June 25, 2012
Contact: Rebecca Matulka, 703-516-0621, email@example.com
State Transportation Officials Meet in Raleigh to Pave Way for Plug-in Electric Vehicles
Transportation officials from eight states are meeting today and tomorrow in Raleigh to develop state-level strategies for accelerating the deployment of plug-in electric vehicles (PEVs).
The two-day workshop is being co-organized by the Washington State Department of Transportation and the Center for Climate and Energy Solutions (C2ES) as part of a broader effort with industry, environmentalists, and policymakers to advance PEVs nationwide. The workshop is being hosted by the city of Raleigh at the Raleigh Convention Center. Speakers include North Carolina Transportation Secretary Gene Conti and Raleigh Mayor Pro Tem Russ Stephenson.
Officials from Arizona, California, Georgia, North Carolina, Ohio, Oregon, Washington, and Wisconsin and from the U.S. Department of Transportation will examine how state transportations departments can help ensure the smooth introduction of the new infrastructure needed for charging electric vehicles. Other participants include representatives of Raleigh and other cities taking the lead on introducing PEVs.
“PEVs are a transformative technology—they offer us a way reduce both our reliance on imported oil and our carbon footprint,” said Judi Greenwald, C2ES’s vice president for technology and innovation. “But to realize this potential, a broad range of stakeholders and policymakers will need to work together. We’re very pleased to be working with these states and others to help make sure that happens.”
"Our goal for this project is to not only help DOTs define their role with respect to electric vehicles, but to create a community of practice so that we can learn from each other and share resources as this rapidly evolving technology comes into the market," said Jeff Doyle, director of public/private partnerships at the Washington State Department of Transportation.
The Raleigh workshop will lead to a new “self-assessment” tool to help state transportation planners understand PEV needs in their states and develop cost-effective strategies to meet them. It follows a similar workshop in March at the University of California, Berkeley.
The workshop is part of a broader C2ES initiative implementing the recommendations of its PEV Dialogue Group, which includes automakers, electric utilities, policy makers, environmental groups and others. In March, the group released An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid, which outlines steps to safeguard grid reliability while ensuring that PEV owners can plug in at home and on the road. Washington State and Raleigh both participate in the PEV Dialogue Group.
C2ES is also working with the U.S. Department of Energy’s Clean Cities Program to help communities across the country assess PEV-related needs such as revising codes and updating permitting processes to smooth the installation of residential and commercial charging stations.
Some PEVs such as the Nissan Leaf run exclusively on rechargeable batteries; others such as the GM Volt couple batteries with gasoline engines that extend their range to that of a conventional vehicle. More than 30,000 PEVs have been sold in the United States since January 2011. Nearly 10 companies now have PEVs on the road, and over the next year or two, all of the major automakers plan to offer them.
More information on this project and the PEV Dialogue Group Initiative is available at www.c2es.org/initiatives/pev.
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.
As Rio+20 negotiators rush to complete a consolidated text of outcomes before heads of state begin arriving tomorrow, participants at hundreds of side events are calling on business and government to take stronger action on clean energy, poverty elimination, food security, oceans, sustainable cities, green technology development, education, and more.
On Sunday at the U.S. Center pavilion, C2ES and the Global Environment Facility (GEF) convened a panel of companies, small-business innovators, and business representatives highlighting the critical roles played by each in promoting low-carbon innovation and sustainable development.
Opportunities for low-carbon innovation are growing, driven by policy changes, market shifts, and continued growth in energy demand, particularly in developing countries. This Sunday in Rio de Janeiro, ahead of the UN’s “Rio+20” Conference on Sustainable Development, C2ES will have a chance to share what it’s learned about low-carbon innovation with partners from around the world.
With the Global Environment Facility (GEF), we will convene a panel of companies (Johnson Controls, DuPont), small-business innovators (from the Cleantech Open), and government and business representatives (from UNIDO and ABDI) to share stories and lessons from the front lines of clean-tech entrepreneurship. The event, to be held at the U.S. Center pavilion, will examine the keys to successful low-carbon innovation, and the benefits for climate mitigation and adaptation, energy security, resource efficiency, and job creation.
