Carbon Capture and Storage

Carbon capture and storage technology is becoming more important across the U.S. as policymakers deal with a balancing act—how to mitigate climate change while keeping the cost of electricity down.

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Executive Summary:

Coal-fired power plants constitute the largest source of greenhouse gas emissions from the electricity sector, producing 27 percent of all U.S. emissions.  Coal-derived electricity makes up nearly 50 percent of the electricity generation market and cannot simply be abandoned.

Carbon capture and storage technology, however, can help ensure that relatively low-cost electricity will continue to be produced from America’s abundant supply of coal while capturing and sequestering approximately 90 percent of emissions. Numerous technical, regulatory and legal obstacles, however, must first be overcome. Policymakers have several options for advancing carbon capture and storage, including defining pore-space ownership (i.e. who owns the subsurface area where CO2 will be stored); establishing liability limits and providing incentives such as cost-recovery and property and income tax breaks.

Balancing Electricity Generation and Greenhouse Gas Emissions

Carbon capture and storage technology is becoming more important across the U.S. as policymakers deal with a balancing act—how to mitigate climate change while keeping the cost of electricity down. That is especially challenging since 42 percent of all carbon dioxide—or CO2—emissions in the U.S. come from electricity generation, 1 and coal-fired power plants constitute the largest source of greenhouse gas emissions from the electricity sector, producing 27 percent of all U.S. emissions.2

These coal-fired plants represent a significant target for policymakers because they are stationary, unlike transportation sources, and thus simpler to monitor and control.  Coal-derived electricity makes up nearly 50 percent of the electricity generation market and cannot simply be abandoned. Carbon capture and storage technology can help ensure that relatively low-cost electricity will continue to be produced from America’s abundant supply of coal while capturing and sequestering approximately 90 percent of emissions.

Numerous technical, regulatory and legal obstacles, however, must first be overcome. This brief provides an overview of carbon capture and storage technology, the challenges it faces, and what state leaders can do to advance carbon capture and storage into widespread application.

How Carbon Capture and Storage Works
The idea behind carbon capture and storage is this: CO2 emissions from power plants are captured after—or in some cases before—coal is burned for electricity. The emissions are compressed, then transported in pipelines and stored deep underground—most likely in saline reservoirs— for an indefinite period of time. The processes are in fact still evolving. Different capture technologies provide unique challenges, and storage and regulatory uncertainties remain.

Capture: Two different capture technologies exist today, with a third—oxy-fuel—now in the demonstration phase.3 Postcombustion capture is the primary method used for pulverized coal plants, which represent the majority of plants in operation. This type of capture involves using a chemical solvent to separate CO2 from the flue gas (the gases that are produced during the combustion of coal).4

Pre-combustion capture, meanwhile, will likely be applied to new Integrated Gasification Combined Cycle plants. The process involves gasifying coal to create a synthesis gas rather than burning it directly. Though pre-combustion capture is a more expensive and complicated method, it allows more CO2 to be captured because higher concentrations of CO2 exist in the gas stream, thus making removal more efficient.5

Because energy is required to capture and compress CO2, power plants need an additional 10 to 40 percent capacity, depending on the type of generating technology used at the plant, to achieve the same output of a generating plant without carbon capture and storage. 6 Expanding output to remain at current levels will therefore increase the cost of electricity. A study by the Electric Power Research Institute—a non-profit firm that conducts research on electricity generation and delivery as well as related policy analyses—found that implementing carbon capture and storage would raise the cost of electricity between 40 and 60 percent depending on the plant and capture technology used.7

