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THE FUTURE OF COAL UNDER CLIMATE 

LEGISLATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

MARCH 10, 2009 

Serial No. 111–10 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


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COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

PARKER GRIFFITH, Alabama 

ROBERT E. LATTA, Ohio 

(II) 


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(III) 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

EDWARD J. MARKEY, Massachusetts, Chairman 

MICHAEL F. DOYLE, Pennsylvania 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

BARON HILL, Indiana 

DORIS O. MATSUI, California 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

RICK BOUCHER, Virginia 

FRANK PALLONE, New Jersey 

ELIOT ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

JANE HARMAN, California 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

DENNIS HASTERT, Illinois 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

STEVE BUYER, Indiana 

GREG WALDEN, Oregon 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

MICHAEL C. BURGESS, Texas 


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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachussetts, opening statement ................................................... 1 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 3 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 4 

Prepared statement .......................................................................................... 6 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 8 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 9 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 10 

Hon. Michael F. Doyle, a Representative in Congress from the State of Commonwealth of Massachussetts, opening statement ........................................... 11 

Hon. John Shimkus, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 11 

Hon. Gene Green, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 12 

Prepared statement .......................................................................................... 14 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 16 

Hon. Jay Inslee, a Representative in Congress from the State of Washington, 

opening statement ................................................................................................ 16 

Hon. Steve Scalise, a Representative in Congress from the State of Louisiana, 

opening statement ................................................................................................ 17 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 18 

WITNESSES

David Hawkins, Director, Climate Center, Natural Resources Defense Council ........................................................................................................................... 19 

Prepared statement .......................................................................................... 21 

Answers to submitted questions ...................................................................... 123 

David Crane, President and Chief Executive Officer, NRG Energy, Inc. ........... 44 

Prepared statement .......................................................................................... 46 

Answers to submitted questions ...................................................................... 129 

Ian Duncan, Associate Director for Earth and Environment Systems, Bureau 

of Economic Geology, University of Texas at Austin ........................................ 50 

Prepared statement .......................................................................................... 52 

Frank Alix, Chief Executive Officer, Powerspan Corp. ........................................ 69 

Prepared statement .......................................................................................... 71 

Answers to submitted questions ...................................................................... 131 

Harold P. Quinn, Jr., President and CEO, National Mining Association ........... 81 

Prepared statement .......................................................................................... 83 

Answers to submitted questions ...................................................................... 133 

Lindene Patton, Chief Climate Product Officer, Zurich Financial Services ....... 87 

Prepared statement .......................................................................................... 89 

Answers to submitted questions ...................................................................... 138 

SUBMITTED MATERIAL

Charts from the Energy Information Administration, dated January, 2007 

and February 2009, submitted by Mr. Barton ................................................... 120 


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THE FUTURE OF COAL UNDER CLIMATE 

LEGISLATION 

TUESDAY, MARCH 10, 2009 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:35 a.m., in Room 

2123 of the Rayburn House Office Building, Hon. Edward J. Markey (chairman) presiding. 

Members present: Representatives Markey, Doyle, Inslee, 

McNerney, Dingell, Boucher, Green, Gonzalez, Matheson, Barrow, 

Waxman (ex officio), Upton, Hall, Stearns, Whitfield, Shimkus, 

Pitts, Sullivan, Scalise, Barton (ex officio), and Terry. 

Staff present: Matt Weiner, Clerk; Alexandra Teitz, Senior Counsel; Joe Beauvais, Counsel; Melissa Bez, Professional Staff; Ben 

Hergst, Senior Policy Analyst; Lindsay Vidal, Press Assistant; and 

Michael Goo, Counsel. 

OPENING STATEMENT OF HON. EDWARD J. MARKEY 

Mr. MARKEY. Welcome to the Subcommittee on Energy and Environment, and our very important hearing on the Future of Coal 

Under Climate Legislation. For the information of the members, 

this hearing is being televised, recorded by C-Span, and we thank 

Mr. Shimkus for his help in making sure that we have the cameras 

working. We have portable cameras in here today showing the ingenuity of technological innovation when necessity requires, and 

that breakthrough is the same kind of breakthrough that I think 

we are going to hear in coal and its sequestration and other potential processes. 

