/utility-shelves-plan-to-capture-carbondioxide.html?_r=1.

Michael G. Morris, chairman of AEP, quoted in Matthew L. Wald and John M. Broder, “Utility Shelves Ambitious

Plan to Limit Carbon,” The New York Times, July 13, 2011.

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

emissions, as well as the weak economy, may have diminished the incentives for a company like

AEP to invest in CCS.78 One source concluded that “Phase 2 has been cancelled due to unknown

climate policy.”79

Reshuffling of Funding for CCPI

According to DOE, $140 million of the $295 million previously allotted to the Southern

Company Plant Barry project was redistributed to the Texas Clean Energy project and the

Hydrogen Energy California project. DOE provided additional funding, resulting in each project

receiving an additional $100 million above its initial award.80 The remaining funding from the

canceled Plant Barry project (up to $154 million) was allotted to the NRG Energy project in

Texas (now the Petra Nova Energy Project; see Table 2).81

According to a DOE source, selection of the Basin Electric Power project was announced but a

cooperative agreement was never awarded by DOE.82 Funds that were to be obligated for the

Basin project could therefore have been reallocated within the department, but were rescinded by

Congress in FY2011 appropriations.

Some of the funding for the AEP Mountaineer project was rescinded by Congress in FY2012

appropriations legislation (P.L. 112-74). In the report accompanying P.L. 112-74, Congress

rescinded a total of $187 million of prior-year balances from the Fossil Energy Research and

Development account.83 The rescission did not apply to amounts previously appropriated under

P.L. 111-5; however, funding for the AEP Mountaineer project that was provided by the

Recovery Act and not spent was returned to the Treasury and not made available to the CCPI

program.84

Industrial Carbon Capture and Storage Projects

The original DOE ICCS program was divided into two main areas: Area 1, consisting of large

industrial demonstration projects; and Area 2, consisting of projects to test innovative concepts

for the beneficial reuse of CO2.85 Under Area 1, the first phase of the program consisted of 12

projects cost-shared with private industry, intended to increase investment in clean industrial

technologies and sequestration projects. Phase 1 projects averaged approximately seven months

in duration. Following Phase 1, DOE selected three projects for Phase 2 for design, construction,

Wald and Broder, New York Times, July 13, 2011.

MIT Carbon Capture & Sequestration Technologies, AEP Mountaineer Fact Sheet: Carbon Dioxide Capture and

Storage Project, http://sequestration.mit.edu/tools/projects/aep_alstom_mountaineer.html.

Telephone conversation with Joseph Giove, DOE Office of Fossil Energy, March 19, 2012.

U.S. DOE Fossil Energy Techline, “Secretary Chu Announces Up To $154 Million for NRG Energy’s Carbon

Capture and Storage Project in Texas,” March 9, 2010, http://www.fossil.energy.gov/news/techlines/2010/10005NRG_Energy_Selected_to_Receive_DOE.html.

Telephone conversation with Joseph Giove, DOE Office of Fossil Energy, April 11, 2011.

U.S. Congress, House Committee on Appropriations, Subcommittee on Military Construction, Veterans Affairs, and

Related Agencies, Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2012,

conference report to accompany H.R. 2055, 112th Cong., 1st sess., December 15, 2011, H.Rept. 112-331 (Washington:

GPO, 2011), p. 851.

Telephone conversation with Joseph Giove, DOE Office of Fossil Energy, March 19, 2012.

Email from Regis K. Conrad, Director, Division of Cross-Cutting Research, DOE, March 20, 2012.

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

and operation.86 The three Phase 2 projects are listed as large-scale demonstration projects in

Table 3. The total share of DOE funding for the three projects, provided by the Recovery Act, is

$686 million, or approximately 64% of the sum total Area 1 program cost of $1.075 billion.

