Energy & Technology

Broad Coalition Offers Plan to Accelerate Adoption of Plug-In Electric Vehicles

Press Release
March 13, 2012
Contact: Tom Steinfeldt, steinfeldtt@c2es.org, 703-516-0638

Broad Coalition Offers Plan to Accelerate Adoption of Plug-In Electric Vehicles
C2ES-Led Group Recommends Strategies to Connect PEVs to the U.S. Electrical Grid

WASHINGTON, D.C. – A coalition including automakers, electric utilities, environmental groups, and state officials outlined joint recommendations today to accelerate the adoption of plug-in electric vehicles (PEVs) nationwide.

The PEV Dialogue Group, convened last year by the Center for Climate and Energy Solutions (C2ES), presented its recommendations at a Washington, D.C. event featuring remarks by group members from General Motors, Southern California Edison, the state of Michigan, and the Natural Resources Defense Council.

The group’s report, An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid, provides a roadmap for coordinated public and private sector action at state and local levels to ensure that PEV owners can conveniently plug in their cars without overtaxing the grid.  It recommends steps to ensure compatible regulatory approaches nationwide, balance public and private investments in charging infrastructure, and better inform consumers about PEVs.

“With plug-in electrics, we now have a mass-produced alternative to the internal combustion engine,” said C2ES president Eileen Claussen. “This is a major opportunity to tackle both energy security and climate change, and to put American industries and workers out front on a truly transformative technology. But for PEVs to succeed, we need all the right parties working together. That’s what this plan is all about.”

Nearly 18,000 PEVs were sold in the United States last year; over the next year or two, all of the major automakers plan to have models on the road. Some PEVs like the Nissan Leaf rely entirely on battery power, while others like the Chevy Volt have small backup engines to extend their driving range.

Broad deployment of PEVs, which use little or no gasoline, can significantly reduce U.S. reliance on imported oil and curb harmful tailpipe emissions. If accompanied by the gradual decarbonization of U.S. electricity, PEVs can also significantly reduce emissions of greenhouse gases. But growth of the PEV market faces major challenges, including new infrastructure letting owners plug in at home and on the road while ensuring the reliability of the grid.

The PEV Dialogue Group’s Action Plan includes recommendations to:

  • Encourage state public utility commissions and other policymakers to establish a consistent regulatory framework nationwide to harmonize technical standards; streamline the installation of household and commercial charging stations; and use electricity rate structures to promote charging at off-peak hours.
  • Assist local policymakers and stakeholders in assessing local needs, developing tailored strategies, and optimizing public and private investment in charging infrastructure.
  • Provide consumers with reliable information on the costs and benefits of PEVs and the choices among PEV technologies.

“Instead of policies that increase our addiction to oil, we need to provide Americans more transportation choices,” said Roland Hwang, transportation director at the Natural Resources Defense Council. “Putting millions of electric vehicles on the road will cut drivers’ fuel bills, help the auto industry, keep billions of dollars in the U.S. economy, and curb emissions of dangerous air pollutants. By working together across the political spectrum to enact this Action Plan, we can create a vibrant market for electric cars, restore U.S manufacturing leadership and create thousands of jobs.”

“The U.S. electrical grid is a national energy security asset and has the excess capacity, off-peak to support millions of electric vehicles right now,” said Edward Kjaer, director of PEV readiness, at Southern California Edison, a major electric utility. “With the PEV Action Plan, C2ES has spearheaded an important effort that will help us all use this critical domestic resource for transportation and begin to reduce this nation's dependence on imported oil."

“GM is glad to work with groups such as C2ES that are working to advance the adoption of electric vehicles through real-world best practices and stakeholder education,” said Michael Robinson, vice president of sustainability and global regulatory affairs at GM.

“It has been a pleasure to work with the other members of the PEV Dialogue Group and identify policies that will help seamlessly integrate plug-in electric vehicles with our electrical grid,” said Orjiakor Isiogu, a member of the Michigan Public Service Commission. “I look forward to continuing my work within the group and helping it properly balance the needs of electricity customers and the opportunity presented by PEVs.”

C2ES will work with the PEV Dialogue Group and others to promote implementation of the Action Plan. Over the coming months, C2ES is working with the Washington State Department of Transportation to advise transportation officials in seven states on steps to accelerate PEV adoption, and with the U.S. Department of Energy to support DOE-funded Clean Cities Coalitions working in dozens of communities across the country to develop local PEV deployment plans.


About C2ES
The Center for Climate and Energy Solutions (C2ES) is an independent non-profit, non-partisan organization promoting strong policy and action to address the twin challenges of energy and climate change. Launched in November 2011, C2ES is the successor to the Pew Center on Global Climate Change, long recognized in the United States and abroad as an influential and pragmatic voice on climate issues. C2ES is led by Eileen Claussen, who previously led the Pew Center and is the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.


PEV Dialogue Group Participants

  • A123 Systems
  • AASHTO
  • Argonne National Laboratory
  • Alliance of Automobile Manufacturers
  • Better Place
  • Center for Climate and Energy Solutions
  • City of Raleigh, NC
  • Daimler
  • U.S. Department of Energy
  • Edison Electric Institute (EEI)
  • Electric Drive Transportation Association (EDTA)
  • Electrification Coalition
  • Electric Power Research Institute (EPRI)
  • General Electric
  • General Motors
  • Georgetown Climate Center
  • Indiana Utility Regulatory Commission*
  • Johnson Controls Inc.
  • Metropolitan Washington Council of Governments
  • Michigan Public Service Commission*
  • National Wildlife Federation
  • North Carolina Department of Transportation
  • Northeast Utilities System
  • Natural Resources Defense Council
  • NRG Energy
  • PJM Interconnection
  • Rockefeller Brothers Fund
  • Rocky Mountain Institute
  • Southern California Edison
  • U.S. Department of Transportation
  • University of Delaware
  • Washington State Department of Transportation

*The role of these group members must be limited to technical contribution because of their organizational function.