Before we get started this morning, I want to inform the members and their staff that tomorrow from noon to 1:00 p.m., the Secretary General of the United Nations, Mr. Ban Ki-moon, will brief 

our members and their staffs. The subject of the briefing will be 

global climate change and the international negotiations leading to 

the U.N. climate conference this December in Copenhagen. This 

briefing is for subcommittee members and their staffs only and will 

not be open to the public or the media. Secretary General Ban will 

address the subcommittee after which members will have an opportunity to direct questions to him. This is a great chance for us to 

have an open exchange with the Secretary General on this critical 

issue, and I strongly urge the members to attend so they can do 

so. 


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There is a growing consensus that to avoid catastrophic climate 

change, we must cut global greenhouse gas emissions by at least 

50 percent by 2050. U.S. emissions must be cut by at least 80 percent in the same period. Those objectives, quite simply, cannot be 

achieved unless we act quickly to control coal-fired powered plants. 

Coal supplies half of all electricity in the United States, and we 

have the largest coal reserves in the world. China and India also 

have abundant reserves and are even more coal dependent. But 

while coal is plentiful, it is also the leading source of global warming pollution. Coal-fired power plants are responsible for over a 

quarter of all U.S. and global greenhouse gas emissions. We are at 

a watershed moment. 

By 2030 U.S. electricity demand is expected to increase by 30 

percent and global demand will double. Coal’s role in meeting that 

demand will play a huge role in determining the fate of our planet. 

Globally as many as 3,000 coal-fired power plants are projected to 

be built by 2030. These new plants alone would increase global 

emissions by 30 percent. At the same time, coal’s future here in the 

United States is deeply uncertain. In the face of escalating public 

opposition and regulatory risk dozens of planned coal-fired plants 

have been cancelled in the last 2 years. 

The Department of Energy’s Energy Information Administration 

is now predicting a flat line in construction of new coal plants over 

the next 20 years. Meanwhile, the Environmental Protection Agency is expected to move forward with regulation of carbon dioxide 

emissions from power plants and other sources under the Clean Air 

Act. Carbon capture and storage or CCS offers a path forward for 

coal and opportunity for the U.S. economy and a bridge to a low 

carbon future. CCS generally involves capturing CO2 emissions at 

the source and disposing of the CO2 in deep geological formations. 

All indications are that CCS is a viable interim solution to the coal 

problem. 

CCS could also dramatically increase domestic oil production by 

providing abundant CO2 for enhanced oil recovery. Ultimately, CCS 

can go beyond geological disposal. For example, Silicon Valley 

based Calera Corporation is proposing to convert captured CO2 into 

cement. That technology could be a game changer, a win-win solution that would dramatically reduce cement’s carbon footprint 

while sequestering billions of tons of CO2 from power plants. All 

these advances are possible but only if we enact the right policies 

to drive innovation. The economic recovery package passed last 

month includes 3.4 billion in advanced coal technology funding 

much of which will be used for CCS demonstration projects. But ultimately only climate legislation can provide CCS the boost it needs 

to create jobs and unleash the private sector’s vast resources and 

ingenuity. We need regulatory drivers and strong incentives. 

An economy wide cap on global warming pollution will provide 

the long-term investment incentive, but the cap alone will not insure rapid deployment of CCS. To drive innovation, we must require new coal plants to use CCS by a certain date. At the same 

time, we must provide robust financial incentives for early development of this technology. This carrot and stick approach was included both in my ICAP legislation and in the discussion draft put 

forward by Mr. Dingell and Mr. Boucher last year. If we fail to 


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bring CCS online quickly, we will have the worst of all worlds. 

Coal’s future here in the United States will remain dim and the 

fleet of coal-fired plants being built in China and India will swamp 

whatever emissions reductions we achieve at home. 

But if we blaze this trail, the world will follow, and we will reap 

the environmental and economic rewards of leadership. I trust that 

this morning’s hearing will help guide us in that endeavor. 