Transport: In addition to capture technology, more pipeline infrastructure is needed to transport the CO2 to storage sites. Approximately 3,600 miles of CO2 pipelines in the U.S. bring the gas to oil fields for enhanced oil recovery,8 so there is already significant expertise in the design and construction of pipeline infrastructure. Many more thousands of miles will need to be added to sufficiently address CO2 transportation from the nearly 500 point sources that exist for coal-fired power generation.9 The demand for additional CO2 pipeline capacity will likely unfold relatively slowly and in a geographically dispersed manner. Growth in the pipeline system is estimated to grow between 100 and 1,000 miles per year.  By comparison, from 1950 to 2000, the U.S. natural gas pipeline distribution system grew at rates that far exceed these projections.10

Storage: The majority of storage is expected to be in saline reservoirs, which will trap the CO2 in porous rock formations deep underground. (The CO2—which becomes a liquid when pressurized at depths—will migrate through these spaces horizontally and eventually will either form solid carbonates with minerals in the saline or dissolve in the brine, making storage permanent.11) Other potential storage sites include declining or depleted oil and gas fields, which are useful for enhanced oil recovery and will offset some of the costs associated with carbon capture and storage, unmineable coal seams and basalt formations—solidified lava fields typically  found in the upper Northwest.

Once the CO2 is pumped deep underground (around 800 meters), a cap rock —a nonporous rock layer—above the injection site prevents the CO2 from  migrating to the surface and seeping into groundwater or dispersing into the air. Experience with CO2 injected for enhanced oil recovery shows that leakage is highly unlikely. Norway’s Sleipner Project, for example, has been injecting approximately 1 million tons of CO2— considered commercial scale—into a North Sea saline reservoir over the past 13 years with no leaks and none projected through computer modeling.12 The other primary concern associated with storage is the effect of increased pressure from the gas on the surrounding geology.13

To help set guidelines and facilitate carbon capture and storage deployment, the Department of Energy’s National Energy Technology Laboratory’s goal is creation of a system that captures 90 percent of emissions, stores those emissions with 99 percent permanence (i.e. less than one percent of all CO2 captured is permitted to escape), and results in only a 10 percent increase in the cost of electricity by 2012.14 Competition among technologies is expected to result in selection of the most efficient method.15


Source for Illustration: Statoil
Source for Illustration Notations: The Ocean Acidification Network
Source for Directional Arrows: Bellona, “Security of CO2 Storage in Norway,”
Semere Solomon and Intergovernmental Panel on Climate Change (IPCC)

Impediments to Deployment:
Cost is perhaps the most prominent hurdle for carbon capture and storage. A study by the National Energy Technology Laboratory found that the cost of electricity could increase by 70 to 100 percent.16 Older plants in particular are subject to higher overall costs, as conducting retrofits will require extensive upgrades. For newer plants, especially Integrated Gasification Combined Cycle plants, much of the technology will already come preinstalled and adding carbon capture systems will be cheaper. However, the cost of carbon avoided is expected to be around $150 per ton,17 which leaves little incentive for electricity producers to deploy carbon capture and storage technologies until mandated to do so.

The existing technology for carbon capture and storage has not been applied on a commercial scale—that is, to plants larger than 500 megawatts—raising questions about full-scale implementation. In addition to those economic and technical hurdles, regulatory obstacles also remain. For example, legal issues surrounding liability for the storage site—who holds it and for how much and how long—need to be addressed. Because the carbon is supposed to remain underground for thousands of years and companies that capture and store carbon are unlikely to be around for the geologic time scales expected to contain the carbon, a governmental body will likely be needed.18

Additional questions arise over how, and to what extent, monitoring and verification of stored CO2 will need to be done,19 to what extent states and the federal government should be involved in setting regulations, and whether the federal government should have primacy to ensure compatible design.

States’ Role
As is often the case, states are taking the initiative in drafting legislation that supports and defines activities related to carbon capture and storage. In 2008, Wyoming enacted pore-space legislation that grants surface owners rights to subsurface space and legislation requiring the state Department of Environmental Quality to develop regulations for long-term CO2 storage,20 both of which will help clarify and guide carbon capture and storage development for power generators.