An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid

An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid

March 2012

Download the full report (PDF)

Press Release

Resources:


Executive Summary:

Americans purchased almost 18,000 plug-in electric vehicles (PEVs) in 2011, a strong first year for these transformative vehicles. Recently, private industry and government have invested valuable resources in developing, promoting, and deploying PEVs. These vehicles offer an uncommon opportunity to address energy security, air quality, climate change, and economic growth. However, market growth is uncertain due to policy, economic, and technical challenges, and other advanced vehicle technology may prove more popular with consumers over time. There are steps that can be taken now, however, to meet some of these challenges and ease adoption of PEVs nationwide. In An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid, the PEV Dialogue Group lays out some of these critical steps needed to enable a robust national PEV market. 

With PEVs’ important opportunities and challenges in mind, the Center for Climate and Energy Solutions (C2ES) convened the PEV Dialogue Group—a unique, diverse set of stakeholders composed of leaders from the public and private sectors along with non-governmental organizations. The Group developed an Action Plan to fill gaps in the existing work on PEVs using a consensus process that aimed to optimize public and private investments and avoided favoring certain PEV technology. 
 

C2ES convened the PEV Dialogue Group in early 2011 to create an Action Plan that identifies many of the steps that would be necessary to integrate PEVs with the electrical grid nationwide.


The Group believes PEVs could be an important part of the vehicle market in the United States and worldwide if they are given a fair chance to compete with conventional vehicles. The Group identified a series of market-based actions for all stakeholders that foster innovation, minimize public cost, educate consumers, and maintain electrical grid reliability. 

The Group began by identifying key challenges and objectives that existing PEV efforts have not addressed adequately, such as integrating PEVs with the electrical grid. The Group did not focus on reducing vehicle upfront cost directly, since federal and state tax credits are already in place. The Group then held a series of face-to-face meetings to hash out the details of the Action Plan over the course of one year. The plan represents a unique and valuable contribution to the national conversation on PEVs by identifying practical steps that policymakers, regulators, local and state officials, private market participants, and others should consider as PEVs become more broadly available in the coming years.

The plan recommends specific actions in four categories summarized below:

  1. Create a Consistent Regulatory Framework Nationwide: Regulations by state public utility commissions that are compatible across the country can help foster innovation and increase the PEV value proposition while also maintaining the reliability of the electrical grid.
  2. Optimize Public and Private Investments in Charging Infrastructure:  There are opportunities to accelerate private investment, encouraging innovative business models while also acknowledging that PEVs warrant some public investment in charging infrastructure. 
  3. Facilitate PEV Rollout: Connecting stakeholders to provide a satisfactory PEV and electric vehicle supply equipment (EVSE) purchase and home EVSE installation is a necessary step to seal the deal once a consumer commits to purchasing a PEV.
  4. Educate Consumers: Explaining the PEV value proposition and bridging the consumer information gap about PEV technology can be accomplished through a combination of cutting-edge online resources and traditional touch-and-feel experiences.

The Action Plan represents Phase I of a larger initiative to pave the way for PEV adoption nationwide by helping level the playing field. Phase II aims to work with stakeholders “on the ground” to go about implementing the Action Plan with leaders across the country. 

The table below provides an overview of the Action Plan, which is fleshed out in great detail in the body of the report. Next to each action component are a number of individual actions or the principles for the individual actions. Many activities for these actions can occur concurrently. Businesses, electric utilities, government, and non-governmental organizations (NGOs) will all play a role in each action component.

 

Create a Consistent Regulatory Framework Nationwide

 

  • 4 Principles of Utility Regulation
  • Protect the reliability of the grid
  • Minimize cost to the electricity distribution system
  • Encourage transportation electrification
  • Provide consistent treatment between PEVs and loads with comparable power requirements within each rate class
  • Focus Areas for Regulatory Action (utility and other)
  • Residential & commercial EVSE installation
  • Residential & commercial electricity rate structure
  • Transportation infrastructure finance
  • Vehicle charging standards
  • Protecting consumer privacy

Optimize Public & Private Investments of Charging Infrastructure Regarding Location, Amount, & Type

 

  • Assess PEV suitability based on consumer interest, gasoline & electricity prices, existing regulatory environment, local government & utility involvement, area geography, travel patterns, & expected environmental & economic benefits
  • Estimate charging equipment & infrastructure needs based on consumer interest & travel patterns
  • Estimate extent of public investment in EVSE based on consumer interest, private sector investments, & state/local government policy

Facilitate PEV Rollout

 

  • Expedite EVSE home installation process
  • Cooperatively remove local and state market barriers for PEV service providers

Educate Consumers

 

  • Develop consumer web platform and other materials to understand PEV value proposition
  • Help consumers understand total cost of ownership (e.g., fuel & maintenance cost)
  • Estimate a broad set of benefits (e.g., fuel price certainty, environmental & energy security benefits)
  • Close PEV technology information gap

 