June 13, 2012
Contact: Colleen Kredell (Center for Climate and Energy Solutions) 703-516-4146
or Tyler Daluz (Citi) 212-793-5234
C2ES, Citi Unite to Promote Employee Engagement on the Environment
New York—Citi and the Center for Climate and Energy Solutions (C2ES) today announced a new partnership to raise awareness and mobilize action on energy and climate issues in communities throughout the United States and globally. C2ES will support Citi’s efforts to engage the bank’s employees, their families and members of their communities in conserving energy and achieving other environmental objectives.
“Citi is a longtime leader in the banking sector in advancing practical solutions to the energy and climate challenges facing the world today,” said Katie Mandes, Vice President for Community Engagement with C2ES. “We are thrilled to be able to help Citi take its environmental commitment to the next level.”
C2ES has partnered with a range of companies to enable and support employee action at home and in the community to live more sustainably. Through the use of online tools and other resources, as well as hands-on activities and community outreach, C2ES and its corporate partners have directly engaged more than 100,000 people and identified over 80 million pounds of greenhouse gas savings.
"Citi recognizes the importance of business leadership on environmental issues,” said Pamela Flaherty, Director of Corporate Citizenship at Citi. “We look forward to working with C2ES to strengthen our employee engagement activities on these vital issues for the future of our communities and our planet.”
The C2ES-Citi partnership will draw on the expertise and the resources of C2ES to strengthen Citi’s employee engagement efforts on sustainability issues. In particular, C2ES will support the work of Citi Green Teams, employee-led groups that promote awareness of sustainability issues and help their colleagues reduce their environmental impact at Citi worksites throughout the world.
The two organizations’ collaborative efforts will build on a robust program of existing sustainability initiatives at Citi. Citi earned the 2011 Energy Star Partner of the Year award from the U.S. Environmental Protection Agency, and in April of this year announced that it had reduced greenhouse gas emissions from its operations by 13.6 percent from 2005 levels. In 2010, the company established a set of environmental goals it intends to reach by 2015 through investments in energy efficiency, green buildings, and technology optimization. Among Citi’s goals: reduce the company’s absolute greenhouse gas emissions by 25 percent; reduce waste to landfill by 40 percent; and reduce water use by 20 percent.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi
The Center for Climate and Energy Solutions (C2ES) is an independent non-profit, non-partisan organization promoting 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. http://www.c2es.org. To find out more about C2ES’s Make an Impact program, visit makeanimpact.c2es.org.
A comprehensive analysis by C2ES concludes that increased natural gas use can help reduce U.S. greenhouse gas emissions in the near to medium term, but deeper long-term reductions will require broader deployment of other low-carbon energy sources as well.
"Leveraging Natural Gas to Reduce Greenhouse Gas Emissions" examines the climate challenges and opportunities posed by the current natural gas boom. The report synthesizes information from a series of background papers and workshops in Houston and Boston attended by several dozen experts and representatives of industry, environmental organizations, and state agencies
Among the report’s key findings:
- U.S. greenhouse gas emissions are back down to mid-1990s levels, in part because electricity generators are using more natural gas, which emits half as much carbon dioxide as coal. Further reductions can be achieved by substituting natural gas for coal and oil in the transportation, manufacturing and building sectors.
- Simply substituting natural gas will not achieve the deeper emissions cuts needed in the longer term. Zero-carbon energy sources such as solar, wind and nuclear are critical. Strong support also is needed to perfect and deploy technologies to capture carbon emissions from coal- and natural gas-fired power plants and bury them underground.
The potential climate benefits of increased natural gas use can be maximized only if further steps are taken throughout the natural gas system to reduce leaks of methane, the principal component of natural gas and a potent greenhouse gas.
