Engineers at the University of Texas at Austin have designed a pioneering project to capture carbon dioxide emissions from the existing Mustang natural gas power plant in West Texas. If built, the project could help kickstart an industry to clean up America’s energy sector after a decade of false starts.
The protest against carbon capture is an extension of environmentalists’ long-held opposition to most uses of fossil fuels, especially coal, as well as nuclear energy because of the pollution and toxic waste they leave behind. The difference here is a technology that can potentially provide much cleaner fossil fuel power that greens reject anyway as a cynical scheme by industry to extend the life of coal and gas plants and slow the rollout of renewable energy.
“Carbon capture in the power sector is a documented ploy to keep the fossil fuel industry profits going,” says John Noel, a senior climate campaigner at Greenpeace USA. “We shouldn’t be giving incentives to polluting industries to capture CO2.”
But even as wind and solar power expand, energy experts say, natural gas will remain a mainstay of America’s electrical grid for the foreseeable future because it’s cheap and more reliable than intermittent renewables. The irony is that if environmentalists can convince their Democratic allies in Congress to block tax credits for carbon capture technology, the large U.S. fleet of gas plants will continue to be a major polluter for decades to come—accelerating the warming of the planet that they seek to avoid.
“Pulling carbon capture for energy off the table could lead to a catastrophic failure of our climate goals to slash emissions,” says Dr. Julio Friedmann, a former Department of Energy official and now an energy policy specialist at Columbia University. “Environmental groups are mistaken to oppose the technology because of the fossil fuel supply it’s associated with. The only point of the technology is to reduce and remove carbon pollution.”
The rollout of carbon capture would be a big and costly affair. An entire industry, with several hundred capture plants just for the power sector alone, would have to be built. That means lots of blue-collar jobs, as President Biden likes to say, but they come at a price. Industry advocates will have to win billions of dollars in government financing to start the buildout—and that’s what environmentalists are trying to stop as Congress begins to debate climate policy.
Groups like Greenpeace and Friends of the Earth wave off the risks of undermining the technology. Emboldened by the falling price of solar and wind energy—thanks partly to the kind of tax credits that they oppose for carbon capture—environmentalists are pushing the country to place its chips on renewables. The dramatic transformation they envision will rapidly push gas and coal power to the sidelines, making carbon capture a waste of tax dollars.
“The majority of new energy coming online in the U.S. today is renewable not only because it’s more sustainable,” says Carroll Muffett, president of the Center for International Environmental Law. “It’s also more economic than building new gas plants.”
Headwinds for Renewables
But in the tricky economics of energy, today’s low prices don’t provide renewables an easy path to dominate the grid. Wind and solar farms provide 11% of America’s energy. Under a best-case scenario, renewables could supply more than 80% in the coming decades. But such a fast expansion faces an economic barrier: the price is expected to jump substantially as energy storage is added to the grid for backup when the sun and wind are down. That could put a drag on growth.
The politics are difficult too. For wind and solar to expand at a more rapid clip, the Biden administration has to win the approval of a clean energy standard. It would force utilities to ramp up production of any form of clean energy they prefer, from renewables and hydro to plants with carbon capture. Uneconomical coal power would disappear even more quickly. But lawmakers from states that depend on fossil fuels for power have in the past opposed such a mandate because it would drive up costs to consumers.
Senator Tina Smith (D-MN) is proposing a fix—a mandate that offers federal grants paid for by taxpayers to utilities to offset the extra costs as long as they hit their clean energy targets. And they will pay fines for missing their marks. Will such a complicated scheme sway key moderate Democratic senators like West Virginia’s Joe Manchin? His support is crucial for the passage of the sweeping measure, which Democrats said will be part of the administration’s upcoming trillion-dollar social spending package.
In a sign of the polarizing debate over carbon capture, more than 700 environmental and advocacy groups signed a letter in May urging lawmakers to vote against the very clean energy mandate that would deliver a revolution in renewables. Why? Because it allows utilities to also use carbon capture and nuclear power to reach their green targets.
These obstacles to a fast expansion of renewables add to the case for carbon capture in the power industry, which produces about a quarter of the country’s greenhouse gas emissions. Earlier this year, a report by the International Energy Agency (IEA), a prominent global research and policy group, bolstered that case, stressing that carbon capture for fossil fuel plants needs to play a major role in the effort to reliably and affordably reach net zero emissions by 2050.