Create a Consistent Regulatory Framework Nationwide

  • Residential & Commercial EVSE Installation: Stakeholders should jointly create a competitive and innovative market for residential and commercial PEV charging services. Decisions by Public Utility Commissions (PUCs), local government, and PEV service providers regarding household EVSE installation should streamline the installation process. Regulations should reflect the local characteristics of markets, potential PEV users, PEV service providers, and electric utilities.
  • Residential & Commercial Electricity Rate Structure: Stakeholders should work together to determine electricity rate structures that maintain the reliability of the electrical grid and reward households for charging PEVs at off-peak hours. Rate structures should offer households choices, including options that better reflect the cost of electricity generation.
  • Transportation Infrastructure Finance: Stakeholders should work together to determine how PEV owners can pay their fair share of transportation infrastructure maintenance. Permanent or temporary methods should be implemented in a way that does not affect PEV market growth before PEVs have a noticeable impact on tax revenue for a state.
  • Vehicle Charging Standards: Voluntary standards bodies should work together, with the assistance of stakeholders, to develop vehicle charging standards and best practices related to the vehicle charging connector, PEV interconnection and communication with the electrical grid, and EVSE installation.
  • Protecting Consumer Privacy: Stakeholders should ensure that individual identity is impossible to glean from data collected from EVSE and vehicles released to NGOs, government, and other researchers while also maintaining the usefulness of these data for researchers.

Optimize Public and Private Investments in Charging Infrastructure

  • Assess PEV Feasibility: Stakeholders should cooperatively develop a method to assess the suitability of deploying PEVs in a geographic area and share this information with area governments.
  • Estimate Charging Equipment and Infrastructure Needs: Stakeholders should collaborate to estimate charging equipment and infrastructure needs in a geographic area based on the expected PEVs in an area, travel patterns, and area geography.
  • Estimate the Extent of Public Investment in EVSE: Stakeholders should work together to estimate the amount of public investment in an area that is appropriate to overcome existing market deficiencies.

Facilitate PEV Rollout

  • Expedite EVSE Home Installation: Stakeholders should design an expedited EVSE home installation process. A locality can speed up permitting and inspection processes to reduce overall installation time. Localities can also promote training, best practices as identified by early-action cities, and guidelines for electrical contractors. PUCs and electric utilities should provide assistance when creating this process to ensure regulatory compliance. Steps should also be taken to encourage utility notification about EVSE installation.

  • Remove Market Barriers for EVSE Service Providers: Stakeholders should cooperatively remove local and state market barriers for PEV service providers. Legal and regulatory hurdles that prevent a PEV service provider from competing in an area could exist. PEV service providers should identify local and state barriers that prevent them from introducing their product in a market. They should work together with automakers, PUCs, and local and state government to clear those barriers and facilitate new market introduction. Local and state government should encourage the training of inspectors and electrical contractors on all aspects of EVSE installation. Face-to-face meetings between PEV service provider representatives and government officials can begin this process.

Educate Consumers

  • Create Tools to Help Consumers Understand PEV Value Proposition: The value proposition PEVs provide includes tangible operational cost savings such as lower fuel and maintenance costs throughout the vehicle’s lifetime. In the short term, however, consumers may find non-financial benefits more valuable, like the driving experience or the statement driving a PEV conveys. Since consumers attain most of their information about vehicles online, stakeholders should cooperate on unbiased web tools that accurately communicate the PEV value proposition.
  • Close the PEV Technology Information Gap: The focus of an effort to close the technology information gap should be to increase PEV publicity, develop web tools on PEV technology, and improve stakeholder outreach. Stakeholders should develop engaging and sophisticated web tools to educate consumers about the difference between PEVs, other alternative vehicles, and conventional vehicles. While consumers obtain most of their information about vehicles online, there is no replacing test drives and other valuable hands-on experiences.

Consumers will ultimately decide whether PEVs will succeed or not in the vehicle marketplace. The inaugural year indicates there is strong consumer interest, but the number of early adopters and the ability of PEVs to reach the mainstream consumer are still uncertain. The benefits PEVs provide warrant action by relevant stakeholders to level the playing field in order to provide a fair chance for these vehicles to compete with conventional vehicles. Implementing the steps laid out in the PEV Dialogue Group’s Action Plan will enable a more viable transition to a nationwide PEV market. 

 

Nick Nigro
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Electric Vehicles: Plugging into the U.S. Grid

Promoted in Energy Efficiency section: 
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Please join C2ES and members of the Plug-in Electric Vehicle Dialogue Group for the presentation and discussion of a new Action Plan to enhance energy security and environmental protection by accelerating the commercial deployment of plug-in electric vehicles nationwide.

Electric Vehicles: Plugging into the U.S. Grid


Tuesday, March 13, 2012
2:00 to 4:00pm
7th Floor Knight Conference Center at the Newseum
555 Pennsylvania Ave., N.W., Washington, DC

 

Introductory remarks from:

  • Senator Lamar Alexander (R-TN)
  • Eileen Claussen, President, C2ES

Panel Discussion:

  • Mike Robinson, Vice President for Environment, Energy, and Safety Policy, General Motors
  • Ed Kjaer, Director, Plug In Electric Vehicle Readiness, Southern California Edison
  • Orjiakor Isiogu, Member, Public Service Commission, State of Michigan
  • Roland Hwang, Transportation Director, Natural Resources Defense Council
  • Panel moderated by Judi Greenwald, Vice President for Technology and Innovation, C2ES

Plug-in electric vehicles (PEVs) present an opportunity to reduce America’s dependence on imported oil and curb pollution that damages health and contributes to climate change. The PEV Dialogue Group convened by C2ES brings together automakers, electric utilities, policymakers, environmental and consumer advocates, and others to develop consensus approaches to accelerate PEV deployment nationwide. Culminating a year’s work by the Dialogue Group, An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid, provides a comprehensive strategy for public and private action to build infrastructure, educate consumers, and enable the PEV market. Following the Plan’s release, the Dialogue Group will work with businesses, stakeholders, and officials at the local, state, and federal levels to promote its implementation.

