The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
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.
February 28, 2012
|Contact:||Tom Steinfeldt, email@example.com, 703-516-0638|
|Patrice Lahlum, firstname.lastname@example.org, 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-CIO||Ohio Environmental Council|
|Arch Coal, Inc.||Southern Company|
|Archer Daniels Midland Co.||Summit Power|
|Basin Electric Power Cooperative||Tenaska Energy|
|Clean Air Task Force||United Transportation Union|
|Enhanced Oil Recovery Institute, University of Wyoming||Wyoming Outdoor Council|
|Chaparral Energy LLC||North American Carbon Capture and Storage Association|
|Core Energy, LLC||Southern States Energy Board|
|Interstate Oil and Gas Compact Commission|
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
“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.”
“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.”
"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."
“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.”
“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.”
“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
"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."
C2ES is pleased to release our updated report, Climate Change Adaptation: What Federal Agencies are Doing, which lays out the rapidly expanding efforts across the federal government to respond to the increasing economic risks of extreme weather and climate change.
Federal agencies are under growing pressure to reduce costs, eliminate unnecessary regulations, and make certain the public is getting a good return on the tax dollars they invest in government. In the context of climate change, federal agencies are reviewing the programs they operate and the facilities and resources they manage to identify cost-effective steps to minimize their vulnerability and enhance their resilience to increased risks of extreme weather and a changing climate. With our nation having experienced a record number of extreme weather events last year, each causing economic damages exceeding $1 billion, it’s both common sense and smart fiscal policy to analyze and minimize the vulnerability of federal assets to extreme weather and climate impacts.
Recommended Modifications to the 45Q Tax Credit for Carbon Dioxide Sequestration
The National Enhanced Oil Recovery Initiative (NEORI) recommends that Congress consider implementing a revenue-positive federal production tax credit to support deployment of commercial carbon dioxide (CO2) capture and pipeline projects. A new, more robust federal incentive is needed to increase the supply of man-made or anthropogenic CO2 that the oil industry can purchase for use in enhanced oil recovery (EOR) to increase domestic production from existing oil fields.
NEORI also recommends that Congress undertake immediate modification of the existing Section 45Q Tax Credit for Carbon Dioxide Sequestration, through legislative action and/or working with the Department of the Treasury to revise Internal Revenue Service program guidance.
To avoid stalling important commercial CO2 capture projects under development, there is an urgent need to improve the functionality and financial certainty of this federal incentive to enable its effective commercial use. To make 45Q immediately accessible to US companies, Congress should pursue the following changes to the program:
- Designate the owner of the CO2 capture facility as the primary taxpayer;
- Establish a registration, credit allocation, and certification process;
- Change the recapture provision to ensure that any regulations issued after the disposal or use of CO2 shall not enable the federal government to recapture credits that were awarded according to regulations that existed at that time; and
- Authorize limited transferability of the credit within the CO2 chain of custody, from the primary taxpayer to the entity responsible for disposing of the CO2.
The consensus recommendations below detail the specific 45Q program modifications requested, and the section-by-section summary provides further explanation and context.
Background and Rationale
Section 45Q makes available a per-ton credit for CO2 disposed of in secure geologic storage. The program provides $10 per metric ton for CO2 stored through EOR operations and $20 per metric ton for CO2 stored in deep saline formations. However, due to unforeseen issues in the original statute (§ 115 of the Energy Improvement and Extension Act of 2008), the 45Q program lacks sufficient transparency and certainty for companies to be able to use the credit to secure private financing for projects.
Large-scale expansion of commercial EOR using industrially-sourced CO2 later in this decade requires that critical industrial capture projects begin construction now and enter commercial operation within the next few years. If Congress makes modest, functional improvements this year to 45Q that result in little or no additional fiscal cost, the program currently authorized at 75 million metric tons of CO2 stored can help several significant EOR projects nationwide secure private sector financing and move forward to commercial operation.
1. 26 USC §45Q provides a tax credit for carbon dioxide sequestration. Section 45Q was enacted by § 115 of the Energy Improvement and Extension Act of 2008.
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
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, CO2 capture 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.
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.
This is the first blog post in a multi-part series on the Bingaman Clean Energy Standard. Read part 2.
