Statement of Christopher Smith, Acting Assistant Secretary for Fossil Energy before the House Committee on Science, Space and Technology Subcommittee on Energy
Thank you Chairman Lummis, Ranking Member Swalwell, and members of the Subcommittee. I appreciate the opportunity to discuss the Department of Energy’s (DOE) coal research and development (R&D) activities.
Coal fuels approximately 40 percent of our domestic electricity production. As the Energy Information Administration (EIA) recently pointed out in the Annual Energy Outlook 2013 reference case, coal is projected to remain the largest energy source for electricity generation through 2040. Because it is abundant, the clean and efficient use of coal is a key part of President Obama’s all-of-the-above energy strategy.
A major challenge to coal, however, is that it is a major source of carbon dioxide (CO2) emissions. Therefore, it is critical that we promote currently available technologies and develop more economic and broadly available technologies to reduce those emissions from coal-fired power plants. To that end, the Obama Administration strongly supports the development of clean coal technologies, including carbon capture and storage (CCS). In addition to the Administration’s annual budget requests, that support was made clear in the 2009 American Recovery and Reinvestment Act (Recovery Act), which provided $3.4 billion for CCS. It was also evident in the formation of the Interagency Task Force on Carbon Capture and Storage, which the President charged in February 2010 to develop a plan to overcome the barriers to the widespread, cost-effective deployment of CCS within 10 years.
On June 25, President Obama laid out a broad Climate Action Plan to cut carbon pollution in America, prepare the United States for the impacts of climate change, and lead international efforts to combat global climate change and prepare for its impacts. A key component of that plan is an $8 billion draft loan guarantee solicitation which is designed to support investments in innovative technologies that can cost-effectively meet financial and policy goals, including the avoidance, reduction, or sequestration of anthropogenic emissions of greenhouse gases. The proposed solicitation will cover a broad range of advanced fossil energy projects. The draft solicitation was released on July 2, commencing a 60 day public comment period.
As the President has made clear, fossil fuels – including coal – provide more than 80 percent of our energy today and they are projected to remain a large source of energy for decades. The fossil solicitation – in addition to the $6 billion the Administration has already committed to clean coal technologies – reflects the Administration’s commitment to “all of above” energy strategy that develops every available source of American energy – a strategy that’s cleaner, cheaper, and full of new jobs.
Clean Coal Research Program
DOE continues to play a leadership role in the development of clean coal technologies with a focus on CCS. The Clean Coal Research Program – administered by DOE’s Office of Fossil Energy and implemented by the National Energy Technology Laboratory – is designed to enhance our energy security and reduce environmental concerns over the future use of coal by developing a portfolio of revolutionary clean coal technologies. The Program is well positioned to help overcome the technical challenges associated with the development of clean coal technologies.
The Clean Coal Research Program, in partnership with the private sector, is focused on maximizing efficiency and environmental performance, while minimizing the costs of these new technologies. In recent years, the Program has been restructured to focus on clean coal technologies with CCS. The Program pursues the following two major strategies:
- capturing and storing greenhouse gases; and
- improving the efficiency of fossil energy systems.
The first strategy aims to remove emissions of greenhouse gases from fossil fueled energy systems. The second strategy seeks to improve the fuel-to-energy efficiencies of these systems, thus reducing pollutant emissions, water usage, and carbon emissions on a per unit of energy basis. Collectively, these two strategies comprise the Clean Coal Research Program’s approach to ensure that current and future fossil energy plants can contribute to a safe and secure clean energy future.
Core Research and Development Activities
The Clean Coal Research Program is addressing the key challenges that confront the development and deployment of clean coal technologies through research on cost-effective capture technologies; monitoring, verification, and accounting technologies to ensure permanent storage; and development of advanced energy systems. As an example, today's commercially available CO2 capture technologies are projected, after experience gained from multiple plant installations, to increase the cost of electricity by as much as 70 percent for a new coal-fueled power plant (equivalent to about $60 per tonne of CO2 captured) This cost is for removing 90 percent of the CO2 emissions and exclusive of any expenses associated with transporting and storing the captured CO2, but it also omits potentially material benefits from using the CO2 for enhanced oil recovery, as discussed in detail below. Recognize that capturing less than 90 percent CO2 emissions from either a new or existing power plant will reduce the cost of electricity penalty, as expected. However, installing a smaller unit to remove less CO2 emissions will result in an increase in avoided CO2 mitigation costs due to the loss of “economies of scale” savings associated with the larger capital equipment. The Program is aggressively pursuing developments that would reduce the cost penalty for electricity from new coal-fueled power plants with carbon capture from roughly 70 percent to about 35 percent (equivalent to about $40 per tonne of CO2 captured).
