Climate Change
Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Key Mitigation Option Gao ID: GAO-08-1080 September 30, 2008Key scientific assessments have underscored the urgency of reducing emissions of carbon dioxide (CO2) to address climate change. Many have cited carbon capture and storage (CCS) as an essential technology because it has the potential to greatly reduce CO2 emissions from power plants while allowing for projected increases in electricity demand. CCS involves capturing CO2 from a power plant's emissions, transporting it to an underground storage location, and then injecting it into a geologic formation for long-term storage. As requested, GAO examined (1) key economic, legal, regulatory, and technological barriers impeding commercial-scale deployment of CCS technology and (2) actions the Department of Energy (DOE), Environmental Protection Agency (EPA), and other agencies are taking to overcome barriers to commercial-scale deployment of CCS technology. Among other things, GAO examined key studies and contacted officials from pertinent agencies, companies, and environmental groups, as well as research and other organizations.
Nationally-recognized studies and GAO's contacts with a diverse group of industry representatives, nongovernmental organizations, and academic researchers show that key barriers to CCS deployment include (1) underdeveloped and costly CO2 capture technology and (2) regulatory and legal uncertainties over CO2 capture, injection, and storage. Key technological barriers include a lack of experience in capturing significant amounts of CO2 from commercial-scale power plants and the significant cost of retrofitting existing plants that are the single largest source of CO2 emissions in the United States. Regulatory and legal uncertainties include questions about liability concerning CO2 leakage and ownership of CO2 once injected. According to the National Academy of Sciences and other knowledgeable authorities, another barrier is the absence of a national strategy to control CO2 emissions (emissions trading plan, CO2 emissions tax, or other mandatory control of CO2 emissions), without which the electric utility industry has little incentive to capture and store its CO2 emissions. Moreover, according to key agency officials, the absence of a national strategy to control CO2 emissions has also deterred their agencies from resolving other important practical issues, such as how sequestered CO2 will be transported from power plants to appropriate storage locations and how stored CO2 would be treated in a future CO2 emissions trading plan. Federal agencies have begun to address some CCS barriers but have yet to comprehensively address the full range of issues that would require resolution for large-scale CCS deployment: (1) DOE's research strategy has, until recently, devoted relatively few resources to lowering the cost of CO2 capture from existing coal-fired power plants, focusing instead on innovative technologies applicable to new plants. In recent years, however, the agency has begun to place greater emphasis on CCS technologies applicable to existing facilities. (2) EPA issued in July 2008 a proposed rule to guide the permitting of large volume, or commercial-scale, CO2 injections. It addressed at least some of the key issues under the Safe Drinking Water Act but left other issues related to EPA's implementation of its air, hazardous waste and substance statutes unresolved. (3) Other agencies, such as Interior and Transportation, have jurisdiction over a number of interdisciplinary issues that could delay CCS deployment if unaddressed, but which have thus far received little attention. These include, among others, a legal and regulatory regime for a national CO2 pipeline infrastructure and a plan for addressing CO2 emissions reductions from CCS in a future emissions trading plan. In addition, unless the effects of CCS deployment are clearly explained, public opposition could delay future CCS projects.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-1080, Climate Change: Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage As a Key Mitigation Option
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Report to the Chairman of the Select Committee on Energy Independence
and Global Warming, House of Representatives:
United States Government Accountability Office:
GAO:
September 2008:
Climate Change:
Federal Actions Will Greatly Affect the Viability of Carbon Capture and
Storage As a Key Mitigation Option:
GAO-08-1080:
GAO Highlights:
Highlights of GAO-08-1080, a report to the Chairman of the Select
Committee on Energy Independence and Global Warming, House of
Representatives.
Why GAO Did This Study:
Key scientific assessments have underscored the urgency of reducing
emissions of carbon dioxide (CO2) to address climate change. Many have
cited carbon capture and storage (CCS) as an essential technology
because it has the potential to greatly reduce CO2 emissions from power
plants while allowing for projected increases in electricity demand.
CCS involves capturing CO2 from a power plant‘s emissions, transporting
it to an underground storage location, and then injecting it into a
geologic formation for long-term storage.
As requested, GAO examined (1) key economic, legal, regulatory, and
technological barriers impeding commercial-scale deployment of CCS
technology and (2) actions the Department of Energy (DOE),
Environmental Protection Agency (EPA), and other agencies are taking to
overcome barriers to commercial-scale deployment of CCS technology.
Among other things, GAO examined key studies and contacted officials
from pertinent agencies, companies, and environmental groups, as well
as research and other organizations.
What GAO Found:
Nationally-recognized studies and GAO‘s contacts with a diverse group
of industry representatives, nongovernmental organizations, and
academic researchers show that key barriers to CCS deployment include
(1) underdeveloped and costly CO2 capture technology and (2) regulatory
and legal uncertainties over CO2 capture, injection, and storage. Key
technological barriers include a lack of experience in capturing
significant amounts of CO2 from commercial-scale power plants and the
significant cost of retrofitting existing plants that are the single
largest source of CO2 emissions in the United States. Regulatory and
legal uncertainties include questions about liability concerning CO2
leakage and ownership of CO2 once injected. According to the National
Academy of Sciences and other knowledgeable authorities, another
barrier is the absence of a national strategy to control CO2 emissions
(emissions trading plan, CO2 emissions tax, or other mandatory control
of CO2 emissions), without which the electric utility industry has
little incentive to capture and store its CO2 emissions. Moreover,
according to key agency officials, the absence of a national strategy
to control CO2 emissions has also deterred their agencies from
resolving other important practical issues, such as how sequestered CO2
will be transported from power plants to appropriate storage locations
and how stored CO2 would be treated in a future CO2 emissions trading
plan.
Federal agencies have begun to address some CCS barriers but have yet
to comprehensively address the full range of issues that would require
resolution for large-scale CCS deployment:
* DOE‘s research strategy has, until recently, devoted relatively few
resources to lowering the cost of CO2 capture from existing coal-fired
power plants, focusing instead on innovative technologies applicable to
new plants. In recent years, however, the agency has begun to place
greater emphasis on CCS technologies applicable to existing facilities.
* EPA issued in July 2008 a proposed rule to guide the permitting of
large volume, or commercial-scale, CO2 injections. It addressed at
least some of the key issues under the Safe Drinking Water Act but left
other issues related to EPA‘s implementation of its air, hazardous
waste and substance statutes unresolved.
* Other agencies, such as Interior and Transportation, have
jurisdiction over a number of interdisciplinary issues that could delay
CCS deployment if unaddressed, but which have thus far received little
attention. These include, among others, a legal and regulatory regime
for a national CO2 pipeline infrastructure and a plan for addressing
CO2 emissions reductions from CCS in a future emissions trading plan.
In addition, unless the effects of CCS deployment are clearly
explained, public opposition could delay future CCS projects.
What GAO Recommends:
Among GAO‘s recommendations are that (1) DOE continue to place greater
emphasis on CO2 capture at existing power plants and (2) EPA examine
how its statutory authorities can be used to address potential CCS
barriers. DOE neither explicitly agreed nor disagreed with the first
recommendation. EPA expressed general agreement with the second
recommendation.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1080]. For more
information, contact John Stephenson at (202) 512-3841 or
stephensonj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Barriers to CCS Deployment Include the High Cost of Current
Technologies, Regulatory Uncertainty, and the Lack of a National
Strategy to Control CO2 Emissions:
Federal Agencies Have Yet to Resolve the Full Range of Issues Requiring
Resolution for Widespread CCS Deployment:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Department of Energy:
GAO Comments:
Appendix III: Comments from the Environmental Protection Agency:
GAO Comments:
Appendix IV: GAO Contact and Staff Acknowledgments:
Figures:
Figure 1: Contribution of Coal-Fired Power Plants and Other Sources to
Total U.S. CO2 Emissions:
Figure 2: CO2 Capture, Transport, and Storage in Geologic Formations:
Figure 3: Pre-combustion (i.e., IGCC) versus Post-combustion (i.e.,
pulverized coal) CO2 Capture:
Figure 4: Potential Geologic Storage in the United States:
Abbreviations:
AoR: Area of Review:
BLM: Bureau of Land Management:
CCS: carbon capture and storage:
CCTP: Climate Change Technology Program:
CERCLA: Comprehensive Environmental Response, Compensation, and
Liability Act:
CO2: carbon dioxide:
DOE: Department of Energy:
EPA: Environmental Protection Agency:
ETS: Emissions Trading Scheme:
EU: European Union:
FERC: Federal Energy Regulatory Commission:
IEA: International Energy Agency:
IGCC: Integrated Gasification Combined Cycle:
IPCC: Intergovernmental Panel on Climate Change:
MIT: Massachusetts Institute of Technology:
NSR: New Source Review:
PHMSA: Pipeline and Hazardous Materials Safety Administration:
RCRA: Resource Conservation and Recovery Act:
SDWA: Safe Drinking Water Act:
SO2: sulfur dioxide:
STB: Surface Transportation Board:
UIC: Underground Injection Control:
UNFCCC: United Nations Framework Convention on Climate Change:
USGS: U.S. Geological Survey:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 30, 2008:
The Honorable Edward Markey:
Chairman:
Select Committee on Energy Independence and Global Warming:
House of Representatives:
Dear Mr. Chairman:
Key scientific assessments have underscored the urgency of reducing
emissions of carbon dioxide (CO2), the most significant greenhouse gas,
to help mitigate the negative effects of climate change. Given the
United States' heavy reliance on coal-burning power plants that emit
significant quantities of CO2, many have cited carbon capture and
storage (CCS) as an essential technology because it can greatly reduce
CO2 emissions from these facilities, while allowing for projected
increases in electric power demand.[Footnote 1] CCS is a process of
separating CO2 from other gases produced in fuel combustion and other
industrial processes, transporting the CO2 via pipeline to an
underground storage location, and injecting and storing it long-term in
underground geologic formations.
While other climate mitigation options exist--such as energy efficiency
improvements, a switch to less carbon-intensive fuels, nuclear power,
and renewable energy sources--CCS is considered by many to be a crucial
component of any U.S. approach or strategy for addressing the climate
change problem, particularly given the United States' current reliance
on coal for almost half of its electricity production. Moreover, there
is a large potential role for CCS in rapidly developing countries, such
as China and India, which will be relying increasingly on coal to meet
their energy needs. In fact, as of 2007, Chinese CO2 emissions likely
exceeded those of the United States, according to the International
Energy Agency (IEA).[Footnote 2] The IEA projects continued growth in
CO2 emissions from China and other developing economies.
At present, there are few commercial-scale CCS projects in operation.
While recent assessments by the IEA and the Intergovernmental Panel on
Climate Change (IPCC) have indicated that CCS could be a key
contributor to controlling greenhouse gas emissions worldwide,[Footnote
3] a number of barriers may preclude its widespread use. Therefore,
many organizations, including the IEA, emphasize that it will be
critical to overcome these barriers and demonstrate the feasibility of
this technology. In this context, this report examines (1) the key
economic, legal, regulatory, and technological barriers impeding
commercial-scale deployment of CCS technology and (2) the actions
federal agencies are taking to overcome barriers to or facilitate the
commercial-scale deployment of CCS technology.
To examine barriers to CCS, we conducted a literature review and
synthesized CCS-related information contained in a number of key
reports, including those by the IPCC, the National Academy of Sciences,
and by various federal agencies. We also contacted a nonprobability
sample of electric power companies, major oil and gas companies, CO2
pipeline owners, environmental organizations, and researchers at think
tanks and universities to determine their perspectives on key barriers
to CCS deployment at commercial scale. We selected major U.S. energy
producing companies, as well as organizations and researchers that
participate actively in ongoing dialogues on CCS. We also selected a
number of smaller companies and organizations to ensure that we
obtained a broader range of perspectives on key issues.[Footnote 4] We
used a semistructured interview guide to (1) obtain information from
individual stakeholders on key barriers to CCS deployment at commercial
scale and (2) facilitate an aggregate analysis of stakeholder
perspectives on key barriers to CCS.
To examine federal actions to address CCS barriers, we obtained and
analyzed information from the Environmental Protection Agency (EPA),
the Department of Energy (DOE), and other federal agencies regarding
their CCS-related activities. We collected 12 years of budget
information from DOE's Coal Program and followed up on recommendations
contained in two recent EPA and DOE advisory committee reports. We also
attended two EPA Underground Injection Control program workshops and
followed up with EPA officials on stakeholder concerns expressed at
these meetings. Using the methodology described for our first
objective, we obtained the perspectives of industry stakeholders,
environmental organizations, and researchers at think tanks and
universities on federal agency actions to overcome barriers to, or to
facilitate deployment of, commercial-scale CCS in the United States. We
conducted this performance audit from October 2007 to September 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
Nationally-recognized studies and our contacts with a diverse group of
industry representatives, nongovernmental organizations, and academic
researchers show that key barriers to CCS deployment include (1)
underdeveloped and costly CO2 capture technology and (2) regulatory and
legal uncertainties over CO2 capture, injection, and storage. Among the
key technological barriers are a lack of experience in capturing
significant amounts of CO2 from power plants and the significant cost
of capturing CO2, particularly from existing coal-fired power plants,
which are the single largest source of CO2 emissions in the United
States. Compounding these technological issues are regulatory and legal
uncertainties, including uncertainty regarding liability for CO2
leakage and ownership of CO2 once injected. According to the IPCC, the
National Academy of Sciences, and other knowledgeable authorities,
another barrier is the absence of a national strategy to control CO2
emissions (emissions trading plan, CO2 emissions tax, or other
mandatory control of CO2 emissions), without which the electric utility
industry has little incentive to capture and store its CO2 emissions.
Moreover, according to key agency officials, the absence of a national
strategy has also deterred their agencies from addressing other
important practical issues, such as resolving how stored CO2 would be
treated in a future CO2 emissions trading plan.
Federal agencies have begun to address some CCS barriers but have yet
to comprehensively address the full range of issues that would require
resolution for commercial-scale CCS deployment:
* Key technological barriers. DOE has achieved limited results in
lowering the cost of CO2 capture from existing coal-fired power plants.
A major reason is that the agency has focused on "Integrated
Gasification Combined Cycle" (IGCC) technology, a promising technology
for new coal-fired power plants, but one that is less useful when
applied to existing coal power plants. The agency has only recently
begun to shift toward an approach that also emphasizes CCS technologies
applicable to existing power plants.
* Key legal and regulatory barriers. The EPA issued a proposed rule in
July 2008 concerning underground injection of CO2 for geologic
sequestration. Because of the large injection volumes associated with
geologic sequestration, this proposed rule would apply to commercial-
scale injections. The proposed rule was issued under the agency's Safe
Drinking Water Act (SDWA) authority. However, some issues that fall
outside of this authority are still unresolved. These include whether
and how the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) and the Resource Conservation and Recovery Act
(RCRA) apply to injected CO2. Also unresolved are issues concerning how
the Clean Air Act's requirements will apply to existing power plants
that install CCS.
* Other considerations. Even if the DOE-and EPA-related issues are
resolved, there are a number of issues, many of which cross the
jurisdictions of multiple agencies, that could delay CCS deployment if
not addressed in a timely fashion. These include whether the federal
government could be held liable if CO2 stored below public lands leaked
onto adjoining nonfederal property. In addition, a number of federal
agencies (such as the Federal Energy Regulatory Commission, the Surface
Transportation Board, Department of Transportation, DOE, and EPA) will
need to work together to examine how CO2 pipeline infrastructure might
be regulated to accommodate commercial-scale CCS. Others will need to
devise a plan for how CO2 emissions reductions from CCS will be treated
in a future emissions trading scheme.
We are making a number of recommendations to agencies with major CCS-
related responsibilities to address key barriers to CCS deployment. To
better ensure that DOE's research and development efforts address CCS
at both new coal-fired power plants and existing plants, we are
recommending that DOE continue its recent practice of placing a greater
emphasis on technologies that can reduce CO2 emissions from existing
coal-fired power plants. In commenting on a draft of this report, DOE's
September 9, 2008, letter neither explicitly agreed nor disagreed with
this recommendation but included a number of comments that recognized a
need for increased funding for CO2 emissions control technologies for
existing coal-fired power plants.