Mr. MARKEY. Let me turn now and recognize the ranking member, the gentleman from Michigan, Mr. Upton, for his opening 

statement. 

OPENING STATEMENT OF HON. FRED UPTON 

Mr. UPTON. Thank you, Mr. Chairman. The future of coal mirrors the future of our economy. Coal provides inexpensive American 

made energy to power our manufacturing sector and keep electricity affordable for millions of Americans, and, like it or not, without coal the U.S. would hemorrhage millions of jobs. Electricity 

rates would skyrocket and we would become dependent on imported natural gas to meet electricity demand. In a recent hearing, 

Treasury Secretary Geithner said cap and trade will increase the 

cost of energy on those fuels that are high in carbon. For people 

whose behavior is energy, and energy use doesn’t change, the cost 

will go up. Translation, coal has a big target on its back and America’s working families already struggling will get stuck with the 

bill. Now is not the time to send those costs higher. Now is not the 

time to turn our back on coal. 

It is imperative that we continue to take advantage of our Nation’s vast coal resources, which have the promise to produce clean 

and affordable power for generations, and in our quest to reduce 

greenhouse gas emissions and protect the environment, we must 

promote clean coal technologies that will not only keep costs down 

from consumers but also foster new jobs and a strong economy. 

These technologies exhibit great promise and encouraging advancements in carbon capture. We will be able to responsibly fortify our 

Nation’s energy supply with American made energy and protect the 

pocketbooks of our Nation’s consumers as well. Last year, members 

of this committee introduced legislation that would block any new 

coal-fired power plant without carbon capture and sequestration. 

At the same time, I introduced bipartisan legislation with Representatives Boucher, Barton, and Shimkus that would spur investment in CCS technologies, and surprisingly none of the co-sponsors 

of the anti-coal bill co-sponsored our bill that would insure CCS actually would become available. We plan on reintroducing our CCS 

deployment bill in the next few days, and I would hope members 

of this committee would join us in co-sponsoring that important 

legislation. In ’08, the IEA noted CCS offers a viable and competitive route to mitigate CO2 emissions. Current spending and activity 

levels are nowhere near enough. Investment in CCS will only occur 

if there are suitable financial incentives. The next 10 years will be 

critical. 

To put our existing policies in perspective, wind currently enjoys a subsidy of $24.35 per megawatt hour versus 44 cents for coal, 

24.35 versus 44 cents. Wind must be an important part of the overall equation, but it will never compare to the base load generation 


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that we need for coal. To replace the 3,300 megawatt coal-fired 

plant in Monroe, Michigan that sits on 200 acres and runs at greater than 90 percent capacity would require 6,000 wind turbines covering some 300,000 acres generating a 30 percent capacity and over 

2,300 megawatts of natural gas generation to act as a backup at 

nearly double the cost. By insuring that CCS becomes available, we 

won’t need to set arbitrary mandates that will send electricity rates 

through the roof and American jobs overseas. 

We have a choice, pursue irrational policies that will bankrupt 

America’s working families and eviscerate our economy or pursue 

sound policies that in fact will improve our environment, preserve 

the intensity of our economy, and keep costs down for consumers. 

We are clearly at a crossroads. Whatever course of action we pursue, we do so with the economy in a precarious position. By using 

a common sense, no regrets legislative approach that focuses on deployment of all clean energy, we can avoid a costly cap and trade 

scheme that will have no impact on emissions from the developing 

world. Instead, we will advance technology that creates U.S. jobs 

and provides the opportunity to export. Working Americans will be 

better off. I yield back. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the chairman of the full committee, the gentleman from California, Mr. Waxman. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN 

Mr. WAXMAN. Thank you very much, Mr. Chairman. Today’s 

hearing is about the future of coal, and as we seek to reduce both 

domestic and global greenhouse gases addressing the use of coal 

will be at the center of our efforts in the years to come. The U.S. 

has abundant reserves of coal, and generating electricity from coal 

is inexpensive relative to other fuel types. Currently roughly half 

of our Nation’s power is supplied by coal. Although coal is abundant the emissions resulting from its use are massive. Burning coal 

results in roughly twice as much carbon dioxide being emitted as 

compared to using natural gas. 

