Energy & Technology

Energy in the News

Each week, C2ES provides a roundup of top energy news. Each headline below links to the full story at the original news outlet, which is solely responsible for its content.  Additional links to relevant C2ES resources are also provided.

Week of February 17, 2015

Week of February 9, 2015

  • IEA releases Medium-Term Oil Market Report (International Energy Agency)
    In the Medium-Term Oil Market Report 2015, the International Energy Agency expects global oil demand will increase by 6.6 million barrels per day from 2014 – 2020, a growth rate of 1.2 percent per year, which is below its 2001 – 2007 growth trend of 1.9 percent per year.
    More from C2ES on oil
  • Desert Sunlight Solar Farm formally dedicated (Minneapolis Star Tribune)
    The 550 MW Desert Sunlight Solar Farm located in Riverside County, California was formally dedicated by the Interior Secretary last week. The facility is currently tied with the Topaz Solar project, also in California, for the title of largest solar plant in the world.
  • Duke Energy buys major stake in REC Solar (Utility Dive)
    Duke Energy, currently the largest U.S. electric utility, acquired a majority stake in commercial solar installer REC Solar, continuing a trend of large utilities moving into the commercial solar arena.
    More from C2ES on renewables
  • Natural gas prices expected to be lower in 2015 (Energy Information Administration)
    In its latest Short-Term Energy Forecast, the Energy Information Administration predicts that Henry Hub (U.S. benchmark) natural gas prices will average $3.05 per million Btu in 2015 – 30 percent lower than average 2014 prices.
    More from C2ES on natural gas
  • EU installs more wind in 2014 than coal and gas combined (Fierce Energy)
    Europe added around 11.8 GW of new wind power capacity in 2014, an increase of 3.8 percent compared to 2013. It now has 128.8 GW of wind power capacity across 28 countries; Germany’s share is 30 percent and Spain represents nearly 18 percent of the total installed capacity.
    More from C2ES on wind

 

Week of February 2, 2015

  • Oil prices rebound (Wall Street Journal)
    Responding to reports of fewer U.S. rigs drilling for oil and lower spending plans by major oil companies (among other things), Brent crude prices (the global benchmark) have surged nearly $10 per barrel over the past 10 days.
    More from C2ES on oil
  • U.S. solar capacity increased 55 percent in 2014 (Bloomberg New Energy Finance)
    With around 7.2 GW of new solar capacity added in 2014, cumulative capacity now exceeds 20 GW in the United States. This was responsible for around 19 TWh of generation or 0.5 percent of total U.S. generation in 2014.
    More from C2ES on renewables
  • Carbon capture and storage project canceled (Quincy Herald-Whig)
    The Department of Energy suspended development funding for FutureGen 2.0, a 200 MW coal-fired carbon capture and storage project in Meredosia, Illinois. Coal companies working with the government to develop the facility said they had no choice but to shut down the project.
    More from C2ES on carbon capture and storage
  • Kerry offers no timeline for KXL (The Hill)
    On Monday, federal agencies reported to the State Department on whether the Keystone XL Pipeline is in the nation’s interest. At a press conference, Secretary of State John Kerry said that the State Department would “analyze and address” the information, but gave no indication for when a final decision might come.
    More from C2ES on Keystone XL Pipeline
  • Energy-pinching Americans pose threat to power grid (Wall Street Journal)
    Utility experts fear that as Americans use less power, electric companies will not have the required revenue to maintain the vast network of power plants and transmission lines.
    More from C2ES on energy