To enhance EPA's ability to address barriers that may be affecting CCS
deployment, we are recommending that EPA more comprehensively examine
barriers to CCS development beyond those relevant to the SDWA, by
addressing issues under RCRA, CERCLA, and other statutes within the
agency's jurisdiction. EPA's September 12, 2008, letter responded that
providing regulatory certainty on issues related to geological storage
of CO2 was a high priority for the agency and agreed with the intent of
the recommendation--to provide clarity on how statutes within the
agency's jurisdiction may apply. The agency noted that it had made an
initial effort to identify and discuss these issues in the preamble of
its July 2008 proposed rulemaking and had requested comments on many of
the SDWA topics--including some of those identified in our report. It
said it expected further progress on the SDWA topics after receiving
input from stakeholders during the comment period (which extends
through November 24, 2008).
Finally, we are recommending that an interagency task force (or similar
mechanism) be established to develop a comprehensive strategy that
guides cognizant federal agencies in resolving remaining issues that,
if not addressed proactively, could impede commercial-scale CCS
deployment. DOE maintained that a coordinating body--the DOE-led
Climate Change Technology Program (CCTP)--already addresses these kinds
of issues. However, the CCTP's scope focuses on technology; it does not
address legal and institutional issues, such as the resolution of CO2
pipeline regulation and infrastructure, among others. In addition,
officials from cognizant offices within the Departments of the Interior
and Transportation told us they have not yet been invited to
participate in CCTP discussions. Moreover, we continue to believe that
a more centralized task force with a broader mission, perhaps
authorized by the Executive Office of the President, would be a
preferable alternative.
DOE's and EPA's comments are addressed at the end of this letter and
reproduced in appendixes II and III, respectively (along with our
responses to each of their main points). The agencies also provided
technical comments separately, which have been incorporated in our
final report, as appropriate. In addition, we sought and received
clarification and verification on specific issues from the Department
of the Interior's Bureau of Land Management and U.S. Geological Survey;
the Department of Transportation's Pipeline and Hazardous Materials
Safety Administration; the Federal Energy Regulatory Commission; and
the Surface Transportation Board, and have incorporated their input in
finalizing the report.
Background:
There is growing concern about climate change and the impact it will
have on people and the ecosystems on which they depend. According to
the National Academy of Sciences, global temperatures have already
risen 1.4 degrees Fahrenheit since the start of the 20th century--with
much of this warming occurring in the last 30 years alone--and
temperatures will likely rise at least another 2 degrees Fahrenheit,
and potentially more than 11 degrees, over the next 100 years. This
warming will cause significant changes in sea level, ecosystems, and
ice cover, among other impacts. In the Arctic region, temperatures have
increased almost twice as much as the global average, and the landscape
is changing rapidly. Most scientists agree that the warming in recent
decades has been caused primarily by human activities that have
increased the amount of greenhouse gases in the atmosphere. Greenhouse
gases, such as CO2, have increased markedly since the Industrial
Revolution, mostly from the burning of fossil fuels for energy,
industrial processes, and transportation. According to the National
Academy of Sciences, CO2 levels are at their highest in at least
650,000 years and continue to rise.
In 1992, the first major multilateral treaty on global warming, the
United Nations Framework Convention on Climate Change (UNFCCC), was
finalized. One hundred ninety-two countries, including the United
States, have ratified this treaty and agreed to its objective to
"achieve—stabilization of greenhouse gas concentrations in the
atmosphere at a level that would prevent dangerous anthropogenic
interference with the climate system." The UNFCCC required signatory
states to publish greenhouse gas emission levels; formulate a national
response to climate change; and develop and distribute technologies to
control, reduce, or prevent greenhouse gas emissions. However, its
mitigation provisions focused on voluntary efforts by signatory states.
Under the Kyoto Protocol to the UNFCCC, 37 industrialized countries
have agreed to reduce or limit their greenhouse gas emissions by an
average of 5 percent below 1990 levels between 2008 and 2012. Also, in
2005, the European Union (EU) began implementing its Emissions Trading
Scheme (ETS), a program that limits CO2 emissions in each member state
and is intended to help states achieve their commitments under the
Kyoto Protocol. Many countries with significant greenhouse gas
emissions, including the United States, China, and India, have not
committed to binding limits on emissions through the Kyoto Protocol or
other mechanisms as of the date of this report. Despite the UNFCCC's
ratification, global annual fossil fuel-related CO2 emissions increased
from an average of approximately 23.5 billion metric tons of CO2 per
year in the 1990's to approximately 26.4 billion metric tons of CO2 per
year from 2000 to 2005.[Footnote 5]
A complicating factor in addressing this increase in temperature is the
heavy reliance by the United States and other countries on coal-fired
power plants for electric power generation. Coal accounts for about
half of electricity generation in the United States. Moreover,
according to the IEA, coal is used to produce more than half of several
other nations' electricity, including South Africa, Poland, China,
Australia, and India.
Coal-fired power plants are one of the largest sources of CO2
emissions. In the United States, coal-fired power plants account for
approximately one-third of total CO2 emissions. Figure 1 shows total
U.S. CO2 emissions, what portions are from each sector of the economy,
and sources where CCS could more readily be used.[Footnote 6]
Figure 1: Contribution of Coal-Fired Power Plants and Other Sources to
Total U.S. CO2 Emissions:
[See PDF for image]
This figure is a pie-chart depicting the following data:
Contribution of Coal-Fired Power Plants and Other Sources to Total U.S.
CO2 Emissions:
Coal-fired power plants: 32.3% (Source for which CCS is applicable);
Transportation: 31.0%;
Industrial: 14.4% (Source for which CCS is applicable);
Other fossil fuel power plants (e.g., natural gas): 6.6% (Source for
which CCS is applicable);
Residential: 5.5%;
Commercial: 3.5%;
All other: 6.7%.
Source: GAO analysis of data from the Environmental Protection Agency,
Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006 (April
2008).
[End of figure]
To complicate matters further, increased energy demands are projected
for the future, both in the United States and worldwide. The IEA
projects that if governments around the world proceed with current
policies, the world's energy needs would be over 50 percent higher in
2030 than today.[Footnote 7] For the United States, an assessment by
DOE's Energy Information Administration indicates that electricity
sales will increase 29 percent by 2030, if current policies continue.
Moreover, the IEA anticipates that the two largest developing
countries--China and India--will drive increased demand for coal to
meet growing electricity demand. The IEA notes that China and India's
heavy reliance on coal has already contributed significantly to recent
increases in global CO2 emissions, with China likely overtaking the
United States as the largest CO2 emitter in 2007.
In order to prevent this dramatic increase in coal-based energy
production from emitting significant amounts of CO2 to the atmosphere,
many are suggesting CCS as a unique tool that allows for continued coal
use, while mitigating its associated effect on the climate. The IEA
identifies CCS and other clean coal technologies as one of the most
promising routes for mitigating emissions and notes that "CCS could
reconcile continued coal burning with the need to cut emissions in the
longer term." Similarly, the IPCC notes that CCS would help preserve
existing energy infrastructure, thereby restraining the cost of
emissions reductions. Looking ahead, the IEA projects that CCS could
contribute to 21 percent of avoided emissions to stabilize atmospheric
CO2 concentrations at 450 parts per million, a level which is projected
to limit the average increase in global temperature to 2.4 degrees
Celsius (4.3 degrees Fahrenheit).
The EU is also beginning to highlight the importance of CCS in
addressing climate change. In 2008, the EU proposed legislation, known
as a proposed directive, on the geological storage of CO2 that would
support the EU policy of limiting global average temperature increases
to less than 2 degrees Celsius (3.6 degrees Fahrenheit). Specifically,
in 2007, the European Council urged EU member states and the European
Commission to develop the necessary technical, economic, and regulatory
framework to remove existing legal barriers to CCS so that the
technology can be applied to new fossil fuel power plants by 2020, if
possible. The following year, the European Commission proposed
legislation that would create a legal framework for capture, transport,
and geological storage of CO2 within member states' territories.
CCS is comprised of multiple processes, including CO2 capture and
compression; transport of the CO2 to a storage location; injection and
storage in geologic formations; and monitoring to verify that the CO2
is staying in place. A successful CCS system must integrate all of
them. The first step in CCS is identifying and verifying a suitable
location for CO2 storage. Next, CO2 would be captured at power plants
and other large industrial sources. The goal of CO2 capture is to
produce a concentrated stream of nearly pure CO2 at high pressure so
that it can be transported via pipeline to a storage site. Regardless
of the capture approach used, additional energy, often referred to as
the energy penalty, is required for capture and compression. Three
major approaches to capturing or separating CO2 from industrial sources
have been identified--pre-combustion capture, post-combustion capture,
and oxyfuel combustion capture.[Footnote 8]
After CO2 capture and compression, the compressed gas, now in a
supercritical state,[Footnote 9] would likely be transported via
pipeline to a storage site, unless a storage site was available at the
capture facility. Once at a storage site, the CO2 would likely be
injected well below the surface, at depths of over 800 meters, or about
2,600 feet, into geologic formations thought to be conducive for long-
term sequestration (that is, hundreds to thousands of years) from the
atmosphere. When injected, the CO2 is sequestered by a combination of
physical and geochemical trapping processes.
Physical trapping occurs because the relatively buoyant CO2 reaches a
layer of rock that inhibits further upward migration. Geochemical
trapping occurs when the CO2 reacts chemically with minerals in the
geologic formation that result in the precipitation of solid minerals.
Geologic formations, such as depleted oil and gas reservoirs and saline
formations, are thought to be particularly favorable for CO2 storage.
These formations tend to have high porosity, or an abundance of pores
for CO2 to fill in, and an impermeable barrier, known as a solid
caprock, to keep the buoyant CO2 from migrating to the surface. Figure
2 depicts CO2 capture, transport, and storage in geologic formations
and highlights the characteristics of caprock and the underlying rock
that are favorable for CO2 storage. DOE and IEA estimates indicate that
the United States has appropriate geology that could potentially store
over 3 trillion tons of CO2--enough to store 1,000 years of CO2
emissions from nearly 1,000 coal-fired power plants.
Figure 2: CO2 Capture, Transport, and Storage in Geologic Formations:
[See PDF for image]
This figure is a drawing depicting CO2 capture, transport, and storage
in geologic formations. The following data is depicted:
Underground geology:
Caprock:
Grains making up this rock are densely packed with few interconnected
pore spaces. The low permeability of these rocks makes them ideal
barriers to prevent the migration of CO2 out of the target storage
formation. Examples are shale and carbonates.
Medium-grained sandstone:
Grains making up this rock are much less tightly packed than the
caprock. The dark gray areas are voids in the rock that are filled with
water not suitable for drinking. Injected CO2 would move into these
void spaces.
Course-grained sandstone: Grains making up this rock are even less
tightly packed than the previous sample. This looser packing means that
all of the voids are well connected to each other allowing the injected
CO2 to more easily move through the formation. Thus, more CO2 can be
injected and at a higher rate that in the medium-grained sandstone.
Coal is used in power plants;
CO2 is captured at the plants;
CO2 is transported to an injection station;
CO2 injection and storage in both medium-grained and course-grained
sandstone.
Source: GAO analysis of IPCC and Joint Global Change Research
Institute, Battelle Pacific Northwest Division data.
[End of figure]
Multiple federal agencies have programs and other responsibilities that
will affect CCS deployment, but the key ones are administered primarily
by DOE and EPA:
* DOE is the lead federal agency for supporting the development of
clean coal technology, including CCS technology. The agency established
the Carbon Sequestration program in 1997 to ascertain the technical
viability of CCS. The core research and development in the program
involves laboratory and pilot-scale research in areas that include CO2
capture and storage. The demonstration and deployment element of the
program is designed to show the viability of CCS technologies at a
scale large enough to overcome real and perceived infrastructure
challenges. In order to do so, DOE established a network of seven
Regional Carbon Sequestration Partnerships to develop the technology,
infrastructure, and regulations necessary to implement CO2 storage in
different regions of the nation. Other DOE programs are also developing
technologies related to coal-fueled power generation with CO2 capture;
including (1) the Advanced Integrated Gasification Combined Cycle
(IGCC) program to support development of gasification technology to
enable CO2 capture; (2) the restructured FutureGen program to
demonstrate IGCC or other advanced coal technology, as well as CO2
capture; (3) the Innovations for Existing Plants program, which has
recently focused more attention on developing technology to facilitate
CO2 capture at existing coal-fired power plants; and (4) the Clean Coal
Power Initiative, which is supporting advanced coal-based technologies
that capture and sequester CO2 emissions.
* EPA has authority under the SDWA to regulate underground injections
of various substances, including nonhazardous and hazardous wastes into
injection wells. Injection wells have a range of uses that
traditionally include waste disposal, enhancing oil production, and
mining. The SDWA requires EPA to develop minimum federal requirements
for injection practices that protect public health by preventing
injection wells from endangering underground sources of drinking water.
There are five different well types: Class I (injections of hazardous
wastes, industrial nonhazardous wastes, municipal wastewater); Class II
(injections associated with enhanced oil and gas production); Class III
(injections associated with mineral extraction); Class IV (now mostly
banned,[Footnote 10] but formerly, to inject hazardous or radioactive
waste above or into an underground source of drinking water); and Class
V (wells not included in other classes, including wells used in
experimental technologies, such as pilot CO2 storage).[Footnote 11] EPA
has given 33 states primacy, or primary enforcement responsibility, to
administer the Underground Injection Control (UIC) program, and 7
states have partial responsibility for administering the UIC program.
[Footnote 12]
* The prospect of widespread, nationwide use of CCS would also require
the involvement of other agencies with varied responsibilities. The
Department of the Interior's Bureau of Land Management, for example,
would have broad jurisdiction over CO2 injected on public lands.
Whether the Federal Energy Regulatory Commission or the Surface
Transportation Board would have regulatory responsibilities for
pipelines transporting captured CO2 is an issue that needs to be
resolved. The CCTP, authorized by the Energy Policy Act of 2005, is
tasked with assisting the interagency coordination of climate change
technology research, development, demonstration, and deployment.
Because the CCTP coordinates interagency discussion of climate change
technology issues, it will likely also be involved in any ongoing
interagency dialogue on CCS deployment.
Barriers to CCS Deployment Include the High Cost of Current
Technologies, Regulatory Uncertainty, and the Lack of a National
Strategy to Control CO2 Emissions:
Nationally-recognized studies and our contacts with a diverse group of
industry representatives, nongovernmental organizations, and academic
researchers show that key barriers to CCS deployment include (1) the
high cost of, and lack of experience with, CO2 capture technologies and
(2) regulatory uncertainties concerning CO2 capture, injection, and
storage. Among the technological barriers impeding CCS deployment at
coal-burning power plants are the significant cost of retrofitting
existing coal-fired power plants and lack of commercial-scale
demonstrations. Compounding these technological issues are
uncertainties over regulatory and legal issues, including legal
uncertainty regarding liability for CO2 leakage and ownership of CO2
once injected. According to the IPCC, the National Academy of Sciences,
and other knowledgeable authorities, another barrier is the absence of
a national strategy to control CO2 emissions (emissions trading plan,
CO2 emissions tax, or other mandatory control of CO2 emissions),
without which the electric utility industry has little incentive to
capture and store its CO2 emissions. Moreover, according to key agency
officials, the absence of a national strategy to control CO2 emissions
has also deterred their agencies from resolving other important
practical issues, such as how stored CO2would be treated in a future
CO2 emissions trading plan.
CO2 Capture Must Overcome Significant Technological Hurdles to be a
Cost-Effective Technology for Coal-Fired Power Plants:
Capturing CO2 from large electric power plants, particularly coal-fired
power plants, entails a number of technological challenges that affect
its cost of deployment, and hence its appeal to industry. Among these
challenges are (1) the absence of any commercial-scale demonstration of
the technology at a power plant; (2) certain limitations of coal
gasification technology for capturing CO2 emissions at new power
plants; and (3) the high cost of retrofitting CCS to existing
pulverized coal-fired power plants that will, for the next several
decades, account for a significant share of U.S. CO2 emissions.
CCS Has Yet to Be Demonstrated on a Commercial Scale at a Power Plant:
To date, there have been several small-scale tests of CO2 capture at
power plants in the United States and other countries, but these
demonstration projects have typically removed CO2 from only a small
fraction of the power plant's overall output. Large-scale
demonstrations of CO2 capture at a power plant have been identified as
an important step in improving capture technology, as well as securing
industry support for CCS. Hence, the DOE Carbon Sequestration Program's
program plan notes that the testing of CCS technologies at a larger
scale is important to identify and eliminate technical and economic
barriers to commercialization of CCS technology. With the need to
accelerate the testing of innovative technologies in mind, two key
international organizations--the IEA and the Carbon Sequestration
Leadership Forum--recommend that a minimum of 20 full-scale CCS
demonstration projects be implemented worldwide by 2020.
