AIChE Annual Carbon Management Technology Conference

Remarks of Assistant Secretary for Fossil Energy Steven Winberg as prepared at the AIChE Annual Carbon Management Technology Conference in Houston, TX on July 16, 2019 

Thank you.

I appreciate the opportunity to talk to you today about the Department of Energy’s R&D to manage and utilize carbon emissions from fossil energy sources.  While our initial focus was on coal, we have expanded to include natural gas, industrial process and direct air capture.

Engineers from across the spectrum have played, and continue to play, an important role in this research — and we’re exploring new areas, where your expertise can help us get over the hump and get critical technologies in place.

So, I’m particularly honored to be able to share with you today some of our critical carbon management initiatives – initiatives that will require your knowledge, capabilities, and contributions.

To set the stage, U.S. energy policy is guided by the goals of the President’s America First Energy Plan – an all-of-the-above energy strategy that combines robust energy development with responsible stewardship of the environment.  And a strategy that puts innovation ahead of over-regulation. 

By innovating more, and regulating a little less and more prudently – by encouraging rather than discouraging production – we’re working to ensure our energy security, grow our economy, create jobs, and protect the environment.

So, these things – energy development and environmental stewardship – are not mutually exclusive.  Technology-enabled solutions will allow us to balance and attain all of our goals.

In fact, the explosive growth of fossil energy development in the United States over the last decade underscores that fact. 

From 2005 to 2017 – in the midst of that growth – the United States led the world in cutting energy-related carbon dioxide emissions, reducing them by nearly 14 percent.  Greenhouse gas emissions in the United States’ electric sector have also fallen by roughly 25 percent over that same period. 

Still, the fact is that fossil-fueled power generation will have to operate with even lower CO₂ emissions.  And the only realistic path to getting there is by commercializing and deploying carbon capture, utilization, and storage, or CCUS, technologies. 

This was made pretty clear by the Executive Director of the International Energy Agency a few months ago, when he told a Senate committee that coal is going to be around for a long time, and that carbon capture is the “most vital” technology for reducing CO2 emissions.

So, even the IEA, which has prioritized renewable energy when it comes to clean energy technology development, recognizes the role that fossil energy will continue to play – and the need for supporting CCUS as a viable clean energy technology. 

DOE has a robust CCUS R&D program and we’ve had some impressive successes.  And one of those is NRG’s Petra Nova plant – the world’s largest post-combustion carbon capture system – about 25 miles from here in Thompsons.

At Petra Nova, they’re capturing and removing about 90 percent of the carbon dioxide from a flue gas stream, and they’re using that CO₂ for enhanced oil recovery in a depleted oil field – where production has gone from 300 barrels per day to about 4,000 barrels per day today.

But even with successes like Petra Nova and other DOE-supported projects, there are still some technical hurdles to commercializing CCUS technologies – the most significant being the costs associated with carbon capture, which we need to reduce by about 50 percent, ultimately getting it down to $30 a ton.  It’s a challenging goal, but we’re exploring early-stage R&D on advanced technologies that have the potential to get us there.

And we’re backing up our commitment with the funding necessary to advance these technologies.  So far this year we’ve:

• Selected carbon capture technology projects totaling $24 million; and
• Announced $30 million for FEED studies for capture systems on both coal and natural gas plants.

We also have a number of innovative projects at our premiere research and testing facility, the National Carbon Capture Center in Wilsonville, Alabama.

This facility provides the infrastructure, real-world operating conditions, flexible testing, and highly skilled technical team needed for commercial application of carbon capture in natural gas- and coal-based power plants.

Right now, R&D at the National Carbon Capture Center is focused on testing post-combustion capture technologies for both coal and natural gas power plants.  And the Center is ideally positioned to test carbon utilization technologies. 

Since construction of the post-combustion infrastructure was completed in 2011, the Center has successfully supported testing of new carbon capture enzymes, solvents, membranes, and other emerging processes, while also focusing on reducing capital- and operating-cost penalties.  And through pilot testing of more than 60 technologies, the Center has helped reduce the projected cost of carbon capture by one-third.

Looking at natural gas, the Center is currently designing and constructing facilities to provide a flexible test platform that accurately represents state-of-the-art natural gas power generation.  We expect testing to begin next year.

As you may know, the National Academies recently released a study on Negative Emission Technologies, which laid out the challenges and potential of those technologies – including Direct Air Capture – to achieve 10 GtCO2/y of negative emissions by the middle of this century – and double that amount by the end of the century. 