Coal-fired plants, which are large and typically have life spans 

measured in decades, can emit millions of tons of carbon dioxide 

per year. Today about 80 percent of the CO2 emissions from domestic electricity generation come from coal. The U.S. and other countries are recognizing there is simply no way we can continue to use 

coal the way we do today if we intend to tackle climate change in 

a meaningful way. State energy companies and particularly the investment community have all begun to understand this new reality. With EPA regulation of carbon pollution imminent, new coal 

facilities are facing longer details and more cancellations. Climate 

change legislation that provides a framework for the substantial reduction of greenhouse gas emissions and that lays down clear rules 

going forward will provide a certainty to the marketplace. This is 

necessary to protect our planet, necessary to insure the long-term 

viability of coal, both domestically and globally. 

Today’s hearing will examine the technologies that could allow 

for the continued use of coal while substantially reducing carbon 

dioxide emissions. In particular, we will hear about the technologies that will enable us to capture carbon and store it in geoVerDate Mar 15 2010 02:45 Feb 05, 2012 Jkt 067098 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 E:\HR\OC\B098.XXX B098

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logic formations and underground. I believe these technologies hold 

great promise. The individual components of carbon capture and 

storage or CCS technologies are well understood and in many cases 

have been used in industrial settings for years. The challenge 

ahead of us is putting all the pieces together in a way to enable 

the cost effective production of low carbon electricity from coal. 

I hope this hearing will explore the ways in which federal climate legislation can help industry deploy CCS to realize its full 

economic and technical potential. Accomplishing that objective is 

essential if coal use is to be part of our Nation’s low carbon energy 

future. I look forward to hearing the input of our witnesses on 

what role coal can play as we seek to address the threat of global 

climate change, and as we transform our Nation’s economy to low 

carbon sources of power. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Waxman follows:] 


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Mr. MARKEY. Thank the gentleman. The Chair recognizes the 

gentleman from Texas, Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON 

Mr. BARTON. Thank you, Mr. Chairman. I appreciate you starting this hearing at 9:30. You saved me from having to go to a political meeting at the NRCC, so there is one good thing about this. 

It is good to have the hearing record being established on climate 

change and potential legislation. I am seriously supportive of establishing a true and fair record. And I think today’s hearing is probably the—I am not sure how many others you are going to have, 

but I believe this is one of the most important ones, if not the most 

important, because as the chairman just pointed out, and other 

members of the panel, we are generating half of our base power 

load of electricity with coal, and it is an abundant domestic resource. 

We have somewhere between 250 and 500 years of supply of coal 

depending on the technologies that we choose to employ, and something that is not often said but I think needs to be said it is our 

cheapest base load fuel source. I know the advocates of climate 

change legislation aren’t too concerned about the cost but if you 

look at the map of states, states like Kentucky and West Virginia 

and Ohio, their average retail price for electricity is somewhere between 5 and 61⁄2 cents a kilowatt hour. They get over 90 percent 

of their electricity from coal, generated by coal power. On the other 

hand, if you look at your state, Mr. Markey, it gets only 2 percent 

of its electricity from coal generation and its base load cost, retail 

cost, is 15.4 cents kilowatt hour. 

The full committee chairman’s State of California’s electricity 

cost at retail is almost 15 cents. Well, you know, you compare 5 

cents to 15 cents, that is 300 percent cost differential. Now if you 

are a Hollywood producer, it probably doesn’t matter much, but if 

you are a manufacturer that is operating on a 2 percent margin, 

and you have to decide whether to keep your plant open in Ohio 

or move it to Mexico or China, it matters a lot. So coal matters. 

Our economy matters. We are in a very serious economic situation, 

and if we start shutting down coal-fired power plants, we just make 

our economic problems worse, not better. 

The issue at hand is the capture of CO2. Now CO2 is not a criteria pollutant under the Clean Air Act. It is not like lead. It is not 

like sulfur dioxide. It is not ozone. It is not like any of those things. 