Under Area 2, the initial phase consisted of $17.4 million in Recovery Act funding and $7.7

million in private-sector funding for 12 projects to engage in feasibility studies to examine the

beneficial reuse of CO2.87 In July 2010, DOE selected six projects from the original 12 projects

for a second phase of funding to find ways of converting captured CO2 into useful products such

as fuel, plastics, cement, and fertilizer. The six projects are listed under “Innovative

Concepts/Beneficial Use” in Table 3. The total share of DOE funding for the six projects,

provided by the Recovery Act, is $141.5 million, or approximately 71% of the sum total cost of

$198.2 million.

Since its original conception, the DOE ICCS program has expanded with an additional 22

projects, funded under the Recovery Act, to accelerate promising technologies for CCS.88 In its

listing of the 22 projects, DOE groups them into four general categories: (1) Large-Scale Testing

of Advanced Gasification Technologies; (2) Advanced Turbo-Machinery to Lower Emissions

from Industrial Sources; (3) Post-Combustion CO2 Capture with Increased Efficiencies and

Decreased Costs; and (4) Geologic Storage Site Characterization.89 The total share of DOE

funding for the 22 projects, provided by the Recovery Act, is $594.9 million, or approximately

78% of the sum total cost of $765.2 million.

Overall, the total share of federal funding for all the ICCS projects combined is $1.422 billion, or

approximately 70% of the sum total cost of $2.038 billion.

Table 3. DOE Industrial Carbon Capture and Storage (ICCS) Projects

(showing DOE share of funding and total project cost)

DOE Share of

Funding

($ millions)

Total Project

Cost

($ millions)

Large-Scale

Demonstration

284

431

66%

Decatur, IL

Large-Scale

Demonstration

141

208

68%

Leucadia Energy,

LLC

Lake Charles,

Large-Scale

Demonstration

261

436

60%

Alcoa, Inc.

Alcoa Center,

Innovative

Concepts/Beneficial Use

13.5

16.9

80%

ICCS Project

Name

Location

Type of Project

Air Products &

Chemicals, Inc.

Port Arthur,

Archer Daniels

Midland Co.

Percent

DOE

U.S. DOE, National Energy Technology Laboratory, Industrial Carbon Capture and Storage (ICCS): Area 1,

http://www.netl.doe.gov/research/coal/major-demonstrations/industrial-carbon-capture-and-storage.

U.S. DOE, Recovery Act, Innovative Concepts for Beneficial Reuse of Carbon Dioxide, http://energy.gov/fe/

innovative-concepts-beneficial-reuse-carbon-dioxide-0.

Email from Regis K. Conrad, Director, Division of Cross-Cutting Research, DOE, March 20, 2012.

U.S. DOE, Carbon Capture and Storage from Industrial Sources, Industrial Carbon Capture Project Selections,

http://fossil.energy.gov/recovery/projects/iccs_projects_0907101.pdf.

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

DOE Share of

Funding

($ millions)

Total Project

Cost

($ millions)

Innovative

Concepts/Beneficial Use

20.5

25.6

80%

Triadelphia, PA

Innovative

Concepts/Beneficial Use

6.7

8.4

80%

Phycal, LLC

Highland

Heights, OH

Innovative

Concepts/Beneficial Use

51.4

80%

Skyonic Corp.

Austin, TX

Innovative

Concepts/Beneficial Use

39.6

70%

Calera Corp.

Los Gatos, CA

Innovative

Concepts/Beneficial Use

21.4

42.7

50%

Air Products &

Chemicals, Inc.

Allentown, PA

Advanced Gasification

Technologies

71.7

96%

Eltron Research

& Development,

Inc.

Boulder, CO

Advanced Gasification

Technologies

71.4

73.7

97%

Research

Triangle Institute

Research

Triangle Park,

Advanced Gasification

Technologies

168.8

174

97%

GE Energy

Schenectady,

Advanced TurboMachinery

31.3

62.6

50%

Siemens Energy

Orlando, FL

Advanced TurboMachinery

32.3

64.7

50%

Clean Energy

Systems, Inc.