Week of January 26, 2015

  • Obama administration plans to open Atlantic to offshore drilling (Washington Post)
    The Obama administration announced plans to allow offshore oil drilling in the waters off the East Coast from the southern Chesapeake to Georgia.
    More from C2ES on oil
  • Georgia reactor’s schedule slips again (Energywire - subscription)
    In its latest filing, Georgia Power said that its Plant Vogtle Unit 3 nuclear reactor would commence operations in the second quarter of 2019 with Unit 4 starting up one year later – around 3 years behind its original schedule.
    More from C2ES on nuclear
  • Wind has a good fourth quarter (Climate Wire - subscription)
    Wind power added 4,850 MW of new capacity in 2014 due to a flurry of activity in the fourth quarter. There is now more than 65,000 MW of installed wind capacity in the United States.
    More from C2ES on wind power
  • EPA power plant rule will boost natural gas (Climate Wire - subscription)
    A semiannual report from consultants Black & Veatch, forecasts that natural gas combined cycle power plants will be responsible for nearly half of U.S. power generation by 2038, due in part to upcoming EPA greenhouse gas regulations for existing power plants.
    More from C2ES on EPA Clean Power Plan
  • Report sees signs of slow demand growth in China (Energywire - subscription)
    Consultants Wood Mackenzie in a new report say that energy demand growth slowed significantly in China in 2014 – “compared to 2013, power demand growth fell by almost half, gas demand growth fell by more than 8 percent; coal demand barely grew; and diesel demand actually contracted for the first time in more than a decade."
    More from C2ES on energy
  • China’s coal production drops (Xinhua News)
    For the first time since 2000, China’s year-on-year coal production has dropped. The China National Coal Association estimated that 2014 coal production was 2.5 percent lower than in 2013. Sluggish demand, overcapacity (large stock piles), and large imports were factors contributing to the reduced production.
    More from C2ES on coal

Week of January 19, 2015

  • Crude exports would raise production, lower prices – study (Fuel Fix)
    A study from Columbia’s Center on Global Energy Policy and the Rhodium Group finds that lifting the ban on crude exports could raise U.S. production an additional 1.2 million barrels per day by 2025, which would lower the price of gasoline and other petroleum products by up to 0.12 cents per gallon.
    More from C2ES on oil
  • Tennessee reactor on track for 2015 startup (Nuclear Energy Institute)
    The Tennessee Valley Authority’s Watts Bar Unit 2 nuclear reactor is scheduled to commence commercial operations later this year, becoming the first new nuclear plant in the United States to start up in nearly 20 years.  There are currently 4 other reactors under construction in Georgia and South Carolina.
    More from C2ES on nuclear
  • Texas wind power’s share of generation exceeds 10 percent (Houston Chronicle)
    According to the Electric Reliability Council of Texas (ERCOT), wind power was responsible for 10.6 percent of power generation in the state in 2014 – a record share of the electricity mix.
    More from C2ES on wind power
  • State Department gives federal agencies deadline to weigh in on KXL (Washington Post)
    The State Department is giving eight federal agencies (Departments of Defense, Justice, Interior, Commerce, Transportation, Energy, Homeland Security, and the Environmental Protection Agency) until February 2 “to provide their views on the national interest with regard to the Keystone XL Pipeline permit application.” There is no explicit timeline for the permit process beyond the February 2 date.
    More from C2ES on Keystone XL
  • Algeria backtracks on plans for shale gas (AP)
    Algeria has put on hold its plans to exploit its shale gas resource. According to the U.S. Energy Information Administration, Algeria has the world’s third largest technically recoverable shale gas resource.
    More from C2ES on natural gas
  • India to reveal climate goal in June (The Economic Times)
    India, the third largest emitter of greenhouse gases after China and the United States, is expected to reveal its Intended Nationally Determined Contribution (INDC) in June. INDCs provide information about a country’s particular climate targets. These targets will form the basis of a global climate deal expected to be signed in Paris in December.
    More from C2ES on International

Week of January 12, 2015

  • South Korea launches cap and trade system (The Hill)
    Last week, South Korea launched the world’s second largest cap-and-trade system, behind Europe, covering 525 companies. The country pledged in the 2010 Cancún Agreements to reduce emissions 30 percent below business-as-usual levels by 2020; the carbon market is a key piece of its strategy.
    More from C2ES on International
  • Suncor cuts jobs and spending amid oil price collapse (Bloomberg)
    Suncor, Canada’s largest oil company, will cut 1,000 jobs and reduce its 2015 capital budget by 13 percent due to the recent slide in oil prices. Specifically, the company plans to defer the second phase of its MacKay River oil sands project and the White Rose Extension project offshore Newfoundland and Labrador.
    More from C2ES on oil
  • Wholesale electricity prices were higher in 2014 (Energy Information Administration)
    According to data from SNL and the U.S. Energy Information Administration, wholesale electricity prices increased at major trading locations across the United States last year, primarily due to increases in natural gas prices and high energy demand caused by cold weather in the beginning of 2014.
    More from C2ES on electricity
  • EIA issues U.S. coal production forecast (Energy Information Administration)
    In its latest Short-Term Energy Outlook (STEO), the Energy Information Administration (EIA) projects that 2014 U.S. coal production will rise around 1 percent above 2013 levels to 994 million short tons. However, this is around 15 percent lower than the U.S. peak production level in 2008. The EIA projects that production will fall to 977 million short tons in 2016.
    More from C2ES on coal
  • New turbine technology will open Southeast to wind development (Utility Dive)
    New maps from the National Renewable Energy Laboratory, which incorporate taller wind turbine heights, show that the Southeast United States could produce wind energy at much higher capacity factors.
    More from C2ES on wind power