In a similar vein, a DOE advisory committee, the National Coal Council,
noted that larger-scale demonstrations will be necessary to secure
industry support. It noted, in particular, that "deployment will
require successful pilot-scale testing and operation at a demonstration
scale of 50 to 100 megawatts before companies will have confidence in
their cost and performance for large scale systems."[Footnote 13]
Similar opinions were offered by several of the stakeholders we
interviewed, who told us they thought it would be helpful for testing
to focus more on actual demonstrations, rather than laboratory testing.
For example, two electric power company officials told us they thought
testing on a larger scale was important because the reliability of
power plants with carbon management has not been adequately considered.
Despite the importance of gaining this kind of experience with CO2
capture, CO2 capture has not been demonstrated on a large scale at a
power plant in the United States or in any other country. The IPCC's
Special Report on CCS observed that "there have been no applications
[of carbon capture] at large-scale power plants of several hundred
megawatts" and emphasized the significance of this omission by
cautioning that large-scale power plants are the major source of
current and projected CO2 emissions.
It should be noted that some progress has been made in testing CCS at
other types of industrial facilities. Specifically, four industrial
facilities have received attention as major demonstrations of CO2
capture and storage technology. These facilities presently capture and
store anthropogenic CO2 on a large scale.[Footnote 14] Three of these
projects involve separation of CO2 from natural gas: the Sleipner and
Snohvit projects, located off the coast of Norway, and the In Salah
project in Algeria. The fourth project captures CO2 at a facility in
North Dakota, where coal is gasified to make methane. The captured CO2
is then injected at an oil field in Weyburn, Canada for the purposes of
enhanced oil recovery and to permanently store almost all of the
injected CO2.
CO2 capture has also been demonstrated at other industrial facilities,
including plants that purify natural gas and produce chemical products
(ammonia, alcohols, and synthetic liquid fuels). For example, one
existing industrial application of CO2 capture is to remove CO2 from
natural gas--a process called natural gas sweetening--to prevent
pipeline corrosion and increase the heating value of the gas. However,
much of the CO2 captured at these facilities is currently vented to the
atmosphere because there is no requirement or incentive to store it.
[Footnote 15]
Nonetheless, according to the IPCC and other knowledgeable authorities,
key differences may inhibit the transferability of CO2 capture at these
facilities to coal-fired power plants:
* Lower CO2 concentrations at coal-fired power plants. A study by
researchers at the Massachusetts Institute of Technology (MIT)
indicated that industrial processes, such as natural gas processing and
ammonia production, produce highly concentrated streams of CO2 as a
byproduct, facilitating CO2 capture.[Footnote 16] By contrast, CO2 is
relatively diffuse in the exhaust, or flue gas, produced by coal power
plants--about 13 to 15 percent by volume--making CO2 capture
substantially more energy intensive.
* Challenges in adapting the CO2 removal process to power plants. The
most commonly-used chemical method for removing CO2 from natural gas
may be challenging to adapt to capture at power plants. According to
the IPCC Special Report on CCS, CO2 is most commonly removed from
natural gas using chemical solvents. However, DOE officials told us
that one such commonly used solvent, monoethanolamine, is not designed
to cost-effectively remove the dilute concentrations of CO2 from the
extremely large volumes of flue gas produced by pulverized coal power
plants.
The IPCC report noted that applying CO2 capture and sequestration only
at these types of industrial facilities--and not at other facilities,
such as coal-fired power plants--would contribute only marginally to
addressing climate change. Specifically, it estimates that CO2 capture,
if widely used at natural gas sweetening facilities, would account for
less than 1 percent of CO2 emissions per year from large stationary
sources.
Coal Gasification Technology Offers Promise in Capturing CO2 at New
Plants but Has Limitations That May Impede Its Widespread Use:
DOE has pursued gasification technology--specifically IGCC technology-
-as a key technology for reducing the environmental impact of coal-
based electricity generation, and which may be advantageous for CO2
capture. The gasification process chemically decomposes the fuel before
its combustion to provide a stream of CO2 for separation and storage,
as well as a stream of hydrogen for electricity production. It is
advantageous in facilitating CO2 capture because it provides a more
concentrated stream of CO2 at high pressure for separation and reduces
the energy required for additional compression of the CO2 for
transport. DOE also indicates that IGCC plants may enable near-zero
emissions of pollutants, including sulfur dioxide, nitrogen oxides, and
particulate emissions, as well as increase fuel efficiency.
While capturing CO2 at IGCC plants would impose additional costs,
assessments by DOE and international organizations concluded that these
costs would be lower than they would be for pulverized coal-fired power
plants that remove the CO2 after fuel combustion. For example, a 2007
DOE study concluded that IGCC plants--if built initially with the
capability to capture CO2 emissions--had a lower adverse impact on
efficiency and cost of electricity production than equipping a new
pulverized coal-fired power plant and, therefore, were a less expensive
option for capturing CO2 emissions.[Footnote 17] DOE officials told us
that, based on the agency's analysis, the cost of electricity
production would increase by 35 percent for newly constructed IGCC
plants with CO2 capture, compared to a 77 percent increase for newly
constructed pulverized coal power plants equipped with CO2 capture.
[Footnote 18] Figure 3 illustrates several of the key differences
between the two capture approaches.
Figure 3: Pre-combustion (i.e., IGCC) versus Post-combustion (i.e.,
pulverized coal) CO2 Capture:
[See PDF for image]
This figure illustrates several of the key differences between the two
capture approaches, as follows:
IGCC (pre-combustion):
Air: enters air separation chamber, oxygen sent to gasification
chamber;
Coal: sent to gasification chamber;
Syngas sent to CO@ capture chamber;
H2 sent to combustion turbine; electricity is produced;
CO2 sent to CO2 compression.
Pulverized coal (post-combustion):
Coal and air enter boiler; combustion occurs; steam turbine produces
electricity;
Flue gas (mostly nitrogen and oxygen) is sent to the CO2 capture
chamber; nitrogen is vented off; CO2 is sent to compression.
Source: GAO analysis of IPCC and DOE data.
[End of figure]
Nonetheless, while IGCC plants using CCS technology have been planned
in a number of countries, the outlook for IGCC power plants remains
uncertain. Among the factors impeding deployment of the technology are
the following:
* Cost of constructing IGCC power plants. Recent assessments indicate
that it may be initially more expensive to build a new IGCC power plant
than to build a pulverized coal power plant if CO2 emissions are not
captured. The IEA notes, in particular, that the investment cost for an
IGCC plant is about 20 percent higher than for a pulverized coal
combustion plant.[Footnote 19] Moreover, the DOE Cost and Performance
Baseline for Fossil Energy Plants report states that if the power plant
does not capture CO2 emissions, both the total cost of the plant as
well as cost of electricity production would be more expensive at the
IGCC power plants.[Footnote 20] Furthermore, the IEA notes considerable
uncertainty in IGCC costs because no coal-fired IGCC plants have
recently been built.
* Reliability concerns with IGCC plants. Several stakeholders we
interviewed expressed concern about the reliability of IGCC plants for
electricity production. One electric power company official said that
existing turbines for IGCC power plants are not reliable enough to
provide base-load power for customers at high levels of CO2 capture.
Moreover, according to an MIT study, several IGCC power plants
experienced reliability challenges in the first few years of operation,
although many of these early problems proved manageable and the
reliability of the plants subsequently improved.[Footnote 21] However,
the National Coal Council identifies reliability as one continuing area
of concern in which IGCC technology could be improved.[Footnote 22]
* Challenges in building new coal-fired power plants in the United
States. Using IGCC as an enabling technology for CCS is premised on
building new coal-fired power plants. However, efforts to build new
coal-fired power plants, regardless of the technology used, are facing
increased regulatory scrutiny due to environmental concerns. A 2008 DOE
report, Tracking New Coal-Fired Power Plants, states that significantly
fewer new U.S. coal-fired power plants have been built than originally
planned. Delays and cancellations have been attributed to regulatory
uncertainty, including climate change concerns and escalating costs.
Capturing CO2 from Existing Coal-fired Power Plants Requires
Significant Amounts of Energy and Imposes High Costs:
Key assessments indicate that post-combustion capture of CO2, which
would be used at pulverized coal power plants, faces significant
technical challenges that greatly affect the cost and feasibility of
its deployment using currently available technology.[Footnote 23] This
is significant because these pulverized coal facilities account for an
overwhelming share of the world's coal-fired capacity.
In a pulverized coal plant, coal is burned with air in the boiler to
produce steam. The steam then drives a turbine to generate electricity.
Hence, CO2 would have to be separated from the boiler exhaust, or flue
gas, after combustion, rather than separating the carbon before
combustion, as is the case in an IGCC plant. The need to separate CO2
from the flue gas adds a number of technical challenges that can affect
the cost and efficiency of CO2 capture:
* Treating large volumes of flue gas to remove CO2. As noted earlier,
large volumes of flue gas must be treated to remove dilute
concentrations of CO2. DOE estimates that CO2 accounts for only about
15 percent of the volume of the flue gas from a pulverized coal-fired
power plant, compared to about 40 percent in an IGCC plant.
* Removing impurities from the flue gas before CO2 removal. Trace
impurities in the flue gas, such as particulate matter, sulfur dioxide,
and nitrogen oxides, can reduce the effectiveness of certain CO2
capture processes. The IPCC notes that it is important to reduce the
acidic gas components, which would reduce the absorption capacity of
the solvent used to remove CO2. Additionally, IPCC notes that fly ash
and soot present in the flue gas could be problematic, if not
addressed.
* Compressing the captured or separated CO2. Compressing captured or
separated CO2 from atmospheric pressure to pipeline pressure represents
a large auxiliary power load on the overall plant system. The MIT study
indicated that the energy required to compress the CO2 is the second
largest factor in reducing the efficiency of the power plant.[Footnote
24]
* Significant cost increases in retrofitting CCS to an existing plant.
An IPCC assessment of several studies concluded that retrofitting a CO2
capture system to existing coal-fired power plants would increase the
incremental cost of producing electricity from about 150 to 290
percent. Similarly, based on a study of a representative coal-fired
plant in Ohio, DOE estimated that capturing 30 percent of a retrofitted
plant's CO2 emissions would increase its cost of electricity production
by 2.3 cents per kilowatt-hour, while capturing 90 percent of the
plant's CO2 emissions would increase the cost of producing electricity
by nearly 7 cents per kilowatt-hour.[Footnote 25] For comparative
purposes, the DOE's Energy Information Administration reports that the
average retail price of electricity in the United States is 8.9 cents
per kilowatt hour.
Regulatory and Legal Uncertainties Also Complicate Capture, Injection,
and Storage of CO2:
The IPCC, two federal advisory committee reports, and many stakeholders
we contacted agreed that key regulatory and legal issues will need to
be addressed if CCS is to be deployed at commercial scale. Among these
issues are (1) confusion over the rules for injecting large volumes of
CO2, (2) long-term liability issues concerning CO2 storage and
potential leakage, (3) how property ownership patterns may affect CO2
storage, and (4) how the Clean Air Act will apply to facilities that
capture CO2.
Confusion over Rules about Large-Volume Injections of CO2:
Electric utilities and oil and gas companies have underscored the need
for guidance on how CCS projects that inject large volumes of CO2 would
be regulated under EPA's Underground Injection Control (UIC) program,
which is designed to protect underground sources of drinking water. As
noted earlier, under the UIC program, EPA regulates underground
injections of various substances, including nonhazardous and hazardous
wastes into more than 800,000 injection wells. The SDWA requires EPA to
develop minimum federal requirements for injection practices that
protect public health by preventing injection wells from endangering
underground sources of drinking water. However, the injection of CO2
for long-term storage raises a new set of unique issues related to its
relative buoyancy, its corrosiveness in the presence of water, and
large volumes in which it would be injected.
Stakeholders suggested that the absence of regulations related to large-
volume CO2 injection and storage was creating considerable uncertainty
for CCS projects. Recently, EPA proposed a regulation to address this
uncertainty. Prior to this proposal, nearly half of the 20 stakeholders
we interviewed said uncertainty regarding CO2 injection and storage
regulations was a large or very large barrier to CCS deployment. For
example, one industry stakeholder said that he was uncertain about
whether injecting CO2 in large volumes was actually legal, since EPA's
guidance to date only addresses pilot CCS projects. Other stakeholders
have mentioned that without new EPA guidance on large volume CO2
injections, they were uncertain about how stringent their well
construction and monitoring needed to be. In addition, a diverse panel
at EPA's 2007 UIC workshop on the issue noted that well spacing could
be a significant issue that needed to be addressed, since the pressure
effects caused by various CO2 injections could intersect and have a
major impact due to injection volumes, particularly with the size and
potential number of CO2 projects. Finally, according to a 2007 report
by the American Public Power Association, the uncertainty associated
with UIC permit requirements has complicated commercial scale planning
for new coal-fired power plants because it has left utilities uncertain
as to whether they could inject CO2 locally or be required to pipe CO2
over great distances.
In July 2008, EPA addressed some of these technical and regulatory
issues in its proposed rule for underground injection of CO2 for
geologic sequestration. Preliminary stakeholder reaction to EPA's
proposed rule, discussed later in this report, suggests that some CO2
injection-related uncertainties may be headed for resolution through
the EPA rulemaking but that others will be more challenging to resolve.
Long-Term Liability Concerns over CO2 Storage and Possible Leakage:
Beyond the immediate concerns over how to inject large volumes of CO2,
stakeholders expressed broader concerns over the long-term liability
associated with its storage. They pointed specifically to a lack of
clarity regarding who--the injector or the property owner--will
ultimately be responsible for CO2 injections and storage after the
wells are capped. If stored CO2 migrated beyond the area in which it
was intended to be stored, there are two potential outcomes that
generate concern:
* Stored CO2 could migrate underground and endanger underground sources
of drinking water, leading to liability under the SDWA for the party
responsible. According to EPA, CO2 migration into drinking water can
cause the leaching of contaminants, such as arsenic, lead, and other
compounds, into the water. CO2 migration could also result in changes
in regional groundwater flow and the movement of saltier fluids into
drinking water, causing its quality to degrade. As the July 2008
proposed rule's preamble reiterates, under the SDWA, well operators
remain responsible indefinitely for any migration that endangers
underground sources of drinking water, and courts could impose civil
penalties as high as $25,000 per day. Participants in EPA's 2007 UIC
workshop raised the prospect of environmental and health concerns posed
by CO2 injections, including the mobilization of previously isolated
metals, lower pH as a result of CO2 interaction with water, and
saltwater displacement.
* Stored CO2 could also migrate beneath adjacent lands. If CO2 was
injected for geologic storage and it migrated underground into
neighboring mineral deposits, for example, it could interfere with the
adjacent mineral owners' abilities to extract those resources, and the
injection well's operator could be held liable for nuisance, trespass,
or another tort.
EPA's 2007 UIC workshop, attended by more than 200 stakeholders,
revealed liability associated with unintended migration of injected CO2
to be a critical concern. Similarly, 19 of the 20 stakeholders we
interviewed told us that liability related to CO2 storage was a large
or very large barrier to deployment of CCS at commercial scale, with
some noting that liability concerns have already negatively impacted
companies' ability to initiate CCS projects. For example, two
stakeholders reported that these concerns have already made it
difficult to obtain insurance for CCS projects. They noted specifically
that insurers have difficulty writing insurance policies because of the
uncertainties associated with and limited data available for CCS, while
another added that investors will not support projects like CCS if they
expose them to unlimited and undefined long-term liabilities,
especially when future revenue streams are uncertain.
Property Ownership Patterns May Also Affect CO2 Storage:
Setting aside any complications that could later arise from CO2 leakage
onto others' property, electric utilities and other stakeholders note
that at the outset of a CCS project, it would be essential to identify
and obtain the consent of all surface and mineral property rights
owners. Such a determination is not always straightforward because
ownership of surface land is often severed from ownership of minerals
located below the land's surface and, in the same vein, ownership of
saline reservoirs. In these circumstances of severed ownership, state
law varies on who owns the geologic formation or potential storage site
that would sequester the CO2. In some states, the surface landowner
owns the geological formation, but in others, the mineral rights owner
owns the formation. Moreover, those geologic formations used for CO2
storage that extend below surface lands could encompass the mineral
rights of multiple owners.