Rancho

Cordova, CA

Advanced TurboMachinery

42.9

70%

Ramgen Power

Systems

Bellevue, WA

Advanced TurboMachinery

79.7

63%

ADA-ES, Inc.

Littleton, CO

Post-Combustion

Capture

18.8

80%

Alstom Power

Windsor, CT

Post-Combustion

Capture

12.5

80%

Membrane

Technology &

Research, Inc.

Menlo Park, CA

Post-Combustion

Capture

18.8

80%

Praxair

Tonawanda,

Post-Combustion

Capture

55.6

63%

Siemens Energy,

Inc.

Pittsburgh, PA

Post-Combustion

Capture

18.8

80%

Board of

Trustees U. of IL

Champaign, IL

Geologic Site

Characterization

6.5

77%

N. American

Power Group,

Ltd.

Greenwood

Village, CO

Geologic Site

Characterization

7.85

64%

ICCS Project

Name

Location

Type of Project

Novomer, Inc.

Ithaca, NY

Touchstone

Research Lab,

Ltd.

Congressional Research Service

Percent

DOE

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

ICCS Project

Name

DOE Share of

Funding

($ millions)

Total Project

Cost

($ millions)

Percent

DOE

Location

Type of Project

Sandia

Technologies,

LLC

Houston, TX

Geologic Site

Characterization

4.38

5.63

78%

S. Carolina

Research

Foundation

Columbia, SC

Geologic Site

Characterization

6.25

80%

Terralog

Technologies

USA, Inc.

Arcadia, CA

Geologic Site

Characterization

6.25

80%

U. of Alabama

Tuscaloosa, AL

Geologic Site

Characterization

10.8

46%

U. of Kansas

Center for

Research, Inc.

Lawrence, KS

Geologic Site

Characterization

6.29

80%

U. of Texas at

Austin

Austin, TX

Geologic Site

Characterization

6.25

80%

U. of Utah

Salt Lake City,

Geologic Site

Characterization

7.23

69%

U. of Wyoming

Laramie, WY

Geologic Site

Characterization

100%

1,422.4

2,038.4

70%

Totals

Source: Emails from Regis K. Conrad, Director, Division of Cross-Cutting Research, DOE, March 20 and March

27, 2012; U.S. DOE, National Energy Technology Laboratory, Major Demonstrations, Industrial Capture and Storage

(ICCS): Area 1, http://energy.gov/fe/articles/new-recovery-act-funding-boosts-industrial-carbon-capture-and; U.S.

DOE, Carbon Capture and Storage from Industrial Sources, Industrial Carbon Capture Project Selections,

http://fossil.energy.gov/recovery/projects/iccs_projects_0907101.pdf.

Notes: Table is ordered from top to bottom by type of project: Large-Scale Demonstration; Innovative

Concepts/Beneficial Use; Advanced Gasification Technologies; Advanced Turbo-Machinery; Post-Combustion

Capture; and Geologic Site Characterization. Totals may not add due to rounding.

Geologic Sequestration/Storage: DOE RD&D for the

Last Step in CCS

DOE allocated $112 million in FY2012, $107 million in FY2013, $109 million in FY2014, $100

million in FY2015, and is requesting $109 million in FY2016 for its carbon sequestration and

storage activities. (See Table 1.) In contrast with the carbon capture technology RD&D, which

received nearly all of the $3.4 billion from Recovery Act funding, carbon sequestration/carbon

storage activities received approximately $50 million in Recovery Act funds. Recovery Act funds

were awarded for 10 projects to conduct site characterization of promising geologic formations

for CO2 storage.90

The total DOE share for the 10 projects is $49.4 million. See Table 3.