Week of January 5, 2015

  • Nebraska court clears hurdle for KXL (Wall Street Journal)
    The Nebraska Supreme Court threw out a lower-court ruling, and found that the law passed by the state legislature, granting the governor the power to review and approve certain major pipelines, including Keystone XL was constitutional. The Obama administration put the State Department led Keystone XL approval process on hold in April 2014, pending the outcome of this court challenge.
    More from C2ES on Keystone

  • Illinois identifies options to support existing nuclear power (Energywire - Subscription)
    Four Illinois agencies produced a report outlining a range of policy actions that could be taken to help support three in-state nuclear plants that are struggling economically. The options range from relying solely on changes in federal regulation and regional wholesale markets to drive change to a cap-and-trade policy, carbon tax and making nuclear energy part of a low-carbon portfolio standard.
    More from C2ES on nuclear power

  • PJM seeks permission to postpone plant closures (Greenwire - Subscription)
    PJM, the operator of the nation’s largest wholesale power market, has asked the Federal Energy Regulatory Commission for permission to pay plant owners to keep generating beyond their scheduled retirement dates. PJM is concerned about system reliability, particularly in the event of severe weather such as the polar vortex.
    More from C2ES on electricity

  • IEA releases medium-term coal report (International Energy Agency)
    According to the IEA’s latest report, coal is the fastest growing fossil fuel in the world. However, the annual rate of coal consumption growth is slowing, especially compared to the 10-year average. Coal is expected to grow at a rate of 2.1 percent per year over the next 5 years, down from 2.3 percent per year in last year’s forecast.
    More from C2ES on coal

  • 5. Russian oil production hits a post-Soviet high (Reuters)
    According to the Energy Ministry, Russian oil output averaged 10.58 million barrels per day in 2014, an increase of 0.7 percent over the previous year. The International Energy Agency expects production to fall by 1 percent in 2015.
    More from C2ES on oil

  • India launches energy conservation program (Times of India)
    Indian Prime Minister Narendra Modi announced a plan to distribute two subsidized, energy efficient LED light bulbs to all registered electricity consumers.
    More from C2ES on energy efficiency – on-bill financing

Older Stories

Electric vehicle consumers - beyond early adopters

Sales of electric vehicles (EVs) in the United States nearly doubled last year—and with consumer acceptance broadening, sticker prices dropping, new models on the way, and policy support growing, the outlook is even better for 2014.  

In 2013, EVs increased their market share by 70 percent from 2012 levels, while all-vehicle sales grew 8 percent to reach a six-year high. Still, EV sales continue to lag forecasts made when these cars hit the market in late 2010, accounting for less than 1 percent of new light-duty vehicle sales. The strong growth in vehicle sales is mostly due to rising sales of gas-guzzling pickup trucks.

Optimism for EV market expansion is warranted, however, not only due to steady sales growth but also due to three key developments in 2013.

'60 Minutes' story on clean tech omits climate change

A recent "60 Minutes" story highlighted the demise of a few high-profile clean-tech companies that received federal funding. The story neglected to report why clean technology is vital to the future of our economy and environment in the first place, and therefore why it makes sense for the government to promote the development of wind and solar energy, electric vehicles, and other clean tech. Simply put, the goal is to transform our economy from one based on fossil fuels that emit heat-trapping gases to one based on clean energy that won't contribute to global climate change.

Meeting our energy needs

The United States is moving toward meeting all of its energy needs from domestic resources even faster than was predicted just a year ago.

