**STATEMENT OF THOMAS D. SHOPE**

**ACTING ASSISTANT SECRETARY FOR**

**FOSSIL ENERGY**

**U.S. DEPARTMENT OF ENERGY**

**BEFORE THE**

**ENERGY AND NATURAL RESOURCES COMMITTEE**

**UNITED STATES SENATE**

**APRIL 16, 2007**

Mr. Chairman, members of the Committee, it is a pleasure for me to
appear before you today to discuss the Department of Energy's
Sequestration Program and Senate Bills 731 and 962.

CARBON SEQUESTRATION AND FOSSIL FUELS

The availability of affordable energy is an important component of
economic growth. The use of fossil fuels, however, can result in the
release of emissions with potential impacts on the environment. Of
growing significance are emissions of carbon dioxide (CO~2~) which
contribute to global climate change.

Balancing the economic value of fossil fuels with the environmental
concerns associated with fossil fuel use is a difficult challenge.
Carbon capture and storage technologies provide a key strategy for
reconciling energy and environmental concerns. Geologic sequestration -
the capture, transportation to an injection site, and long-term storage
in a variety of suitable geologic formations -- is one of the pathways
that the Department of Energy (DOE) is pursuing to allow the continued
use of fossil fuels while reducing CO~2~ emissions.

DOE is taking a leadership role in the development of carbon capture and
storage technologies. Through its Carbon Sequestration Program --
managed within DOE's Office of Fossil Energy and implemented by the
National Energy Technology Laboratory (NETL) -- DOE is developing both
the technologies through which geologic carbon sequestration could
potentially become an effective and economically viable option for
reducing CO~2~ emissions. The Carbon Sequestration Program works in
concert with other programs within the Office of Fossil Energy that are
developing the complementary technologies that are integral to
coal-fueled power generation with carbon capture: Advanced Integrated
Gasification Combined Cycle, Advanced Turbines, Fuels, Fuel Cells, and
Advanced Research. Successful research and development could enable
carbon control technologies to overcome the various technical and
economic barriers in order to produce cost-effective CO~2~ capture and
enable wide-spread deployment of these technologies.

DOE'S CARBON SEQUESTRATION PROGRAM

The Carbon Sequestration Program, with a Fiscal Year 2008 budget request
of \$86 million (including Sequestration R&D by federal employees under
the Program Direction line), encompasses two main elements of technology
development for geologic sequestration: Core R&D and Validation and
Deployment. The Core R&D element converts technology needs in several
focus areas into technology solutions that can then be validated and
deployed in the field. Lessons learned from the field tests are fed back
to the Core R&D element to guide future research and development.
Through its Integrated Gasification Combined Cycle, Fuels,
Sequestration, and Advanced Research programs, DOE is investigating a
wide variety of separation techniques, including gas phase separation,
absorption, and adsorption, as well as hybrid processes, such as
adsorption/membrane systems. Current efforts cover not only improvements
to state-of-the-art technologies but also the development of several
revolutionary concepts, such as metal organic frameworks, ionic liquids,
and enzyme based systems. The ultimate goal is to drive down the energy
penalty associated with capture so that geologic sequestration can be
done while keeping any increase in the cost of electricity to less than
10 percent.

REGIONAL CARBON SEQUESTRATION PARTNERSHIPS

One of the key questions regarding geologic sequestration is the ability
to store CO~2~ in underground formations with long-term stability
(permanence); this requires monitoring and verification of the fate of
the CO~2~, to ensure that the science is sound and ultimately gains
public acceptance. Answering this question is the responsibility of
DOE's Regional Carbon Sequestration Partnerships (RCSPs), which are
developing and validating the technology, and national infrastructure
needed to implement geologic sequestration in different regions of the
Nation.

Collectively, the seven RCSPs represent regions that account for 97
percent of coal-fired CO~2~ emissions, 97 percent of industrial CO~2~
emissions, 97 percent of the total land mass, and essentially all the
geologic storage sites in the U.S. potentially available for carbon
sequestration. The RCSPs are evaluating numerous geologic sequestration
approaches in order to determine those best suited for specific regions
of the country. They are also developing the framework to validate and
deploy the most promising technologies for geologic sequestration.

A THREE-PHASE APPROACH

The RCSP Initiative takes a three-phased approach. The first,
Characterization Phase, was initiated in 2003 and focused on
characterizing regional opportunities for carbon capture and storage,
identifying regional CO~2~ sources and storage formations. The
Characterization Phase was completed in 2005 and led into the current
Validation Phase, which focuses on field tests to validate the efficacy
of geologic sequestration technologies in a variety of storage sites
throughout the U.S. Using the extensive data and information gathered
during the Characterization Phase, the seven RCSPs have identified the
most promising opportunities for field tests to validate the efficacy of
geologic sequestration technologies in a variety of storage sites
throughout the U.S. Using the extensive data and information gathered
during the Characterization Phase, the seven RCSPs identified the most
promising opportunities for carbon storage in their Regions and
commenced geologic field tests.. In addition, the RCSPs are verifying
regional geologic sequestration capacities initiated in the first phase,
satisfying project permitting requirements, and conducting public
outreach and education activities.

The third phase, or Deployment Phase for large-volume testing, scheduled
to begin in FY 2008, will demonstrate the feasibility of CO~2~ capture,
transportation, injection, and storage at a scale equivalent to future
commercial deployments. Given the opportunities provided by the FY 2007
Operations Plan, DOE will initiate these activities in 2007.