CO2 is a naturally occurring compound. It is a greenhouse gas. 

That is a true statement. It is not a pollutant in the sense of the 

word that it is harmful to public health. I am producing CO2 as I 

speak. I drink 3 or 4 Diet Dr. Peppers a day. They have CO2 in 

them. That is what makes it a carbonated beverage. So it is a little 

bit different breed of cat. 

And we can be on both sides of the issue. Somebody like me who 

is a climate change skeptic, and somebody like Mr. Markey or Mr. 

Waxman, who is a true believer, and still think that we need to do 

something to capture or convert CO2 if we can do it economically, 

if we can do it economically. We don’t want to raise the price of 

coal to 15 cents a kilowatt hour at retail. We don’t want to destroy 

the industrial base of America. So if we get this right, and Mr. 


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Boucher has got a bill to do the research to see if there is a technology that works. I am a co-sponsor. I am going to be a co-sponsor 

when he reintroduces it some time in the near future. If we can 

get coal right in America, Mr. Markey can be happy, and I can be 

happy, and everybody can be happy, and all God’s children can be 

happy, but we got to get it right. We can’t kill coal. 

And so I am glad to see David Crane here. His company is a big 

industrial producer of electricity in Texas, and we are proud that 

he is although I wish he wasn’t headquartered in New Jersey. It 

kind of galls me but that is the way it is. I am glad to see Mr. 

Hawkins here because he is one of the international experts, and 

I am glad to see somebody from the Mining Association in Ms. Patton, who is going to talk about some of the liability issues. This is 

a good panel, Mr. Chairman. And, as I said earlier, this is I think 

the most important hearing and if we get this hearing right and 

the policy coming out of it right our country has a chance to stay 

economically competitive. So with that, I yield back. 

Mr. MARKEY. We thank the gentleman. The chair recognizes the 

gentleman from Michigan, Chairman Emeritus Dingell. 

OPENING STATEMENT OF HON. JOHN D. DINGELL 

Mr. DINGELL. Thank you, Mr. Chairman, and thank you for holding this hearing. It is an important one. The future of coal is an 

issue that must be addressed if we are to succeed in passing meaningful climate change legislation. As we all know, currently coal 

generates more than 50 percent of the United States electricity 

supply. We have hundreds of years of coal reserves. Realistically, 

coal must and will play a significant part in our energy future. The 

challenge, however, is to balance the need for dramatically reducing their greenhouse gas emissions with the continuing need for 

coal to power this Nation. To meet this challenge legislation must 

spur development and deployment of carbon capture and sequestration, CCS technology. 

China and India’s reliance on coal makes the need for this technology that much greater. And when I hear my friends amongst 

the environmentalists tell us how we should develop technology, I 

agree, but this is some of the technology that should be developed 

here. One approach this committee considered at a hearing last 

year is Mr. Boucher’s Carbon Capture and Storage Early Deployment Act. I was very sympathetic and remain so to that excellent 

piece of legislation. This bill is based on recommendations put forward last year by the advanced coal technology work group, an advisory panel to the EPA. I urge this committee to look at this draft 

legislation when considering broader climate change legislation although some changes may be appropriate given CCS provisions in 

the stimulus bill incorporating large scale grant programs to accelerate the commercial demonstration of CCS and for testing carbon 

dioxide storage sites which is essential to the success of CCS and 

therefore essential to the success of comprehensive climate change 

legislation. 

We are also becoming aware of the fact that there are now technologies which can be used by this country to convert CO2 emissions from power plants into a useful raw material for other industrial processes. This also must be pushed forward. The committee 


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should also consider the CCS deployment program that Representative Boucher and I and other members of this committee released 

last year. We proposed an incentive system for carbon capture and 

sequestration technology. Power plants or large emitters that adopt 

CCS technology early would receive bonus allowances. A similar incentive system was included in the Blueprint for Action put forward by USCAP, an alliance of industry and environmental groups. 

Both the Boucher-Dingell draft and the Blueprint for Action coupled with the incentive program with requirements that insure 

that newly permitted coal-fired facilities will employ technology to 

capture and store carbon emissions. 