 

Click here to RSVP


Follow the event on Twitter using #PEVDialogue 

Eileen Claussen Comments on Sen. Bingaman's Clean Energy Standard Act of 2012

Statement of Eileen Claussen
President, Center for Climate and Energy Solutions

March 1, 2012

From Texas to Ohio to California, 31 states have shown that a clean energy standard for electricity benefits both the economy and the environment. It can diversify our energy supplies, build homegrown industries, sharpen our competitive edge in the global clean tech market, and curb pollution that damages health and contributes to climate change.  Sen. Bingaman’s Clean Energy Standard Act of 2012 presents an opportunity to achieve these benefits nationwide. The bill builds on these state-level successes, President Obama’s call for a federal clean energy standard, and earlier proposals from both sides of the aisle.

The Center for Climate and Energy Solutions has closely studied the issues and options in designing a federal clean energy standard. Congress faces some difficult questions: Do we focus on renewable energy only, or do we try to advance nuclear power and lower-carbon uses of fossils fuels as well? Do we set a performance goal and let the market decide how best to achieve it, or do we specify particular technologies in order to guarantee diversity of energy sources? How do we reward state leadership while putting all regions of the country on an equal footing?

There are important balances that must be struck, questions that must be resolved, and we shouldn't pretend that resolving them will be easy. But we must try. Maintaining a diverse energy supply, getting the United States into the international race for clean energy, curbing pollution -- these are challenges we must meet, and ignoring them won't make them go away.

Striking the right balance will require real effort by all sides, and Sen. Bingaman’s bill is an excellent place to start. We hope it launches a vital and constructive national conversation about how best to ensure reliable and affordable electricity for our country while tackling climate change. C2ES applauds Sen. Bingaman and the bill’s cosponsors, and looks forward to working with them, their colleagues and other stakeholders to move this forward.

For more information, view our Clean Energy Standards Resource page.

Contact: Rebecca Matulka, 703-516-4146, matulkar@c2es.org

Climate Leadership Conference

Promoted in Energy Efficiency section: 
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February 29-March 1 in Fort Lauderdale, Florida.

With the U.S. Environmental Protection Agency as the headline sponsor, the first annual Climate Leadership Conference will be held from February 29-March 1, 2012, in Fort Lauderdale, Florida. The conference will bring together leaders from business, government and academic institutions, and the non-profit community interested in exchanging ideas and information on how to address climate change while simultaneously running their operations more competitively and sustainably.

The conference includes a gala to honor recipients of the Climate Leadership Awards, a new national awards program to recognize exemplary corporate, organizational, and individual leadership in response to climate change. U.S. EPA, in partnership with C2ES, The Climate Registry (The Registry), and the Association of Climate Change Officers (ACCO), sponsor the awards. 

Featured conference speakers include:

  • Nancy Sutley – Chair, White House Council on Environmental Quality
  • Gina McCarthy – Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency
  • Mary Nichols – Chair, California Air Resources Board
  • Eileen Claussen – President, Center for Climate and Energy Solutions

Click here for complete speakers list and detailed conference agenda.

Program Highlights

  • Network with leaders from the public and private sectors, including federal and state government officials, industry leaders, and nonprofit experts
  • Attend the Climate Leadership Awards Gala, which is held in conjunction with the conference
  • Hear insights from winners of the 2011 Climate Leadership Awards for the Supply Chain, Organizational and Individual Leadership categories

Conference attendees will learn about and exchange solutions on topics including

  • Leveraging Clean Energy Opportunities
  • Managing Climate Risks and Building Resilience
  • Supply Chain Strategies
  • Disclosures and Questionnaires
  • Setting and Achieving GHG Reduction Goals Education & Engagement
  • Strategies Making the Business Case for Climate Response

Any sponsorship or advertisements appearing in these materials do not imply endorsement, recommendation, or favor by the United States Government or the U.S. Environmental Protection Agency.

The Bingaman Clean Energy Standard: What is “Clean”?

This is the second blog post in a multi-part series on the Bingaman Clean Energy Standard. Read part 1.

One question on the eve of the debut of Sen. Jeff Bingaman’s (D-NM) Clean Energy Standard bill:  What is “clean”?  

Broadly speaking, a clean energy standard requires an electric utility to generate or purchase a certain percentage of its supply from “clean” sources. Judging by previous Congressional proposals for promoting renewable or other low-emitting energy sources – not to mention the electricity portfolio standards in place in 31 states and the District of Columbia – cleanliness is in the eye of the beholder.

Press Release: Enhanced Oil Recovery Plan Draws Bipartisan Welcome in Congress

Press Release

February 28, 2012


Contact:Tom Steinfeldt, steinfeldtt@c2es.org, 703-516-0638
 Patrice Lahlum, plahlum@gpisd.net, 701-281-5007  

 

Enhanced Oil Recovery Plan Draws Bipartisan Welcome in Congress 

Consensus Recommendations from Industry, State and Nonprofit Leaders Benefit Economy, Energy Security, and Environment

WASHINGTON, D.C. – A coalition of industry, state, environmental and labor leaders called today for federal and state incentives to stimulate the expansion of enhanced oil recovery using carbon dioxide (CO2) from power plants and industrial facilities. The proposed measures would boost domestic U.S. oil production while reducing the nation’s CO2 emissions. 