Creating a Carbon Capture Industry
But will the U.S. build a carbon capture industry almost from scratch? Advocates say it would need to cover big polluters like cement makers in addition to electricity producers. Other sectors like steel manufacturing may be too complex to effectively use carbon capture technology anytime soon. So snatching greenhouse gases directly from the ambient air would be needed to offset pollution from these hard to decarbonize parts of the economy.
The size of such an industry would be enormous. Consider that a single carbon capture facility is as big as the power plant it cleans, taking up the space of about three football fields. By 2050 the U.S. may need more than 1,000 of these facilities serving different industries, according to a Princeton University study. In the power sector, each facility can cost from about $300,000 to $1 billion or more.
That’s not all. The industry would need up to 68,000 miles of new pipelines crisscrossing the country to deliver the CO2 to thousands of geologic storage wells, primarily in the Gulf Coast region. The pipelines alone could run about $200 billion.
The U.S. started a piecemeal rollout decades ago, focusing on low-hanging fruit. A dozen commercial facilities are operating today in sectors like ethanol and fertilizer production where the cost of grabbing carbon is low. They make an important statement to counter environmental critics. The technology works.
To rev up this industry, the government would have to pay for it—in the same way that federal dollars helped drive the expansion of wind and solar farms. IEA’s Sustainable Development Scenario laid out the enormousness of the challenge, saying the U.S. needs to capture about 50 times more carbon than it now does—from 25 million tons a year today to 1.2 billion by 2070. As a first step, a set of proposed tax credits now before Congress can get the U.S. about a quarter of the way to that long-term goal by the mid-2030s.
“The role of government is to get carbon capture to that level,” says John Thompson, a chemical engineer and carbon capture specialist at the Clean Air Task Force (CATF). “We have to pay for it. That’s the way it is.”
Of course, other countries will have to hit their marks too. China, the world’s biggest emitter of carbon, is expanding its fleet of coal-fired power plants and carbon capture industry. It needs to store more than 2 billion tons a year by 2070—nearly twice the U.S. target.
Although building an industry is expensive, it’s nonetheless the most cost-effective pathway to clean power, according to several recent studies. If the U.S. takes an all-of-the-above approach—wind and solar, gas and biofuels with carbon capture and more—then the price of power is projected to be about $80 a megawatt-hour in 2035, according to a study this year by the Electric Power Research Institute. That compares with $60 if the U.S. continues on its current path.
But if wind and solar provide the lion’s share of power without gas and bio plants providing backup, then costs will soar to $110 because of the heavy use of energy storage. The Princeton report comes to a similar conclusion.
“Study after study shows that without carbon capture helping to provide firm and clean dispatchable power, the costs of decarbonization become exorbitant,” says Thompson. “It doesn’t mean that fossil fuels are good, but we have to use them to make this transition work.”
Congress Gets Onboard, Sort Of
The funding issue is coming to a head in Congress. After more than a decade of indifference and piecemeal backing for carbon capture, bipartisan support has grown this year for a package of bills to build the industry.
It’s one of the few areas where senators ranging from Democrat Chris Coons of Delaware to Republican John Barrasso of Wyoming find common ground. They are backing a bill this year to boost the size, duration and availability of tax credits for projects to directly capture carbon from the air. A bipartisan group in the House also introduced the CATCH Act to provide bigger and better tax credits for industries like cement and as well as power. Another Senate bill, the SCALE Act, supports the construction of pipelines and geologic storage.
Environmentalists are far from united in their response to such carbon capture proposals. Some groups like the National Resources Defense Council see the need for the technology in industries where there are few other cleanup options. The Sierra Club, while preferring nature-based methods of carbon absorption such as tree planting, might support some types of direct air capture if the CO2 isn’t used to help recover oil in wells. The Climate Action Network, a global coalition of almost 1,600 groups, rejects all uses of the technology.
Most of the groups agree on at least one point—no government support for carbon capture for fossil fuel plants, period.
That doesn’t bode well for proposed projects like the one in West Texas. The problem is that the current tax credits approved in 2018 are too puny. The incentive of up to $50 a ton for stored carbon isn’t lucrative enough to attract investors for most energy projects. So the CATCH Act boosts the incentive to up to $85 a ton, making the West Texas project and others more commercially viable.
