Technology is ‘demonstrated,’ McCarthy insists

There is an ironic aspect to the controversy surrounding EPA’s proposal to hold new coal-fired power plants to a CO2 emissions limit that can be achieved only by carbon capture and sequestration (CCS).  The argument being made by some is that absent a federal CCS-derived standard, there is a possibility that the use of coal in power generation will actually decrease.  This line of thinking here appears to be based on the idea that regulation, even very stringent regulation, provides the certainty on which economic decisions—i.e., new coal-fired generation—can be based.  

This scenario was touched up by David Hawkins at a hearing of the House Subcommittee on Energy and Power.  Hawkins, who advocates for clean air at the Natural Resources Defense Council (NRDC), was discussing a House bill that would effectively prohibit the EPA from using CCS as the best system of emissions reduction (BSER) for new coal-fired power plants unless CCS is deployed on a fully commercial basis at a minimum of six full-size power plants in different parts of the country. 

Of course, the bill cannot prohibit energy companies from implementing CCS; however, it would prevent the EPA from basing its New Source Performance Standards (NSPS) for new coal-fired power plants on that technology probably until 2020, at the earliest, which is when analysts believe the lessons about CCS being learned in pilot projects might actually be commercialized at large power plants.  But the bill does not answer the question of how this will happen absent a Clean Air Act (CAA) requirement—in other words, power companies will not switch to CCS unless they are forced to do so by a federal standard.  So the underlying and primary intent of the bill is simply to discourage CCS from occurring at new coal plants; CCS advocates believe this will unintentionally inhibit any plans energy companies may have to build new coal-fired generation. 

The real drivers

Accordingly, Hawkins believes the bill and any similar legislation will not assist the coal industry.  He stated:

“From the perspective of coal advocates, the rationale for this bill appears to be that Congress can protect the volumes of coal consumed by the power sector by prohibiting EPA from setting any meaningful limits on carbon pollution from power plants. This tactic simply will not work.  A careful examination of the forces confronting the coal industry shows that handcuffing EPA cannot be a successful way to improve the lot of coal producers or coal communities.  Most U.S. coal use is in the power sector and the power sector has choices for the resources it uses.  The bill seems to ignore the obvious fact that power producers are not in business to burn coal.  Their business interest is in supplying electricity resources and their fuel and technology choices will be driven by market forces that together are much more powerful than the effects of Clean Air Act standards on power production prices.”

According to Hawkins, CCS is not among the following “biggest drivers” of the power sector’s continuing shift away from coal:

• The lower costs of natural gas when compared to coal;
• The comparatively lower cost of building natural gas power plants;
• The expanded penetration of renewables, particularly wind;
• The success of demand side management in reducing demand for power; and
• The conviction in much of the investor community that climate science and observed climate disruptions will lead to public demands for policies to limit carbon emissions, likely before investments in new or refurbished coal plants are recouped.

This viewpoint is intriguing because it differentiates between coal producers, who are adamantly opposed to CCS, and energy companies, who are under no obligation to build new coal generation and therefore need not be concerned about CCS, its cost, and technical feasibility.  On the other hand, even with a very stringent NSPS CO2 emissions limit based on CCS, power companies may indeed find it profitable to continue the use of coal, for example, in areas of the country where injection of CO2 underground is not cost prohibitive or where CO2 can be sold for enhanced oil recovery (EOR).  In other words, CCS will provide a regulatory foundation on which energy companies can explore new ways to profit from new coal generation … or so the argument goes.

Full-scale coal plants

But these considerations are not swaying industry leaders and their political supporters, who simply see the proposed NSPS and CCS as part of EPA’s “war on coal.” 

The core question at the subcommittee hearing was whether CCS has been adequately demonstrated.  Indeed, the CAA does specify that the BSER applied in developing an NSPS must be a technology that is more than just theoretical.  And, CCS does satisfy that criterion since it has been demonstrated in the real world, primarily in the oil and gas industry.  But it has not been demonstrated at a full-scale coal-fired power plant, a point that appears to be of the highest importance to opponents of the proposed NSPS. 

This topic was the subject of a brief, intense exchange—summarized below—between EPA administrator Gina McCarthy and Rep. Randy Neugebauer (R-TX) at a hearing of the House Committee on Science, Space, and Technology. 