The recommendations by the National Enhanced Oil Recovery Initiative (NEORI), convened by the Great Plains Institute (GPI) and the Center for Climate and Energy Solutions (C2ES), were released at an event on Capitol Hill.  

Senator Kent Conrad (D-ND) and Congressman Mike Conaway (R-TX) were on hand to welcome the recommendations, and Senator Max Baucus (D-MT), Senator John Hoeven (R-ND) and Senator Richard Lugar (R-IN), and Congressman Rick Berg (R-ND) offered written statements in support of the initiative.

In CO2-enhanced oil recovery (EOR), oil producers inject CO2 into wells to draw more oil to the surface. The practice, 6 percent of current U.S. domestic oil production, helps sustain production in otherwise declining oil fields, but limited supplies of CO2 constrain the expansion of EOR. NEORI’s recommendations would encourage the capture of CO2 from industrial and power facilities for use in EOR.

The centerpiece of the group’s recommendations is a proposed federal tax incentive focused on companies that capture and transport CO2, not oil companies. NEORI estimates that the tax credit would quadruple U.S. oil production from EOR, to 400 million barrels a year, while reducing CO2 emissions by 4 billion tons over the next 40 years. The U.S. Treasury Department would administer the competitively awarded tax credit. 

NEORI calculates that the program would pay for itself within 10 years through increased federal revenues generated by boosting domestic oil production, with an estimated net return of $100 billion over 40 years. The incentive would reduce the trade deficit by saving the United States about $610 billion in expenditures on imported oil over the same period. 

As an immediate measure, NEORI recommends that Congress or the Treasury Department modify the existing Section 45Q Tax Credit for Carbon Dioxide Sequestration to provide a more workable incentive to firms to capture and transport CO2.

At the state level, NEORI identified a range of existing state policies encouraging commercial deployment of CO2 capture technologies and projects and recommends that other states tailor and adopt them. The model state policies include tax credits, exemptions or abatements, and the inclusion of carbon capture-and-storage in electricity portfolio standards, among others.

“The EOR Initiative’s recommendations strike common ground among a diverse collection of interests and offer a realistic opportunity to increase U.S. oil supplies while reducing carbon emissions,” said C2ES President Eileen Claussen. “The proposal reflects practical solutions that deliver a win for our nation’s economic growth, energy security, and the climate.” 

“Implementing these recommendations for EOR can create a virtuous circle of increasing benefits to our nation over time,” said Brad Crabtree, policy director for GPI.  “Congress and state policymakers can expand American oil production, spur jobs, increase revenues, reduce the trade deficit and store significant CO2, all with incentives that pay for themselves.”

In total, an estimated 26 billion to 61 billion barrels of economically recoverable oil could be produced in the United States using currently available CO2-EOR technologies and practices, or potentially more than twice the country’s proved reserves.  Expanded use of CO2-EOR also can advance the development of infrastructure needed for long-term capture, transportation and storage of carbon emissions.

NEORI participants include state officials from Illinois, Indiana, Michigan, Montana, New Mexico, Texas, West Virginia and representatives of:

Air Products, Inc.Natural Resources Defense Council
AFL-CIOOhio Environmental Council
Arch Coal, Inc.Southern Company
Archer Daniels Midland Co.Summit Power 
Basin Electric Power CooperativeTenaska Energy
Clean Air Task ForceUnited Transportation Union 
Enhanced Oil Recovery Institute, University of Wyoming Wyoming Outdoor Council
GE Energy 

 

NEORI observers:

Chaparral Energy LLCNorth American Carbon Capture and Storage Association
Core Energy, LLCSouthern States Energy Board
Interstate Oil and Gas Compact Commission 

 

 

###

About C2ES
The Center for Climate and Energy Solutions (C2ES) is an independent non-profit, non-partisan organization promoting strong policy and action to address the twin challenges of energy and climate change. Launched in November 2011, C2ES is the successor to the Pew Center on Global Climate Change, long recognized in the United States and abroad as an influential and pragmatic voice on climate issues. C2ES is led by Eileen Claussen, who previously led the Pew Center and is the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

About the Great Plains Institute
The Great Plains Institute is a non-partisan, non-profit organization dedicated to transforming how we produce, distribute, and consume energy to be both environmentally and economically sustainable. Through research and analysis, consensus policy development, and technology acceleration, we are helping to advance clean, efficient and secure energy. Our collaborative efforts with public and private leaders focus on energy efficiency, renewable and low-carbon electricity and fuels, enhanced oil recovery, energy storage, smart grid and transmission.

 

Statements from Members of Congress in support of the National Enhanced Oil Recovery Initiative

 

Senator Max Baucus (D-MT) 

“I applaud the National Enhanced Oil Recovery Initiative for bringing together such a diverse group of stakeholders and presenting this set of policy recommendations. Enhanced oil recovery is a critical element of our broad, all-of-the-above approach to pursuing energy independence for America. It is also a clear example of American ingenuity that is re-invigorating oil fields. Along with bringing on more domestic oil and reducing carbon emissions, it brings more jobs and economic development to rural areas of our country. From a CO2 pipeline and injection project under development in the Bell Creek oil field in southeastern Montana to an innovative public-private carbon sequestration project in the Kevin Dome in Toole County, Montana is helping to lead the way. I look forward to working with members of the Initiative to make the existing federal incentives work better to promote a safer, cleaner and more prosperous American economy.”

