Prepared Remarks of Chief of Staff Dr. Shuchi Talati at The Carbon Capture and Storage 101 Webinar on May 21, 2021
Good morning, everyone. Thanks to the Global CCS Institute for giving me this opportunity to speak about the role of carbon capture and storage in the Biden Administration’s plan to meet the climate challenge we face today.
There is no greater challenge facing us today than the climate crisis. President Biden has laid out the boldest climate agenda in our nation’s history, and we hope to inspire an equitable clean energy economy and achieve net-zero carbon emissions by 2050. The Department of Energy is a crucial agency in meeting these goals.
DOE has long been the nation’s powerhouse for scientific and innovative solutions to the challenges we face, including the climate emergency. Our program offices and 17 National Laboratories research, develop, and deploy the clean energy technologies of the future, including battery storage, renewable power, electric vehicles, carbon capture, and resilient grid infrastructure.
DOE uses its expansive loan authority to invest in American companies who are at the cutting edge of clean energy technology and manufacturing.
DOE also coordinates across the federal government to deliver on the Administration’s climate priorities— procuring carbon pollution-free electricity and leveraging DOE’s unparalleled scientific strength to engage the best available research and science to combat the climate crisis. Our agency takes policy initiatives off the drawing board and makes them into real world solutions.
How does public policy become reality? How does the process work? Federal agencies develop budgets based on an administration’s goals. The White House then submits its budget to Congress, including every agency’s detailed request.
Congress also moves to authorize specific programs, which can be aligned with the budget or their own policy agenda. “Authorization” is legislation that “can establish, continue, or modify an agency, program, or activity for a fixed or indefinite period of time.” In other words, authorization means Congress is saying that money can be spent on a given item—not that it necessarily will be spent on that item.
Next Congress must pass legislation that gives federal agencies the legal authority to spend the money appropriated to them - or the money can’t be spent. That legislative language is in the appropriations bills that give agencies permission to spend the money that was authorized. Appropriations bills must be renewed every year to keep federal agencies and programs operating. One of the 12 appropriations subcommittees is “Energy and Water Development,” the one that oversees DOE.
The next step: appropriations bills are submitted by 12 House and Senate appropriations subcommittees to their respective chambers for a vote, and finally for adoption.
President Biden’s FY 2022 Congressional Budget Request, which will come out in the coming weeks, will clarify how much DOE is seeking to fund the department’s mandate and will also describe how much we are looking for specifically for the Office of Fossil Energy and Carbon Management. That budget request is built upon the administration’s priorities for FECM and the areas where we can help bolster the most promising and needed RD&D. That budget request for next year brings me to where we stand today. All agencies are part of the President’s budget, but as an agency that focuses on RDD&D, DOE receives a large chunk.
In the first months of the Biden administration, DOE announced over $1 billion in new funding opportunities, grants, and awards for projects with the potential to get the United States to a net-zero carbon future by 2050.
DOE makes known its funding intentions with what are called Funding Opportunity Announcements – known as FOAs, for short. They are publicly available documents. They may be known as program announcements, requests for applications, notices of funding availability, solicitations, or other names depending on the type of program. In the FOAs, DOE describes the type of project to which it wants to award discretionary grants or cooperative agreements.
To give you relevant examples, in the Fossil Energy and Carbon Management office, we announced $109.5 million this year for carbon capture, critical mineral recovery, and geothermal energy projects that directly support job creation in coal communities impacted by changes in the energy economy. That’s because we believe a just transition for those communities is vitally important to our mission. We have also added important environmental justice requirements in some of our funding announcements, to ensure projects are taking these important considerations into account.
One of the most important technologies that we want to fund, going forward, is CCS. DOE is a global leader in the research and development of CCS. And FECM, along with its industry and commercial partners, has long been at the forefront of researching and developing these critical technologies.
