Development of a Policy Framework for CO2 Carbon Capture and Storage in the States

Development of a Policy Framework for CO2 Carbon Capture and Storage in the States

Prepared for the Pew Center on Global Climate Change by Stephen Melzer, Melzer Consulting
August 2008 

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Executive Summary

This paper presents the background and policy issues surrounding development of a commercial market for captured carbon dioxide (CO2), and seeks to foster among policymakers a deeper understanding of 1) both the generation and carbon capture and storage (CCS) technologies involved, as well as their costs; 2) the technical and regulatory barriers to deployment of those technologies, and 3) the opportunities CCS may offer for increased employment and income. Enhanced oil recovery (EOR) offers one potential pathway to large-scale, widespread use of captured CO2, and Ohio seems particularly well-positioned to take advantage of these emerging opportunities.

There are a number of state-specific actions that Ohio and other states might initiate to facilitate the deployment of next-generation coal technologies. States can compensate for, or even remove, many of the barriers facing first movers by recognizing CCS, and CO2 stored through EOR, as clean energy options. States can provide various incentives for CO2 capture, transportation, and storage, and, since public acceptance of storage of CO2 in deep saline formations (DSFs) may be years away, adoption of CO2 EOR as a recognized CCS activity could facilitate new projects today and set the stage for deeper, more permanent injection and storage in the future.

Federal policies to move the United States to a low-carbon energy future are almost certain to be enacted within the next two to four years. To be at the forefront of states in a favorable position under future federal legislation, Ohio, and other states, should encourage first movers and address policies to remove current impediments to the implementation of projects that could create a source of CO2 for CCS field demonstrations and solutions.