Following is a summary of opportunities and challenges identified in the report, and key next steps:
- Increased direct use of natural gas in homes and businesses by replacing certain electric appliances, such as space and water heaters, with natural gas models.
- Reduced reliance on petroleum and reduced emissions by substituting natural gas for diesel and gasoline in fleets and heavy-duty trucks.
- Manufacturing growth with reduced emissions by using natural gas in more efficient combined heat and power systems.
- Expanded use of natural gas-powered fuel cells and microturbines producing efficient, on-site energy that makes use of waste heat.
- Funding expensive infrastructure to deliver natural gas to more homes and businesses.
- Ensuring that natural gas complements -- not crowds out -- zero-carbon energy such as nuclear, wind, and solar.
- Overcoming regulatory hurdles and a lack of incentives for on-site (distributed) power generation.
- Identifying and addressing methane leaks from the production, transmission, and distribution of natural gas.
- Educating consumers about the full-fuel-cycle efficiency of natural gas appliances.
- Encouraging innovative funding models and incentives to extend natural gas lines to consumers and promote on-site power generation.
- Informing manufacturers about the increased efficiency and resilience of combined heat and power systems.
- Aligning state policies to overcome perceived conflicts between utilities and combined heat and power operations, encourage development of distributed generation technologies such as microturbines, and address the high cost of expanding natural gas infrastructure.
- Agenda of our June 4, 2013, launch event.
- Photos of our launch event
- Blog post: Leveraging the natural gas boom to cut carbon
- Press release on report.
- Our Leveraging Natural Gas Webinar Series.
Video of our launch event
Remarks by Eileen Claussen and Michael Webber
CEO-Level Discission on the greenhouse gas reduction benefits of natural gas
Opportunities for clean-tech innovations are growing, driven by policy changes, market shifts, and continued growth in energy and resource consumption, particularly in developing regions of the world. The next 20 years will be critical for the development, demonstration and deployment of clean technologies that can support climate mitigation and adaptation, energy security, resource efficiency, job creation, and competitiveness. This panel will feature recent projects and lessons learned in promoting low-carbon and clean-tech innovation and entrepreneurship in both established multinational companies and start-ups. Business leaders will discuss the drivers and strategies for developing solutions that reduce GHG emissions at the same time as they bring bottom-line value, improved efficiency, enhanced performance, or competitive edge in a global marketplace. Innovation experts from business and government will describe the steps that can be taken to recognize and support innovation and entrepreneurs in their countries, including the needs for mentorship and incubation for aspiring innovators and small-medium enterprises.
This RIO+20 side event was held on Sunday, June 17, 2012, from 5:00-6:30 pm at the U.S. Center pavilion. Links to PDFs of the presentations are provided below.
- David Rodgers, Senior Energy Specialist, Global Environment Facility
- Meg Crawford, Markets Business Strategy Fellow, Center for Climate and Energy Solutions (C2ES)
- Clay Nesler, Vice President, Global Energy Sustainability, Johnson Controls, Inc.
- Dawn Rittenhouse, Director, Sustainable Development, DuPont
- Rex Northen, Executive Director, Clean Tech Open
- Pradeep Monga, Director, Climate and Energy, United Nations Industrial Development Organization (UNIDO)
- Roberto Alvarez, Agency for Industrial Development in Brazil (ABDI)
This event is organizied by the Global Environment Facility (GEF) and the Center for Climate and Energy Solutions (C2ES)
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity Detailed Methodology and Assumptions
The Center for Climate and Energy Solutions (C2ES) and the Great Plains Institute (GPI) conducted an analysis, with extensive input from the participants of National Enhanced Oil Recovery Initiative (NEORI), to inform NEORI’s recommendations for a federal production tax credit to support enhanced oil recovery with carbon dioxide (CO2-EOR). In particular, C2ES and GPI explored the implications of the recommendations for CO2 supply, oil production and federal revenue. This document describes the research, assumptions, and methodology used in the analysis.