Aside from the question of who owns the storage site, it is also not
clear who would actually own the CO2 once injected--the injector, the
owner of the surface land, or the owner of the subsurface geologic
formation--because few state laws or courts have yet to address the
issue. Some state laws and courts, however, have recognized that
injectors of natural gas retain ownership of that gas.
Multiple stakeholders told us that this issue will be a much larger one
as CCS projects are scaled up to commercial scale and move beyond
existing enhanced oil recovery projects that inject smaller volumes of
CO2 in order to extract additional oil from underground reservoirs.
They noted that the CO2 plume, or pressure front created by injecting
the CO2 underground, can cover tens to hundreds of square miles,
affecting numerous property owners. According to one power company
official, this property rights issue is different from liability-
related issues, since it could prevent CO2 from being injected into the
ground in the first place. If they cannot get access rights to the
formation, they cannot do a project.
Uncertainty Regarding How the Clean Air Act Will Apply to Power Plants
with CCS:
According to EPA air officials, the Clean Air Act's New Source Review
(NSR) requirements apply to new power plants that are constructed with
carbon capture technology and may apply to existing power plants that
install the technology. NSR is triggered when a new facility is built,
or when an existing facility makes a major modification, a physical or
operational change that would result in a significant net increase in
emissions. Under NSR, permitting authorities review the proposed
facility or modification to establish emission limits and ensure the
requisite pollution control technologies will be used before granting
it a permit. Because of the additional energy required for carbon
capture, EPA officials note that power plants implementing the
technology might need to burn more coal to generate the same amount of
electricity. If this increased coal usage resulted in a significant net
increase of emissions of pollutants regulated under the act, such as
ozone or sulfur oxide, NSR could be triggered.
Some note that the NSR requirements, and the additional costs and
uncertainties associated with them, may discourage facilities such as
power plants from adopting CCS technology. For example, a recent report
from a federal advisory committee to the Secretary of Energy states
that "for existing coal-fired facilities, a major question is whether
the Clean Air Act, including the NSR requirements of the Act, would
apply if CCS equipment is installed."[Footnote 26] Multiple
stakeholders we interviewed agreed that adding CCS equipment to an
existing power plant could raise problems under NSR. One noted, in
particular, that NSR challenges were manageable while CCS projects were
at the demonstration scale but could pose greater problems when CCS is
deployed at a larger scale.
The Absence of a National Strategy to Control CO2 Emissions Gives
Neither Industry Nor Government Agencies an Incentive to Invest in CCS:
According to the IPCC, the National Academy of Sciences, and other
knowledgeable authorities, another barrier is the absence of a national
strategy to control CO2 emissions (emissions trading plan, CO2
emissions tax, or other mandatory control of CO2 emissions), without
which the electric utility industry has little incentive to capture and
store its CO2 emissions. Moreover, according to key agency officials,
the absence of a national strategy to control CO2 emissions has also
deterred their agencies from resolving other important practical issues
that will ultimately require resolution if CCS is to be deployed on a
large scale. Such issues include lack of clarity regarding who owns
injected CO2 and how stored CO2 will be addressed in a future emissions
trading scheme.
Industry Has Little Incentive to Invest in CO2 Control Technologies
without a National Strategy to Control CO2 Emissions:
A wide range of academic, industry, and other knowledgeable authorities
agree that CCS is unlikely to be used to any substantial extent without
some kind of national strategy to control CO2 emissions. The IPCC's
2005 report on CCS observed, for example, that "all models indicate
that CCS systems are unlikely to be deployed on a large scale in the
absence of an explicit policy that substantially limits greenhouse gas
emissions to the atmosphere. With greenhouse gas emission limits
imposed, many integrated assessments foresee the deployment of CCS
systems on a large scale within a few decades from the start of any
significant climate change mitigation regime." It stated further that
"the stringency of future requirements for the control of greenhouse
gas emissions and the expected costs of CCS systems will determine, to
a large extent, the future deployment of CCS technologies relative to
other greenhouse gas mitigation options."[Footnote 27]
EPA's Clean Air Act Advisory Committee's Advanced Coal Technology
Workgroup similarly reported that widespread commercial deployment of
advanced clean coal technologies, including large-scale CCS, likely
will not occur without legislation that establishes a significant long-
term "market driver." The majority of stakeholders we interviewed
agreed, characterizing the absence of a national strategy to control
CO2 emissions as a large or very large barrier to CCS deployment on a
commercial scale, with many stating that without a price on emitting
CO2, there is no rationale for utilities or other facilities to control
their emissions. Moreover, according to a leading researcher,[Footnote
28] "in order for significant progress to be made in reducing
greenhouse gas emissions, some form of mandatory emissions limits or
tax on greenhouse gases will be required, just as in every other area
of environmental regulation where substantial costs of emission
reductions must be borne."
One indication as to how emitters might respond to a cost on CO2
emissions was provided by a Norwegian petroleum company after Norway
introduced a $40 per metric ton tax on offshore CO2 emissions in 1991.
The Statoil petroleum company's Sleipner project, a natural gas
processing project located at a gas field 250 kilometers off the coast
of Norway, had already been removing CO2 from the natural gas to
prepare it for sale on the open market. But with no financial incentive
to do otherwise, Statoil had simply vented the CO2 into the atmosphere.
At least partly in response to the tax, however, the company, in 1996,
began to capture approximately 3,000 metric tons of CO2 per day from
natural gas extraction and store it 800 meters under the North Sea's
seabed in a geologic formation called a saline reservoir.
The United States' experience with other pollutants, notably sulfur
dioxide (SO2), also provides insights into the kind of market-based
emissions control regime that could emerge if a national strategy to
control CO2 emissions was adopted. In Title IV of the Clean Air Act
1990 Amendments, Congress established a goal of reducing annual
emissions of SO2 by 10 million tons from 1980 emissions levels.
Specifically, the law established overall emission limitations and
allocated SO2 emission allowances to individual electric utilities. The
utilities are required to own enough allowances at the end of each year
to cover their emissions. Under the law's allowance trading system,
utilities can trade some or all their allowances in a way that allows
them greater flexibility in achieving the required emission reductions
at the lowest cost. In cases where utilities were able to reduce
emissions below their required allowance, they were able to sell the
extra allowances at the market price to other utilities. As with the
SO2 program, analyses by government and academic organizations
generally indicate that CCS technology will be more extensively used as
emission limits tighten.
An important lesson from the SO2 program was that as vendors competed
to meet utilities' emission reduction needs, they were prompted to seek
the least expensive means of providing utilities with low-sulfur coal,
"scrubbers," and other methods for reducing sulfur dioxide emissions.
[Footnote 29] As a result, the overall cost of reducing emissions
decreased over time. More generally, a study commissioned by the IEA's
Greenhouse Gas R&D Program emphasizes the decrease in costs of new
technologies over time.[Footnote 30] It suggests that for new coal
emission control technologies, the initial higher plant costs incurred
are gradually reduced through experience and from continued research
and development.
The Absence of a National Strategy to Control CO2 Emissions Has
Constrained the Federal Government's Efforts to Plan For and Develop
CCS Projects:
The absence of a national strategy to control CO2 emissions not only
leaves the regulated community with little incentive to reduce their
emissions, it also leaves regulators with little reason to devise the
practical arrangements necessary to implement the reductions. For
example, regulators have not addressed how utilities that capture and
sequester CO2 would be treated under a future emissions trading plan.
The EU's early experience with CO2 emissions trading illustrates the
significance of including CCS in an emissions trading plan. EU
officials told us when the Emissions Trading System (ETS) was
conceived, the maturity of CCS as a technical reduction option for
CO2was not clear. Therefore, CCS projects were not systematically
included in the ETS.[Footnote 31] However, EU officials noted that the
situation has changed substantially since then. Indeed, a recent
European Commission report indicates that not systematically including
CCS in the ETS may be one barrier to its deployment.[Footnote 32]
Accordingly, the European Commission is now proposing legislation to
explicitly include, after 2012, facilities involved in the capture,
transportation, and storage of CO2 in the ETS. These facilities would
then earn allowances for nonemitted CO2 and would have to surrender
emissions allowances for any leakages of CO2 that occur. Consequently,
EU officials told us that the proposed directive, when enacted, would
remove this barrier.
Likewise, cognizant agency officials responsible for U.S. programs have
told us that they will not act on key CCS implementation issues prior
to Congress establishing a national strategy to control CO2 emissions.
For example, as noted earlier, the officials told us that uncertainty
regarding property rights ownership stems from ambiguity over who owns
the injected CO2, and it is similarly unclear what the government's
potential liability might be for long-term storage of CO2 on federal
lands. Bureau of Land Management (BLM) officials said they are aware of
the issue and of the BLM's jurisdiction in the matter but told us they
are looking to Congress for a solution before they will take any
specific actions to address it. These officials also noted that while
they do have authority to permit CO2 injections on federal lands that
are solely for sequestration purposes, they are uncertain whether BLM
has statutory authority to establish a funding mechanism for long-term
management of sequestration sites on federal lands.
Other practical issues requiring resolution, which cross the
jurisdictions of a range of federal agencies and of state and local
governments, are discussed later in this report.
Federal Agencies Have Yet to Resolve the Full Range of Issues Requiring
Resolution for Widespread CCS Deployment:
While federal agencies have begun to address CCS barriers, they have
yet to comprehensively address the full range of issues that would
require resolution for widespread CCS deployment. DOE has achieved
limited results in lowering the cost of CO2 capture at existing power
plants, and the agency's focus on gasification technology to date may
not provide for the needed reductions in emissions because few
facilities with this technology currently exist. However, DOE's focus
has recently shifted to better balance the need for capture technology
at both new and existing power plants. EPA has recently issued a
proposed rule that clarifies significant regulatory uncertainties
related to CO2 injection and storage. However, critical questions
remain about long-term liability for stored CO2. Elsewhere in the
federal government, agencies have not addressed a number of issues that
could delay CCS deployment. Among them are how CO2 pipeline
infrastructure might be developed and how a future emissions trading
plan would treat avoided CO2 emissions due to CCS.
DOE Has Only Recently Prioritized Research to Help Control CO2
Emissions from Existing Power Plants:
DOE has identified IGCC technology as the key enabling technology for
reducing CO2 emissions from newly constructed coal-fired power plants
and has helped to develop and demonstrate IGCC technology. However, key
assessments by the National Academy of Sciences and international
organizations have raised questions about how the agency's focus on
IGCC technology may have affected the broader effort to substantially
reduce CO2 emissions from coal-based electricity generation because (1)
as noted earlier, the outlook for widespread deployment of IGCC
technology is questionable and (2) the agency's funding related to IGCC
technology has substantially exceeded funding for technologies more
applicable to reducing emissions from existing coal-fired power plants.
DOE has recently started to focus greater attention on technologies
more applicable to reducing emissions from existing power plants.
DOE Has Achieved Some Advances with IGCC Technology:
Consistent with DOE's emphasis on IGCC, the agency cites a number of
accomplishments in advancing the technology, such as its support for
two operational IGCC power plants, in Florida and Indiana, that produce
substantial amounts of electricity, while also demonstrating the
production of high-pressure syngas amenable to CO2 capture.[Footnote
33] DOE also cites its contributions to the development of several IGCC-
related technologies, which would advance pre-combustion CO2 capture.
Specifically, recent technological advances cited by the agency include
successful fabrication and testing of a liquid membrane that is stable
at high temperatures and that could be used for CO2 capture in IGCC
plants, as well as a new material with CO2 separation potential for gas
separation. Moreover, according to a published journal article with
three DOE co-authors, advances in membranes may be significant in
advancing CO2 capture because membranes are less energy intensive,
compared to other separation techniques.[Footnote 34] Taken together,
the National Academy of Sciences credits DOE's efforts in promoting
IGCC technology, citing the agency's efforts to develop "a close
working relationship with the industry to move the technology through
the commercial demonstration stage."[Footnote 35]
Looking ahead, DOE hopes to make further investments, and progress, in
demonstrating IGCC's feasibility to capture CO2 through its FutureGen
program, which aims to accelerate commercial deployment of IGCC or
other advanced clean coal-based power generation technology with CCS.
Moreover, under the restructured FutureGen program, DOE anticipates
supporting demonstrations at more than one site.
DOE Funding Decisions Reflect Agency's Focus on IGCC:
DOE's progress, however, has required both significant time and
resources. As the National Academy of Sciences noted, the development
of an integrated IGCC system has been an important component of DOE's
Fossil Energy Research Development and Demonstration program for more
than 20 years, and between 1978 and 2000, DOE invested $2.3 billion in
gasification technology.[Footnote 36] Moreover, DOE budget data
indicate that in more recent years, the agency has continued to provide
substantial funding for IGCC technology. Several Fossil Energy programs
provide substantial support for developing IGCC technology, including
the IGCC program, the FutureGen program, and the advanced turbines
program. Together, these programs account for a significant share of
Fossil Energy's overall budget. The Carbon Sequestration program also
provides some additional funding for CO2 capture using IGCC technology.
Developing an exact estimate of DOE funding for IGCC technology is
challenging because the individual DOE programs pursue multiple
objectives and funding categories have changed over time. However, an
examination of DOE's budget information suggests that its support from
1997 (the year the Carbon Sequestration program began) to present is
likely on the order of hundreds of millions of dollars and probably in
excess of $500 million. A DOE official within Fossil Energy
acknowledged to us that "the bulk of coal program capture funding
relates to gasification, particularly IGCC," although DOE officials
said they are now focusing more attention on existing pulverized coal
power plants.
IGCC Technology's Potential for Reducing CO2 Emissions Is Uncertain:
The payoff for this investment, however, will depend heavily on the
extent to which IGCC technology is used in newly constructed power
plants--both in the United States and worldwide. In this regard, the
National Academy of Sciences said in a recent assessment that the
Carbon Sequestration program "is taking on a relatively high overall
risk to create technologies for commercial demonstration by 2012 in
that it relies heavily on the successful deployment of full-scale IGCC
plants." The report added that there are only a few IGCC plants
operating worldwide and advanced, commercial-scale IGCC units are only
in the design phase and have no CO2 sequestration.[Footnote 37]
Moreover, as noted earlier, studies by the IEA, DOE, and the National
Coal Council cite a number of compelling factors, such as the relative
cost of IGCC plant construction and the limited operational experience
worldwide with this relatively new technology, which may limit
commercial deployment of IGCC technology. Several industry stakeholders
we interviewed expressed concerns about using IGCC technology for
electricity generation, including the cost of constructing IGCC plants
and possible reliability concerns. For example, officials from one
electric power company told us they thought high levels of CO2 capture
at IGCC plants would necessitate the use of a turbine, which has not
yet been commercially demonstrated. Looking ahead, the IEA's 2007 World
Energy Outlook notes that "for IGCC to establish itself in the market,
further development to bring down costs and improve operational
flexibility is necessary."
DOE Has Thus Far Achieved Limited Success in Reducing CO2 Emissions
from Existing Power Plants:
Until recently, DOE budget decisions reflected a view that IGCC
technology offered greater potential to capture CO2 than technologies
applicable to pulverized coal-fired power plants. As indicated earlier,
DOE budget information we reviewed indicates substantial funding for
IGCC technology, likely in the order of hundreds of millions of
dollars. By comparison, DOE support for post-combustion CO2 capture
technology, most applicable for existing plants, appears more limited,
likely on the order of tens of millions of dollars.