Senator Kent Conrad (D-ND)

“The Department of Energy has estimated that standard oil recovery techniques leave as much as 80 percent of the original oil in place. As a result, our country has tens of billions of barrels of oil in existing oil fields that, until now, has been out of reach. ” Senator Conrad said. “Using CO2 enhanced oil recovery significantly increases the efficiency of oil recovery, resulting in a win-win situation that would increase domestic oil production while reducing our greenhouse gas emissions in a fiscally responsible manner.”

Senator John Hoeven (R-ND)

"Enhanced oil recovery is an important resource to get us to North American energy independence.  As home to one of the world's only commercial scale carbon sequestration operation, North Dakota is uniquely poised as a leader in energy production.  Expanding all areas of domestic energy production will help lower gas prices and make our country more secure."    

Senator Richard Lugar (R-IN) 

“Americans today struggle with high oil prices, and our economy is vulnerable to massive price spikes. Producing more domestic oil through enhanced oil recovery is a win for fiscal responsibility, a win for energy security, and a win for environmental stewardship. Addiction to foreign oil from unfriendly nations imperils United States’ national security and makes our economy more vulnerable to conflict, terrorist activity, and natural disasters far outside the United States. My Practical Energy Plan would enable 1.8 million barrels of new domestic oil production each day through enhanced oil recovery and earn an estimated $170 billion in federal revenue. Industries and utilities using Indiana’s coal would be able to sell their emissions, enabling a valuable economic boost in Indiana. I commend members of the National Enhanced Oil Recovery Initiative for taking up this opportunity and thank them for their recommendations.” 

Congressman K. Michael Conaway (R-TX) 

“I want to thank all the participants in the National Enhanced Oil Recovery Initiative for their hard work over the past eight months. This project has yielded many new relationships, some surprising common ground, and a couple of good recommendations for Members of Congress to consider. I have no doubt that the groundwork NEORI has laid will pay dividends long into the future.

“Finding new ways to access the resources we have already found will continue to be an important piece of our domestic energy strategy for years to come. EOR is a critical tool that allows us to do just that - it breathes new life into old fields. Expanding our domestic energy production remains a top priority for me and many of my colleagues.  We all look to a time when our nation will import less oil, create more jobs, and has a growing economy, thanks in part to EOR and increased production of domestic energy.”

Congressman Rick Berg (R-ND)

“As the need for our nation’s energy independence increases, it’s important that we continue working to find ways to increase domestic oil production. In North Dakota alone, more than 250 million incremental barrels of oil could be produced from already discovered, currently producing conventional oil fields through carbon dioxide enhanced oil recovery. Using technology like this to expand our domestic energy production holds great potential to help lower energy costs for consumers as well as breaking our dependence on foreign oil.”

 

State officials welcome the National Enhanced Oil Recovery Initiative’s recommendations

Texas State Representative Myra Crownover, Vice-Chair, Energy Resources Committee (R)

"Increasing domestic energy production is essential to our national interest. Enhanced oil recovery combined with carbon capture and storage technology is one of the most promising developments for increasing the energy security of the United States. The work of the National Enhanced Oil Recovery Initiative has been a valuable first step in the conversation regarding this important policy area, and I want to commend all of the members of the Initiative for their hard work."

Doug Scott, Chairman, Illinois Commerce Commission

"The National Enhanced Oil Recovery Initiative (NEORI) addresses a number of concerns about energy policy, the economy and the environment. In Illinois, we have been exploring a number of carbon capture and sequestration (CCS) projects, such as Future Gen, a CCS demonstration by a major manufacturer, and several power generating facilities with CCS as part of their plans. These kinds of projects are all very expensive, and enhanced oil recovery (EOR) could provide economic incentives that would benefit them. Illinois is a major coal producer and coal user. Understanding how EOR works can help us to understand what role coal-fired generation can have in our state going forward.

"If successfully implemented on a larger scale, EOR would help reduce our dependence on foreign sources of oil, thereby strengthening our opportunity for energy independence. EOR can provide good-paying power- and manufacturing-sector jobs in this country and more tax revenue to governments. From an environmental perspective, EOR not only captures and reduces CO2 emissions, but it also more fully utilizes already-developed oil and gas fields.

"I have found that collaborative policy initiatives, involving many states, the federal government, the private sector and the non-governmental organizations can help to provide solutions to complex issues. The NEORI is just such a collaborative. I look forward to working with other states, to share best practices, and to work with NEORI and federal policy makers to insure that EOR policies make sense for the private sector, the states and the federal government. Having a federal policy will help to advance EOR technology to provide benefits in many areas."

Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity

Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity

February 2012

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Introduction:

Amidst economic uncertainty, fiscal crisis and political division over energy policy, carbon dioxide enhanced oil recovery (CO2-EOR) offers a safe and commercially proven method of domestic oil production that can help the United States simultaneously address three urgent national priorities: 

  • Increasing our nation’s energy security by reducing dependence on foreign oil, often imported from unstable and hostile regimes; 
  • Supporting job creation, increasing tax revenue, and reducing our trade deficit by keeping dollars now spent on oil imports here at home and at work in the U.S. economy; and 
  • Protecting the environment by capturing and storing CO2 from industrial facilities and power plants, while getting more American crude from areas already developed for oil and gas production. 

A largely unheralded example of American ingenuity, CO2-EOR was pioneered in West Texas in 1972 as a way to sustain oil production in otherwise declining oil fields. It works by injecting CO2 obtained from natural or man-made sources into existing oil fields to free up additional crude oil trapped in rock formations. In this way, CO2- EOR can significantly extend the lifespan and revitalize production of mature oil fields in the United States. 