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Brief History of DOE Geological Sequestration/Storage Activities

DOE has devoted the bulk of its funding for geological sequestration/storage activities to RD&D

efforts for injecting CO2 into subsurface geological reservoirs. Injection and storage is the third

step in the CCS process, following the CO2 capture step and CO2 transport step. One part of the

RD&D effort is characterizing geologic reservoirs (which received a $50 million boost from

Recovery Act funds, as noted above); however, the overall program is much broader than just

characterization, and has now reached the beginning of the phase of large-volume CO2 injection

demonstration projects across the country. According to DOE, these large-volume tests are

needed to validate long-term storage in a variety of different storage formations of different

depositional environments, including deep saline reservoirs, depleted oil and gas reservoirs, low

permeability reservoirs, coal seams, shale, and basalt.91 The large-volume tests can be considered

injection experiments conducted at a commercial scale (i.e., approximately 1 million tons of CO2

injected per year) that should provide crucial information on the suitability of different geologic

reservoirs; monitoring, verification, and accounting of injected CO2; risk assessment protocols for

long-term injection and storage; and other critical challenges.

In 2003 DOE created seven regional carbon sequestration partnerships (RCSPs), essentially

consortia of public and private sector organizations grouped by geographic region across the

United States and parts of Canada.92 The geographic representation was intended to match

regional differences in fossil fuel use and geologic reservoir potential for CO2 storage.93 The

RCSPs cover 43 states and 4 Canadian provinces and include over 400 organizations, according

to the DOE 2011 Strategic Plan. Table 4 shows the seven partnerships, the lead organization for

each, and the states and provinces included.94 Several states belong to more than one RCSP.

Table 4. Regional Carbon Sequestration Partnerships

Regional Carbon

Sequestration Partnership

(RCSP)

Lead Organization

States and Provinces in the

Partnership

Big Sky Carbon Sequestration

Partnership (BSCSP)

Montana State University-Bozeman

MT, WY, ID, SD, eastern WA,

eastern OR

Midwest Geological Sequestration

Consortium (MGSC)

Illinois State Geological Survey

IL, IN, KY

Midwest Regional Carbon

Sequestration Partnership

(MRCSP)

Battelle Memorial Institute

IN, KY, MD, MI, NJ, NY, OH, PA,

WV,

DOE 2010 CCS Roadmap, p. 55.

Four Canadian provinces are partners with DOE in two of the regional partnerships, and are members with other

participating organizations that are contributing funding and other support to the partnerships.

DOE National Energy Technology Laboratory, Carbon Sequestration Regional Carbon Sequestration Partnerships,

http://www.netl.doe.gov/technologies/carbon_seq/infrastructure/rcsp.html.

In its FY2016 budget justification, DOE renamed the RCSPs subactivity the Storage Infrastructure subactivity. See

U.S. Department of Energy, FY2016 Congressional Budget Request, volume 3, Fossil Energy Research and

Development, p. 572.

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Regional Carbon

Sequestration Partnership

(RCSP)

Lead Organization

Plains CO2 Reduction Partnership

(PCOR)

University of North Dakota Energy

and Environmental Research Center

MT, northeast WY, ND, SD, NE, MN,

IA, MO, WI, Manitoba, Alberta,

Saskatchewan, British Columbia

(Canada)

Southeast Regional Carbon

Sequestration Partnership

(SECARB)

Southern States Energy Board

AL, AS, FL, GA, LA, MS, NC, SC, TN,

TX, VA, portions of KY and WV

Southwest Regional Partnership

on Carbon Sequestration (SWP)

New Mexico Institute of Mining and

Technology

AZ, CO, OK, NM, UT, KS, NV, TX,

West Coast Regional Carbon

Sequestration Partnership

(WESTCARB)

California Energy Commission

AK, AZ, CA, HI, OR, NV, WA, British

Columbia (Canada)

States and Provinces in the

Partnership

Source: DOE National Energy Technology Laboratory, Carbon Sequestration Regional Carbon Sequestration

Partnerships, http://www.netl.doe.gov/research/coal/carbon-storage/carbon-storage-infrastructure.