As noted earlier, DOE has cited a number of challenges that complicate
efforts to capture CO2 emissions from pulverized coal-fired power
plants, including the large volumes of gas that must be treated; trace
impurities in the exhaust gas (such as particulate matter, sulfur
dioxide, and nitrogen oxides) that can degrade the effectiveness of
certain capture processes; and the high amount of energy needed to
compress CO2 emissions. Among other things, a DOE study concluded that
if CO2 capture were added to a pulverized coal-fired power plant that
started operations in 2010, its cost of electricity production would
increase by approximately 80 percent.[Footnote 38]
These technological realities, however, are at odds with another
reality anticipated by a number of organizations: these facilities will
account for the vast majority of coal capacity in the United States and
around the world in the near term. Accordingly, in past years, the
agency has undertaken some initiatives to advance technologies to
capture CO2 from these facilities and points to a number of
accomplishments arising from these efforts. Among them, DOE researchers
reported patenting a technique to capture CO2 from a coal-fired power
plant's exhaust using ammonia, a technique planned for two capture
demonstrations at power plants in Ohio and North Dakota. DOE officials
also point to several other projects related to post-combustion CO2
capture, including development of ionic liquids with greater absorption
capacity for CO2 and development of sorbent technology for retrofitting
existing pulverized coal plants. DOE officials also pointed to
investments in two other challenging aspects of CO2 capture. One
involves research to address one of the largest cost drivers, the cost
of regenerating the absorbent. DOE officials also pointed to work on
technologies to improve the efficiency of compressing CO2, a major cost
factor in capturing CO2 at these facilities.
Nonetheless, DOE's own analysis raises questions concerning the
agency's progress in helping to reduce the cost of CO2 capture at
pulverized coal power plants. For post-combustion CO2 capture, DOE
officials indicated to us that the agency's current goal is to develop,
by 2012, pilot-scale systems to capture 90 percent of CO2 at no more
than a 35 percent increase in the cost of electricity production.
However, it is noteworthy that this goal is to develop pilot-scale
systems only; commercial-scale units will not come online until the
2020 time frame.
An assessment report recently published by DOE indicates the size of
the challenge DOE faces in reducing the cost of capture. The study
indicated that CO2 capture would increase the cost of electricity
production by 77 percent at a pulverized coal power plant starting
operation in 2010.[Footnote 39] A DOE official within Fossil Energy
acknowledged to us that owners of existing pulverized coal power
plants, under a future emissions trading arrangement, might choose to
purchase carbon allowances, rather than pay for an expensive retrofit,
and that plant age and other economic considerations will make the
determination of whether a retrofit or another action, such as
purchasing allowances, will occur.
One contributing factor to DOE's limited progress in reducing CO2
emissions from existing power plants is that it is a relatively lower
priority for DOE. The National Academy of Sciences noted that the
Carbon Sequestration program has focused on IGCC technology to achieve
its goal of reducing the cost of carbon capture.[Footnote 40] Our
examination of DOE's budget in recent years supports this view:
* The Carbon Sequestration program has provided limited capture
funding: DOE officials estimated the Carbon Sequestration program
provided approximately $50 million in funding related to all types of
CO2 capture from fiscal year 2002 to fiscal year 2007. While DOE
officials were able to provide limited information quantifying
precisely how this funding was split between post-combustion and pre-
combustion capture, they indicated that the majority of it went toward
the development of post-combustion and oxy-combustion capture
technologies. DOE officials suggest that, historically, 20 percent of
the Carbon Sequestration program's budget has gone toward capture,
which DOE officials said allowed capture technology development to
continue as DOE evaluated geologic storage of CO2. However, capture-
related funding has generally received less funding in the Carbon
Sequestration program's budget than other areas, such as the regional
partnerships.
* Post-combustion capture has not been supported by related programs:
Until recently, post-combustion CO2 capture had not received large
amounts of funding from other programs in Fossil Energy. Specifically,
until fiscal year 2008, no other major Fossil Energy programs provided
substantial funding related to post-combustion capture, in contrast to
those programs' support for IGCC technology.
DOE Has Recently Focused More Attention on Existing Plants:
Looking ahead, DOE officials told us that the agency is now focusing
more attention on reducing CO2 emissions from existing plants by
shifting the focus of a related Fossil Energy program, the Innovations
for Existing Plants program, so that it emphasizes the development of
post-combustion capture of CO2. Among the factors cited in this
decision were (1) the large number of pulverized coal power plants in
the United States; (2) congressional direction in the report
accompanying the agency's fiscal year 2008 appropriation to focus more
attention on this issue; and (3) the applicability of advances in this
area to the large number of pulverized coal power plants under
construction in China and India.
In February 2008, DOE announced that it was soliciting applications for
projects "specifically focused on developing technologies for CO2
capture and separation that can be retrofitted to existing pulverized
coal (PC) power plants." In July 2008, the agency announced it was
providing $36 million in funding for 15 projects to develop new and
cost-effective capture technologies for existing power plants.
Other recent changes in DOE's funding decisions also appear to
recognize the significance of reducing emissions from existing power
plants:
* The Carbon Sequestration program's funding for post-combustion CO2
capture (including oxyfuel combustion capture) increased from $10.1
million in fiscal year 2007 to $15.4 million in fiscal year 2008.
* The network of Regional Carbon Sequestration Partnerships appears to
be placing more emphasis on demonstrations of CO2 capture at coal power
plants for an upcoming series of large-scale sequestration projects.
Specifically, a DOE official identified three projects being planned to
capture CO2 from coal-fired power plants, including possibly capturing
500,000 tons of CO2 from a coal-fired power plant in North Dakota.
* DOE indicated in an August 2008 announcement that the agency's Clean
Coal Power Initiative program would support coal-based technologies to
capture and sequester CO2 emissions. For post-combustion CO2 capture,
the announcement indicated that advanced technologies are sought to
reduce the cost and additional power load of CO2 capture.
While it seems too early to evaluate the results of DOE's increased
focus on post-combustion CO2 capture, key organizations' assessments
appear supportive of this shift. A 2008 National Coal Council report,
for example, identifies retrofitting existing coal power plants with
CCS as part of a larger approach to reducing emissions.[Footnote 41] In
the same vein, the IPCC notes that the strategic importance of post-
combustion capture systems becomes evident when one considers the large
amount of emissions from pulverized coal power plants.
EPA Has Begun to Address Regulatory Uncertainty Concerning CO2
Injection and Storage, but Key Issues Remain Unresolved:
As discussed earlier in this report, CCS stakeholders have stated that
the absence of regulations governing large-volume CO2 injection and
storage had created considerable uncertainty about the projects and
risks associated with CCS. In an effort to address many of these
concerns, EPA issued a proposed a rule in July 2008 to address
permitting and other requirements for injection of CO2 for geologic
sequestration. The proposed rule, issued under the agency's SDWA
authority, clarifies a number of practical issues for prospective well
owners and operators concerning CO2 injection and identifies certain
requirements governing their financial responsibilities, including for
the period after the CO2 is injected and the well is closed. However,
as EPA officials note, the rulemaking was not intended to resolve many
questions concerning how other environmental statutes may apply to
captured and injected CO2, including the Clean Air Act, CERLCA, and
RCRA. A number of key issues, therefore, have yet to be addressed.
EPA Has Issued a Proposed Rule under the SDWA on Permitting Large-
Volume CO2 Injections:
EPA's July 2008 proposed rule creates a new "Class VI" well type for
injection of CO2 for geologic sequestration. In doing so, it clarifies
a number of issues relating to the more immediate, practical issues
regarding CO2 injection for geological storage. However, some notable
ambiguities remain, particularly in the area of longer-term financial
responsibility requirements. The following summarizes both the issues
that have been addressed and those which may still need to be
clarified. In the discussion below, we provide the preliminary views of
the stakeholders we interviewed. It is important to note, however, that
the proposed rule's 120-day comment period runs until November 24,
2008, during which time EPA will obtain a broader array of public
advice and opinions on its proposed rule.
Site characterization, well construction, and monitoring requirements.
The proposed rule specifies a number of requirements concerning the
location of the CO2 injection well, including (1) the criteria for
characterizing the site of the geologic formation and (2) requirements
for reviewing the wider geographic area surrounding the storage site
prior to injection. Regarding site characterization, the well owner or
operator must demonstrate that the well will be located in an area with
a suitable geologic system, including a confining zone for the injected
CO2 that is free of faults or fractures, that would contain the CO2.
The proposed rule also specifies that injection of CO2 above the
lowermost formation containing an underground source of drinking water
is prohibited. Regarding the wider geographic area surrounding the
storage site that may be impacted by the injection, it requires well
owners and operators to delineate an Area of Review (AoR) within which
the owner or operator must identify all penetrations, such as wells,
that may penetrate the confining zone and determine whether the wells
have been plugged in a manner that prevents the movement of CO2 or
associated fluids that may endanger underground sources of drinking
water.
The proposed rule also includes standards for well construction,
operation, and monitoring. For example, although EPA does not specify
which materials must be used, the proposed rule does require the use of
materials that meet or exceed industry standards, that are compatible
with injected CO2, and that are designed for the life of the well. The
proposed rule also contains an injection pressure limitation so that an
injection does not create new fractures or cause movement of injected
CO2 that endangers underground sources of drinking water. It requires
continuous monitoring of injection pressure, rate, and volume, and
requires semiannual reporting of this data to EPA. The proposed rule
also requires well owners and operators to submit, with their permit
application, a testing and monitoring plan to verify that the CO2
storage project is operating as permitted and is not endangering
underground sources of drinking water.
The proposed rule also addresses stakeholder concerns about how current
CO2 injection wells operating as Class I industrial wells, Class II
injection wells that use CO2 for enhanced oil or natural gas
extraction, and Class V experimental CO2 injection wells would be
regulated if they transition to use for long-term storage. It specifies
that owners of these existing wells may apply for the new Class VI
permit and that the UIC program director would have the discretion to
grandfather the well's pre-existing construction requirements if the
director determined that doing so would not endanger underground
sources of drinking water. With this exception, the project would have
to meet all other Class VI requirements in order to obtain a Class VI
permit.
Financial responsibility requirements. EPA's proposed rule specifies
that well owners and operators must demonstrate and maintain financial
responsibility for corrective action (that is, repairs or other actions
necessary to assure that wells within the AoR do not serve as conduits
for the movement of fluids into underground sources of drinking water),
well plugging, post-injection site care for a period of 50 years
following cessation of injections, site closure, and emergency and
remedial response. The UIC program director can adjust the 50-year time
period for post-injection site care depending on whether the project
poses an endangerment to underground sources of drinking water. If the
UIC program director chooses to lengthen the post-injection site care
time period, the owner and operator must continue to demonstrate
financial responsibility until the end of that period. Although the
financial responsibility demonstration requirement ends when the post-
injection site care time period does, the proposed rule's preamble
indicates that well operators remain responsible indefinitely for any
endangerment of underground sources of drinking water.
In addition to clarifying well site care, the proposed rule also
requires that well owners and operators periodically update their cost
estimate for corrective action, well plugging, post-injection site care
and site closure, and emergency and remedial response, and that they
redemonstrate financial responsibility for these increased costs as the
UIC program director deems necessary. It also requires well owners and
operators to notify the UIC program director of any adverse financial
conditions they encounter, such as bankruptcy.
While stakeholders acknowledge EPA's progress in clarifying some key
financial responsibility requirements, they cite several other
concerns:
* Although EPA's proposed rule establishes a post-injection site care
period, it does not include a provision allowing well operators to be
released from liability for endangerment of underground sources of
drinking water during the hundreds of years that CO2 will be stored in
a geologic storage project. While it is beyond EPA's authority to
release injection well owners and operators from liability, a
discussion of long-term liability is included in the proposed rule's
docket. Stakeholders told us that they were concerned by the
unspecified period of time for which they may be liable for stored CO2.
* The proposed rule only specifies a duty to demonstrate financial
responsibility, stating that guidance will be developed at a later date
describing the types of financial mechanisms that owners or operators
can use. Currently, financial responsibility for other well classes is
demonstrated through third-party instruments, such as a surety bond
that establishes a trust fund, or self-insurance instruments, such as a
corporate financial test. However, EPA's existing financial
responsibility requirements have been criticized as inadequate and the
agency is currently reviewing its approach. EPA is evaluating whether
to revise its financial responsibility guidance in light of these
criticisms and is seeking public comments on various financial
responsibility topics. Moreover, EPA officials told us that the
Miscellaneous Receipts Statute limits the financial responsibility
regulations because it prevents EPA from requiring a cash deposit or
receiving money as a trustee.[Footnote 42] The proposed rule's preamble
also notes that EPA does not have the statutory authority to transfer
financial responsibility from the well owner or operator to a third
party.
Finally, there is some question as to whether EPA will have sufficient
resources to implement the expanded UIC program. EPA has not examined
the level of resources that will be needed to administer the UIC
program once commercial-scale deployment of CCS occurs. However, a 2007
report by DOE's Argonne National Laboratory did examine the issue and
concluded that if CO2 were stored in large enough volumes to have a
meaningful impact on global warming, it is likely that thousands or
tens of thousands of injection wells would need to be developed and
permitted in the United States. The report noted that this would
require that state and regional UIC programs expand their staff and
capabilities. In this connection, it observed that the annual national
budget for the UIC program--approximately $11 million--has remained
static for many years, even as UIC agencies have been asked to take on
additional responsibilities. It warned that failure to provide
sufficient resources would likely create permitting backlogs, resulting
in a bottleneck in the overall carbon sequestration effort.
Multiple stakeholders agreed that EPA needs additional resources for
the UIC program, including permit writers. One industry representative
expressed concern that it can take up to 2 years to obtain a permit for
a well under EPA's UIC program, and that if CCS projects become more
widespread, EPA will be responsible for permitting thousands of
additional injection wells.
Key Legal and Regulatory Issues outside of the SDWA Have Been Largely
Unaddressed:
While EPA has addressed at least some of the legal and regulatory
issues on how CO2 injectors are to protect underground sources of
drinking water, it has thus far not resolved a number of key
environmental issues that fall under the jurisdiction of other
statutes, including the Clean Air Act, RCRA, and CERCLA.
Clean Air Act. As noted earlier, the Clean Air Act's New Source Review
(NSR) requirements could be triggered if an existing facility's
installation of capture technology makes a major modification that
significantly increases emission of regulated pollutants. EPA officials
acknowledge concerns that NSR could cause delays and impose added costs
to CCS projects. However, they said that an assessment of how NSR might
impact the feasibility of CCS projects cannot be made globally because
it depends on site-specific factors, such as geological and
hydrological considerations, the CCS technology that will be used, how
it will operate, and how that operation could affect the rest of the
plant.
Laws governing hazardous wastes and substances. RCRA and CERCLA could
pose similar complications for CCS projects. RCRA authorizes EPA to
establish regulations governing the treatment, storage, and disposal of
hazardous waste. A hazardous waste is generally defined as a solid
waste that either (1) exhibits certain characteristics (ignitability,
corrosivity, reactivity, or toxicity) or (2) has been listed as a
hazardous waste by EPA. CERCLA established the Superfund program to
clean up sites that have been contaminated by hazardous substances.
CERCLA authorizes EPA to compel the parties statutorily responsible for
the hazardous substances to bear the costs of cleaning up the
contaminated site or to carry out cleanups itself and recover costs
from the responsible parties. Hazardous substances are those which may
present substantial danger to the public health, welfare, or
environment when released and include all hazardous wastes subject to
RCRA.
Whether any given injected CO2 stream is categorically a hazardous
waste or hazardous substance has not been resolved by EPA. The preamble
to EPA's proposed rule notes that pure CO2 in and of itself is not
listed as a hazardous substance under CERCLA. However, the rule's
preamble cautions that injected CO2 streams could contain hazardous
constituents that would make these streams "hazardous."[Footnote 43] It
notes that since the chemical composition of individual injected CO2
streams vary, no categorical determination can be made as to whether
all injected CO2 streams are hazardous wastes. Accordingly, the
preamble says that it will be up to the well owners and operators to
make this determination on the basis of their particular circumstances.
EPA officials said that they lacked the information about the
composition of CO2 streams captured from coal-fired power plants
necessary to determine whether those streams should categorically be
listed as a hazardous waste under RCRA.
Thus, considerable uncertainties over how owners and operators of CCS
projects would be treated under key environmental laws other than the
SDWA remain unresolved. An EPA federal advisory committee working group
had emphasized, in particular, that the EPA address the liability
implications concerning CO2 injection under RCRA and CERCLA.[Footnote
44] However, the proposed rule is unclear as to whether the two laws
even apply to injected CO2, and it is therefore uncertain whether
injectors will be subject to hazardous waste disposal requirements and
liability for hazardous substance releases.
