LAWMAKERS EXAMINE IF CCS HAS BEEN ‘ADEQUATELY DEMONSTRATED’

Karen Frantz
GHG Monitor
11/01/13

Carbon capture and storage was called into question as the best system of emission reduction for coal-fired power plants this week at a House Science subcommittee hearing exploring new U.S. Environmental Protection rules that would set emissions limits for new-build plants, with several witnesses rejecting EPA’s determination that CCS has been adequately demonstrated. “The technology is being demonstrated. It’s successfully deployed in some early first-of-a-kind projects. But it’s clearly not ready. It’s really that simple,” testified Charles D. McConnell, executive director of the Energy & Environment Initiative at Rice University and former Assistant Secretary for Fossil Energy at the Department of Energy.

The hearing was held by the Environment and Energy Subcommittee of the House Committee on Science, Space and Technology and focused on the EPA’s Sept. 20 retooled proposal, which set CO2 emission standards for coal units at between 1,000 and 1,100 lbs CO2/MWh, depending on whether plant operators decide to measure emissions over a 12- or 84-month operating period. The Clean Air Act requires EPA to determine which type of compliance technology, when taking into account factors like cost, technical feasibility and size of emissions reductions, constitutes the “best system of emission reduction” (BSER) for fossil units. Based on those criteria, the agency said the “partial” capture and storage of roughly 30 to 50 percent of a plant’s emissions is the best BSER technology adequately demonstrated for coal plants.

But in large part, witnesses argued that CCS faces significant barriers and has not yet been adequately demonstrated at a commercial scale. McConnell said that the cost of CCS technology is too high to be commercially viable, with separation and capture increasing the cost of generated electricity at plants with the technology by as much as 50 to 80 percent. “CO2 pipeline and transmission systems are mature, but they face incredible siting difficulties for expansion of this marketplace,” he said. “DOE’s regional carbon sequestration partnerships must continue developing the needed database to help analyze the success of this deployment. And, of course, the injection of CO2 faces regulatory barriers as well, unresolved property rights, long-term liability issues—all of the issues that in many cases the EPA’s very involved in and needs to be supportive of to allow this technology to move forward.”

Panel Divided on EPA Rules

Republican members of the Subcommittee blasted the EPA’s proposed regulations, contending that the agency greatly stretched the meaning of the term “adequately demonstrated” and the rules would set a precedent that would have far-reaching consequences. “If EPA is allowed to twist the definition of adequately demonstrated to include yet-to-be-proven technologies for power plants, there is also little to stop EPA from doing the same for other manufacturers like refiners, cement or steel plants,” said Subcommittee Chairman Cynthia Lummis (R-Wyo.). “Not only would this throw our economy into a tail-spin, it would force manufacturers to flee to countries with less restrictive environmental requirements, costing jobs and increasing global emissions.” She also said that the regulation “effectively bans the building of new coal plants, and fulfills President Obama’s campaign promise to bankrupt coal companies.” Republicans also looked warily to the EPA’s next steps on existing coal-fired plants and the effects on jobs in the coal sector.

But Democrats pointed to the importance of reducing carbon dioxide emissions in order to curb climate change and emphasized coal’s role as a major contributor to global greenhouse gas emissions as justification for action. Ranking Member Eric Swalwell (D-Calif.) rejected the notion that the rules would affect coal jobs. “Zero [existing] plants are effected by these standards. Zero jobs today will be lost by these new standards,” he said. He also added that the value of regulatory certainty was important. “The fact that there was uncertainty in what the regulations were going to be was also affecting job creation in existing plants and plans for new plants, and now that we have standards, that lends certainty to the marketplace,” he said.

Clean Air Task Force defends EPA proposed rules

Kurt Walzer, managing director of the Clean Air Task Force, emerged as the sole defender among the witnesses of the contention that CCS has been adequately demonstrated. He testified that the regulations allow enough flexibility in structure and implementation so that new coal plants would be able to meet the new standards through CCS technology. “It is not the end of coal, instead it is the beginning of CCS worldwide,” he said of the EPA regulations. “CCS is technically feasible in the context of this rule because the rule requires partial, not full, CCS, and because the rule allows a plant up to eight years to meet this standard. The 40 percent capture level is well within the experience of the technology.” He said giving plants eight years for compliance is flexible enough so that new plants going into operation can continue to run even if they encounter unforeseen issues, such as with establishing CO2 pipelines.

He also said that “nearly all new coal plants plan to have some level of CCS installed when they open,” pointing to the Kemper County plant, the Boundary Dam retrofit in Canada, and the Texas Clean Energy Project as examples. “Each of the components of CCS have had a long history of use in the U.S. and around the world,” he said. Moreover, he said based on a Clean Air Task Force analysis of the EPA’s initial version of the rule that was released in 2012, costs of electricity at a new coal plant with partial CCS would only be 13 percent higher than at a plant without CCS.

CCS Still on ‘Learning Curve’

But Richard A. Bajura, director of the National Research Center for Coal and Energy at West Virginia University, said that “what we learn in the laboratory doesn’t always hold true when we go into the full scale system.” He described learning curve theory, which holds that the most expensive power plant occurs on the first edition, with costs decreasing over time in future plants. “By the time we get to the nth edition, the technology is mature and costs are reduced,” he said.  He said the learning curve for coal uses a factor of .06, meaning that when mature technology comes around its costs are reduced by 25 percent. He said in the case of the Kemper Plant, the 582 MW coal power plant currently under construction, a cost reduction of 25 percent would currently be $1 billion dollars.

Bajura also said that coal plants have unique barriers for technology development because coal comes in different forms. “When you look at the deployment of technologies, what I learn on my technology is different from what you learn in your technologies. I don’t share my results,” he said. “As a result, while we might say we have different examples of technologies, they’re all almost first-of-a-kind because they don’t share the technology, they have different systems, they apply to different coal.”

Roger R. Martella, Jr., an environmental lawyer with Sidley Austin LLP, also took issue with EPA’s determination that CCS is adequately demonstrated given the legal definition of the term. “This does fall past the end points of what is considered adequately demonstrated,” he said, saying that the rule would effectively prevent coal from being used in facilities in the future—contrary to the intent of new source performance standards, which are supposed to be technology-driving.

CCS Needs Better Support

But despite differences in opinion on whether CCS has been adequately demonstrated, there was some agreement among witnesses that the government needs to better support developing the technology. “The technology can be made ready over time and will have to have the support of the EPA as well as the marketplace industry,” McConnell said. “It’s disingenuous to state that the technology is ready and at the same time starve the R & D programs for our nation’s energy security global competitiveness or our global leadership in terms of economic performance.” Bajura also contended in his testimony that “a robust federal research, development and demonstration program is needed.”