The RCSPs have pursued their objectives through three phases beginning in 2003:

(1) Characterization Phase (2003 to 2005), an initial examination of the region’s potential for

geological sequestration of CO2; (2) Validation Phase (2005 to 2011), small-scale injection field

tests (less than 500,000 tons of CO2) to develop a better understanding of how different geologic

formations would handle large amounts of injected CO2; and (3) Development Phase (2008 to

2018 and beyond), injection tests of at least 1 million tons of CO2 to simulate commercial-scale

quantities of injected CO2.95 The last phase is intended also to collect enough information to help

understand the regulatory, economic, liability, ownership, and public outreach requirements for

commercial deployment of CCS.

There are RD&D activities funded by DOE under its carbon sequestration/carbon storage

program activities other than the RCSPs, such as geological storage technologies; monitoring,

verification, and assessment; carbon use and reuse; and others. However, the RCSPs were

allocated approximately 66% of annual spending on carbon sequestration/carbon storage in

FY2015, and comprised 58% of that account in the FY2016 budget request. The RCSPs provide

the framework and infrastructure for a wide variety of DOE geologic sequestration/storage

activities.

Current Status and Challenges to Carbon Sequestration/Storage

The third phase—Development—is currently underway for all the RCSPs, and large-scale CO2

injection has begun for the SECARB and MGSC projects.96 The Development Phase large-scale

injection projects are arguably akin to the large-scale carbon capture demonstration projects

discussed above (see Table 2). They are needed to understand what actually happens to CO2

DOE National Energy Technology Laboratory, Carbon Sequestration Regional Carbon Sequestration Partnerships,

http://www.netl.doe.gov/research/coal/carbon-storage/carbon-storage-infrastructure.

For details on the two large-scale injection experiments by SECARB, see http://www.secarbon.org/; for details on

the large-scale injection experiment by MGSC, see http://sequestration.org/.

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

underground when commercial-scale volumes are injected in the same or similar geologic

reservoirs as would be used if CCS were deployed nationally.

In addition to understanding the technical challenges to storing CO2 underground without leakage

over hundreds of years, DOE also expects that the Development Phase projects will provide a

better understanding of regulatory, liability, and ownership issues associated with commercialscale CCS.97 These nontechnical issues are not trivial, and could pose serious challenges to

widespread deployment of CCS even if the technical challenges of injecting CO2 safely and in

perpetuity are resolved. For example, a complete regulatory framework for managing the

underground injection of CO2 has not been developed in the United States. However, EPA

promulgated a rule under the authority of the Safe Drinking Water Act (SDWA) that creates a new

class of injection wells under the existing Underground Injection Control Program. The new class

of wells (Class VI) establishes national requirements specifically for injecting CO2 and protecting

underground sources of drinking water. EPA’s stated purpose in proposing the rule was to ensure

that CCS can occur in a safe and effective manner in order to enable commercial-scale CCS to

move forward.98

The development of the regulation for Class VI wells highlighted that EPA’s authority under the

SDWA is limited to protecting underground sources of drinking water but does not address other

major issues. Some of these include the long-term liability for injected CO2, regulation of

potential emissions to the atmosphere, legal issues if the CO2 plume migrates underground across

state boundaries, private property rights of owners of the surface lands above the injected CO2

plume, and ownership of the subsurface reservoirs (also referred to as pore space).99 Because of

these issues and others, there are some indications that broad community acceptance of CCS may

be a challenge. The large-scale injection tests may help identify the key factors that lead to

community concerns over CCS, and help guide DOE, EPA, other agencies, and the private sector

towards strategies leading to the widespread deployment of CCS. Currently, however, the general

public is largely unfamiliar with the details of CCS and these challenges have yet to be

resolved.100

Outlook

Testimony from Scott Klara of the National Energy Technology Laboratory sums up a crucial

metric for the success of the federal CCS RD&D program, namely, whether CCS technologies are

deployed in the commercial marketplace:

The success of the Clean Coal Program will ultimately be judged by the extent to which emerging

technologies get deployed in domestic and international marketplaces. Both technical and

financial challenges associated with the deployment of new “high risk” coal technologies must be

overcome in order to be capable of achieving success in the marketplace. Commercial scale

DOE National Energy Technology Laboratory, Carbon Sequestration Regional Partnership Development Phase

(Phase III) Projects, http://www.netl.doe.gov/technologies/carbon_seq/infrastructure/rcspiii.html.

