Carbon Capture Myths

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Sarah Miller October 2018

Carbon capture and storage (CCS) is a business concept whose time will never come. Whatever role carbon capture may or may not play at some future point in the battle against global warming, it will not prolong the life of gas- and coal-fired electricity. Back when renewables were expensive and hefty carbon pricing was widely anticipated, it seemed that CCS might before long become cheap enough to make gas- and even coal-fired power a competitive low-carbon energy source. But with carbon pricing low or absent virtually worldwide, and solar and wind plus battery storage on a short path to becoming the lowest-cost source of electricity on an unsubsidized basis, even small additional costs for carbon removal would shorten, not extend, the life of coal- and gas-fired power.

The notion that carbon could be extracted from the flue gas coming out of fossil fuel power plants, and either sold for some purpose such as enhanced oil recovery (EOR) or stored underground, has been presented for decades as the mythical path to saving the climate without ditching fossil fuels or fundamentally changing the way people live. The savings from the avoidance of high carbon emission costs would largely reimburse the generator for the cost of carbon capture, especially if a bit could be earned by selling the carbon dioxide, and coal and gas would remain the cheapest fuels for power generation. An assumption, which went without saying, was that wind and solar would remain more expensive than fossil fuel generation in most places, most of the time. Some questioned whether this would work for coal, but it would certainly do so for gas, the theory went.

Governments have periodically offered to foot a good part of the bill for initial projects that would establish the large-scale viability of the technology, but industrial partners -- whether big oil and gas companies, power generators or others -- frequently dropped out even of subsidized schemes, on the grounds that the economics didn't work.

What's surprising is that the CCS myth lives on, despite the fact that solar and wind can already provide the cheapest electricity in prime locations and are quickly catching up elsewhere (NE Jun.28'18). And even though battery costs have fallen by 80% since 2010, they seem likely to take another plunge over the next few years as battery-powered electric vehicles go into mass production, making storage an increasingly viable backup for intermittent renewables (NE Mar.22'18).

The recent Fifth Assessment Report from the UN Intergovernmental Panel on Climate Change (IPCC) was accompanied by UN warnings that extensive use of CCS will be needed if the world is to avoid massive catastrophes resulting from exceeding a 2°C rise in global temperatures. Likewise, 16 European oil and gas companies have just sent a joint letter to the EU, claiming that widespread use of CCS is necessary to prevent global warming from exceeding 2°C. But these companies, like their US and Asian counterparts, aren't actually investing much in CCS themselves, while critics also portray the UN's devotion to CCS as more political than scientific or economic.

How the UN Economic Commission for Europe (UNECE) -- which includes the US, Canada and others outside Europe -- actually puts it is that CCS is the only technology "other than energy efficiency and shifting the primary energy mix to lower carbon fuels that can deliver net emissions reductions at the required scale." Having established that CCS is the only thing that will work other than all other identified alternatives, the UNECE goes on to calculate that relying on energy saving and low-carbon fuels alone would cost 138% more than also using CCS for 14% of cumulative emission reductions between 2015 and 2050. Whether its price assumptions for efficiency, renewable energy and CCS will be borne out -- and why they settled on 14% instead of some other number -- are open questions.

Try, Try Again

Many of the claims about even the modest degree of CCS in commercial use at the moment are also questionable. According to a US Congressional Research Service report from August 2018, CCS is currently in large scale at only two power plants worldwide, one in Texas and the other in the Canadian province of Saskatchewan. The latter, at the provincial government-owned 110 megawatt SaskPower Boundary Dam coal plant, became the world's first commercial-scale CCS facility at a power plant when it started up in 2014, amid predictions that it would set the wheels in motion for technological takeoff for carbon capture. But that never happened, for a combination of technological, cost and political reasons (NE Jan.14'16). Instead, the pro-fossil-fuel Saskatchewan government announced earlier this year that it would not be duplicating the effort at SaskPower Units 4 and 5.

The only other CCS facility currently operating at a power plant is at a 240 MW unit at the Petra Nova coal-fired power complex in Texas. Costs for that facility, which started up in early 2017, were covered to the tune of $190 million by the US Department of Energy (DOE) with the notion that it would provide a demonstration of the viability of flue-gas carbon recovery when combined with the sale of CO2 for use in EOR. But the DOE reported earlier this year that three other projects lined up for similar assistance had all been canceled, suspended or "remain in development."

The other 18 or more supposedly "large-scale" CCS projects frequently cited as being in operation today are at something other than power plants, often industrial facilities or oil and gas fields where the excess CO2 can be used in EOR.

This is all the world has to show from 20 years of serious and expensive work on CCS technology by governments and companies alike. And the expense has not been inconsiderable -- the US government alone has appropriated $5 billion in total for DOE work on the technology since 2010. US President Donald Trump proposed heavily slashing CCS funding this year and next, but Congress instead increased tax credits for companies using the technology, in the hope of belatedly jump-starting commercial carbon recovery.

Exxon Mobil has remained a strong proponent of CCS, but with a different twist. The technology-oriented US supermajor announced in 2016 that, after studying numerous technical variants on the basic carbon capture theme, it had decided that "carbonate fuel-cell technology" offered great potential and would be tested at pilot scale at Southern Co.'s James M. Barry gas-fired power plant in Alabama. Exxon explained that the process would run flue gas through a fuel cell in place of air, thereby concentrating CO2, making it easier to remove and in the process generating an additional 120 MW of power for every 500 MW of gas-fired capacity using the plant. It would also produce hydrogen.

This sounds great in theory, but the company concedes a central point. While the new technology "could reduce the costs associated with current CCS processes," it would still add to, not subtract from, the cost of gas-fired power. So the central drawback remains -- which perhaps helps explain why Exxon has gone quiet on the idea over the past couple of years, while solar, wind and battery costs have continued to fall.

If CCS won't work economically, governments could simply mandate that CCS capacity be added to gas plants and then dump the bill on the consumers -- as Trump has proposed doing for uncompetitive coal and nuclear plants in the US, in an attempt to retain jobs at coal mines and at the power plants themselves. But how long would consumers stand for that once they understood that they could get carbon-free wind and solar power, backed up by storage, for less money, and that this would at least in the short-term also create more jobs?

Pretending that CCS is a feasible way to keep fossil fuel power plants running without adding to the global carbon count is a luxury neither the gas industry nor the earth's atmosphere can afford.

Sarah Miller is Editor-at-Large at Energy Intelligence, and a former editor of Petroleum Intelligence Weekly, World Gas Intelligence and Energy Compass.

Carbon Capture (CCS), Low-Carbon Policy
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