C2ES and GPI compared the likely cost of a federal tax credit for greater CO2 capture and supply with the federal revenues expected from applying existing tax rates to the resulting incremental oil production. C2ES and GPI quantified two key relationships for CO2-EOR develop-ment and a related tax credit program:
- Cost gap – the difference between CO2 suppliers’ cost to capture and transport CO2 and EOR operators’ willingness to pay for CO2. The goal of the tax credit is to bridge the cost gap. Thus, the cost gap determines the expected level of the tax credit in a proposed competitive-bidding process.
- Revenue neutrality/revenue-positive outcome - the federal government will bear the cost of a CO2-EOR tax credit program, yet it will enjoy increased revenues from the expansion of CO2-EOR oil production when existing tax rates are applied to the additional production. C2ES and GPI analyzed when the net present value of expected revenues would equal or exceed the net present value of program costs.
C2ES and GPI calculated the tax credit required to bridge the cost gap, and the cost and revenue implica-tions. C2ES and GPI developed input assumptions based on real-world physical and market conditions after consulting with NEORI participants and other industry experts and reviewing available literature. C2ES and GPI developed a core scenario based on “best guess” inputs and conducted several sensitivity analyses of key inputs. C2ES and GPI demonstrated that a program can be designed that will become “revenue positive” (defined as when the federal revenues from ad¬ditional new oil production exceed the cost of a carbon capture tax credit program after applying a discount rate to both costs and revenues) within ten years after tax credits are awarded. Sensitivity analysis reveals that the program remains revenue positive using a realistic range of likely assumptions.
I spent the last few days at the eleventh annual Carbon Capture Utilization & Sequestration Conference (CCUS) in Pittsburgh.
For its first 10 years, it was the CCS conference, focused primarily on advancing efforts to capture and permanently sequester carbon emissions underground. This nascent technology is absolutely critical if we are going to continue burning fossil fuels and have any hope of averting dangerous climate change.
This year the conference organizers added “Utilization” to the title. This addition reflects a new reality: in the absence of strong climate policy, the key driver of CCS innovation is the utilization of CO2 for enhanced oil recovery (CO2-EOR). This is a little-known technique in which CO2 (usually drawn from naturally occurring underground reservoirs) is injected into declining oil fields to boost their output. It now accounts for about 6 percent of domestic U.S. oil production.
Keynote speech by Eileen Claussen, President of the Center for Climate and Energy Solutions
11th Annual Conference on Carbon Capture, Utilization and Sequestration
May 1, 2012
Thank you very much. It is a pleasure to be here in Pittsburgh. And I want to thank Exchange Monitor Publications and Forums, together with the Department of Energy and the National Energy Technology Laboratory and their partnering organizations, for convening this very timely and very important conference.
Everything is so well organized and the breakfast spread was so perfect and so tantalizing … for a moment I thought I was at an event put together by the General Services Administration.
I also congratulate you for putting added emphasis this year on the utilization of carbon emissions and for changing the title of the conference to reflect this … Now it can officially be said that this is the event that put the “you” in CCS. If only we could add an “A” word to the end and make it CCUSA, then we could add some patriotic flair to this whole endeavor.
In all seriousness, I want to talk with you today about why CCS (or any acronym we choose to employ for it) is so important … not just for the future of fossil fuels—but also for the future of this country and its efforts to get a handle on the twin challenges of energy and climate change.
And I also want to discuss one of the most promising technologies available for making large-scale CCS a reality. I am talking, of course, about CO2-enhanced oil recovery, or CO2-EOR, which is an issue that my organization has been working intently on as a co-convener of the National Enhanced Oil Recovery Initiative.
Whether you spend the bulk of your waking hours worrying about the potential dangers of climate change or not, CO2-EOR makes a huge amount of sense for a number of reasons that I intend to go over later in my remarks. But first I want to talk about why we are even having this conversation and why the United States and the world must finally get serious about taking full advantage of big opportunities CO2-EOR.
