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Biden Pushes for Carbon Capture Progress

Copyright © 2021 Energy Intelligence Group

US President Joe Biden's administration is throwing its weight behind carbon capture as a key part of its effort to take on climate change as support on both sides of the aisle opens new avenues of government spending for the technology. "You can't get to that goal of net-zero carbon without technology, like carbon capture, like hydrogen solutions, like direct air capture," Energy Secretary nominee Jennifer Granholm told a senate panel last month. She also said she believed natural gas, oil and coal will continue to be a part of the energy mix. The most progressive climate action advocates do not see a role for carbon capture, however, but only a moral hazard in which fossil fuel resources are left on line for longer and their carbon emissions are not fully mitigated. But the scale of action needed to decarbonize the economy means that ruling out carbon capture would limit options for utilities and power companies. While the goal of achieving net-zero carbon emissions is possible without carbon capture, a recent study from Princeton University found it would involve even more wide-scale deployment of renewables and transmission infrastructure (OD Dec.23'20). Granholm said the Department of Energy (DOE) will "immediately proceed" to find new carbon capture demonstration projects, and will support direct air capture. She'll have help doing so, with Shuchi Talati, whose previous work at advocacy Carbon180 focused on scaling up carbon removal technologies, serving as chief of staff in the Office of Fossil Energy (OD Jan.28'21). In part, the decision to support carbon capture was made for the Biden team last year, when stimulus and spending legislation instructed the Energy Department to begin work on large-scale carbon capture demonstration plants. That law provides for the DOE to build six demonstration facilities over the next five years, at coal- and gas-fired power stations as well as industrial facilities. The bill also extended a tax credit for carbon capture programs known as 45Q through the end of 2025. Next Moves Now Congress needs to fund those carbon capture projects, proponents say, and more changes are needed on the tax credit program. Advocates pushed for a direct pay option for companies claiming credit, a change that would allow firms with otherwise low tax burdens to receive a payment from the Department of the Treasury. It also lets those companies avoid complicated financial structures in which partners with higher tax burdens are taken on to take full advantage of the credit. With the economic crisis, there are fewer of these types of partners available. Lee Beck at the Clean Air Task Force says there is also a need to support carbon capture at less carbon-intensive facilities. The existing tax credit pays out a flat fee per ton. "The problem in the power sector is [the credit] is worth half as much for natural gas plants as it is for coal," given natural gas' lower emissions, Beck said. Each sector that deploys carbon capture might need different policy incentives. "The model of how we do it might be very similar, but the economics are very different," she added. Given relatively low oil prices, changes in those tax credits and government support for demonstration projects may be more critical for seeing enough carbon capture deployed at scale than in the past. "Given the turmoil in the oil markets and the continuing low prices of oil, enhanced oil recovery is now seemingly a smaller opportunity than it was before," said Rich Powell, executive director of conservative climate group ClearPath. Beck advocates policies to support so-called "supersized" infrastructure -- large-scale pipelines and saline storage that multiple facilities can share to reduce the cost and burden to each facility interested in deploying carbon capture. Powell is pushing for a review of the National Environmental Policy Act (Nepa) that governs environmental permitting. The Trump administration pushed out its own Nepa reform, which the Biden administration is reviewing. Nepa reform is often viewed as a nonstarter on Capitol Hill, with Democrats concerned that it would weaken environmental reviews. But Powell notes that large-scale wind farms and new transmission lines also encounter permitting opposition. "I think it'll be the renewables industry that'll drive that," he said. "They're rapidly going to have to grapple with that issue and find a path forward, and I really hope it's a path forward that really helps all clean technologies." Emily Meredith, Washington

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