Other Key Issues That Should Be Proactively Addressed to Support a
National CCS Framework:
In addition to the technical and legal issues affecting CCS's
prospects, key studies, federal advisory committees, and the
stakeholders we interviewed also identified an array of other issues
that would need to be resolved if the technology is to be deployed
within a time frame scientists believe is needed to address climate
change. Moreover, whereas many of the technical and regulatory issues
discussed earlier fall within the domain of two agencies (DOE and EPA),
these other issues cross the jurisdictions of the Departments of the
Interior and Transportation, the Federal Energy Regulatory Commission,
and other agencies in a manner that would require collaboration between
agencies and, in many cases, coordination with state governments and
other entities.
Property Rights and Liability Issues Related to CO2 Injection on Both
Federal and Nonfederal Lands:
Under a national CCS program, CO2 could be sequestered on both federal
and nonfederal lands and would raise complex property rights issues
needing resolution in both instances. In the case of federal lands,
BLM, which manages the federal government's mineral resources, is
required by the Energy Independence and Security Act of 2007[Footnote
45] to report by December 2008 on a framework to manage geological
carbon sequestration activities on public lands. According to BLM
officials, the report will include a discussion of the unresolved
property ownership and liability issues related to long-term CO2
storage. They note that the report will also discuss the statutory
authority BLM currently has and what it lacks, such as the authority to
establish a funding mechanism for monitoring and mitigation efforts
associated with sequestration sites. They cautioned, however, that the
report will not recommend solutions to current uncertainties and
explained that since injected CO2 can move onto adjacent private or
state lands, resolving them will require collaboration with private
landowners and state agencies.
Nationwide CO2 sequestration would also pose major challenges on
nonfederal lands. EPA notes that states with primacy for the UIC
program have typically addressed such challenges when they have arisen
under that program. The agency acknowledged the additional
complications that would arise as stored CO2 crossed state boundaries,
but noted that such cross-jurisdictional issues typically occur under
the UIC program and that states have worked together to address them.
Nonetheless, the significantly larger scale of a future CCS program
could magnify the problems posed by these jurisdictional issues. EPA
officials noted that they are hoping that the proposed rule's comment
process will surface ideas to address these problems. However, EPA
officials also note that the agency lacks authority to issue
regulations resolving these issues.
Furthermore, while EPA's proposed rule reaffirms liability related to
underground sources of drinking water, ambiguity remains regarding who-
-the injector or the property owner--is ultimately responsible for
unanticipated releases of the injected CO2 that have other effects. As
discussed earlier, the released CO2 could interfere with the adjacent
mineral owners' abilities to extract those resources, and the injection
well's operator could be held liable for nuisance, trespass, or another
tort.
CO2 Pipeline Regulation:
Pipelines are the preferred method of transporting large amounts of
CO2. The Department of Transportation's Pipeline and Hazardous
Materials Safety Administration (PHMSA) administers safety regulations
for CO2 pipelines that affect interstate commerce and certifies states
that have adopted regulations compatible with the minimum federal
safety standards to regulate their intrastate pipelines. No federal
agency has claimed jurisdiction over siting, rates, or terms of service
for interstate CO2 pipelines.[Footnote 46] However, early assessments
indicate that a nationwide CCS program could require a network of
interstate CO2 pipelines that would raise cross-jurisdictional issues
and involve multiple regulatory authorities--all in the unprecedented
context of a nationwide program to transport massive volumes of CO2.
Neither the Federal Energy Regulatory Commission (FERC) or Surface
Transportation Board (STB) currently regulate interstate CO2 pipelines
and have not developed any guidance for possible regulation because,
according to agency officials, neither agency has statutory authority
to do so. FERC has the statutory authority to regulate the siting,
rates, and terms of service for interstate pipelines transporting
natural gas, which is defined as "natural gas unmixed or any mixture of
natural and artificial gas."[Footnote 47] FERC has interpreted this
statutory language to mean a gaseous mixture of hydrocarbons that is
used as a fuel.[Footnote 48] According to FERC officials, under this
interpretation, CO2 pipelines fall outside of the commission's
jurisdiction.[Footnote 49] According to the FERC Chairman's
congressional testimony, he would not recommend that Congress preempt
the states on CO2 pipelines because state siting has not been a
failure, unlike the situation that led to federal preemption of natural
gas pipeline siting.[Footnote 50] FERC officials noted that the
commission could have a prospective role in regulation of CO2
pipelines, which could be modeled on its natural gas transport and
storage work, but that it would need statutory authority to take such a
role.
The STB has statutory jurisdiction over pipelines that transport a
commodity "other than water, gas, or oil."[Footnote 51] STB's
predecessor, the Interstate Commerce Commission, interpreted its
organic statute as excluding all gas types (including CO2), regardless
of origin or source, from its jurisdiction.[Footnote 52] Therefore, the
commission concluded that it lacked jurisdiction over interstate CO2
pipelines. STB staff told us that if a party sought reconsideration of
the prior decision disclaiming jurisdiction over interstate CO2
pipelines, the board would consider re-examining the commission's
earlier decision.
While neither FERC nor STB has developed guidance for the regulation of
interstate CO2 pipelines, the stakeholders we interviewed had differing
views on whether federal regulation of CO2 pipelines should be
expanded. Several stakeholders thought it would be necessary for the
federal government to take a more active role in siting issues and CO2
pipeline rates. On the other hand, several other stakeholders expressed
concern that expanding federal regulation could have unintended
consequences. For example, one industry stakeholder told us that
regulating pipeline rates could discourage investment in new pipelines.
Other factors may need to be considered for CO2 pipelines that cross
federal lands managed by BLM. According to stakeholders, one key
question will be whether new CO2 pipelines should operate as common
carriers under federal law. As common carriers, pipelines' terms of
service would need to be just, reasonable, and nondiscriminatory. Under
the Federal Land Policy Management Act, BLM has the authority to grant
rights-of-way for pipelines across federal lands but not to require
them to operate as common carriers. In addition, BLM officials told us
they are not assessing the rights-of-way on federal lands for CO2
pipelines because their current statutory authority for rights-of-way
is sufficient.
DOE's Southwestern and West Coast Regional Carbon Sequestration
Partnerships are presently conducting a CO2 pipeline study, in
conjunction with MIT and Sandia National Laboratories, which may inform
the discussion about future CO2 pipelines. According to DOE officials,
the report will be issued next year. The officials note that it is not
clear whether the report will address all of the relevant issues,
including regulatory jurisdiction and siting decisions.[Footnote 53]
Detailed Assessment of Feasible CO2 Storage Sites:
In recent years, DOE has worked with state geologic survey offices and
other partners to construct a national carbon sequestration geographic
information system that provides information that can be used to
evaluate the potential for CO2 geologic sequestration across the United
States. However, knowledgeable authorities agree that a more detailed
evaluation of these sites' actual capacity is needed. As figure 4
shows, the geology of much of the United States may be well suited for
CO2 sequestration. However, a more detailed evaluation would determine
whether these potential sites are actually appropriate for long-term
CO2 sequestration. For example, it is currently not known whether the
caprock overlying these geologic formations is sufficient to contain
stored CO2.
Figure 4: Potential Geologic Storage in the United States:
[See PDF for image]
This figure is a map of the continental United States with potential
geologic storage areas indicated by shading.
Source: GAO analysis of DOE data.
[End of figure]
The Energy Independence and Security Act of 2007[Footnote 54] requires
the U.S. Geological Survey (USGS) to develop a methodology for, and
conduct an assessment of, the capacity for sequestration of CO2 in the
United States. USGS officials explained that their approach will be to
explore geologic formations at the individual sedimentary basin level,
and they will take storage integrity and injectivity into account. They
plan to begin with oil and gas reservoirs because these are the most
familiar geologic formations in terms of the integrity of the
reservoirs and their ability to store CO2. USGS officials will then
assess saline formations, about which less data are available.
According to USGS officials, the methodology should be completed by
March of 2009, at which time it will be released for external technical
review and public comment. Following any needed revisions to the
methodology and receipt of funding, the USGS will proceed with the
actual assessment.
Potential Public Opposition Arising from Health Concerns over CO2
Storage and Transport:
According to the preamble to EPA's proposed rule, improperly operated
injection activities or ineffective long-term storage could result in
release of injected CO2 to the atmosphere, resulting in the potential
to impact human health. EPA's summaries of stakeholder workshops
indicate that public health concerns have been expressed about such
issues. One concern is the risk that improperly operated injections
could result in the release of CO2, and that at very high
concentrations and with prolonged exposure, CO2 can lead to
suffocation. Concerns have also been raised that improperly injected
CO2 could raise the pressure in a geologic formation and, if it became
too high, could cause otherwise dormant faults to trigger seismic
events, such as earthquakes. The IPCC has noted, however, that 99
percent of the CO2 stored in appropriately selected and managed
formations is very likely to be retained for over 100 years,[Footnote
55] and EPA states in the preamble to its proposed rule that the risk
of asphyxiation and other health effects from airborne exposure to CO2
resulting from injection activities is minimal.
Thus far at least, there has been little public opposition to the CO2
injections that have taken place in states such as Texas to enhance oil
recovery. However, several notable studies explain that this lack of
publicly-expressed concern may reflect more a lack of knowledge about
CCS rather than confidence that the process is safe.[Footnote 56] This
is suggested in the IPCC's 2005 report on CCS which stated, for
example, that there is insufficient public knowledge of climate change
issues and of the various mitigation options and their potential
impact. In another 2005 study, researchers surveyed 1,200 people,
representing a general population sample of the United States, and
found that that less than 4 percent of the respondents were familiar
with the terms carbon dioxide capture and storage or carbon storage.
Some of the stakeholders we interviewed explained that public
opposition could indeed grow when CCS extends beyond the relatively
small projects used to enhance oil and gas recovery, to include much
larger CO2 sequestration projects located in more populated areas. One
noted, in particular, that a lack of education about CCS's safety could
potentially create confusion and fear when commercial-scale CCS is
implemented.
Citing such concerns, a recent report by the National Academy of
Sciences underscored the importance of public outreach, noting that
while the success of DOE's carbon capture program depends heavily on
its ability to reduce the cost of the technology, "the storage program
cannot be successful if a significant fraction of the public views it
as dangerous or unacceptable. Thus, the technologies must not only be
safe and effective, they must be explainable to the public and the
regulatory community in such a way as to instill confidence that they
are in fact safe and effective."[Footnote 57] The report went on to
caution that "the federal government in general and the DOE in
particular have not had a good track record in accomplishing this task
in other programs." For its part, EPA received similar advice from its
Clean Air Act Advisory Committee's Advanced Coal Technology Work Group.
The Work Group's January 2008 report recommended that the agency
immediately develop, in consultation with other agencies, a public
outreach effort to explain carbon capture and sequestration.[Footnote
58] A diverse group of panel members at EPA's 2007 UIC workshop made
similar recommendations for public outreach and participation.
Accounting System for Measuring CO2 Stored by CCS for Use in a CO2
Emissions Trading Plan:
According to a recent federal advisory committee report, an accounting
system, or protocol, will be needed to quantify the CO2 emissions from
CCS. The accounting protocol could clarify uncertainty related to
monitoring, reporting, quality assurance and control, and cross-border
issues. Establishing this protocol would be a necessary step to
integrate projects that prevent CO2 from being emitted to the
atmosphere into a future regulatory regime that addresses climate
change. The advisory committee report also notes that the IPCC has
released national greenhouse gas inventory guidelines for CO2 capture,
transport, injection, and storage, and that a comprehensive CCS
accounting protocol developed by EPA and other agencies would provide
needed guidance for applying IPCC Guidelines in the United States.
The European Union's experience suggests that in planning for future
CCS deployment, it is important to address such practical issues early
in the process, particularly how to address reductions in emitted CO2
achieved by CCS. Specifically, the European Commission proposes to
revise the EU ETS to include CO2 capture facilities, pipelines, and
storage sites. A European Commission report acknowledges that
resolution of this important practical matter is important to remove
barriers to future CCS deployment.[Footnote 59] Although EU member
states can seek to include CCS projects in their national emissions cap
by gaining approval from the European Commission on a case-by-case
basis, proposed legislation would explicitly include, after 2012,
facilities involved in the capture, transportation, and storage of CO2
in the ETS. These facilities would then earn allowances for nonemitted
CO2 and would have to surrender emission allowances for any leakages of
CO2 that occur.
Thus far, EPA's Office of Air and Radiation has begun to develop a rule
requiring mandatory reporting of greenhouse gas emissions from all
sectors of the economy.[Footnote 60] The agency is not, however,
developing a protocol clarifying how emissions avoided as a result of a
CCS project would be measured, nor how a future emissions trading plan
would treat the avoided emissions. EPA officials explained that, given
the pressure of other priorities, they would only develop such a
protocol when mandated by Congress to do so. However, they noted that
such an accounting system would be closely linked to the design of
voluntary programs, future policies, and regulations to reduce
greenhouse gas emissions.
Conclusions:
Recent federal and international assessments indicate that the United
States will need to rely on CCS as an essential mitigation option to
achieve appreciable reductions in greenhouse gas emissions. Federal
agencies whose action--or inaction--will greatly affect the prospects
for timely CCS deployment have taken early steps that address some
barriers to CCS, but have left critical gaps that impede our
understanding of CCS's full potential for reducing CO2 emissions and
that could affect CCS deployment on a broader scale.
DOE has invested heavily in advancing CCS in IGCC plants, but
knowledgeable authorities agree that these facilities will account for
only a small percentage of power plants' CO2 emissions in the next
several decades to come. DOE has recently begun to shift its approach
in a way that also emphasizes development of CCS technology for
existing coal-fired power plants. Given the broad consensus that the
technology used by these plants will dominate coal-fired power plant
capacity for the next several decades--both in the United States and
around the world--we believe the agency should continue this trend. EPA
has begun to address some of the regulatory uncertainties under the
SDWA that will need resolution for a national CCS program to move
forward, but other key issues associated with other environmental
statutes--such as RCRA, CERCLA, and the NSR provisions of the Clean Air
Act--have not been addressed.
In addition to these key barriers, there is an array of other issues
that would need to be resolved if the technology is to be deployed
within a time frame scientists believe is needed to address climate
change. Moreover, whereas many of the technical and regulatory issues
discussed earlier fall within the domain of two key agencies (DOE and
EPA), these other issues cross the jurisdictions of the Departments of
the Interior and Transportation, FERC, and other agencies in a manner
that would require collaboration between agencies and, in many cases,
coordination with state governments and other entities. While the DOE-
led CCTP coordinates climate change technology research, development,
demonstration, and deployment among federal agencies, it has not been
tasked with resolving the issues of CO2 pipeline regulation and
infrastructure and liability for stored CO2, among other issues.
Furthermore, officials from relevant offices within the Departments of
the Interior and Transportation told us they have not yet been invited
to participate in CCTP discussions.
Recommendations for Executive Action:
We recommend that the Secretary of Energy direct the Office of Fossil
Energy to continue its recent budgetary practice of helping to ensure
that greater emphasis is placed on supporting technologies that can
reduce greenhouse gas emissions at existing coal-fired power plants.
We recommend that the Administrator of EPA more comprehensively examine
barriers to CCS development by identifying key issues that fall outside
the agency's SDWA authority. Specifically, we recommend that the
Administrator direct the cognizant EPA offices to collectively examine
their authorities and responsibilities under RCRA, CERCLA, and the
Clean Air Act for the purposes of (1) obtaining the information
necessary to make informed decisions about the regulation of (and
potential liabilities associated with) the capture, injection, and
storage of CO2; (2) using this information to develop a comprehensive
regulatory framework for capture, injection, and underground storage of
CO2; and (3) identifying any areas where additional statutory authority
might be needed to address key regulatory and legal issues related to
CO2 capture, injection, and storage.
We recommend that the Executive Office of the President establish an
interagency task force (or other mechanism as deemed appropriate) to
examine the broad range of issues that, if not addressed proactively,
could impede large-scale commercial CCS deployment and to develop a
strategy for cognizant federal agencies to address these issues. Among
the issues this task force should examine are: (1) identifying
strategies for addressing regulatory and legal uncertainty that could
impede the use of federal lands for the injection, storage, and
transport of CO2; (2) examining how any regulation of carbon emissions
will address leakage of stored CO2 into the atmosphere; (3) developing
an accounting protocol to quantify the CO2 emissions from capture,
transport, injection, and storage of CO2 in geologic formations; (4)
examining CO2 pipeline infrastructure issues in the context of
developing a large-scale national CCS program; (5) developing a public
outreach effort to explain CCS; (6) evaluating the efficacy of existing
federal financial incentives authorized by the Energy Policy Act of
2005 and other relevant laws in furthering the deployment of CCS; and
(7) examining the federal and state resources required to implement the
EPA's expanded UIC program incorporating commercial-scale CCS.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Secretary of DOE and the EPA
Administrator for review and comment. DOE's September 9, 2008, letter
first "commend[s]— the comprehensiveness of this study, including the
analysis of potential barriers to widespread commercialization of CCS
and the potential need for involvement by multiple Federal agencies."