When it comes to energy and climate, the United States stands at a crossroads today. Indeed, we are standing there with the rest of the world. At this crossroads, we have a choice to make. We can continue with a business-as-usual or status quo approach to energy and climate issues. If that’s what we choose, we’ll continue to face the same questions and the same concerns not just about the environment and climate change but about energy-related risks to our national security, our economy and jobs, and more.
Or we can choose a new road to the future--that protects our economy, our security and our climate for decades to come.
The environmental case for doing this is compelling enough. According to most scenarios, global emissions of greenhouse gases need to peak by 2015 in order to have a reasonable chance of limiting global warming to no more than 2 degrees Celsius. This is the level where many scientists say we can manage the risks of climate change, but there is considerable debate even on this point and some think we will already be flirting with disaster at 2 degrees Celsius.
Whatever the case, 2015 is just three years away. Are emissions showing any signs of peaking? Not even close … After a brief downturn due to the recession, newly released figures from the EPA show that U.S. emissions resumed their upward march in 2010, rising by 3.2 percent compared to 2009. And global emissions are projected to grow 17 percent by 2020, and 37 percent by 2035. Under that scenario, we could see average global temperatures rise 3 to 4 degrees Celsius by 2100.
But, even if you are an ardent skeptic of the science of climate change or of our ability to dramatically reduce our greenhouse gas emissions, the energy case should be motivation enough for abandoning the status quo and following a new and different road to the future.
What do we care about? Reliability. Affordability. Security. Reduced environmental impact. These have to be the hallmarks of U.S. energy policy going forward, and carbon capture and storage can and must be an important component of that policy. It provides us with the means to continue using fossil fuels in a carbon–constrained future. It is especially critical for producing electricity from both coal and natural gas, while simultaneously reducing greenhouse gas emissions.
Coal, of course, has the most at stake in this discussion. Coal, in fact, is at a crossroads itself. The latest figures from the U.S. Energy Information Administration confirm that coal’s share of U.S. electricity generation is decreasing.
In 2006, coal-fired generation accounted for more than half (50.4 percent to be exact) of the total generation mix in this country. By the end of 2011, that figure had declined to 43.4 percent of the mix, a drop of 7 percentage points. The biggest factor in coal’s relative decline, of course, is dropping natural gas prices. According to EIA, natural gas prices are forecast to remain below $5 per million BTUs for the next 10 years. This is why we’re seeing so many new natural gas power plants. EIA’s latest estimates for 2011 and 2012 show around 20 gigawatts of added capacity planned for natural gas versus around 9 gigawatts for coal. Add to this the spare capacity of existing gas-fired power plants that were built to generate electricity during the daytime hours only and you can see the challenges facing coal.
New EPA rules also pose challenges for coal. The new Mercury Rule alone, which was issued last December, will affect 1,325 units at 525 power plants of all types around the United States. Some of these plants are more than 50 years old, and companies may retire older plants rather than paying to install new pollution control equipment.
In addition, there is EPA’s Cross-State Air Pollution Rule (CSAPR) and, on the industrial side, the 2011 rule imposing new emissions reductions requirements on coal-fired boilers. And most notably, of course, earlier this spring the EPA proposed the first-ever national standards for limiting greenhouse gas emissions from new power plants. In order to comply with the rules, new plants would have to install carbon capture and storage technologies. There is essentially no other way for these plants to reduce their emissions to the level required under this proposal.
After detailing all of these challenges for coal, I am inclined to ask the question, “Other than that, Mrs. Lincoln, how did you enjoy the play?”
The proposed GHG rules make it official: In order to keep coal’s share of the U.S. energy mix from declining further, we need to throw out old ways of thinking. We need to think big. This is not just about trying to compete with natural gas on price; it is about embracing new ideas and new technologies to ensure that coal can continue as a fuel of choice in a world that, whether you like it or not, will become increasingly focused on limiting and reducing carbon emissions.