The International Energy Agency (IEA) said last year that the U.S. would become the world’s largest oil producer, surpassing Saudi Arabia and Russia, by 2017. Its new World Energy Outlook moves that up to 2015. The U.S. is already the world’s top producer of natural gas, a position it reached in 2012 thanks to an expanding supply of shale gas. The IEA sees the United States holding both top spots at least until the early 2030s and being energy self-sufficient by 2035.

This huge shift didn’t happen by accident, and it will have implications for both the economy and the environment.

The opportunities of distributed generation

When the vast majority of Americans turn on the lights, the electricity is coming from a centralized, fossil fuel power plant.

However, there is a big change on the horizon that will alter that - distributed (also called decentralized) generation. This is when power is produced much closer to where it is used, such as with rooftop solar panels or natural gas-fired combined heat and power systems, including fuel cells and microturbines.

Currently, less than 7 percent of U.S. electricity is generated outside a centrally located power plant. Expanding distributed generation will bring exciting opportunities to increase efficiency, improve our resilience to extreme weather, and reduce greenhouse gas emissions. It will also bring challenges for our existing grid on which we must continue to depend.

These opportunities and challenges were the focus of a discussion I participated in this week at the World Alliance for Decentralized Energy annual conference with WADE Executive Director David Sweet, Duke Energy Chairman James Rogers, and PSEG President Ralph LaRossa.

Efforts to limit aviation emissions advance at ICAO

The United Nations’ body that oversees civil aviation has reached an important milestone in international efforts to craft effective and equitable solutions to climate change from this fast-growing sector. And this success last week in Montreal should send a hopeful signal to other UN organizations as they grapple with the challenges of limiting greenhouse gas emissions.

At the 38th General Assembly of the International Civil Aviation Organization (ICAO), governments endorsed a comprehensive set of actions aimed at achieving an aspirational mid-term goal of zero carbon emissions growth for the aviation industry beginning in 2020. The October 4 accord brings together a number of measures being developed by ICAO, including: a certification requirement for a global CO2 efficiency standard for aircraft; support for an updated, more efficient air traffic control regime; continued development of sustainable biofuels; and updating national action plans laying out country strategies to reduce emissions.

Proud of what we've done, but there's still more to accomplish

When I founded a new nonprofit organization 15 years ago, the United States and the world urgently needed practical solutions to our energy and climate challenges. That need has only grown more urgent.

Earlier today, I announced my plans to step aside as the President of the Center for Climate and Energy Solutions (C2ES) once my successor is on board. As I look back, I find we have come a long way. That said, any honest assessment of our progress to date in addressing one of this century’s paramount challenges must conclude that we have much, much further to go.

When our organization, then named the Pew Center for Global Climate Change, first launched in 1998, 63 percent of the world’s electricity generation came from fossil fuels. Incredibly, that number is even higher today – 67 percent. The concentration of carbon dioxide in the atmosphere, the main driver of climate change, is also higher than it was then – in fact, at its highest level in more than 2 million years.

Scientists around the globe have just reaffirmed with greater certainty than ever that human activity is warming the planet and threatening to irreversibly alter our climate. Climate change is no longer a future possibility. It is a here-and-now reality. It’s leading to more frequent and intense heat waves, higher sea levels, and more severe droughts, wildfires, and downpours.

We at C2ES have believed from the start that the most effective, efficient way to reduce greenhouse gas emissions and spur the innovation needed to achieve a low-carbon economy is to put a price on carbon. It’s a path that a growing number of countries, states, and even cities are taking.

U.S. Department of Energy Investment in Carbon, Capture and Storage

 

The U.S. Department of Energy (DOE) oversees federal efforts to advance the deployment carbon capture and storage (CCS) technology. In addition to working on the research and development of CCS component technologies, DOE has provided financial support to multiple commercial-scale CCS projects in the power and industrial sectors. This brief examines DOE’s support for CCS through the American Recovery and Reinvestment Act of 2009 and through its annual budget.

 

 

 


   
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Congressional Testimony of Judi Greenwald on the Future of Coal: Carbon Capture, Utilization and Storage

Testimony of Judi Greenwald, Vice President for Technology and Innovation
Center for Climate and Energy Solutions
Subcommittee on Energy
Committee on Science, Space, and Technology
U.S. House of Representatives
July 25, 2013

Click here to view video of the testimony.