So, the Office of Fossil Energy is developing an R&D program plan for Direct Air Capture, often referred to as DAC.

While DAC is often described as new technology, the chemistry of capturing CO₂ is very similar whether capturing directly from the air or at a stack so we are not starting from scratch.  The chemistry for Direct Air Capture is similar to what we have been developing over the last 20 years or so and there are many similarities to our CCUS technology program.  So, we’re looking at ways that we can leverage our carbon capture work to help develop new Direct Air Capture technologies.  

In fact, the United States Energy Association is hosting a Direct Air Capture workshop in a couple of days where we'll discuss technology requirements and pathways for moving forward.  So, we're looking forward to those discussions – and exploring this important research area.

Now, looking at carbon storage, our Regional Carbon Sequestration Partnerships and our demonstration projects have safely and securely injected over 10 million metric tonnes of CO₂ at over 26 different locations across the country.

The results and lessons learned from this work directly contributed to the success of the commercial-scale projects at the Archer Daniels Midland ethanol production facility in Decatur, Illinois, the Air Products plant in Port Arthur, and the Petra Nova facility.

Building on these successes, we’re making investments in initiatives like the Carbon Storage Assurance Facility Enterprise – or CarbonSAFE – to validate geologic storage sites with capacities to store greater than 50 million metric tons of captured CO₂.

We’re also assessing the EOR potential and associated CO₂ storage in unconventional oil plays, like shales and residual oil zones.  And we’re extending our reach to evaluate the potential of offshore CCUS in the Gulf of Mexico.

We estimate that future EOR in the United States could recover 100 billion barrels from unconventional tight oil fields, and much more from residual oil zones and offshore oil fields.  And we’re just beginning our assessment of the unconventional and offshore opportunities, but we’re excited about the potential here.

Now, there are still challenges when it comes to storing and transporting CO₂, and we recently made available $20 million for a regional initiative to address those challenges, and in the process, we have accelerated the deployment of CCUS.

We’re also investigating ways to extract an economic benefit or additional value from CO₂.  Of course, EOR is the most near-term application, but we’re also looking into ways that we can convert CO₂ into building materials, chemicals, and fuels – valuable products that can shore up the business case for CCUS.

We have a pretty successful track record with this R&D.  For instance, our work with Novomer – a chemistry technology development company – resulted in world’s first successful large-scale production of a polypropylene carbonate polymer that includes as much as 40 percent CO₂ as a raw material.

Over the last few years, we’ve funded multiple new projects at various technology readiness scales to develop novel ways to produce plastics or intermediate feedstocks for plastic production, such as methanol, ethylene, and formic acid for biodegradable polymers.

One of those, at North Carolina State University, will develop a comprehensive proof-of-concept for sustainable and cost-effective production of acetic acid, a critical building block for the plastics industry, from CO₂ and domestic shale gas.

And researchers at our lab, the National Energy Technology Laboratory, have developed a new catalyst that can selectively convert syngas from CO₂ and other agents into olefins – which, of course, are widely used as building blocks in the manufacture of plastics.

Another project, at the University of Kentucky Research Foundation, is focused on developing a process to convert CO₂ from coal-fired flue gas using microalgae-based CO₂ capture, and converting the resulting algal biomass to bioplastics, as well as chemicals and fuels.

In addition to this R&D, there’s a pressing need to develop and implement policies that will provide financing and market certainty needed for deployment, and that will support the development of CCUS supply chains, commercial infrastructure, and private investment.

The good news is that there’s been some important movement in that direction.

For instance, the 45Q tax credit – which Congress expanded last year – is designed to encourage the deployment of CCUS projects in the United States.  And, the credit amount was increased from $20/ton of CO₂ up to $50/ton for saline storage, and $10/ton up to $35/ton for EOR, enhanced gas recovery, or other utilization methods. 

We’re currently working with the IRS to support their efforts to finalize the 45Q guidance so that industry can take advantage of this opportunity. 

So 45Q, as well as policies adopted by some state governments, is generating increased interest in CCUS among utilities and industry, including the oil and gas sectors.

By the way, we’re also seeing a global convergence toward CCUS in the coal and oil and gas industries.  The National Petroleum Council is working on a study requested by Secretary Perry to address the entire CCUS value chain and its applicability to power generation, as well as industrial sources.