Coal alone is responsible for 28 percent of U.S. greenhouse gas emissions. Worldwide, 43 percent of CO2 emissions from fuel combustion come from coal. Clearly, something has to give. In order for the world to get a handle on the climate problem, and in order for coal to hold onto its place as a major energy source in the decades to come, we need to show – and very quickly – that it is possible to achieve substantial cuts in emissions from coal-fired power generation.
In other words, we need to find a low-carbon solution for coal. And coal is not our only challenge – we need all the low-carbon and carbon-free technologies we can get. The good news about natural gas is that it generates half of the emissions of coal when used as a fuel source. But that’s also the not-so-good news about natural gas; it still generates substantial emissions, and in order to achieve the level of reductions that will reduce the risk of climate change, we need CCS for natural gas as well as for coal.
The potential for CCS to reduce emissions is undeniable. Studies show that CCS technology could reduce CO2 emissions from a coal-fueled power plant by as much as 90 percent. Modeling done by the International Energy Agency (IEA) forecasts that CCS could provide 19 percent of total global GHG emission reductions by 2050. That includes reductions from coal and natural gas-fired power plants, as well as all other sources.
But these are just studies, they are merely estimates of what could happen if CCS finally emerges from the world of drawing boards and demonstration projects to actual widespread deployment throughout this country and around the world. What we are doing right now to develop these technologies is not enough; it’s not even close to enough. We have two decades at most to deploy these technologies at the scale needed to achieve substantial reductions in emissions.
And one way to start is by taking a more serious approach to the development of CO2-Enhanced Oil Recovery in this country.
For nearly 15 years, my organization has sought to bring industry, government, NGOs and others together to explore innovative solutions to the climate and energy challenges we face in the United States and around the world. We see CO2-EOR as a very important piece of the puzzle. And this is why we worked with the Great Plains Institute to convene the National Enhanced Oil Recovery Initiative, or NEORI. NEORI is a coalition of industry, state, environmental and labor leaders who have come together to develop and present recommendations for boosting domestic oil production and reducing CO2 emissions through the expanded use of CO2-EOR.
The participants in this effort believe that EOR using captured carbon dioxide offers a safe and commercially proven method of expanding domestic oil production that can help the U.S. simultaneously address three urgent national priorities.
- The first priority is increasing our nation’s energy security by reducing dependence on foreign oil, including oil that is imported from unstable and hostile nations. CO2-EOR potential in the United States equals 26 to 61 billion barrels of oil with existing technology; with next-generation techniques the potential rises to 67 to around 140 billion barrels. U.S. proven reserves are 20 billion barrels, so we are talking about at least doubling U.S. oil potential. That’s huge.
- The second priority that CO2-EOR addresses is creating economic opportunity – if we do this right, it will create jobs, boost tax revenues, and reduce the U.S. trade deficit. We can put dollars we now spend on oil imports to work right here in the U.S. economy. How much money are we talking about? One estimate, from Advanced Resources International, projects that the reduction in oil imports associated with CO2-EOR would total $600 billion by 2030.
- And the third priority addressed by CO2-EOR? Protecting the environment. Capturing and storing CO2 from industrial facilities and power plants will reduce U.S. greenhouse gas emissions, while getting more American crude from areas already developed for oil and gas production. By fully developing American reserves that are amenable to this practice, we could reduce CO2 emissions by 10 billion to 19 billion tons, an amount equal to 10 to 20 years of emissions from personal vehicle use in this country. And the bonus is that it can help us further the commercial deployment of the CCS industry in this country — not just with coal and natural gas power plants, but with other domestic industries such as natural gas processing, ethanol and ammonia production, and steel and cement manufacturing. Driving innovation in CCS technology will allow us both to take advantage of our nation’s vast fossil fuel resources and achieve much larger CO2 emission reductions.
I have worked on the climate issue for many years now, and I assure you this is a big deal. Reducing U.S. CO2 emissions by up to 19 billion tons while also advancing CCS technology would be a major achievement.
So if CO2-EOR is so important, why aren’t we doing more of it? Well, as all of you know, the major hurdle standing in our way is that there’s just not enough readily available CO2. And this is why our organization joined with the Great Plains Institute to convene the NEORI.
