We haven't heard much urgency about carbon capture and storage since cap and trade legislation to limit carbon emissions died in the Senate in July 2010.
But in preparing to write fresh legislation to promote its development, Sen. Jay Rockefeller, D-W.Va., is seeking ideas from a wide range of stakeholders.
The West Virginia Democrat sent a letter Aug. 3 to about 30 coal, utility, labor, environmental and analysis organizations that operate at the national scale asking for their thoughts on how now to move forward with carbon capture, use and storage, or CCUS.
"Technological development to reduce carbon emissions is critical to increasing our energy and economic security, reducing our environmental impact and securing the future of coal and other domestic resources," Rockefeller wrote.
"I would appreciate your suggestions and ideas about the research targets, policies, and regulatory and financial incentives that are needed to fully develop the potential of CCUS and thereby secure tangible benefits for our environment and our economy," he wrote.
This may be a good time, politically, for a renewed push for investment in CCUS, given newly energized talk of a carbon tax.
On the other hand, given that it will increase the cost of using coal at a time of persistent competition from inexpensive natural gas, it may be a particularly challenging time.
Now, as in 2010, the "regulatory and financial incentives" Rockefeller asks about are probably the tricky part.
Brief history
Rockefeller is a long-time proponent of clean coal technology development.
In 2009 and 2010, he opposed cap-and-trade legislation to control climate-warming carbon emissions and parallel Environmental Protection Agency efforts because, he argued, they did not allow time for the development of CCUS, widely seen as essential to coal's viability in a carbon-constrained economy.
"The Senate should be focusing on the immediate issues before us — to suspend EPA action on greenhouse gas emissions, push clean coal technologies, and tackle the Gulf oil spill," he urged in a media release in June 2010. "We need to set aside controversial and more far-reaching climate proposals and work right now on energy legislation that protects our economy, protects West Virginia and improves our environment."
In July 2010, he co-introduced legislation that, had it succeeded, would have put $850 million in federal matching funds toward the development of what was then usually referred to only as carbon capture and storage, or CCS.
Those animated efforts fell away with the failure that month of cap and trade and the sluggish economy since.
But Rockefeller raised the topic again in June in a frustrated statement on the Senate floor in which he advised the coal industry to "lean into the future" for the sake of coal miners and for the nation.
"I'm not giving up hope for real solutions for clean coal," he said. "Solving big challenges with American ingenuity is what we do."
Asked by The State Journal whether the economic pressures on coal might not make this an especially challenging time to promote technologies that will add to the cost of coal-fired generation, Rockefeller brushed that concern aside.
"The coal industry is working through a tough patch but we shouldn't let current challenges get in the way of planning for the future," he wrote in an e-mail response.
Coal is needed in the energy mix now and in the future, he wrote, and, at the same, time, growing concerns about climate change worldwide should drive us toward clean coal technology, not away from it.
"Only through research, development and deployment will the technology become more efficient and affordable," he continued. "That's why we need to make smart, targeted investments for the future of energy in West Virginia and around the country. … Yes, it's hard, but that shouldn't keep us from doing anything about it."
Letter recipients on timing
The timing of any legislation promoting clean coal is not an issue, as far as the United Mine Workers of America is concerned.
"There's never a bad time to be looking at new technologies and new ways for us to use this abundant natural resource which will be a part of the energy mix in this country for the foreseeable future," said spokesman Dave Kameras.
Letter recipient the Environmental Defense Fund is one of the environmental organizations that argue for cleaning coal rather than stopping coal, and it sees clean coal technology as a subset of needed technologies.
"I don't know that I see the need for low-carbon technologies being an exclusive focus on coal," said Mark Brownstein, chief counsel of the Energy Program at EDF. "I think it's an important topic for all fossil fuels."
Published analyses say the U.S. will need to invest $1 trillion over the next quarter century in utility infrastructure, Brownstein said.
"We might as well address the economic and environmental imperatives that we know are there," he said. "It's not a question of whether we're going to spend the money, it's a question of whether we're going to do it thoughtfully and smartly, and taking advantage of the latest in science and engineering."
Ideas about how it can be paid for are part of what the senator is asking for, he said.
"Obviously the best ideas are ones that take advantage of market forces, that leverage existing capital — so you're looking for things that are smart, that are catalytic, that are cost-effective, that work with market forces, not against them," he said. "Those are the kinds of ideas that we'll be trying to bring to the table and that we hope others will too."
About that cap …
Timing, or a well-timed coordination of regulation and funding, is going to be critical, in the view of major utility American Electric Power, another recipient of Rockefeller's letter,
AEP will have recommendations for him borne out of hard experience.
The company placed itself at a leading edge of CCS with its high-profile retrofit project at the Mountaineer plant in New Haven, W.Va.
Having succeeded there in early 2011 with a small-scale CCS validation project, the company received a Department of Energy commitment of $334 million, with Rockefeller's help, to pay half the cost of a commercial-scale demonstration.
But without a federal mandate to reduce its carbon emissions, the company was unable to receive approval to recover its project expenses from ratepayers and, in July 2011, suspended the project.
"It's a Catch-22," said AEP spokesman Pat Hemlepp. "To be able to get cost recovery from customers, we have to be required to pursue the technologies. But we need to be developing the technology before requirements kick in."
Then-AEP Chairman and CEO Michael Morris put it more like "chicken and egg." At the time, he asked which comes first: the technology that makes the regulation palatable, or the regulation that makes the technology necessary?
That is, the emissions caps that Rockefeller opposed — the advancing cap and trade legislation would have reduced greenhouse gas emissions by 17 percent from 2005 levels by 2020 and by 83 percent by 2050 — would have created the conditions for private investment in and regulatory cost recovery of CCS projects.
"When we undertook the Mountaineer project, we fully expected that by the time we worked our way through the project we would have rules in place for greenhouse gas emissions," Hemlepp said. "That didn't happen."
A rule with targets and timelines for emissions reductions would make the cost recovery case easier with regulators, he said.
"But developing a technology for an unknown target with unknown deadlines makes it extremely difficult to convince regulators to authorize cost recovery," he said.
Rockefeller asked in his letter that respondents get back to him by Sept. 14.
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