When the idea of a “clean energy standard” (CES) was first proposed a couple of years ago, it was viewed as the Republican alternative to both a renewable energy standard and a greenhouse gas cap-and-trade program. Many Republicans favored this approach because it included not just renewable energy, but also traditional Republican priorities such as nuclear power, hydropower, and clean coal.
Following the defeat of cap-and-trade legislation, President Obama began to see merit in this approach too. He proposed a Clean Energy Standard in his State of the Union in 2011 and again this year.
In a few days, Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, is expected to introduce a CES bill. If it is anything like the long line of earlier Bingaman bills, it will be a thoughtful balance of economic, energy, and environmental objectives, and – to those of us who read a lot of legislation – beautifully written.
With Secretary Clinton’s announcement this week of a new coalition aimed at short-lived climate pollutants such as methane and soot, the U.S. is helping to focus international attention on a critical but frequently overlooked dimension of the climate challenge. To maximize its leadership on this front, the U.S. should also take stronger steps to tackle these pollutants at home.
The new multilateral effort to address short-lived climate pollutants (also called short-lived climate forcers) is an important recognition of both the scientific and political realities that surround climate change. A growing body of scientific evidence underscores the importance of near-term action to slow the rate of climate change, which is proceeding more rapidly than scientists predicted. Because methane, black carbon and hydroflurorocarbons (HFCs) have relatively short atmospheric lifetimes, reductions in these compounds will have significant near-term benefits in reducing climate change. In contrast, carbon dioxide remains in the atmosphere for hundreds of years. Reductions in CO2 are critical to limit the amount of warming over the longer term, but have more limited impact in the near term.
Fast Action to Reduce the Risks of Climate Change: U.S. Options to Limit Short-Lived Climate Pollutants
Short-lived climate pollutants such as soot, methane and hydroflurorocarbons (HFCs) account for 30 to 40 percent of global warming to date. Targeted efforts to reduce these emissions can slow the pace of global warming and moderate climate impacts already underway, including the melting of sea ice and glaciers. By reducing local air pollution, such measures would also produce substantial public health benefits and reduce crop losses, particularly in developing countries. The factsheet outlines ways to further reduce U.S. emissions of these short-lived pollutants.
Through a broad range of efforts – including voluntary programs to reduce methane emissions, regulation of diesel emissions, and the development of alternatives to HFCs – the United States has made substantial progress in reducing short-lived climate pollutants, also called short-lived climate forcers. Options to strengthen these domestic efforts including the following:
Federal leadership in reducing short-lived climate pollutants
A 2009 Executive Order, Federal Leadership in Environmental, Energy, and Economic Performance (E.O. 13514), directs agencies across the federal government to compile inventories of their greenhouse gas emissions, and to set targets and develop plans for reducing those emissions through 2020. HFCs and methane (but not black carbon) are explicitly included among the greenhouse gases covered under E.O. 13514. The Administration could instruct the Federal Environmental Executive charged with implementing the Executive Order to provide guidance directing all agencies to place a priority on identifying actions aimed at reducing emissions of all short-lived climate pollutants. For example, agencies could be encouraged to purchase products made without HFCs, to retrofit their dirtiest diesel engines, and to take actions to facilitate capture of methane emissions from existing gas and oil wells and coal mines on federal lands.
An inter-agency Short-Lived Climate Pollutant Task Force could develop tools to help agencies develop and implement plans to reduce these compounds.
Methane reductions from oil and gas production and processing
Natural gas is mostly methane, and the natural gas industry is the single largest source of methane emissions from the United States, due primarily to leaks and intentional routine releases of gas. In July, 2011, EPA proposed new source performance standards and hazardous pollutant regulations for oil and gas production and gas processing, transmission and storage facilities. While primarily aimed at reducing smog-forming and toxic pollutants, the proposed rules also have the indirect effect of reducing methane emissions in significant amounts. By capturing and beneficially using methane emissions, EPA estimates that the proposed rules would result in a net cost-savings to industry. If finalized as proposed, the rules will begin to address one of the concerns about the extent of methane emissions from hydraulic fracturing, or fracking, a segment of the industry which is rapidly growing. EPA estimates the proposed rules would reduce methane emissions from the oil and gas sector by 26 percent, or 3.4 million tons – equal to 65 million metric tons of carbon dioxide.