Research is focused on developing technology options that dramatically lower the cost of capturing carbon dioxide from fossil fueled energy plants. This research can be categorized into three technical pathways: post-combustion, pre-combustion, and oxy- combustion. Post-combustion refers to capturing CO2 from the stack gas after a fuel has been combusted in air. Pre-combustion refers to a process where a hydrocarbon fuel is gasified to form a mixture of hydrogen and carbon dioxide, and CO2 is captured from the synthesis gas before it is combusted. Oxy-combustion is an approach where a hydrocarbon fuel is combusted in pure or nearly pure oxygen rather than air, which releases energy and produces a mixture of CO2 and water that can easily be separated to produce pure CO2.
Collectively, research in each of these technical pathways is exploring a wide range of approaches such as membranes; oxy-combustion concepts; solid sorbents; advanced gas/liquid scrubbing technologies; and advanced hybrid concepts such as liquid membrane contactors.
These efforts cover not only improvements to state-of-the-art technologies but also development of several revolutionary concepts, such as metal organic frameworks, ionic liquids, enzyme-based systems, and chemical looping –a form of oxy-combustion that utilizes oxygen from metal oxide oxygen carrier for fuel combustion, or for making hydrogen by “reducing” water. In combustion applications, the products of chemical looping are CO2 and H2O. Thus, once the steam is condensed, a relatively pure stream of CO2 is produced ready for sequestration.
Coupling these developments with other advances in efficiency improvements and cost reduction from developments in gasification and turbines, will help provide a technology base that overcomes economic barriers to commercial adoption of fossil energy systems integrated with CCS.
Regional Carbon Sequestration Partnerships
The Regional Carbon Sequestration Partnerships were created by DOE in 2003 through a competitive solicitation. The Partnerships were designed to address a range of issues associated with geologic storage of CO2. The Clean Coal Research Program has been performing CCS field tests focused on injection, monitoring, verification, accounting and other aspects of geologic storage for many years, and the seven Regional Carbon Sequestration Partnerships are critical to this effort. These Partnerships are comprised of state agencies, universities, and private companies. They represent more than 400 unique organizations in 43 States, and four Canadian Provinces. Geographic differences in fossil fuel use and potential storage sites across the United States dictate the use of regional approaches in addressing CCS, so each Partnership is focused on a specific region of the United States and Canada that holds similar characteristics relating to CCS opportunities.
Together, the Partnerships form a network of capability, knowledge, and infrastructure that will help enable geologic storage technology to play a role in the clean energy economy. They represent regions encompassing 97 percent of coal-fired CO2 emissions, 97 percent of industrial CO2 emissions, 96 percent of the total land mass, and essentially all the geologic storage sites that can potentially be available for geologic carbon storage.
During the Validation Phase of the program, Regional Partnerships drilled wells and injected small quantities of CO2 to validate the potential of key storage locations totaling more than 1 million metric tons of CO2 at 18 small scale injection projects throughout the United States and Canada. Those tests helped to validate storage at a small scale to understand the fate of CO2 in different depositional systems containing saline water, oil, and natural gas. The program is currently in the Development Phase, during which large-scale field testing involving at least 1 million metric tons of CO2 per project will be injected. Tests are designed to not only investigate commercial-scale injection of CO2, but will also be used to understand the necessary regulatory, economic, liability, ownership, and public outreach efforts needed for successful CCS, and to develop the necessary human capital, knowledge base, and experience necessary to implement future CCS operations. Several of the large-scale tests are currently underway and one project has safely injected over 3.6 million metric tons and is being monitored for safe and permanent storage.
