If industry could invest in the technologies to capture carbon dioxide releases and either bury them or use them to help produce more oil discoveries, it would be a win-win for the environment and the economy. That's what Energy Secretary Rick Perry said to representatives of the oil industry.The technologies to do so are within reach but they remain expensive. And while the Obama administration had allocated billions to the concept, the Trump administration has submitted budgets to diminish the funding for those projects -- ironic, given the president's support for increasing the production of fossil fuels in this country.
Electricity generation remains the largest contributor of greenhouse gases at 29%; transportation at 27%; industry at 21% while commercial and residential buildings and agriculture are at 12% and 9%, respectively. That's according to the Environmental Protection Agency.
“Integrating technology and deploying CCUS (carbon capture utilization and storage technology) at scale still remains a commercial challenge,” Perry said at a meeting this week before the National Petroleum Council, a 200-member group of industry representatives that advises the energy secretary, in a Reuters story.
The story makes note of a project by Petro Nova, which will be capturing 5,000 tons a day of CO2 in Texas for enhanced oil recovery. But the technology has foundered elsewhere: Southern Co.'s attempt to do so at the Kemper Plant coal plant in Mississippi has gone way over budget and just recently, the plant's operators said that the facility would run exclusively on natural gas.
But the White House is proposing to cut the funds allocated for research and development at the U.S. Department of Energy — monies that go to such early-stage projects that would not ordinarily attract private sector investment. For example, the Office of Energy Efficiency and Renewable energy would see its budget cut by 69% while its Advanced Research Project Agency-Energy would be cut by 93%, all from 2016 levels. That includes the funds for carbon capture and storage.
Despite the president's proposed budget, the coal operators are pushing for public incentives to motivate new capital to flow into ultra-efficient plants and those that are able to capture carbon releases. The result, they say, will produce power plants as clean as today's natural gas units -- a roughly 45% efficiency rate, which is greater than the current 33% figure and which means fewer emissions on the backend. That's a position generally endorsed by former Energy Secretary Ernest Moniz, who served under President Obama.
“The coal industry must build, own and operate these new plants. …,” Moniz said last fall before the Energy Innovation Forum. “Getting the tax credits ... would be a very, very big deal. Having the tax credits in place and the trajectory for carbon reductions, in my view, is what the investment community needs.”
For their part, oil companies are getting behind efforts to price carbon and at least one is investing in the technologies to capture it. Part of that is because oil prices are low and part is because of the pressures they are getting from environmentalists. But those companies would not buck the interest of their shareholders if they didn’t think the investments would pay off.
Consider ExxonMobil Corp., which said last year that it would explore carbon capture and sequestration with a fuel cell company. FuelCell Energy and Exxon said the development of this new technology would “substantially reduce costs” associated with carbon capture and that its process would use carbonate fuel cells to concentrate and capture CO2 from power plants.
They now have a small pilot project going in Alabama -- one that tries to capture carbon from a duel coal and natural gas power plant there, using the CO2 to enhance oil recovery. Their technology also cuts nitrogen oxide, or smog-causing pollutants, by 70%. Their mutual goal, obviously, is to scale up this project and to eventually commercialize it.
Critics, however, say that if the carbon is captured and it is then used to enhance oil recovery, then it would do little to mitigate the level of CO2 getting released into the atmosphere. Meanwhile, an earlier story in Environmental Leader story references the IEA Clean Coal Center which says that capturing and storing CO2 requires massive amounts of energy. That can become cost prohibitive and can cause the cost of electricity to increase by up to 80%.
FuelCell Energy’s Tony Leo, vice president of application engineering and new technology development, told Environmental Leader in that same story that the two companies’ technology reduces costs “because the fuel cells are producing power while efficiently capturing and concentrating the CO2. The power has value and can be sold."
The oil sector is allocating capital to cleaner energies and modern technologies because it sees market potential. And while Energy Secretary Perry's words may be encouraging, many in industry would rather those sentiments get expressed in the upcoming budget talks.