But the fate of this sweetened incentive is less clear than the others because of opposition from environmentalists, says Brad Crabtree, director of the Carbon Capture Coalition, a group of 80 energy, advocacy and union groups. “The Sierra Club and Greenpeace say we should be retiring all of our fossil fuel power plants, and this creates uncertainty within the Democratic caucus,” he says.
Whether lawmakers approve any of these tax credits ultimately may have little to do with carbon capture itself. Most of the incentives are expected to be part of the administration’s climate package. And that’s hitching a ride on the social spending bill that Democrats hope to push through the reconciliation process this summer to avoid a Republican filibuster.
But the bill has become a tug of war following the bipartisan deal on infrastructure. As progressive Democrats threaten to torpedo the spending bill if it’s not big enough, and conservative Republicans reject proposals to pay for the infrastructure deal, the future of carbon capture, oddly, hangs in the balance.
Lessons for the Industry
The early years of carbon capture saw progress and setbacks. In 2008 small companies in the coal business persuaded Congress to enact the first carbon capture tax credits. But they were poorly designed with a low cap on the amount of carbon that would qualify for a credit. Investors stayed away.
The Carbon Capture Coalition was started in 2011 to sound the alarm about the need for progress. Advocates tried to get lawmakers to strengthen the tax credit, but the fossil fuel industry didn’t recognize the urgency. That changed in 2014 when the Intergovernmental Panel on Climate Change called for the large-scale removal of carbon from the atmosphere, putting the industry on notice that carbon was a business risk.
It would take another four years for lawmakers to improve the tax credits in 2018, but that wasn’t enough to spur a rollout of the technology in the power industry. “It was a squandered decade,” says Kurt Waltzer, the managing director at CATF. “If we had made significant investments in carbon capture and storage we would be in a much better place in terms of being able to reach net-zero emissions.”
The few demonstration projects that did get off the ground had mixed results. A federally funded power plant in Kemper County, Mississippi, suffered billions of dollars in cost overruns. But the problem was the flawed coal gasification process, not the carbon capture technology. Kemper converted to using natural gas without carbon capture in 2017.
The Sierra Club apparently had a hand in stopping another demonstration plant as it grappled with higher than expected costs. The group’s 2014 lawsuit challenging a permit cast more uncertainty over the FutureGen project in Illinois, delaying construction. The Department of Energy pulled the plug after FutureGen failed to meet its deadlines, angering advocates who accused the Obama administration of “hypocrisy towards clean coal technology.”
Petra Nova in Texas, the last of the demonstration projects in the power sector, had a promising start. It was built on budget for $1 billion and on time in 2017. The Texas governor and Secretary of Energy attended the ribbon cutting. When operating, it captured 92% of the carbon emissions from one unit of the coal plant, showing that the technology could work at a commercial scale.
While the technology had some outages and kinks to iron out, Petra Nova’s downfall in 2020 was its business model. The carbon it collected was used to extract oil from wells, earning revenue while storing the gas underground. But when oil prices and production collapsed, so did Petra Nova’s oil extraction business.
These failed efforts provided plenty of fodder for environmentalists to deride carbon capture as a boondoggle. “Carbon capture is clearly not viable economically or even technologically,” says Lukas Ross at Friends of the Earth who works on ending subsidies to polluting industries. “Its main purpose is to serve as a prop in a political game of make-believe to delay the inevitable day of reckoning for big oil and gas.”
Next Up, West Texas
The next round of projects that aim to come online have learned from mistakes of the past. The West Texas project, for instance, has been designed to keep costs down, says Gary Rochelle, a chemical engineering professor at UT Austin who’s heading the initiative.
Located in the Permian basin, a fossil fuel hub, the plant can tap into existing pipelines rather than build new ones. Rochelle also has access to cheap natural gas to power the technology. An organic compound in water grabs the CO2, and when the liquid is heated by boilers, it drives the carbon out of the solution. The plan is to catch 90% to 95% of the carbon from the Mustang gas plant and the boilers too.
The total cost: $300 to $600 million, half the price of some past projects. Yet the scientist says it will be difficult to raise the money from investors with today’s tax credits.
“Carbon capture has been demonstrated to be technically and environmentally successful,” he says. “It needs more financial and regulatory incentives to be commercially successful.”
This article was written by Vince Bielski for RealClearInvestigations.