• -Neugebauer tells McCarthy that representatives from the Department of Energy (DOE) told the Committee that CCS has not been adequately demonstrated at a full-scale power plant anywhere in the world. 
• McCarthy responds that CCS has been proven, adequately demonstrated, and available and is being included in coal facilities that are now being constructed. 
• Neugebauer asks for an example of a full-scale power plant now using CCS. 
• McCarthy answers that she is aware of two plants with CCS that are 75 percent completed (Southern Company’s Kemper, Mississippi, project and a project in Canada) and knows of others in the planning stage. 
• Neugebauer points out that the Kemper project is receiving DOE funding and that the Energy Policy Act prohibits use the use of a DOE-funded technology as BSER. 
• McCarthy repeats that CCS has been adequately demonstrated for decades. 
• Neugebauer presses McCarthy to concede that CCS has not been demonstrated without DOE funding at a full-scale power plant. 
• McCarthy says the components of CCS have been demonstrated in other full-scale applications. 

Neugebauer keeps trying to get McCarthy to state that CCS has not been demonstrated at a full-scale power plant and, in the end, McCarthy refuses to do so. 

It is not clear who has the upper hand here.   As pointed out by Hawkins, in a 1999 opinion (Lignite Energy Council v. EPA), a federal appeals court held that the EPA may find that a technology is adequately demonstrated based on the “reasonable extrapolation of a technology’s performance in other industries.”  Certainly, the coal industry will not find the extrapolation of CCS from other industries to coal-fired power plants to be reasonable.  Should the EPA follow through with its proposal, the courts will likely take a another look at how a technology can be adequately demonstrated in the context of coal-fired power generation.

An engineering view

An engineering perspective on CCS was provided by J. Edward Cichanowicz, who told the Subcommittee he has over 40 years’ experience with environmental controls for fossil fuels.  According to Cichanowicz, it is possible that CCS can evolve to help mitigate CO2 emissions, but “we do not know enough now to draw a conclusion.”  Cichanowicz makes the following points:

• Scaling design to larger capacities. The task of scaling from a pilot plant or demonstration equipment to a large commercial generating unit must be addressed. Experience at small pilot plant capacities that are equivalent to 20 to100 megawatts is invaluable, but it is necessary to know how to extend these lessons to larger sizes.

• Generalizing design for broad application. Any one test or demonstration site is characterized by coal composition and site conditions that cannot be readily generalized to other fuels or sites.  Extending design lessons from demonstration equipment to different fuels and sites is necessary to apply CO2 capture technology on a broad national basis.  For example, coal composition—particularly inorganic material—can affect process chemistry.  Success with a specific coal like lignite does not guarantee success for other coals, such as eastern bituminous coals or coals from the Powder River Basin.

• Seamless operation.  Individual CCS components must work together in a seamless or integrated manner.  “These lessons can only be learned with large-scale demonstration projects,” stated Cichanowicz.  “For example, SaskPower’s [Canada] Boundary Dam Unit 3—equipped with a postcombustion CO2 control and scheduled to start up in early 2014—employs 125 separate subsystems.  Mississippi Power’s Kemper County unit—equipped with precombustion CO2 capture designed for lignite coal and also scheduled to start up in 2014—employs an equally large number of subsystems never operated as one integrated design to exclusively serve power generation.”

• Timeline and testing.  Significant time is needed to make use of data from test projects to design.  Design rules can be derived from experimental data typically 2 to 3 years subsequent to the unit start date.

• CO2 reuse or sequestration.  Finding a place to send captured CO2 is a significant challenge.  Using CO2 for enhanced oil recovery has been demonstrated, but the largest sites are concentrated in a limited number of states.  Sequestration in deep saline sinks is an alternative.  But this option may also be constrained by nontechnical property rights issues.  For example, the needed pore space may extend into multiple states and be owned by different parties.  Also, CO2 repositories must be extensive and could infringe on existing mineral and water rights.  Even when suitable repositories are found, time is needed; the International Energy Agency estimates that 5 to 10 years is needed to qualify a saline reservoir as adequate for CO2 sequestration. 

Dialog will continue

As it develops its final NSPS for new coal-fired power plants, the EPA will likely develop responses to questions about these and related issues, as well as its legal understanding of adequately demonstrated.  President Obama has not given the EPA a deadline for issuing a final NSPS.  However, he has directed that the EPA propose carbon “pollution standards, regulations, or guidelines” for modified, reconstructed, and existing power plants by no later than June 1, 2014.  Since the NSPS for existing sources must be linked to the NSPS for new sources, it is likely we will see final action on the Agency’s current power plant proposal before that date. 

Testimony before the House Subcommittee on Energy and Power http://energycommerce.house.gov/hearing/epas-proposed-ghg-standards-new-power-plants-and-whitfield-manchin-legislation 

McCarthy’s testimony http://science.house.gov/hearing/full-committee-hearing-strengthening-transparency-and-accountability-within-environmental

William C. Schillaci
BSchillaci@blr.com