And the Oil and Gas Climate Initiative has been making the business case for CCUS.  To date, they’ve invested in five CCUS projects ranging from an early-stage concept to build the United Kingdom’s first natural gas plant with CCUS, to a project that will cut the cost of carbon capture in half.  And they’re looking to invest in additional projects. 

This work on CCUS in the oil and gas industry is extremely encouraging, and I think it could catalyze broader deployment of these technologies to reduce CO2 emissions. 

Now, in addition to developments at the federal level, there are also efforts underway at the state level to incentivize CCUS.  States have always been the laboratories for policy innovation – and that’s true for CCUS policy development.  While the federal government certainly has a critical role to play in the effort to commercialize CCUS, not all of the ideas and initiatives can – or should – come from Washington, D.C.

So, we’re seeing progress on the policy and regulatory front.  In the process, we’re getting clarity on the kinds of policy approaches that can be effective for commercializing CCUS to address CO2 emissions.  And we’re seeing where federal action is needed, and where state responses are more effective and more appropriate. 

An essential component to our carbon management effort is focused on making our current coal power fleet more efficient and competitive, and ensuring that we’re able to bring the advanced coal plants of the future online.  

For existing coal-powered plants, we’re targeting a suite of advanced processes and technologies to improve their efficiency, resiliency, and competitiveness to allow these units to operate on an evolving grid that is accommodating ever more intermittent, renewable generation and that requires more unit cycling and flexibility. 

We’re also focused on improvements to critical components, like turbines and boilers, and we’re developing the data and analytics – and the modeling – to ensure these improvements and upgrades are coordinated and optimized to achieve the best results possible.

And we just selected 17 projects to receive $39 million in funding to improve the overall performance, reliability, and flexibility of the existing coal-fired power plant fleet. 

In the meantime, we’re also working on concepts that can be deployed in both new and existing plants to minimize water intake and use.  Examining plant cycles and testing new efficient processes can not only reduce water intake, but can also lower overall operating costs.

At the same time, though, we need to begin developing the coal-fired power plants of the future.  And that’s what we’re doing through an initiative we call Coal FIRST – which stands for Flexible, Innovative, Resilient, Small, and Transformative. 

I’d like to focus for a few minutes on what we want to accomplish through this initiative.

As we move towards more distributed generation, we don’t see the need to construct 1,500 to 2,000 MW power plants as we have in the past.  We believe that the evolving grid will require different generation options – cleaner, smaller, and highly efficient plants that can overcome siting, operating, and logistical constraints that limit the deployment of large-scale plants. 

So, through Coal FIRST, we’re working to develop plants that are:

• Small – in the range of 50 to 350 MW;
• Highly efficient – north of 40 percent, which, by the way, would make carbon capture easier and less expensive; 
• Near zero emissions;
• Nimble and flexible to meet the demands of an evolving grid, with the ability to ramp up and down as demand dictates; and
• Modular – think in terms of systems that can fit on a flatbed trailer.

And that’s one of the beautiful things about these plants – their modularity, size, and flexibility mean they can be sited wherever they’re needed. 

We began rolling out the Coal FIRST initiative in earnest last year, and we recently selected 13 projects to design the plants of the future.  These projects represent an impressive diversity of technical approaches that will lay the groundwork for the Coal FIRST initiative.

In the next few months, once we’ve reviewed the designs, we’ll issue a funding opportunity of just over $100 million for projects to develop critical components and advanced manufacturing approaches required by Coal FIRST systems. 

In the meantime, we’re also looking at developing advanced energy systems, such as supercritical CO2 and energy storage, to improve efficiency by capturing almost every last BTU of energy. 

We’re also exploring advanced combustion technologies and novel concepts that can significantly improve efficiency and the flexibility to quickly respond to grid demands for both the existing and future coal fleet. 

And we just selected six projects – a total of nearly $15 million – to develop FEED studies of large-scale R&D pilots over the next year.  The projects include three transformational carbon capture systems, focused on membranes and solvents; and three advanced power systems, including modular gasification, pressurized oxy combustion, and indirect supercritical CO2 cycles.  These designs and components will also help accelerate the deployment of Coal FIRST power plants.

We’re excited about the transformative potential of our research and development.  But, we can’t do what we need to do without the knowledge and innovative work of engineers like you. In other words, we need you to help us find solutions — to keep doing what you do every day.

So, I look forward to our continued partnership and collaboration – and to a productive conference this week.

Thank you.