Hearing on The Future of Coal: Utilizing America's Abundant Energy Resources

Carbon Capture, Utilization and Storage

Madam Chairman, Rep. Swalwell, and members of the Subcommittee, thank you for the opportunity to testify on carbon capture, utilization, and storage. My name is Judi Greenwald, and I am Vice President for Technology and Innovation at the Center for Climate and Energy Solutions (C2ES – formerly known as the Pew Center on Global Climate Change).

My testimony today will focus on the most important climate and energy solution that no one knows about. I will emphasize two main points:

  • Carbon capture and storage (CCS) is a critical technology for solving climate change, while allowing continued reliance on fossil fuels.
  • Carbon dioxide enhanced oil recovery (CO2-EOR) can advance CCS, while boosting domestic oil production and generating net federal revenue.

C2ES is an independent, nonprofit, nonpartisan organization dedicated to advancing practical and effective policies and actions to address our global climate change and energy challenges. We perform multifaceted research and analysis of the scientific, technological, economic, and policy aspects of these issues. Our work is informed by our Business Environmental Leadership Council (BELC), a group of 34 major companies, most in the Fortune 500, that work with C2ES on climate change and energy risks, challenges, and solutions. The views I am expressing, however, are those of C2ES alone.  

C2ES has been analyzing CCS for over a decade and has recently focused on how CO2-EOR can advance CCS. With the Great Plains Institute, C2ES co-convenes the National Enhanced Oil Recovery Initiative, or NEORI, a coalition of businesses, environmental NGOs, labor representatives, and state officials advocating for incentives to use captured CO2 in EOR. You can find more information on NEORI at www.neori.org. I would like to submit NEORI’s CO2-EOR analysis and consensus recommendations for the record. In addition, C2ES serves as the advisor and facilitator to the Sequestration Working Group of the North America 2050 Initiative, a collaborative of states and provinces exploring options for CCS regulations and incentives. C2ES recently completed a summary of state-level regulations and incentives that can be found at www.na2050.org/sequestration.[1]

C2ES also has authored research and publications related to CCS and CO2-EOR. For example, C2ES developed a comprehensive framework for calculating CO2 emissions from CCS based on input from experts in industry, academia, and the environmental community.[2] C2ES also publishes a CCS Climate TechBook,[3] a brief report that explains in layman’s terms how CCS technology works, why its development is needed to address climate change, and how it might be advanced.  

CCS is a critically important technology

The United States and the rest of the world are getting 80 percent of our energy from coal, oil and gas, and our dependence on, and overall use of, these fossil fuels globally is growing rapidly. Under a business-as-usual scenario, the Energy Information Administration expects fossil fuels will continue to provide more than 65 percent of U.S. electricity in 2040 – with 35 percent coming from coal-fired generation. Globally, coal consumption is expected to increase nearly 60 percent over the next two decades, led by developing countries like China and India, which together will comprise 62 percent of the total global coal demand in 2035. This poses an enormous challenge, because the CO2 emissions from the combustion of these fossil fuels are the major contributor to global climate change. While we can and should become more energy-efficient and shift our energy mix toward inherently zero-emitting sources like nuclear power and renewables, it will be difficult to do that fast enough and at a reasonable enough cost to avoid the worst climate impacts.

Hence the critical need for CCS, a suite of technologies that captures CO2 and stores it deep underground in geological formations. CCS can capture up to 90 percent of emissions from stationary sources, such as power plants and industrial facilities, thereby allowing coal and natural gas to remain part of our energy mix. The International Energy Agency (IEA) and others have demonstrated through detailed technology and economic scenario analyses that CCS is likely an essential component of an affordable and effective response to global climate change. In fact, IEA estimates that CCS could provide one-sixth of the requisite GHG emissions reductions by 2050.

What is needed to advance CCS?

CCS has been established and commercialized for the capture of CO2 from some industrial processes such as natural gas processing, chemical, fertilizer and ethanol production, and the gasification of coal. The use of man-made CO2 in EOR has been practiced for several decades. However, CCS in other contexts – for example, coal- and natural gas-powered electricity generation – is a relatively expensive technology that is just reaching maturity. Further R&D is important, but the key challenge for CCS is to get a sufficient number of commercial-scale projects up and running to demonstrate the emerging technologies at scale and bring down their costs. The first large-scale commercial CCS power projects are under construction. Yet, it is still unclear whether more commercial-scale CCS projects will be built after these initial projects are completed. After the collapse of climate legislation in the United States in 2010, a number of CCS projects were cancelled.