The date for compliance, however, merits further discussion in 

my view as we yet do not know when CCS technology can be ready. 

Therefore, in this hearing I look forward to hearing more about 

progress being made on CCS technology and prospects for wide 

scale commercial use. Many questions still need to be answered including can we achieve significant reductions in greenhouse gas 

emissions before CCS technologies are ready. Are we doing enough 

to insure that these technologies are on track? How will carbon 

stored underground impact water resources and the environment 

generally? What happens to CO2 after it is captured? Who owns it? 

Who is responsible for keeping it safe? These are just a few of the 

important questions that need to be answered about carbon capture 

and sequestration technology. 

I look forward to hearing from our witnesses and learning more 

about the future of coal and climate legislation, and I warn that 

this country must proceed carefully, wisely and well lest we create 

greater harm than benefit. I thank you, Mr. Chairman. 

Mr. MARKEY. We thank the gentleman. The chair recognizes the 

gentleman from Kentucky, Mr. Whitfield. 

OPENING STATEMENT OF HON. ED WHITFIELD 

Mr. WHITFIELD. Chairman Markey, thank you very much, and 

we certainly appreciate this important hearing on coal and the impact that environmental legislation and climate change legislation 

can have on this industry. I noticed that over the last couple of 

days the 2009 International Conference on Climate Change has 

been meeting in New York City, and basically that is a group of 

skeptics of global climate change. Primarily, I noticed in reading 

some of the speeches yesterday they were talking about the atmosphere of people creating an alarmist state on this whole issue, and 

that is one of the reasons why this hearing is particularly important because when you have one entity, the coal industry, providing 

50 percent of the electricity in our country and then recently we 

met with a group of Chinese who came over, energy experts, and 

they quoted—they set out the fact that in China they are bringing 

on one new coal-powered plant into operation about every 2 weeks. 

And that is why it is so vitally important that as we look at climate change legislation, we look at cap and trade legislation. We 

look at renewable mandates and the impact that that can have on 

the economy in the U.S., particularly at this time when our economy is weakening, unemployment is going up, if we do not move 

very carefully then I believe that we can put the United States at 

an economic disadvantage to other countries particularly like 


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China and India who are relying more and more on the fuel that 

produces electricity at the most economical cost. 

And the thing that is really frustrating about all this is that as 

we look at the models projecting the future of global warming it is 

really almost impossible to detect the total cost of what the impact 

of that might be, and yet we can very clearly demonstrate the cost 

of renewable mandates and how much they will increase electricity, 

how that will make us less competitive in the global marketplace 

and will go a long way, I believe, in harming our economy as we 

try to come out of this economic decline. So I look forward to this 

hearing. I think it is vitally important and I yield back. I see I have 

no time to yield back. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Pennsylvania, Mr. Doyle. 

OPENING STATEMENT OF HON. MICHAEL F. DOYLE 

Mr. DOYLE. Mr. Chairman, I would like to start by thanking you 

for having this important hearing today. Mr. Chairman, it is clear 

that coal remains the fuel that powers the world for years to come 

even as we work dramatically to expand our own Nation’s renewable energy technologies. Your recognition of this fact is much appreciated, and I want to offer you my continued support as we put 

together policies and incentives to encourage the rapid and immediate deployment of widespread carbon capture and storage technologies. In a hearing last week, British Secretary of State for Energy and Climate Change, Ed Miliband, warned our committee 

about the massive expansion of the Chinese economy expected over 

the next decade. This is an economy that is 78 percent powered by 

coal and has projected increases in emissions that are many times 

the current emissions of the entire European Union. 

Without widespread development and deployment of CCS technologies here in the United States, and the selling of these technologies to nations such as China, we will never be able to achieve 

the worldwide reductions we need to combat climate change. It is 

not a question of if we can do this, it is a question of how fast can 

we get it done. The building and export of clean technology such 

as CCS will revitalize our Nation’s manufacturing base as America 

will become a world leader in the production of clean and cheap energy. Investments in CCS technology as well as those in wind and 

solar power will help lead this energy revolution here at home 

while the technologies we export will generate tremendous carbon 

reductions abroad. 