Over the course of these initiatives, DOE and the Partnerships are addressing key infrastructure issues related to permitting, pore space ownership, site access, liability, public outreach, and education. We are also jointly developing Best Practice Manuals on topics such as site characterization, site construction, operations, monitoring, mitigation, closure, and long-term stewardship. These Manuals will serve as guidelines for a future geologic sequestration industry in their regions, and help transfer the lessons learned from DOE’s Clean Coal Research Program to all regional stakeholders. The first editions of the Best Practice Manuals are available on DOE's reference shelf and the Manuals will be periodically updated as lessons learned from the large scale field tests are realized.
We have also pursued projects designed to develop technologies and protocols for the monitoring, verification, accounting, and assessment (MVAA) of CO2 storage in geologic formations as well as simulating the behavior of geologically-stored CO2. MVAA of geologic storage sites is an important part of making geologic storage a safe, effective and reliable method of greenhouse gas control. These activities will culminate in a set of best practices for the deployment of carbon capture, utilization and storage technology.
Finally, DOE and the Partnerships continue to work closely with the Environmental Protection Agency (EPA) and other Federal and state agencies in developing CCS regulatory strategies, which will provide additional certainty for future CCS deployments.
Demonstrations at Commercial-Scale
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 economic challenges associated with the deployment of newer coal technologies must be overcome in order to be capable of achieving success in the marketplace. Commercial-scale demonstrations help the industry understand and overcome start-up issues, address component integration issues, and gain the early learning commercial experience necessary to reduce technology risk and secure private financing and investment for future plants.
The Department is implementing commercial-scale demonstration projects through the Clean Coal Power Initiative (CCPI), FutureGen 2.0, and the Industrial Carbon Capture and Storage (ICCS) program.
The CCPI is a cost-shared partnership between the Government and industry to develop and demonstrate advanced coal-based power generation technologies at the commercial scale. By enabling advanced technologies to overcome technical risks involved with scale-up and bringing them to the point of commercial readiness, CCPI accelerates the development of advanced coal generation technologies integrated with CCS. The CCPI also facilitates the movement of technologies into the marketplace that are emerging from the core research and development activities.
The CCPI program received an additional $800 million from the Recovery Act which, in combination with base funding, was used to fund four CCPI Round III projects, of which two pre-combustion and one post-combustion capture projects are still active. In addition, a CCPI Round II project, with Southern Company Services, was modified to demonstrate CCS at a new integrated gasification combined cycle power plant. Having completed all design, planning, and environmental review requirements, this project began construction in 2010 and project construction is now 63 percent complete.
The FutureGen 2.0 Project intends to conduct novel large-scale testing to accelerate the deployment of advanced oxy-combustion power production technologies integrated with CCS. This project will be the first advanced repowering oxy-combustion project to store CO2 in a deep saline geologic formation. On August 5, 2010, then-Secretary of Energy Steven Chu announced an award totaling $1 billion in Recovery Act funding to 1) The FutureGen Alliance and 2) Ameren Energy Resources along with their partners (Babcock & Wilcox and Air Liquide Process and Construction, Inc.) to repower an existing plant with advanced oxy-combustion technologies. Together, these two awards comprised the FutureGen 2.0 project for clean coal repowering with CCS. On February 28, 2011, the FutureGen Alliance selected Morgan County, Illinois, as the preferred location for the FutureGen 2.0 CO2 storage site, visitor center, and research and training facilities. The Alliance has subsequently taken over leadership of both projects comprising the FutureGen 2.0 program.
FutureGen 2.0 has successfully completed Phase I, which included identification of a sequestration site, preliminary characterization and test drilling, and a commitment from the Illinois Commerce Commission to cover the project’s output under its purchasing plans. Phase II commenced on February 1, 2013, and the project is now focused on preliminary design and engineering.
In addition to the CCPI and FutureGen 2.0 projects, the Recovery Act has also helped fund more than 80 additional projects, which includes three large scale ICCS demonstrations, 10 geologic site characterizations, 43 university research training projects, seven CCS research training centers, six ICCS projects focused on CO2 reuse, and 14 projects focused on accelerated component development in the core research program.