Today, over 3,900 miles (Dooley, et al., 2009) of pipelines in the United States annually transport approximately 65 million tons of CO2 (Melzer, 2012) that the oil industry purchases for use in EOR, producing 281,000 barrels of domestic oil per day, or six percent of U.S. crude oil production (ARI, 2011). The EOR industry has captured, transported, and injected large volumes of CO2 for oil recovery over four decades with no major accidents, serious injuries or fatalities reported. 

America has the potential to expand CO2-EOR significantly. Advanced Resources International (ARI) estimates that an additional 26-61 billion barrels of oil could economically be recovered with today’s EOR technologies, potentially more than doubling current U.S. proven reserves. Moreover, “next generation” EOR technology could yield substantially greater gains, potentially increasing recoverable domestic oil from EOR to 67-137 billion barrels, and storing 20-45 billion metric tons of CO2 that would otherwise be released into the atmosphere (ARI, 2011). 

The National Enhanced Oil Recovery Initiative (NEORI) was formed to help realize CO2-EOR’s full potential as a national energy security, economic and environmental strategy. Organized and staffed by the Center for Climate and Energy Solutions (C2ES) and the Great Plains Institute (GPI), the Initiative brought together a broad and unusual coalition of executives from the electric power, coal, ethanol, chemical, and oil and gas industries; state officials, legislators and regulators; and environmental and labor representatives.

NEORI was launched on July 17, 2011, in Washington, D.C., with bipartisan support from four U.S. Senators and a member of Congress. Project participants met on three occasions to define the scope and expectations of the project, provide feedback on technical matters, and offer policy guidance. They gathered in Washington, D.C., with the launch of the project on July 17, 2011; in Traverse City, MI, on September 21-22; and in Houston, TX, on November 1-2. The latter two meetings included field visits to commercial EOR operations and to a CO2 capture facility. 

NEORI participants also formed subgroups focused on developing policy recommendations, analysis and modeling, and communications and outreach materials. The subgroups held conference calls over several months, often on a weekly basis, to develop, refine, and reach consensus on recommendations and work products. 

This report presents NEORI participants’ consensus recommendations for targeted federal and state incentives to expand CO2-EOR. If implemented, these recommendations would significantly increase U.S. domestic oil production while generating net new tax revenues for the federal government and states struggling to fill budget gaps and jumpstart our nation’s economy. 

Rationale for Incentives to Support CO2-EOR

The Challenge: Limited Supply of Man-Made CO2 for Use in EOR

Today’s supply of CO2 available for purchase by the oil industry is simply inadequate to achieve the tens of billions of barrels of additional domestic oil production possible through EOR. In a fortunate, if ironic, twist of fate, a key to increasing America’s domestic energy security lies in capturing and productively utilizing a portion of our nation’s industrial CO2 emissions, thereby meeting a critical domestic energy challenge, while also helping to solve a global environmental problem.

Expanding the supply of CO2 available for EOR depends upon wide-scale deployment of carbon capture and compression equipment at a broad range of industrial sources, including natural gas processing; ethanol fermentation; fertilizer, industrial gas and chemicals production; gasification of various feedstocks; coal, natural gas and biomass-fueled power generation; and the manufacture of cement and steel. In addition, a substantial build-out of the existing CO2 pipeline network will be required to deliver CO2 from industrial facilities where it is produced to existing oil fields where it is needed.

The Solution: Reducing the Cost of Capturing and Transporting Man-Made CO2

NEORI’s federal and state incentive recommendations aim to bring down the cost of man-made, or anthropogenic, COcapture and transport over time to a level that private capital can finance without additional government support and based solely on crude oil prices and the economics of commercial EOR operations.

The EOR industry currently purchases CO2 on the open market. Market prices support using anthropogenic CO2 only in those cases where the costs of capture from a particular industrial source are low, and the amount of CO2 produced justifies private financing of pipeline infrastructure. 

However, CO2 capture technologies for some applications, notably electric power generation and some other industrial processes, are not yet fully commercialized and remain expensive to deploy, even at today’s oil prices. Also, the costs of building trunk pipelines to deliver CO2, especially from smaller industrial sources, often exceed the scope of what individual EOR projects can privately finance without the addition of incremental incentives recommended in this report.

Overview of Recommendations:

Federal Production Tax Credit for CO2-EOR: A Revenue-Positive Policy for Domestic Energy Security 

NEORI’s centerpiece recommendation is a competitively awarded, revenue-positive federal production tax credit for capturing and transporting CO2 to stimulate CO2- EOR expansion. Crucially, this federal tax credit would more than pay for itself. Indeed, analysis of the incentive outlined below indicates that federal revenues from existing tax treatment of additional incremental oil production would exceed the fiscal cost of the incentive itself by $100 billion over 40 years. Further, modeling shows that this incentive program, properly designed, would become revenue-positive within the ten-year timeframe typically used by Congressional budget score-keepers. 

Analysis undertaken by NEORI suggests that this tax credit would result in the production of an additional 9 billion barrels of American oil over 40 years, quadrupling CO2-EOR production and displacing U.S. oil imports. At the same time, the proposed incentive would save the United States roughly $610 billion in expenditures on imported oil, while storing approximately 4 billion tons of CO2 captured from industrial and power plant sources, thereby reducing total U.S. CO2 emissions in the process. 

Focusing Incentives on Industrial Suppliers of CO2, not the Oil Industry 

With oil at around $100 per barrel, world-class experience and expertise in the U.S. oil industry, and private capital available to invest, why are new financial incentives needed to expand CO2-EOR? To be sure, EOR represents an American can-do commercial success story, and the U.S. oil industry does not need or seek additional financial incentives to sustain EOR production at present levels. 