I look forward to continuing to work closely with you, Mr. Chairman, so that we can make the widespread deployment of CCS a reality here at home as well as abroad. And I yield back. 

Mr. MARKEY. We thank the gentleman. The chair recognizes the 

gentleman from Illinois, Mr. Shimkus. 

OPENING STATEMENT OF HON. JOHN SHIMKUS 

Mr. SHIMKUS. Thank you, Mr. Chairman. I will try to respect 

your comments from last week and start in third gear, not overdrive, as I did last time. To my colleague from Pennsylvania, I 

think that was the same guy who said he is not going to permit 

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sion, and I think that is what this is all about. I also want to appreciate the C-Span coverage, Mr. Chairman. This is really important for the public to understand and if this is our only shot then 

we need to take advantage of it. And it is a very good panel. I want 

to agree with Congressman Barton. 

Here is an article from the Alton Telegraph, 3,000 workers needed for refinery construction. There is an expansion going on. 100 

full-time jobs will be added. This is what I want to see in the coal 

industry, but what I see especially—and we talked about this too 

last week, Mr. Chairman, is Peabody, you are going to get tired of 

seeing this, Peabody 10, 1,000 mine workers closed because of the 

Clean Air Act amendment, actually 1,200. These are the individuals who lost their jobs. That is my passion and that is my focus. 

I actually found out more stats. This is another request I have for 

you, Mr. Chairman, to invite the United Mine Workers here to talk 

about the impact of job loss because I am throwing out what happened in the Midwest. Hopefully, they can give me the reasons why 

they are strangely silent on this bill, but after the ’90 amendment 

in Southern Illinois alone 18,200 mine workers were working the 

mines in southern Illinois. 

That United Mine Worker region was reorganized into a 3-state 

region that represented only 4,000 United Mine Workers. There is 

a devastating effect on this to jobs, rural America, and coal areas 

of this country. We better, in the words of John Dingell, tread very 

carefully. And I yield back. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Green. 

OPENING STATEMENT OF HON. GENE GREEN 

Mr. GREEN. Thank you, Mr. Chairman. And seeing my colleague 

from Illinois hold up that sign about 1,000 workers needed to expand that refinery, we do expand refineries in my part of the country. And it is interesting following the merger, you say the United 

Mine Workers, I have the same thing in my area, the United Steel 

Workers. We don’t have any steel plants, so to speak, in my area, 

but now they represent all my refineries so it is interesting what 

the market and the economy has done. Today’s hearing reflects on 

the critical need to address coal’s future, both under climate legislation and within our broader national energy security strategy. 

While coal emits high levels of carbon dioxide, it is also one of 

our Nation’s most abundant energy resources. Long-term strategies 

must be in place to reduce coal’s carbon footprint and incentivize 

new technology development for carbon capture and sequestration, 

CCS, in order to utilize our vast coal reserves. CCS is one of the 

most important possible solutions for climate change unlike capture carbon injection technology is well-established and has been 

used for enhanced oil recovery for over 30 years. The Permian 

Basin in west Texas is home to the majority of carbon dioxide injection in the entire world. This is good news for addressing climate 

change and producing more domestic energy. 

Federal policies to encourage the development of CCS related 

technologies are key to avoiding severe cost disruptions in our 

economy. Several cost models for climate change tell us that one 

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mate change program is the availability of CCS. EPA’s analysis 

last year of the Leiberman-Warner bill indicated that CCS could 

account for 30 percent of CO2 reductions by 2050 which would involve injecting several gigatons of CO2 underground. If CCS technologies were unavailable or not commercially viable these reductions would have to come from elsewhere and likely at a higher 

cost. 