Examples of progress on these projects include the Archer Daniels Midland ICCS project in Illinois, which will demonstrate an integrated system of CO2 capture in an ethanol production plant and geologic sequestration in a sandstone reservoir. This project is under construction and approximately 49 percent complete. In Texas, the Air Products and Chemicals, Inc. ICCS project recently began capturing CO2 from two steam methane reformer hydrogen production plants for enhanced oil recovery (EOR) operations. This project is the first to capture CO2 at large scale from steam methane reformers used for hydrogen production, with the captured CO2 then utilized for EOR.
CO2 Utilization Technologies
The coal research and development program has supported research on CO2 utilization technologies for more than a decade. When the Carbon Storage Program (formerly named the Sequestration Program) was initiated in the mid-1990s, it was recognized that technologies such as mineralization, chemical conversion to useful products, algae production, enhanced oil recovery and enhanced coal bed methane recovery could play an important role in mitigating CO2 emissions. Other than EOR, the CO2 emissions reduction potential of these approaches is limited, due to factors such as cost and market saturation of salable byproducts. Even so, these approaches are logical “first-market entry” candidates for greenhouse gas mitigation, due to their ability to produce revenue from use of the CO2 that could be used to offset the costs for these “early adopters.” Hence, these options provide a technology bridge and smoother transition to the deployment of the large-scale, stand-alone geologic sequestration operations that will ultimately be needed to achieve the much larger emissions reductions required to approach stabilizing greenhouse gas concentrations in the atmosphere.
EOR represents the most near term and most commercially attractive utilization option for captured CO2. Over the history of the Department, the focus of CO2-EOR R&D has shifted from increased incremental oil production to monitoring, verification, and accounting of geologically stored CO2 as part of a climate change mitigation strategy. As early as the 1970s, DOE-funded projects were developing concepts to improve the effectiveness and applicability of CO2-EOR. Currently, most commercial EOR projects have been strategically located near cheap sources of naturally occurring CO2 or along pipelines from such sources. If research into reducing the cost of CO2 capture from power plants proves successful, anthropogenic sources of CO2 may become readily available for EOR projects. The DOE’s 2012 Carbon Utilization and Storage Atlas of the United States projects a potential CO2 storage resource estimate of over 200 billion tonnes for oil and gas reservoirs in the United States. In the near-term, incremental oil produced via EOR using anthropogenic CO2 could help offset the costs of CO2 capture. The prospect of relatively low-cost supplies of captured CO2 in widespread areas of the country could, in turn, provide the impetus for a national re-evaluation of the EOR potential in many mature fields. While conventional EOR is a widely used process, CO2 capture and permanent storage is not yet widely used at power plants. Continued evolution of EOR and transformational advances in development and deployment of CO2 capture from coal power on a large scale could help realize the synergy between the coal/power industry and the oil industry. Utilization of the CO2 in EOR will impart knowledge that will be instrumental in the Department’s continued focus on R&D in other geologic storage formations such as saline that have a larger storage potential for CO2.
Conclusion
Today, nearly three out of every four coal-burning power plants in this country are equipped with technologies that can trace their roots back to DOE’s advanced coal technology program. These efforts helped accelerate production of cost-effective compliance options to address legacy environmental issues associated with coal use. CCS and related clean coal technologies can play a critical role in mitigating CO2 emissions under many potential future carbon stabilization scenarios. CO2 utilization technologies with salable byproducts are logical “first market entry” candidates for greenhouse gas mitigation due to their ability to produce revenue from the use of CO2. EOR will be the dominant utilization opportunity in the near term and will impart additional experience that will be useful in the Department’s continued focus on R&D in other storage formations, such as deep saline aquifers, necessary to address climate change. Nevertheless, challenges remain to promote currently available technologies and develop more economic and broadly available technologies for deployment of CCS. The Department’s research programs and efforts have spearheaded R&D that would not have occurred otherwise and has successfully leveraged private investment in advancing the readiness of these emerging clean coal technologies.
Mr. Chairman, and members of the Committee, this completes my prepared statement. I would be happy to answer any questions you may have at this time.