The letter's subsequent comments are also consistent with the report's
recommendations that (1) DOE continue to place greater emphasis on
pursuing increased funding for CO2 emissions control technologies for
existing coal-fired power plants and (2) an interagency task force be
established to examine critical CCS issues and develop a comprehensive
CCS strategy. However, the agency expressed disagreement with our
rationale for placing greater emphasis on CCS technologies applicable
to these facilities and suggests a different approach for the
interagency task force we recommended:
* Placing greater emphasis on existing coal-fired power plants. DOE
says that while it agrees with the report's findings concerning the
importance of pursuing CCS options for existing coal-fired power
plants, these findings incorrectly imply "that DOE has focused too
heavily on the IGCC option for new plants at the expense of retrofit
opportunities." We are not second-guessing decisions DOE made in past
decades. Rather, we are concerned about how the agency can best move
forward in light of the new emphasis on substantially reducing CO2
emissions and the scientific consensus that CCS will be needed to help
reduce emissions.
* Establishing an interagency CCS Task Force. DOE maintained that a
coordinating body--the DOE-led CCTP--already addresses these kinds of
issues. However, the CCTP's scope focuses on technology; it does not
address legal and institutional issues such as the resolution of CO2
pipeline regulation and infrastructure or liability for stored CO2,
among others. In addition, officials from cognizant offices within the
Departments of the Interior and Transportation told us they have not
yet been invited to participate in CCTP discussions. Moreover, we
continue to believe that a more centralized task force, with a broader
scope than the technology-focused CCTP, may be a preferable
alternative.
DOE's letter appears in appendix II, along with our responses to each
of its main points. The agency separately provided technical comments,
which were incorporated in our final report, as appropriate.
EPA's September 12, 2008, letter stated that providing regulatory
certainty on issues related to geological storage of CO2 was a high
priority for the agency and agreed with the intent of our
recommendation--to provide clarity on how the broader range of statutes
within the agency's jurisdiction may apply. The agency noted that it
had made an initial effort to identify and discuss these issues in the
preamble of its July 2008 proposed rulemaking and had requested
comments on many SDWA topics--including some of those identified in our
report. It said it expected further progress on these SDWA topics after
receiving input from stakeholders during the comment period (which
extends through November 24, 2008). EPA did not respond to the
recommendation that an interagency task force be established to examine
critical CCS issues and to develop a comprehensive CCS strategy. The
agency also offered several other comments and clarifications, which
are presented in appendix III, along with our responses.
We are sending copies of this report to the Administrator of EPA; the
Secretary of Energy; the House Select Committee on Energy Independence
and Global Warming; appropriate congressional committees; and other
interested parties. We will also make copies available to others on
request. In addition, the report will be available at no charge on the
GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202)512-3841 or stephensonj@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions
are listed in appendix IV.
Sincerely yours,
Signed by:
John B. Stephenson:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
We were asked to examine (1) the key economic, legal, regulatory, and
technological barriers impeding commercial-scale deployment of carbon
capture and storage (CCS) technology and (2) the actions federal
agencies are taking to overcome barriers to or facilitate the
commercial-scale deployment of CCS technology.
To determine the key economic, legal, regulatory, and technological
barriers impeding commercial-scale deployment of CCS, we reviewed
assessments by the Intergovernmental Panel on Climate Change, the
National Academy of Sciences, federal agencies, nongovernmental
organizations, and academic researchers. We also contacted a
nonprobability sample of stakeholders from industry, including
officials from electric power companies and oil and gas companies, as
well as stakeholders from nongovernmental organizations and academic
researchers. We selected major U.S. energy producing companies, as well
as organizations and researchers that participate actively in ongoing
dialogues on CCS. We also selected a number of smaller companies and
organizations to ensure that we obtained a broader range of
perspectives on key issues.[Footnote 61] We used a semistructured
interview guide to interview these stakeholders and facilitate analysis
of what stakeholders identified as key economic, legal, regulatory, and
technological barriers impeding commercial-scale deployment of CCS. To
obtain federal agency officials' perspectives on key economic, legal,
regulatory, and technological barriers, we conducted interviews with
officials from the Department of Energy's (DOE) Office of Fossil
Energy, the Environmental Protection Agency's (EPA) Office of Ground
Water and Drinking Water and Office of Air and Radiation, as well as
other agencies, primarily in the Department of the Interior and
Department of Transportation.
To examine the actions federal agencies are taking to overcome barriers
to or facilitate the commercial-scale deployment of CCS technology, we
conducted interviews with officials from the DOE's Office of Fossil
Energy and the EPA's Office of Ground Water and Drinking Water and the
Office of Air and Radiation to assess these agencies' efforts to
overcome barriers to or facilitate the commercial-scale deployment of
CCS. Moreover, we reviewed a report by the National Academy of Sciences
assessing DOE's Fossil Energy research and development programs. We
reviewed reports made by two federal advisory committees, the National
Coal Council advising the Secretary of Energy and the Clean Air Act
Advisory Committee advising the EPA Administrator, and asked agency
officials how they were implementing recommendations contained in these
reports. We obtained and analyzed 12 years of DOE budget information,
from fiscal year 1997 through the present, to assess the funding DOE
has provided for various CO2 capture related technologies. We reviewed
the proposed EPA rule for the underground injection of CO2 for geologic
sequestration under the Safe Drinking Water Act. To obtain perspectives
from outside the government, using the methodology described above we
contacted a nonprobability sample of stakeholders and used a
semistructured interview guide to facilitate an aggregate analysis of
stakeholders' assessments of the actions of federal agencies. To assess
the extent to which other federal agencies are overcoming barriers to
or facilitating the commercial-scale deployment of CCS technology, we
also conducted interviews with officials from federal agencies in the
Department of the Interior and Department of Transportation (DOT),
including the U.S. Geological Survey, Bureau of Land Management,
Surface Transportation Board, and DOT's Pipeline and Hazardous
Materials Safety Administration, as well as the Federal Energy
Regulatory Commission. To assess the role of the Climate Change
Technology Program (CCTP) in coordinating CCS-related activities across
federal agencies, we interviewed a senior CCTP official and asked
officials at several federal agencies about their involvement in CCTP
activities. Finally, we attended two stakeholder workshops the EPA held
concerning development of proposed regulations for the underground
injection of CO2 for geologic sequestration under the Safe Drinking
Water Act.
We conducted this performance audit from October 2007 to September 2008
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Energy:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
Department of Energy:
Washington, DC 20580:
September 9, 2008:
Mr. John B. Stephenson, Director:
Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, NW, Room 2T47:
Washington, D.C. 20548:
Dear Mr. Stephenson:
Thank you for the opportunity to review and submit comments on the GAO
draft report: Federal Actions Will Greatly Affect the Viability of
Carbon Capture and Storage As a Key Mitigation Option (GAO-08-1080).
We commend GAO for the comprehensiveness of this study, including the
analysis of potential barriers to widespread commercialization of CCS
and the potential need for involvement by multiple Federal agencies.
Regarding GAO findings related to DOE's CCS research, development and
demonstration (RD&D) activities, we agree with the report's finding
concerning the importance of pursuing CCS options for the sizeable
existing coal power plant fleet. However, we do not believe that GAO
has correctly assessed the significance and priority
of other major components of DOE's CCS program, such as the integrated
gasification combined cycle (IGCC) technology. The report states that
most coal-related emissions will come from existing plants "for many
years to come." It further notes that finding for the IGCC Program has
been much greater that that for the RD&D applicable to existing
pulverized coal power plants, the implication being that DOE has
focused too heavily on the IGCC option for new plants at the expense of
retrofit opportunities. That is not correct. [See comment 1]
emissions for new plants that could be in service for 50 years cannot
be ignored, and current trends indicate that globally many new coal
power plants will continue to be built in coming decades. Of the
various options for combining new coal power plants with CCS, systems
analysis suggests that advanced IGCC subsystems being developed in the
DOE program can lead to a dramatic reduction in the overall costs of
CCS systems. With the addition of lower-cost approached under
development for capturing CO2 in IGCC plants, IGCC/CCS systems have the
potential to be the lowest-cost CCS option for coal power plants. The
goal is to drive CCS cost sufficiently low to encourage large
developing countries such as China and India to eventually deploy CCS
as they continue to build their economic expansion on their large,
domestic coal resource bases. If these countries do not adopt CCS in a
timely manner, it may not be possible to reduce greenhouse gas
emissions sufficiently to limit atmospheric concentrations of GHGs to
acceptable levels. [See comment 2]
The GAO report supports increased funding for CCS retrofit
applications, including DOE's recent increased funding requests. These
funding requests, however, are not the result of recent changes in
DOE's CCS priorities (which should be sustained), as suggested in the
report. ALthough DOE funding for CO2 CCS was relatively modest as
recently as FY 2000, significant work has been underway for much of
DOE's CCS program history on CO2 capture technologies, including
retrofit applications. These technologies were in their infancy when
work first started, and it is important to thoroughly investigate such
technologies at smaller scale for an extended period before it can be
determined if larger-scale testing is justified. As a result, capture
funding has been relatively modest, but is expected to increase as
promising options are ready to be scaled up. [See comment 3]
The GAO report also raises the question of priorities based on
significantly higher current DOE funding for CO2 storage versus capture
activities. This funding difference again reflects where different
activities are in the RD&D funding pipeline. CO2 storage technology is
built on decades of petroleum industry experience, and this has allowed
work in this area to progress rapidly to field testing. Field testing
is expensive, particularly due to the cost of CO2, and thus storage
activities currently account for a relatively large share of the
Sequestration Program budget. [See comment 4]
Finally, regarding the GAO recommendation that an interagency task
force be established to develop a strategy addressing CCS
commercialization barriers, addressing such barriers is already an
important focus of the existing interagency U.S. Climate Change
Technology Program. This program is lead by DOE, has an experienced
staff, resources, and includes representation from relevant Federal
agencies. CCTP was authorized by the Energy Policy Act of 2005, Title
XVI, and directed to develop such strategies, and work is underway. The
recommended strategy could be carried out under this Program without
the organizational and delay issues that would likely occur if a new
group were constituted to address the complex task being proposed. [See
comment 5]
Additional general and detailed comments are attached. If you have any
questions, you may direct them to Kevin Clark, Audit Liaison, 301-903-
4293.
Sincerely,
James A. Slutz:
Assistant Secretary (Acting):
Office of Fossil Energy:
The following are GAO's comments on the Department of Energy's letter
dated September 9, 2008.
GAO Comments:
1. DOE says that while it agrees with the report's findings concerning
the importance of pursuing CCS options for existing coal-fired power
plants, these findings incorrectly imply "that DOE has focused too
heavily on the IGCC option for new plants at the expense of retrofit
opportunities." We are not second-guessing decisions DOE made in the
decades before concerns about carbon dioxide (CO2) emissions had taken
on the prominence they have today. Rather, we are concerned about how
the agency can best move forward in light of the new emphasis on CO2
emissions and the scientific consensus that CCS will be needed to help
deal with them.
2. DOE says that even though CO2 emissions from existing plants are
important, current global trends indicate that many new coal power
plants will continue to be built in coming decades and that many would
choose IGCC as the lowest-cost CCS option if it were available.
However, a DOE report, Tracking New Coal-Fired Power Plants, indicates
that the new coal fired power plants currently being built and
permitted in the United States are predominately using pulverized coal
technologies, with a smaller number of plant operators opting for IGCC
technology. Furthermore, DOE cites the importance of controlling CCS
emissions in developing countries--in particular, China and India.
However, the International Energy Agency states that "the expansion of
coal-fired generation in China will continue to be based on pulverized
coal" and observes that all of India's operating coal-fired power
plants use a form of pulverized coal technology. That said, our report
does not call for a radical shift in focus from IGCC to conventional
technology, but rather a budgetary strategy that appropriately reflects
a greater emphasis on developing capture technologies that could be
applied to existing pulverized coal power plants. As our draft report
noted, such a strategy has in fact already been reflected in recent DOE
budgets.
3. DOE acknowledges that it has recently increased requested funding
for CCS technologies applicable to existing plants, but states that the
increase does not necessarily reflect a higher priority. Rather, the
increase reflects an evolution of the technology development process.
Specifically, it is now moving from investigating such technologies
from a less costly small scale to the point where costs rise as
technology development is "scaled up." Recent statements by the agency,
however, suggest that research applicable to existing coal-fired power
plant technologies do warrant a higher priority. In particular, DOE's
recent funding announcement for CCS technology development for existing
pulverized coal power plants states that this funding opportunity is
"driven by the fact that existing coal-fired power plants produce a
sizeable portion of current CO2 emissions from all fossil fuel-based
sources, and that only about 6 GW of the existing coal-fired
electricity generating fleet is projected to retire by 2030."
Similarly, in our discussions with DOE fossil energy officials about
their fiscal year 2008 budget priorities, they pointed to language in
House Report 110-185, which recommended "a rigorous research program on
the potential for retrofitting existing coal plants for CO2 capture and
sequestration."
4. DOE questions the report's observation that funding for CO2 storage
has been significantly higher than the resources devoted to CO2
capture, noting that the higher funding level for storage-related
activities reflects the fact that it has evolved to the point where
advances in storage would now require expensive field-testing. We do
not dispute the need to invest in the field-testing of storage
activities. Rather, we note that timely CCS deployment will occur only
if progress is made with both capture and storage and that considerably
more progress is needed on the capture front. A comprehensive CO2
storage capability will mean little if there is no CO2 to store.
5. DOE maintains that a coordinating body--the DOE-led Climate Change
Technology Program (CCTP)--already addresses CCS-related issues.
However, the CCTP's scope focuses on technology; it does not address
legal and institutional issues such as CO2 pipeline regulation and
infrastructure or liability for stored CO2, among others. In addition,
officials from cognizant offices within the Departments of the Interior
and Transportation told us they have not yet been invited to
participate in CCTP discussions. Moreover, we continue to believe that
a more centralized task force, with a broader mission than the
technology-focused CCTP, may be a preferable alternative.
[End of section]
Appendix III: Comments from the Environmental Protection Agency:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
United States Environmental Protection Agency:
Office of Water:
Washington, D.C. 20460:
[hyperlink, http://www.epa.gov]
September 12, 2008:
John B. Stephenson:
Director, Natural Resources and the Environment:
Government Accountability Office:
Washington, DC 20548:
Dear Mr. Stephenson:
Thank you for the opportunity to review the draft Government
Accountability Office (GAO) Report: Federal Actions Will Greatly Affect
the Viability of Carbon Capture and Storage as a Key Mitigation Option
(GAO-08-1080), dated September 2008. The Environmental Protection
Agency (EPA) coordinated with your Office throughout the study and
provided additional material at your request, and our professional
staff was made available for a number of meetings. I want to compliment
the professional manner in which your staff conducted the study. We
appreciate their positive responses to the comments we provided on
earlier drafts.
Our three major areas of concern are related to authorities under the
Safe Drinking Water Act (SDWA); the discussion of the interplay with
the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) and the Resource Conservation and Recovery Act (RCRA); and
several key issues related to Geologic Sequestration (GS) but outside
the authority of the SDWA. We will provide you the primary concerns
within this letter and hope that these can be addressed in the final
version of your GAO report.
EPA recognizes the importance of Carbon Capture and Storage (CCS) in
contributing to CO2 emissions reductions and is committed to working
with both governmental and external partners to facilitate deployment
of this technology in a safe and reliable manner. For over twenty-five
years, the Underground Injection Control (UIC) program has successfully
protected our nation's drinking water resources by regulating the
underground injection of fluids and will continue to do so for the
unique case of GS.
EPA comments on discussion of SDWA-related issues:
Early in the report, GAO suggests that EPA "more comprehensively
examine barriers to CCS development under the Safe Drinking Water Act."