The Carbon Capture and Storage Regulatory Project—a partnership between Carnegie Mellon University, the University of Minnesota, Vermont Law School and the law firm of Van Ness Feldman to draft policy recommendations and regulatory approaches for carbon capture and storage — identified 21 states as of July 2009 that have adopted legislation that covers permitting and/or property rights (defining who owns the subsurface space and what permits are needed to move forward), or that establishes incentives such as tax breaks.21

States have taken a varied approach to aspects of carbon capture and storage legislation, such as setting performance standards for performance measurement (Washington requires 99 percent permanence for 1,000 years; Kansas’ legislation does not quantify length of time or containment requirements22) and specifying the oversight agency. Risk assessments— such as health and environmental impact studies—are also essential, though costs of conducting the assessments need to be weighed against potential benefits.23  Those potential risks will require states to carefully consider expectations for geological sequestration, how it will function, and what rules neighboring states have since most geological repositories cross state boundaries.

The Federal Role in Carbon Capture and Storage
The American Recovery and Reinvestment Act of 2009 provided $3.4 billion for carbon capture and storage research.24 In addition, the federal government made available $8 billion in loan guarantees and a little more than $3 billion in tax credits. 25 The government hopes that these measures will help advance research to improve system efficiency and create cheaper capture methods, thereby reducing costs and spurring deployment. But that is unlikely to happen until there is a price for carbon, because utilities will be reluctant to undertake any excess cost, regardless of how cheap it is,26 with one exception, which is discussed below. Cap and trade legislation, which the House approved in June and the Senate will consider this fall, addresses that issue.

Beginning in 2003, the Department of Energy created seven regional partnerships with industry to explore carbon capture and storage. Those partnerships are beginning to use injection wells to determine storage permanence at a commercial scale. Because different circumstances including geology prevail in each region, the partnerships were created to address these issues on a regional basis. In total, the partnerships encompass 97 percent of coal-fired CO2 emissions and all of the different  geologies available for sequestration. Large scale injections of CO2, the third phase of the project, will begin in spring 2010. Phases one and two estimated the potential for CO2 storage and validated that potential through small-scale tests.27

To address legal uncertainties, the Environmental Protection Agency is proposing to regulate CO2 under its Underground Injection Control program. This falls under the Safe Drinking Water Act, which regulates well injections and would require a stringent Class VI well for geological sequestion.28 The Underground Injection Control program will likely set baseline standards for injection and allow states to adopt more stringent rules if desired.  There is a concern, however, that the program is not extensive enough for application here because its focus is on protecting groundwater and does not specifically address climate. It may be that an agency specifically tasked with regulating CO2 might be better suited to the task.29

The Role of Partial Capture
A recent Massachusetts Institute of Technology study indicated that partial capture—capturing 20 percent or less of emissions—might be the best initial option for pulverized coal plants, which would run a post-combustion system. The benefit of partial capture is that it can allow power generators to install capture systems at substantially lower capital costs than the cost of installing full capture systems. In addition, it allows time to determine how well capture and storage systems work and what changes, if any, are needed. The MIT study maintains that incremental steps will help spur deployment of carbon capture and storage. (In anticipation of a cap and trade system, utilities, reluctant to experiment with fullscale carbon capture and storage, may take advantage of partial capture to gain advantage over competitors.) Systems that run on partial capture could then be upgraded to full capture.30

Conclusion
Carbon capture and storage presents a real opportunity to reduce carbon dioxide emissions and maintain continued use of coal at an affordable price. However, carbon capture and storage technology will not be deployed until clear requirements to do so are enacted—either in the form of a price on carbon or a regulatory performance mandate for power plants. Federal research and development funding will help drive down the cost by improving efficiency and creating new methods, especially for capture, but state officials can help further drive carbon capture and storage deployment by enacting legislation that defines requirements for transport and storage of CO2 and that establishes liability limits, defines pore-space ownership, and sets up monitoring and verification protocols.