EPA could maximize cost-effective methane reductions in finalizing the proposed rules. However since these rules apply only to new and modified facilities, EPA could take additional action to address methane emissions from existing facilities. EPA could issue new regulations directly regulating methane emissions from new and existing facilities or it could expand its Natural Gas Star program to include voluntary reduction targets by participating companies at their existing facilities.
Methane reductions at municipal solid waste landfills
Solid waste landfills are the third largest source of methane emissions in the United States, accounting for 17 percent of U.S. methane emissions and almost 2 percent of our total greenhouse gas emissions. In March 1996, EPA issued final rules regulating the emission of air pollutants from municipal solid waste landfills. This rule substantially reduced smog-forming and hazardous pollutants. While methane emissions are not regulated directly, the 1996 performance standards had an important indirect effect in reducing methane emissions from the largest landfills. That is because under these standards, landfills are required to collect and combust their “landfill gas” (LFG) if they have a design capacity of more than 2.5 million tons and more than 2.5 million cubic meters of waste. EPA estimated that the rule would reduce methane emissions by 37 million metric tons of carbon dioxide equivalent, even though it impacts less than 5 percent of all landfills.
The most straightforward way to significantly reduce methane emissions from this sector would be to bring more landfills into the existing regulatory scheme by lowering both the emission threshold and the capacity thresholds to reflect the fact that today, landfills as small as 1 million metric tons design capacity have successfully implemented LFG collection systems. The 1996 rule has been in place unchanged far longer than the 8-year review period called for under the Clean Air Act and new standards are in order. EPA’s Landfill Methane Outreach Program estimates that an additional 500 sites represent potentially attractive opportunities for low cost capture and beneficial use of methane emissions. These sites have a potential for methane reductions of 13 million metric tons of carbon dioxide equivalent.
Under Section 111 of the Clean Air Act, EPA could revise this rule to double the number of sites that are required to capture methane emissions and to work with states to facilitate effective implementation of this requirement.
HFC reductions from vehicle air conditioners
Section 612 was included in the Clean Air Act to ensure the health and safety of alternatives being developed and used to replace chlorofluorocarbons (CFCs) and other ozone-depleting substances. While HFC-134a was an important alternative in allowing for an accelerated phase-out of CFC-12, it has a global warming potential of 1300. With the development of more environmentally benign alternatives, it is now time for EPA to delist HFC-134a as an acceptable alternative. In February 2011, EPA accepted as complete a petition to delist HFC-134a for use in new air conditioners for light-duty vehicles. However, it did not establish a timetable for taking action and did not address the use of HFC-134a in other applications that should also be delisted.
HFCs currently represent less than 2 percent of the nation’s GHG emissions. They are expected to double by 2020. HFC-134a from auto air conditioning is by far the largest source of HFC emissions.
EPA should propose and finalize a rule as soon as feasible delisting HFC-134a for use in new car air conditioners on a timeframe consistent with the availability of adequate supplies of the alternatives. It also should review other significant uses where HFC-134a currently is approved (e.g., aerosols and other refrigerant uses) and determine whether or not any of these uses should also be delisted.
HFC reductions from appliances
In December 2010, EPA proposed a rule to lower the leak rates that trigger repair requirements for comfort cooling, commercial refrigeration, and industrial process refrigeration and air conditioning equipment that use ozone-depleting refrigerants. While reducing leaks of ozone-depleting gases from existing equipment remains an important objective, these refrigerants have or are in the process of being replaced in all of these types of new equipment largely with HFCs. Emissions from HFCs escaping from refrigeration systems account for up to 20 percent of total emissions of these compounds. Under section 608 of the Clean Air Act, the scope of the pending regulations could be expanded from ozone-depleting substances to include HFCs when used as the refrigerant in these types of equipment.
This initiative would require EPA to propose an amendment to the agency’s December 2010 proposal. The revised proposal would impose maximum leakage rates when HFCs are used as the refrigerant in these refrigeration and air conditioning applications.