CCS is being increasingly thought of as carbon capture utilization and storage, or CCUS. Instead of seeing CO2 as a waste, utilizing and selling captured CO2, primarily for EOR, improves the economics of CCS projects and is an important market driver. Almost all of the existing or planned CO2 capture projects in the United States have been developed with the intention of marketing captured CO2 for use in EOR. Still, in many cases, additional drivers are needed. Those projects operating or underway today are being financed though some combination of U.S. Department of Energy (DOE) grants, utility cost recovery from ratepayers, private finance, sales of CO2 for EOR, other revenue streams from chemical production, and existing tax credits.

DOE’s role in CCS development has been and will remain critical. DOE is working with the private sector on the leading innovative CCS projects in the United States today. This collaboration is beginning to yield results. In late 2012, the DOE-supported Air Products’ Port Arthur CCS project, where CO2 is captured from refinery-based hydrogen production and sent for use in EOR, began operations. Through its Industrial Carbon Capture and Storage (ICCS) Program and with funding from the American Recovery and Reinvestment Act of 2009 (ARRA), DOE agreed to fund $284 million of the Port Arthur project’s $430 million total investment cost. The Port Arthur project is expected to capture up to 1 million tons of CO2 per year and enable EOR production of 1.6 million to 3.1 million barrels of domestic oil a year in East Texas. 

DOE is also working on applying CCS to the power sector. Southern Company’s coal-fueled Kemper County energy facility in Mississippi is now under construction and will be the first commercial-scale CCS power project in the United States. DOE selected the Kemper project to receive more than $290 million through its Clean Coal Power Initiative (CCPI). A later round of the CCPI made possible through ARRA funding selected three additional coal-fired CCS power projects for funding. They are Summit Power’s Texas Clean Energy Project (TCEP), NRG Energy’s Washington Parish Project, and SCS Energy’s Hydrogen Energy California project. TCEP is nearing financial close and, when completed, will capture 90 percent of its emissions and supply approximately 2.5 million tons of CO2 for use in EOR.

Given the high costs and uncertainties of CCS investment for the private sector and the urgent need for CCS, it is extremely important that the federal government continue to support CCS research, development, demonstration, and deployment. Beyond DOE’s pivotal role, other forms of federal financial support, such as tax credits, should be reformed and expanded. States too can play a key role in advancing CCS through incentives and well-informed regulation.

Background on CO2-EOR

CO2-EOR is a means of commercial oil production that could play a key role in the development of CCS and in increasing our domestic energy security. CO2-EOR has the potential to increase American oil production by tens of billions of barrels, while displacing imported oil and safely storing billions of tons of CO2 underground.

How does CO2-EOR work? Even after conventional primary and secondary oil recovery, most of the oil in a typical oil field is left in the ground. When injected deep underground, CO2 can make it possible to recover more oil and extend an oil field’s life. The best available evidence indicates that by using best EOR industry practice and existing rules governing underground injection, the overwhelming majority of the injected CO2 remains underground, incidentally and safely storing CO2. Commercial injection of CO2 for EOR is regulated under EPA’s Underground Injection Control Program, and under current federal greenhouse gas reporting rules for air emissions, EOR operators may document this incidental CO2 storage through additional monitoring, reporting, and verification requirements to qualify as geologic sequestration. There is a range of views as to what additional state or federal rules are needed to ensure that CO2 is stored permanently.

The United States has been a global leader in CO2-EOR for 40 years. We currently obtain six percent of our domestic oil production through this method. While most CO2-EOR activity occurs in the Permian Basin of Texas, there are also projects in the Gulf Coast, the Rocky Mountains, Oklahoma, and even Michigan. Estimates of the potential for CO2-EOR to increase oil production and store CO2 have been increasing in recent years. According to the National Energy Technology Lab, using existing techniques, CO2-EOR could double or triple U.S. oil reserves and store 10 to 20 billion tons of CO2, which is equivalent to between five and 10 years of emissions from all U.S. coal-fired power plants. More advanced techniques could yield much higher oil production and CO2 storage.