The idea behind this initiative was to bring together a diverse group of stakeholders and try to come to agreement about what needs to happen to realize CO2-EOR’s potential. More specifically, we wanted to develop a set of recommendations for federal and state incentives that will stimulate the expansion of CO2-EOR using carbon dioxide from power plants and industrial facilities.
Were these conversations easy? In a word, no. This is a group that included participants ranging from major coal companies and industrial suppliers of CO2 to environmental NGOs, organized labor, and state officials. The diversity of the group meant we had some very tough discussions. But in the spirit of the saying, “Nothing that is worthwhile is easy,” the final participants in this project stuck with it, and they came up with a plan that already has attracted bipartisan interest in Congress. We released this plan earlier this year at an event on Capitol Hill, and I want to give you a quick sense of what it entails.
NEORI’s centerpiece recommendation is a competitively awarded, revenue-positive federal production tax credit for capturing and transporting CO2 to stimulate CO2-EOR expansion. This federal tax credit would more than pay for itself because it will lead to additional oil production subject to existing tax treatment. The new incentive will enable a variety of industry sectors to market new sources of CO2 to the oil industry, and to reduce their carbon footprints. It will drive innovation and cost reduction in CO2 capture and compression, and help build out a national CO2 pipeline system.
For the near term and until the broader credit is in place, NEORI also recommends specific “good government” changes to improve the workability of the existing carbon capture and storage credit known as Section 45Q.
Of course, states also have an important role to play in fostering CO2-EOR deployment. This is why NEORI identifies existing state policies that should serve as models for policymakers in other states to adopt and tailor to their particular needs.
Later this morning, you will hear more about our recommendations from a panel of NEORI participants. And I encourage you to visit the website, www.neori.org, for more on the recommendations we have made.
So let’s cut to the chase. What will happen if we adopt these measures I have described? NEORI estimates that our proposed new federal production tax credit for CO2 capture will quadruple the amount of domestic oil currently produced annually through enhanced oil recovery – to 400 million barrels a year in the outyears – while cutting CO2 emissions by 4 billion tons over the next 40 years. In addition, we will be generating new tax revenue for states and for the federal government – as I said, these incentives will more than pay for themselves. And we will be gaining vital experience and creating valuable infrastructure supporting broader deployment of carbon capture and sequestration in the future.
At a time of economic struggle, fiscal crisis and political gridlock, at C2ES we believe the NEORI proposal is an encouraging example of how we can and must make progress on the climate and energy challenges we face. As much as we would like to see comprehensive solutions to our climate and energy challenges, those solutions are not on the immediate horizon. But if we come at these issues one by one, look for opportunities where interests converge, and are open to compromise, we can arrive at practical solutions benefiting our economy, our security and the environment.
At the Capitol Hill event where NEORI announced our recommendations in February, we also were able to welcome a bipartisan group of members of Congress who were on hand to express their support. Given the political gridlock in Washington in this election year, it was reassuring to see lawmakers from both political parties step up and say they agree that this is important work.
Will we see comprehensive legislation on this issue pass the Congress this year? That’s unlikely … but we do think we have a shot at Section 45Q reform this year. Still, the NEORI recommendations have started the conversation and we feel optimistic that we can see progress on this issue in the not-too-distant future no matter who controls the Presidency and the Congress next year.
All of which brings me to the closing segment of my remarks today, in which I simply want to appeal to all of you to help us keep pushing these issues forward.
Rarely in the current political climate do Republican and Democratic lawmakers in Washington rally together in support of anything. So we need to make the most of this opportunity. Everyone who supports CO2-EOR has an obligation to educate their representatives in Washington and in state capitals around the country about the benefits this can deliver for our economy, our national security and the environment.
We also need to help the general public understand what’s at stake here … why we need to reduce emissions, why CO2 use and sequestration in depleted oil fields is an important solution, and what this can mean for the future of our country, and for the future of fossil fuels as well.
Thank you very much.