While the business model of the U.S. EOR industry has worked profitably for decades utilizing existing sources of natural and man-made CO2, the principal constraint on the EOR industry’s ability to expand domestic oil production is the lack of sufficient additional CO2 at current market prices. Therefore, NEORI recommends that incentives be primarily directed to capture and pipeline projects serving industrial facilities and power plants, rather than to EOR operators. 

This approach will enable a variety of industry sectors to market new sources of CO2 to the oil industry and develop the technological and operational experience that will drive innovation and cost reduction in CO2 capture, compression, and transport over time. In addition to increasing CO2 supply for the oil industry, these projects will benefit participating industries by helping them to reduce their carbon footprint in response to emerging and expected state and federal regulatory requirements and by making them more competitive in a global marketplace that increasingly values lower-carbon products and services. Finally, the deployment of CO2 capture and pipelines for use in EOR will establish a national infrastructure that can eventually be utilized by many industries for long-term carbon capture and storage (CCS) in geologic formations beyond oil and gas fields. 

Complement Federal Policies with State Incentives 

States also have an important role to play in fostering CO2-EOR deployment by implementing incentive policies that can complement the federal production tax credit recommended in this report. A number of states have already taken the lead, filling the current vacuum left by the absence of adequate federal policy. Therefore, this report identifies existing state policies that NEORI members believe should serve as models for policy-makers in other states to adopt and tailor to their particular needs. 

Multiple Benefits of CO2-EOR Can Marshall Broad Support for Policy Change 

The federal and state policy recommendations in this report will, if implemented, create a virtuous circle of linked and growing benefits to the American people: expanding CO2 supply, increasing domestic oil production and associated job creation, expanding federal and state  revenues, and declining CO2 emissions. Thus, at a time when our nation’s energy policy is mired in regional, partisan and ideological debate, CO2-EOR can help lay the groundwork for a different policy path forward, one that weaves together a broad coalition of Americans united by common interests. 

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February 2012 Newsletter

Click here to view our February 2012 newsletter.

Learn about the new international coalition aimed reducing short-lived climate pollutants, a framework for carbon capture and storage, and how federal agencies are incorporating climate adaptation into their decision making, the start of a clean energy standard conversation, and more in C2ES's February 2012 newsletter.

Enhanced Oil Recovery & Agriculture

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Agricultural industries and communities can benefit from selling CO2 to meet the growing demand for CO2 to boost domestic oil production.

The agriculture sector can supply high purity, manmade COto access domestic oil resources in existing oil fields.

Agriculture industry opportunities for capturing COto spur EOR expansion include:

  • Ethanol production: The capture of biogenic emissions from ethanol production is technologically straightforward given the  pure stream of CO2 produced in the fermentation process. Many ethanol plants sell CO2 to the food and beverage industry, but CO2-EOR represents a much larger market.
  • Domestic fertilizer production: CO2 capture from fertilizer production is fully commercial and relies on the same proven technology platform used in compressing and dehydrating natural gas.
  • Gasification of biomass with fossil fuels: CO2 capture from gasification of biomass, by itself or with fossil feedstocks for production of electricity and liquid fuels, holds promise for increasing both domestic energy production and reducing carbon emissions.

Agricultural industries present an important, early opportunity to provide CO2 for EOR because of the relatively low cost of capturing CO2 from these types of facilities

Build-out of pipeline infrastructure is required to support expansion of CO2-EOR.
CO2 pipelines have operated in the US for decades and there are currently over 3,900 miles of CO2 pipelines. Additional infrastructure is required to expand domestic oil production by gathering CO2 from sources such as ethanol and fertilizer facilities and transporting the CO2 to EOR operations by pipeline.

Integrating CO2-EOR with agricultural industries provides an opportunity for lowering the carbon intensity of agricultural products.
The environmental benefits of CO2-EOR provides agricultural industries a commercially proven option for complying with emerging and expected state, regional and international lowcarbon fuels policies. For example, capturing CO2 from ethanol plants and permanently storing it in EOR formations significantly lowers the carbon intensity of the ethanol plant operation, and potentially commands higher prices in states with Low Carbon Fuel Standards and other policies that create incentives for lower carbon intensity fuels.

Agricultural industries are working to advance and integrate technologies that can contribute to expanding CO2-EOR.
For example, ADM’s Illinois Industrial Carbon Capture and Sequestration (ICCS) Project will be a commercial-scale example of a CO2 capture and storage project at an ethanol facility and builds on ADM’s experience with a smaller-scale project. ADM will capture one million tons of CO2 per year at their ethanol production plant using dehydration and compression for transport, injection and geologic storage in the Mt. Simon Sandstone Formation. The ICCS project is carried out in partnership with the U.S. Department of Energy’s National Energy Technology Laboratory.

Another example is Chaparral Energy, which has CO2-EOR projects in Kansas, Oklahoma and Texas. Since 1982, the Chaparral and Merit Enid Fertilizer Project has captured and transported CO2 from an ammonia nitrogen fertilizer plant in Enid, Oklahoma to EOR fields in southern Oklahoma. Every year, about 600,000 tons of CO2are captured and injected, demonstrating the longevity of manmade CO2-EOR projects. Looking ahead to 2013, Chaparral will begin capturing about 850,000 tons of CO2 per year from an ammonia nitrogen fertilizer plant in Coffeyville, Kansas, and will transport the CO2 via pipeline approximately 70 miles to an EOR field for CO2-EOR recovery and simultaneous carbon storage. This project will be the largest CO2 capture and injection operation in N. America involving CO2 emissions from a fertilizer facility.

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