These large-volume deployment tests are expected to provide results that
will be used in design of the FutureGen project, which will produce both
hydrogen and electricity from a highly efficient and technologically
sophisticated power plant while capturing and storing CO~2~ emissions.
The geologic structures to be tested during these large-volume storage
tests will serve as potential candidate sites for the future deployment
of technologies demonstrated in the FutureGen Project as well as the
Clean Coal Power Initiative, which will complete a solicitation for
carbon capture technologies at commercial scale in 2008.

The Regional Partnerships, the National Carbon Sequestration Database
and Geographical Information System (NATCARB), and NETL have created a
methodology to determine the capacity for CO~2~ storage in the United
States and Canada and an Atlas from data generated by the RCSPs and
other databases including the United States Geological Survey's (USGS)
National Coal Resources Data System, QW Database, EROS Database. Based
on data displayed in the *2006 Carbon Sequestration Atlas of the United
States and Canada*, the aggregate CO~2~ sink capacity -- including
saline formations, unmineable coal seams, and oil and natural gas
formations -- is estimated to hold several hundred years of total
domestic U.S. emissions.

SENATE BILLS 962 AND 731

Senate bills 962 and 731 highlight Congress's recognition of the
importance of storage technologies. I would like to share with you some
thoughts on these recent bills, specifically related to their relevance
to the Sequestration Program.

On S. 731, the National Carbon Dioxide Storage Capacity Assessment Act
of 2007, we agree that knowing the potential for storage and applying a
good methodology to derive storage estimates is extremely important.
DOE, through its Sequestration Program and Regional Partnerships and
NATCARB, has been improving our knowledge base in this area since 2003,
and released an initial U.S. Assessment this month. The assessment is
based on methodology that has been vetted by geologic experts throughout
the country. We welcome additional data from all sources, and as it
becomes available, the Atlas will be improved and updated. We will work
to avoid redundancy and duplication between the work conducted by the
Regional Partnerships and other sources. We believe that collaboration
with USGS strengthens our efforts. We note that the USGS has been
involved with DOE's program over the last several years, including
participation in a small scale CO2 injection into the FRIO formation in
Texas. I will let my colleague from USGS provide more detailed comments
on S. 731.

Regarding S. 962, the Carbon Capture and Storage Research, Development
and Demonstration Act of 2007, DOE agrees with the majority of its
provisions. We agree that there is a need to expedite and carry out
large-scale testing of storage in a range of geologic formations in
different parts of the country to provide information on the cost and
feasibility of geologic sequestration technologies.

The Regional Partnerships are focusing on these exact issues and will
conduct large volume tests during the Phase III, Deployment Phase.
Efforts are underway to have some of the Regional Partnerships starting
the Phase III efforts by the end of this fiscal year with the intent to
inject CO~2~ as soon as possible, with potential for some injections to
occur by the end of FY 2008. To comply with public and regulatory
requirements of federal and state programs responsible for addressing
possible safety and environmental risks, carbon storage projects will
likely require specific permits. Both DOE and the Regional Partnerships
provided comments for the U.S. Environmental Protection Agency's (EPA)
first Underground Injection Control program guidance related to
permitting initial pilot projects as experimental technology wells,
giving regulatory agencies enhanced flexibility in expediting these
projects. We are also working closely with the EPA to assess
requirements and procedures for permitting future commercial geologic
sequestration deployments

Many of the objectives and activities called for in the Bill are
consistent with those of the DOE Sequestration Program including
cost-sharing requirements. The Regional Partnerships initiative are
investigating small and large-scale tests in each of the seven regions
of the partnerships. The Regional Partnerships also contain four
Canadian provinces in their area and several Canadian government
agencies, thus we anticipate there may be international collaboration in
the tests to be conducted in Phase III.

There are a few items in the Bill that may need more clarification. For
field validation testing activities, the Bill calls for the Secretary of
Energy to promote deep geologic systems that may be used as engineered
reservoirs to extract economical quantities of heat. This appears to be
utilizing CO~2~ as a fluid medium for geothermal power. DOE's Office of
Fossil Energy is unaware of the promise of this concept and would need
further clarification. Also, the Bill allows the Secretary to
'promulgate policies, procedures, requirements, and guidance to ensure
that the objectives are met.' The provision should be clarified to
determine if this provides the Secretary with the authority for DOE to
undertake liability for large-scale testing should this become an issue
that delays or halts large-scale testing. The bill should clarify that
any new policies, procedures, requirements, and guidance should support
or be consistent with existing environmental and public health statutes,
regulations, and policies.

The Administration is working to develop estimates for the Large-Volume
Testing for Phase III of the Regional Partnerships, in addition to
funding for the base program of R&D in capture. The majority of funding
for the large-volume tests would be required in the earlier years for
drilling and injection and for infrastructure construction, with lesser
amounts later for monitoring and verification. We note that funding
beyond the three years of appropriations authorized in the Bill would be
required for both the Sequestration Program core activities and the
Regional Partnerships.

MOVING TOWARD COMMERCIAL DEPLOYMENT

Carbon capture and storage can play an important role in mitigating
carbon dioxide emissions under potential future stabilization scenarios.
The United States has a large capacity of geologic formations amenable
to CO~2~ storage. DOE's Carbon Sequestration Program will continue to
move geologic sequestration technology toward readiness for commercial
deployment.

Mr. Chairman, and members of the Committee, this completes my prepared
statement. I would be happy to answer any questions you may have at this
time.

END