Policy Checklist
Policymakers should consider the following checklist for advancing carbon capture and storage:
1. Define pore-space ownership (i.e. who owns the subsurface area where CO2 will be stored);
2. Establish liability limits;
3. Provide incentives such as costrecovery and property and income tax breaks;
4. Facilitate pipeline development and siting;
5. Determine appropriate oversight agency; and
6. Encourage partial capture.


AEP Mountaineer Power Plant in West Virginia


Carbon capture facility at American Electric Power’s Mountaineer Plant in New Haven,
West Virginia. The facility arose from a partnership between American Electric Power
(AEP) and Alstom, an international company providing technologies for power generation
and rail transport. The facility’s post-combustion process is designed to capture
at least 100,000 metric tons of CO2 annually.
Source for Photo and Caption Information: AEP

Resources
The following sites contain useful information for state officials interested in acquiring greater knowledge about carbon capture and storage regulations and research:
CCSReg

World Resources Institute

National Energy Technology Laboratory: http://www.netl.doe.gov/technologies/carbon_seq/index.html
Regional Partnerships: http://fossil.energy.gov/sequestration/partnerships/index.html
CSG Carbon Capture and Storage Resolution: http://www.csg.org/knowledgecenter/docs/
ResolutiononCarbonCaptureStoragePolicy.pdf

References
1 Folger, Peter. “Carbon Capture and Sequestration,” Congressional Research Service (CRS). June 19, 2009, p. 1.
2 Pew Center on Global Climate Change. “Carbon Capture and Storage,” Climate TechBook. May 2009, p. 1.
3 Intergovernmental Panel on Climate Change (IPCC). "Carbon Dioxide Capture and Storage, Summary for Policymakers. September 2005, p. 5.
4 Ibid, 5.
5 Pew Pew Center on Global Climate Change, 2; IPCC, 5.
6 IPCC, 4.
7 Electric Power Research Institute (EPRI). “The Power to Reduce CO2 Emissions: The Full Portfolio.” August 2007, p. 3–12.
8 Folger, 8.
9 Energy Information Administration (EIA). “Coal
10 Dooley, JJ, RT Dahowski, and CL Davidson. “Comparing Existing Pipeline Networks with the Potential Scale of Future U.S. CO2 Pipeline Networks,” Energy Procedia, Vol. 1, Issue 1. February 2009, Pages 1595-1602.
11 National Energy Technology Laboratory (NETL). “What is the Status of Geologic and Terrestrial Field Projects?” Carbon Sequestration FAQ Portal.
12 CRS, 11.
13 Pollack, Melissa and Wilson, Elizabeth. “Regulating Geologic Sequestration in the United States: Early Rules Take Divergent Approaches.” Environmental Science & Technology, Vol. 43, No. 9, 2009, 3039.
14 National Energy Technology Laboratory (NETL). “Carbon Sequestration Program Goals.”
15 Center for Energy and Economic Development (CEED). "Carbon Capture."
16 NETL. “What are the Costs and Benefits of Carbon Capture and Sequestration?”  Carbon Sequestration FAQ Portal.
17 U.S. Department of Energy (DOE). “Carbon Capture Research.”
18 Pollack. 3039.
19 Ibid. 3039.
20 Council of State Governments. "Carbon Sequestration." Suggested State Legislation (SSL), 2010 Cycle, Docket Book B. p. 24.
21 Carnegie Mellon University. "List of U.S. State Bills on CCS."  CCGReg Project.
22 Pollack, 3036, 3039.
23 Pollack, 3039.
24 Folger, 2.
25 Ibid.
26 Folger, summary.
27 DOE, “Carbon Sequestration Regional Partnerships.”
28 Pollack, 3035.
29 Pollack, 3040.
30 Hildebrand, Ashleigh, “Strategies for Demonstration and Early Deployment of Carbon Capture and Storage: A Technical and Economic Assessment of Capture Percentage.” June 2009, p. 111, 112.