In the past several months, the Office of Fossil Energy and Carbon Management has announced several CCS- related FOAs, including funding for technologies to decarbonize the natural gas power and industrial sectors, large-scale pilot carbon capture technologies, and CO2 storage that minimizes seismicity risks and monitors caprock.
And going forward, we want to take carbon capture out of its silo and leverage some of the work already being done by the Carbon Management team in FECM to expand the potential of CCS. We want to focus more on deployment and development of low-carbon products like cement and concrete, steel, paper, fuel, nylon polyester and other important products.
It’s also important to recognize that the investments we made in CCS on coal in the past can be leveraged. For instance, some of the same technologies for capturing emissions from coal-fired power plants can also be used for capture CO2 from natural gas and even the process emissions from some industrial sectors like cement and steel production.
Carbon capture on committed emissions infrastructure like natural gas-fired power plants that likely won’t reach retirement age over the next decade may be good candidates for CCUS – and we’re exploring the deployment of these technologies on natural gas systems in addition to regional opportunities for co-firing with biomass waste where supply chains are sustainably sourced.
In January this year, the National Carbon Capture Center announced the “first fire” of its new natural gas infrastructure, paving the way for the first test reruns of carbon capture technologies using actual natural gas-derived flue gas.
Commercial deployment of CCS is essential to meeting our climate goals. Many international bodies, from the Intergovernmental Panel on Climate Change to the International Energy Agency, recognize that CCS is an essential clean energy technology for a low-carbon economy at the lowest possible cost.
Of course, there are still challenges to these technologies – including, most notably, a shortage of policies that help to make carbon capture and dedicated storage economically viable.
The 45Q tax credit offers the potential for widespread availability of carbon capture technologies. The credit creates the incentive for expanding associated storage of CO2, and we are also excited about the expansion of the credit in the American Jobs Plan to make 45Q as successful as possible.
The 45Q tax credit has been expanded several times since it was initially established in 2008, most recently at the end of December 2020. The new rules could help unlock significant investment in CCS in the future.
In 2020 and early 2021, the US Treasury Department and the Internal Revenue Service published guidance that addressed many open questions about how the credit works. Regarding project development, the guidance is broadly like the guidance previously provided for wind and solar projects.
In addition to Section 45Q credits, several states also offer tax incentives for carbon capture and sequestration.
An important piece of this puzzle is also demonstration. For CCS in the industrial sector, this is expensive, but with bills like the American Jobs Plan, we can make real progress in making CCS scalable. AJP includes funds for 15 decarbonized hydrogen demonstrations in addition to ten pioneer facilities that demonstrate carbon capture retrofits for large steel, cement, and chemical production facilities, all while ensuring that overburdened communities are protected from increases in cumulative pollution.
It’s only through increased demonstration and deployment and learning by doing that we can drive down the costs of CCS.
Moving forward, to achieve net zero we also need carbon dioxide removal approaches that can permanently remove CO2 from the accumulated pool in the atmosphere. And that’s where our direct air capture initiative can play an important role. Separating CO2 from the atmosphere has aspects that overlap with point source capture, both in terms of chemistry and the separation processes. So, we’re leveraging a lot of the work we’ve been doing on CCS to help move direct air capture forward.
Our direct air capture initiative is part of a broader DOE effort to help develop technology that captures carbon emissions directly from the air. In fact, the Department recently announced up to $24 million in funding for direct air capture research projects.
DOE’s Carbon Capture Program at our National Energy Technology Laboratory – NETL - is also conducting research and development (R&D) activities on advanced carbon capture technologies that have the potential to provide step-change reductions in both cost and energy requirements.
For those of you who are not familiar with NETL, it is managed by the Office of Fossil Energy and Carbon Management, where researchers are developing technologies to manage carbon across the full life cycle, including CCS and DAC.
At the end of the day, we are excited to pursue these important technologies to ensure we can reach our net-zero goals in a just and sustainable way. It is not just about the R&D we pursue, but how we implement them.
Thank you so much for giving me the opportunity to speak with you all, I’m looking forward to taking some questions.