[See comment 1] EPA believes that the recently proposed UIC GS rule
(July 15, 2008) fully covers SDWA-related issues. EPA, working with
partners at the Department of Energy (DOE) and several State regulatory
agencies, proposed these new UIC regulations specifically for
commercial-scale GS. The public comment period is currently ongoing for
this proposed regulation and promulgation of the rule is anticipated in
late 2010 or early 2011. The GAO report includes a preliminary
discussion of the recently proposed UIC rule. We suggest that
information related to this proposed rule should be placed as early in
the report as possible. Although there may be misunderstandings among
certain stakeholders regarding the regulatory framework for CO2
injection, EPA has been clear that there is no regulatory impediment to
seeking a permit for large-volume injection of CO2 under the existing
UIC program. In fact, depending on the nature of the injection
activity, CO2 injection could currently be permitted as a Class I,
Class II or Class V UIC well. The purpose of the Class VI well category
which is proposed in EPA's rule is to provide a more appropriate well
classification for program implementation of this technology on a large
scale.
The draft report mentions 'ambiguity' regarding whether the operator of
a GS site will remain liable indefinitely for potential problems posed
by leakage of CO2. EPA has been clear during discussions with
stakeholders that, consistent with current UIC regulations under the
SDWA applying to all injection wells, the owner/operator of a GS site
will be held liable indefinitely for potential damages caused by
leakage of CO2. Some stakeholders may feel confused about this issue;
GAO's report, however, should represent EPA's position, which is also
reflected in the proposed rule. [See comment 2]
In addition, the report discusses government indemnification of the
potential liability associated with GS sites. It is important to note
that EPA does not have authority under the SDWA to release or indemnify
injection well owners/operators from long-term liability. Thus, the
report should clarify that it is currently beyond the Agency's
authority to do this. [See comment 3]
Finally, EPA has stated in the proposed Class VI regulation that owners
and operators of GS sites must demonstrate financial responsibility for
the operation and post-injection site care phases of the project.
However, EPA acknowledges the need for additional information and plans
to provide guidance on how additional financial responsibility can be
demonstrated.
EPA comments on GAO discussion of CERCLA and RCRA
The GAO report states that ambiguity exists regarding how CERCLA and
RCRA regulations may apply to GS sites and states that the proposed EPA
UIC-GS rule does not resolve, does not address and is `unclear'
regarding these issues. EPA would appreciate if, at the beginning of
this discussion, GAO would note that EPA has discussed RCRA and CERCLA
issues in the preamble to the proposed regulation. EPA is currently in
the process of further evaluating how CERCLA and RCRA may apply to GS
sites. However EPA's proposed rule is clear that if a CO2 stream meets
the definition of "hazardous waste" it may only be injected under the
existing provisions for a Class I hazardous well, which by definition
is subject to RCRA, and if it falls within certain categories of
hazardous waste, it may not be injected unless EPA grants a RCRA
exemption. Such hazardous waste streams would not be subject to the
proposed Class VI permit. Finally releases of a hazardous substance
beyond the scope of a federally-permitted release may be subject to
CERCLA authorities. [See comment 4]
EPA comments on GAO discussion of issues outside of SDWA authorities:
The UIC proposed regulations include clarifications on the effect of
permits on property rights. [See comment 5] 40 CFR 144.35 (b) and (c)
clearly state that the issuance of a permit does not convey any
property rights of any sort, or any exclusive privilege, and the permit
does not authorize any injury to the persons or property or invasion of
other private rights, or any infringement of State or local law or
regulations. While EPA's proposed rule includes a discussion of how
regulations may impact these issues, EPA does not have the authority to
propose federal regulations related to property rights. To be clear,
EPA does not anticipate resolving issues outside the scope of the SDWA
in the context of the regulatory action recently proposed under the UIC
program. [See comment 6]
EPA response to specific GAO recommendation:
GAO recommends that EPA offices "collectively examine their authorities
and responsibilities under RCRA, CERCLA, and the Clean Air Act..."
Providing regulatory certainty on issues related to GS is a high
priority for the Agency and EPA agrees that it is important to provide
clarity on the various statutes that may apply. EPA made an initial
effort to identify and discuss issues related to SDWA, RCRA and CERCLA
in the preamble of its July 2008 proposal and specifically requested
comments on various topics including some of those identified by GAO.
We hope that the input we receive through the public comment process,
in combination with our own efforts to work across EPA to assess
implications of these various statutes on GS, will shed more light on
these important issues.
We have a few additional comments on the draft final report which we
are providing as an enclosure to this letter. Again, we appreciated the
opportunity to coordinate with your staff on this project. Should you
need additional information or have further questions, please let me
know. You may also contact Cynthia C. Dougherty, Director of the Office
of Ground Water and Drinking Water, at (202) 564-3750.
Sincerely,
Signed by:
Benjamin H. Grumbles:
Assistant Administrator:
Enclosure:
The following are GAO's comments on the Environmental Protection
Agency's letter dated September 12, 2008.
GAO Comments:
1. EPA says that its recently-proposed UIC rule fully covers Safe
Drinking Water Act (SDWA)-related issues. We have modified the report
to more fully reflect the work that EPA is doing to examine SDWA-
related barriers to CCS deployment. However, while we acknowledge that
the proposed rule discusses and seeks comments on many issues, we
continue to believe that it leaves many of these issues unresolved.
While EPA's proposed rule prohibits the injection of CO2 above the
lowermost formation containing an underground source of drinking water,
EPA is still exploring whether the UIC director should be given the
authority to approve such an injection--an issue that can affect
whether unmineable coal seams are used for CO2 storage.
2. EPA suggests that the report should state EPA's position on whether
the operator of an injection well will remain liable indefinitely for
potential problems posed by leakage of CO2. Pages 23 and 39 of the
draft report did in fact state that well operators remain responsible
indefinitely for any endangerment for underground sources of drinking
water caused by such leakage. However, the draft report also addressed
other unresolved liability issues of concern to stakeholders, which are
unrelated to endangerment of underground sources of drinking water. We
have added language to further emphasize these issues.
3. EPA says that it is important to note that the agency does not have
authority under the SDWA to release injection well owners or operators
from long-term liability. The draft report had already done so on page
39 and 40, where it explained that EPA does not have the statutory
authority to release well owners or operators from liability or
transfer financial responsibility from the well owner or operator to a
third party. In response to EPA's comments, we have added language to
the report to further clarify this point.
4. EPA suggests that GAO note in its final report that EPA had
discussed RCRA and CERCLA issues in the preamble to its proposed rule.
The draft report had, in fact, mentioned that EPA addressed RCRA and
CERCLA issues in the preamble. For example, page 42 of the draft noted
that the preamble explained that pure CO2 in and of itself is not
listed as a hazardous substance under CERCLA, and cautioned that
injected CO2 streams could contain hazardous constituents that would
make these streams "hazardous." That said, we continue to believe that
the preamble's limited treatment of these issues still leaves much to
be resolved about the implications of the Resource Conservation and
Recovery Act (RCRA) and the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) for CO2 sequestration.
Specifically, EPA suggests that determinations about whether injected
CO2 is a hazardous waste or substance will be made on a case-by-case
basis. Moreover, EPA says it is "currently in the process of further
evaluating how CERCLA and RCRA may apply to [geologic sequestration]
sites."
5. EPA notes that the proposed rule includes clarifications on the
effect of permits on property rights. However, these effects were not
among the property rights-related issues of greatest concern to the
stakeholders we interviewed. As we stated in the report, these
stakeholders told us they were concerned about a lack of clarity
regarding ownership of injected CO2 and ownership of geologic
formations.
6. Notwithstanding the permit-related property rights issues raised in
comment 5 above, EPA explains that it does not have the authority to
propose federal regulations related more broadly to property rights
issues. We agree that EPA's authority does not extend to many of these
issues discussed in the report, which is why the report notes that the
resolution of this and other issues will require the involvement of
other federal agencies and, in some cases, states.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
John B. Stephenson, (202) 512-3841 or stephensonj@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Steve Elstein, Assistant
Director; Chuck Bausell; Cindy Gilbert; Katheryn Summers Hubbell;
Michael O'Neill; Ben Shouse; Jeanette Soares; and Michelle Woods made
major contributions to this report. Additional assistance was provided
by Katherine M. Raheb and Melinda Cordero.
[End of section]
Footnotes:
[1] CCS can also be used to reduce the CO2 emissions from industrial
production of hydrogen, chemicals, substitute natural gas, and
transportation fuels.
[2] The International Energy Agency (IEA) is an intergovernmental
organization founded in 1974 that acts as energy policy advisor to 27
member countries. The IEA's current work focuses on climate change
policies, market reform, and energy technology collaboration and
outreach.
[3] The Intergovernmental Panel on Climate Change (IPCC) is a
scientific body set up by the World Meteorological Organization and by
the United Nations Environment Programme. The IPCC was established to
provide decision makers with an objective source of information about
climate change.
[4] Results from nonprobability samples cannot be used to make
inferences about a population. This is because, in a nonprobability
sample, some elements of the population being studied have no chance or
an unknown chance of being selected as part of the sample.
[5] The IPCC notes that these emissions include those from the
production, distribution, and consumption of fossil fuels and as a by-
product from cement production. The data from 2004 and 2005 are interim
estimates.
[6] CCS is not considered suitable for reducing emissions from the
transportation, residential, and commercial sectors because sources in
these sectors tend to emit small quantities of CO2.
[7] The IEA's 2007 World Energy Outlook also assesses two alternative
scenarios. These include a scenario in which world demand for energy
and coal generally increases less than otherwise expected due to
changes in government policies that address climate change concerns and
a scenario in which world demand increases more than otherwise expected
due to higher rates of economic growth in China and India.
[8] This report focuses primarily on pre-and post-combustion capture.
[9] When the temperature and pressure of CO2 are increased, the CO2
enters a fluid, or supercritical state.
[10] An exception is made for groundwater remediation at hazardous
waste sites.
[11] Class V wells are typically shallow wells that place a variety of
fluids directly below the land surface.
[12] EPA administers the UIC program in 10 states and for all Indian
tribes.
[13] National Coal Council, Technologies to Reduce or Capture and Store
Carbon Dioxide Emissions (June 2007).
[14] The IEA defines large scale as injecting over 0.5 Mt (500,000
metric tons) per year.
[15] The IPCC Special Report on CCS notes that some of the CO2 captured
from natural gas processing and ammonia production facilities is used
for enhanced oil recovery, a process which may result in the
sequestration of a substantial amount of the CO2 from the atmosphere.
[16] Howard Herzog and Dan Golomb, "Carbon Capture and Storage from
Fossil Fuel Use," Encyclopedia of Energy, 2004.
[17] Department of Energy, National Energy Technology Laboratory, Cost
and Performance Baseline for Fossil Energy Plants--Volume 1: Bituminous
Coal and Natural Gas to Electricity, Final Report (2007).
[18] DOE officials told us these estimates were based on Cost and
Performance Baseline for Fossil Energy Power Plants--Volume 1.
[19] International Energy Agency, Energy Technology Perspectives 2008:
Scenarios and Strategies to 2050 (Paris, 2008).
[20] DOE officials told us that the study was based on current
technology and not on possible advanced technology being developed.
[21] MIT, The Future of Coal (2007).
[22] The National Coal Council, Technologies to Reduce or Capture and
Store Carbon Dioxide Emissions.
[23] Nearly all existing coal-fired power plants are pulverized coal
power plants.
[24] MIT, The Future of Coal.
[25] Department of Energy, National Energy Technology Laboratory,
Carbon Dioxide Capture from Existing Coal-Fired Power Plants (2007).
[26] The National Coal Council, The Urgency of Sustainable Coal
(Washington D.C., 2008).
[27] IPCC, IPCC Special Report on Carbon Dioxide Capture and Storage
(2005).
[28] J.M. Antle, University Fellow, Resources for the Future, Is There
a Role for Geologic and Terrestrial Carbon Sequestration in Greenhouse
Gas Mitigation? (February 2008).
[29] GAO, Air Pollution: Allowance Trading Offers an Opportunity to
Reduce Emissions at Less Cost, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/RCED-95-30] (Washington, D.C.: December 16, 1994) and
Air Pollution: Overview and Issues on Emissions Allowance Trading
Programs, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-97-
183] (Washington, D.C.: July 9, 1997).
[30] Edward S. Rubin et al, "Use of Experience Curves to Estimate
Future Cost of Power Plants with CO2 Capture," International Journal of
Greenhouse Gas Control, vol. 1, issue 2 (2007).
[31] EU member states can seek to include CCS projects in their
national emission cap by gaining approval from the European Commission
on a case-by-case basis.
[32] EU Commission Staff Working Document, accompanying document to the
Proposal for a Directive of the European Parliament and of the Council
on the Geologic Storage of Carbon Dioxide (January 23, 2008).
[33] Syngas is the gas produced by the gasification process, composed
of hydrogen, carbon monoxide, and minor amounts of other constituents.
While DOE considers the gas stream amenable to CO2 recovery, CO2
capture was not actually demonstrated in the projects.
[34] Jose D. Figueroa, Timothy Fout, Sean Plasynski, Howard McIlvried,
and Rameshwar D. Srivastava, "Advances in CO2 capture technology-The
U.S. Department of Energy's Carbon Sequestration Program,"
International Journal of Greenhouse Gas Control, vol. 2 (2008).
[35] National Research Council, National Academy of Sciences, Energy
Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy
Research 1978 to 2000 (Washington, D.C., 2001).
[36] National Academy of Sciences, Energy Research at DOE: Was It Worth
It?
[37] National Research Council, National Academy of Sciences,
Prospective Evaluation of Applied Energy Research and Development at
DOE (Phase Two) (Washington, D.C., 2007).
[38] DOE, Cost and Performance Baseline for Fossil Energy Plants--
Volume 1.
[39] DOE, Cost and Performance Baseline for Fossil Energy Power Plants-
-Volume 1.
[40] National Academy of Sciences, Prospective Evaluation.
[41] The National Coal Council, The Urgency of Sustainable Coal.
[42] 31 U.S.C. § 3302(b).
[43] The proposed rule's preamble notes that if a CO2 stream contains
hazardous waste as a constituent, it must be permitted as a Class I
well. Class I wells are intended for hazardous materials.
[44] Clean Air Act Advisory Committee Advanced Coal Technology Work
Group, Final Report of the Advanced Coal Technology Work Group (Jan.
29, 2008).
[45] Pub. L. No. 110-140 (2007).
[46] FERC has jurisdiction over interstate pipelines that transport oil
or natural gas. STB has jurisdiction over interstate pipelines that
transport a commodity other than water, gas, or oil.
[47] 15 U.S.C. § 717a(5).
[48] Cortez Pipeline Company, 7 F.E.R.C. ¶ 61,024 (1979).
[49] Id.
[50] Testimony of the Honorable Joseph T. Kelliher, Chairman, Federal
Energy Regulatory Commission, before the Committee on Energy and
Natural Resources, United States Senate, January 31, 2008.
[51] 49 U.S.C. § 15301.
[52] 45 Fed. Reg. 85,178 (Dec. 24, 1980); 46 Fed. Reg. 18,805 (Mar. 26,
1981).
[53] DOE officials note that several of the Regional Partnerships,
including the Southwest, West Coast, Southeast, Midwest, and Plains CO2
reduction partnerships, have completed or are working on pipeline
studies for their individual regions.
[54] Pub. L. No. 110-140 (2007).
[55] IPCC, IPCC Special Report on Carbon Dioxide Capture and Storage.
[56] IPCC, IPCC Special Report on Carbon Dioxide Capture and Storage
(2005); National Academy of Sciences, Prospective Evaluation; and
Congressional Research Service, Community Acceptance of Carbon Capture
and Sequestration Infrastructure: Siting Challenges (July 2008).
[57] National Academy of Sciences, Prospective Evaluation.
[58] Clean Air Act Advisory Committee Advanced Coal Technology Work
Group, Final Report of the Advanced Coal Technology Work Group.
[59] EU Commission Staff Working Document, accompanying document to the
Proposal for a Directive of the European Parliament and of the Council
on the Geologic Storage of Carbon Dioxide, January 23, 2008.
[60] Specifically, EPA officials told us they are developing a proposal
that would require "upstream" producers and "downstream" sources above
appropriate thresholds to report their greenhouse gas emissions.
[61] Results from nonprobability samples cannot be used to make
inferences about a population. This is because, in a nonprobability
sample, some elements of the population being studied have no chance or
an unknown chance of being selected as part of the sample.
[End of section]
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