The key role of CO2-EOR in advancing CCS

For those CO2 capture technologies that have not reached full commercialization, especially in electric power generation, selling captured CO2 for use in EOR can provide a revenue stream that helps reduce the financial risks and uncertainty of investing in emerging technology. About 75 percent of the CO2 used in EOR currently comes from naturally occurring CO2 reservoirs. The rest comes from man-made CO2 sources. Somewhat oddly, the EOR market lacks sufficient CO2. By expanding carbon capture from man-made sources, we can increase domestic oil production, promote economic development, create jobs, reduce CO2 emissions, and drive innovation in CCS technology.

It is because of these multiple benefits that we have been able to bring together the National Enhanced Oil Recovery Initiative, or NEORI, a diverse coalition favoring the reform and expansion of existing tax incentives to use captured CO2 in EOR. Among the members of NEORI are Arch Coal, Summit Power, Tenaska, the Natural Resources Defense Council, AFL-CIO, and The Wyoming Outdoor Council. Some of NEORI’s participants are primarily interested in job creation, others in increasing domestic oil production, and others in protecting the environment. But all agree that advancing the capture of man-made CO2 for use in EOR makes sense. NEORI has been briefing members on both sides of the aisle in both houses of Congress on its proposals.

EOR operators in some regions are willing to pay upwards of $30 per ton for CO2. At the same time, industrial facilities and power plants are emitting billions of tons of CO2 into the atmosphere as a waste. CO2-EOR therefore offers the opportunity to transform this waste into a marketable commodity and transform an environmental problem into an energy production solution. 

In a few cases, revenue from selling CO2 for enhanced oil recovery is sufficient to pay for CO2 capture and transport. Thanks to the efforts of the private sector and DOE, many CO2 capture technologies are already commercially proven, and only a modest incentive is needed to help close the gap between the market price of CO2 and the costs to capture and transport it. In the case of emerging technologies, however, companies need a larger incentive to help shoulder the additional financial and operational risk of deploying new, pioneering capture projects for the first few times at a commercial scale. 

By combining private EOR operators’ willingness to pay for CO2 with a tax incentive, society leverages its public investment. Perhaps most importantly, according to our analysis, such tax incentives would more than pay for themselves by driving increased domestic oil production and associated taxable oil revenues. Increased CO2-EOR production will generate federal revenue that more than pays for the cost of new incentives within a 10-year timeframe. Under existing tax treatment, CO2-EOR directly yields revenues from three main sources: corporate income taxes, individual income taxes on royalties from production on private land, and royalties from production on federal land. Our analysis indicates that federal revenues from incremental CO2-EOR production would exceed the fiscal cost of new incentives by more than $100 billion over 40 years.

Conclusion

CCS is a critical technology for reconciling our continued dependence on fossil fuels with the imperative to protect the global climate. Our best hope at the moment for CCS advancement is carbon capture, utilization, and storage, or CCUS. The best example of CO2 utilization we know of is enhanced oil recovery (CO2-EOR). Solving our climate and energy problems will require a portfolio of technologies, and all must be pursued vigorously. But we are focusing here today on CO2-EOR, because it is the most important climate and energy solution that no one knows about.                                                               

 

Lifecycle Greenhouse Gas Emissions from Different Light-Duty Vehicle and Fuel Pathways: A Synthesis of Recent Research

Lifecycle Greenhouse Gas Emissions from Different Light-Duty Vehicle and Fuel Pathways: A Synthesis of Recent Research

July 2013

by Nick Nigro and Shelley Jiang

Download the full report (PDF)

Transitioning to a cleaner fleet of advanced vehicles powered by electricity, hydrogen, and advanced biofuels or petroleum products can yield a significant reduction in greenhouse gas emissions and petroleum consumption. A meaningful assessment of the comparative merits of these alternate fuel pathways requires a solid understanding of their technological potential to reduce emissions. Available studies evaluating full lifecycle emissions rely on various assumptions of that potential and yield a wide range of results. This brief summarizes and synthesizes the results of several recent studies and presents the full range of greenhouse gas emission estimates for each type of advanced vehicle and fuel. It also explains the reasons these estimates vary so widely and identifies opportunities for future analyses that use a consistent set of scenarios with transparent assumptions in order to compare the greenhouse gas impacts of fuel and vehicle pathways.

 

Nick Nigro
Shelley Jiang
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