Black carbon reductions from existing diesel vehicles
With an atmospheric lifetime of weeks, reductions in black carbon can have the greatest near-term impact on slowing climate change. While recently enacted particulate matter standards require new diesel engines to reduce their black carbon emissions by 99 percent below uncontrolled levels, existing diesel vehicles and equipment will remain a significant source of emissions over the next few decades. However, existing retrofit technologies (primarily diesel particulate filters) can substantially reduce black carbon emissions from existing equipment. Congress recognized the importance of these efforts to reduce emissions from existing diesel engines when it passed the Diesel Emission Reduction Act (DERA) of 2010. With broad support from industry and environmental groups, this law authorized appropriations of up to $100 million annually for programs (originally created under the Energy Policy Act of 2005) aimed at reducing diesel emissions for fiscal years 2012 through 2016. Innovative funding and state grant programs have been supported under DERA. While funding for this program was eliminated in FY2012, it has been reinstated in the President’s budget request for FY2013.
Additional alternatives that should be further explored include both new regulatory measures and expansion of voluntary programs. EPA has begun to use the Clean Air Act to directly regulate greenhouse gas emissions and is required under the Act to take additional actions. For example, it could issue specific standards requiring methane reductions from landfills, natural gas production, distribution and storage, and other major sources. It could also require reductions in black carbon emissions from large diesel engines when they are undergoing major rebuilds. The agency could strengthen regulatory measures restricting the use of HFCs in those sectors where alternatives are becoming available applications. EPA could also expand programs to capture and use methane from coal-bed mining and agricultural sources and strengthen voluntary programs to recover and destroy CFCs, HCFCs, and HFCs from discarded appliances.
- Bodansky, Daniel, Multilateral Climate Efforts Beyond the UNFCCC, Center for Climate and Energy Solutions, Nov. 2011.
This report looks at a number of multilateral entities that could play a role in addressing certain of the SLCFs including: the Montreal Protocol as a possible venue for HFCs and the Convention on Long-Range Transboundary Air Pollution as a possible venue for BC, methane and other ozone-precursors.
- Bachmann, John, Black Carbon: A Science/Policy Primer, Center for Climate and Energy Solutions (formerly the Pew Center on Global Climate Change), 2009.
This paper summarizes current knowledge on the effects of soot components—black carbon and organic particles—on climate, and identifies sources and technologies to mitigate their impacts. It also presents perspectives on the potential role of soot mitigation approaches in developing more comprehensive climate strategies.
- What is Black Carbon?, Center for Climate and Energy Solutions (formerly the Pew Center on Global Climate Change), April 2010.
This factsheet provides an overview of black carbon as a major contributor to global climate change. It describes why reducing black carbon is a win-win scenario for both climate and health reasons.
 The most important aspect of the proposed rules are new requirements that operators using hydraulic fracturing on new or modified natural gas wells capture the largest amounts of natural gas that is often emitted into the air during the fracking process. While the rules don’t directly regulate greenhouse gases, they will result in substantially reduced methane emissions from fracking, and therefore reduce the climate impacts of this rapidly expanding source of natural gas.
Eileen Claussen Comments on the Climate and Clean Energy Coalition to Reduce Short-Lived Climate Pollution
Statement of Eileen Claussen
President, Center for Climate and Energy Solutions
February 16, 2012
The Climate and Clean Energy Coalition to Reduce Short-Lived Climate Pollution offers a promising avenue for practical action to slow the pace of global warming.
Going after black carbon, methane and other short-lived climate forcers is no substitute for a strong, sustained effort to significantly reduce emissions of carbon dioxide, the main driver of climate change. Nor can this new coalition take the place of the U.N. Framework Convention on Climate Change, the principal forum for mobilizing the global climate response.
But targeted efforts to reduce short-lived climate pollution can moderate climate impacts in the near term while we work toward the longer-term strategies needed to rein in carbon dioxide emissions. They could prove especially critical in slowing the loss of sea ice and of glaciers that millions rely on for freshwater. Many of these measures would also protect public health by curbing local air pollution, particularly in developing countries.
At a time when comprehensive solutions to the climate challenge are not yet at hand, we need to tackle it piece by piece, pursuing practical strategies wherever we can. This coalition is a good example. If the countries launching it can deliver the resources, and succeed in recruiting others to the effort, this new initiative has the potential to make a real difference.
Contact: Rebecca Matulka, 703-516-4146
Learn more about short-lived climate forcers