For more information on the EPA Class VI wells in particular, and the Safe Drinking Water Act generally, see CRS

Report RL34201, Safe Drinking Water Act (SDWA): Selected Regulatory and Legislative Issues, by (name redacted).

For a discussion of several of these legal issues, see CRS Report RL34307, Legal Issues Associated with the

Development of Carbon Dioxide Sequestration Technology, by (name redacted) and (name redacted).

100

For more information on the different issues regarding community acceptance of CCS, see CRS Report RL34601,

Community Acceptance of Carbon Capture and Sequestration Infrastructure: Siting Challenges, by (name redacted).

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

demonstrations help the industry understand and overcome startup issues, address component

integration issues, and gain the early learning commercial experience necessary to reduce risk and

secure private financing and investment for future plants.101

To date, there are no commercial ventures in the United States that capture, transport, and inject

large quantities of CO2 (e.g., 1 million tons per year or more) solely for the purposes of carbon

sequestration. The Kemper County Energy project likely will be the first to do so, although the

majority of the injected CO2 will be for purposes of enhanced oil recovery. The Boundary Dam

Project in Canada, which began operations in 2014, is the first commercial-scale power plant with

CCS in operation in the world. Boundary Dam also sends most of its captured CO2 to a nearby

oilfield for enhanced oil recovery.

The DOE CCS RD&D program has embarked on commercial-scale demonstration projects for

CO2 capture, injection, and storage. The success of these demonstration 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 plants continue to burn

fossil fuels, mainly coal. The proposed EPA standard to limit CO2 emissions from new coal-fired

power plants has invited renewed scrutiny of CCS technology and its prospects for commercial

deployment. Congress may wish to carefully review the CCS R&D program and particularly the

results from the demonstration projects as they progress. Such a review could help Congress

evaluate whether DOE is on track to meet its goal of allowing for an advanced CCS technology

portfolio to be ready by 2020 for large-scale demonstration and deployment in the United States.

In addition to the issues and programs discussed above, other factors might affect the

demonstration and deployment of CCS in the United States. The use of hydraulic fracturing

techniques to extract unconventional natural gas deposits recently has drawn national attention to

the possible negative consequences of deep well injection of large volumes of fluids. Hydraulic

fracturing involves the high-pressure injection of fluids into the target formation to fracture the

rock and release natural gas or oil. The injected fluids, together with naturally occurring fluids in

the shale, are referred to as produced water. Produced waters are pumped out of the well and

disposed of. Often the produced waters are disposed of by re-injecting them at a different site in a

different well. These practices have raised concerns about possible leakage as fluids are pumped

into and out of the ground, and about deep-well injection causing earthquakes.102 Public concerns

over hydraulic fracturing and deep-well injection of produced waters may spill over into concerns

about deep-well injection of CO2. How successfully DOE is able to address these types of

concerns as the large-scale demonstration projects move forward into their injection phases could

affect the future of CCS deployment.

101

Testimony of Scott Klara, Deputy Laboratory Director, National Energy Technology Laboratory, U.S. Department

of Energy, in U.S. Congress, Senate Energy and Natural Resources Committee, Carbon Capture and Sequestration

Legislation, hearing to receive testimony on carbon capture and sequestration legislation, including S. 699 and S. 757,

112th Cong., 1st sess., May 12, 2011, S.Hrg. 112-22.

102

See, for example, CRS Report R43836, Human-Induced Earthquakes from Deep-Well Injection: A Brief Overview,

by (name redacted) and (name redacted).

Congressional Research Service

Carbon Capture and Sequestration: Research, Development, and Demonstration at DOE

Author Contact Information

(name redacted)

Specialist in Energy and Natural Resources Policy

[redacted]@crs.loc.gov, 7-....

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