I hope today’s hearing and testimony will shed some light on the 

most appropriate policies and approaches to develop CCS technologies when allowance prices may not be sufficiently high to encourage rapid development of CCS. And, Mr. Chairman, like my 

colleague from Texas, I want to welcome Mr. Crane. NRG has a 

great office in Houston and does a lot of different things. Although 

we will try to do NRG just like we did Calpine. Calpine actually 

expanded more alternatives and natural gas facilities in my district 

than they did in California so they opened up an office in Houston 

and California Energy is now Calpine in Texas, so we don’t mind 

you expanding your office in Houston. I yield back my time. 

[The prepared statement of Mr. Green follows:] 


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Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from Florida, Mr. Stearns. 

OPENING STATEMENT OF HON. CLIFF STEARNS 

Mr. STEARNS. Good morning, and thank you, Mr. Chairman. As 

pointed out by other speakers, the United States is the Saudi Arabia of coal, and we talked about the huge reserves that we have 

in this country. Recently, some of this research was put together 

in a paper that was published in the Stanford Law Review, December addition, so that I am a strong advocate of coal, and I was 

happy to see that President Clinton recently said—excuse me, 

President Obama recently said—‘‘This is America. We figured out 

how to put a man on the moon in 10 years. You can’t tell me we 

can’t figure out how to burn coal that we mine right here in the 

United States of America and make it work.’’ So I think his statement, Mr. Chairman, shows that he recognizes, with the huge reserves we have, it is a national security to use that and learn to 

mine it right and to figure out to burn coal that does not affect our 

environment. 

It is so abundant in this Nation. In fact, on the average, coal 

costs $1 to $2 per million BTU compared with $6 to $12 per BTU 

for oil or natural gas and because of this plentiful and cost-effective 

coal reserves, power plants fueled by coal account for more than 

half of this Nation’s electricity production, but because of the recent regulatory uncertainty surrounding climate change legislation, 

only 12 new coal-fired power plants have been built in the United 

States since 1990. 

Coal is a prime source of energy throughout the world as pointed 

out, particularly their moving ahead in China and will inevitably 

remain so as worldwide energy demand continues to rise. So, Mr. 

Chairman, any meaningful effort to achieve long-term, sustainable 

reduction in global greenhouse gas emissions will depend on the 

development and deployment of new energy technology including 

advanced clean coal technology and carbon capture and sequestration. The rapid development demonstration of widespread deployment of such technologies are of paramount importance in any reasoned and effective effort to address climate change concerns. 

Thank you, Mr. Chairman. 

Mr. MARKEY. We thank the gentleman. The Chair recognizes the 

gentleman from Washington State, Mr. Inslee. 

OPENING STATEMENT OF HON. JAY INSLEE 

Mr. INSLEE. There is widespread agreement that the future of 

the country’s economy, the future of the planet, my grandkids’ future depend upon the ability to find a technology to use coal cleanly. But I want to make two points that have not been made here 

yet. Point number one, this requires a major, technological transformation. It requires us to really look at the horizons and know 

the companies that are challenging those horizons right now. I 

want to list three of them. The Ramgen Power Systems Company 

in Bellview that has a compression technology that might reduce 

the cost of compression of CO2, which is necessary for geological sequestration by 30 percent. 


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The Calera Cement Company that has found a technology where 

you can sequester CO2 from coal-fired plants in building materials 

so that we can make CO2 part of our buildings rather than wasting 

it and putting it below ground. The Sapphire Energy Company in 

San Diego that has a way to take algae that can eat the CO2 from 

the smoke stacks and produce a gasoline product chemically 

undistinguishable from gasoline. We need these technologies to advance, and that leads to point two. We have to have a fund by 

which to fund this research and development. And here is the point 

I want to make to my friends who want to advance coal. To have 

that fund, we have to have an auction of the permits under the cap 

and trade system. 

If, and only if, we have an auction that will generate revenues 

that can be used to help the coal industry develop these technologies does coal have a future in this country or anywhere on the 

planet. If we are going to sell these technologies to China, which 

we have to do so that China will not destroy the planet Earth, we 

are going to have to have a fund to invest in these technologies. 

The biggest debate in Congress this year on energy will be about 

this issue of whether we are going to have an auction, or whether 

we are going to give these permits away, and what we are going 

to use the money for, and I hope my friends who advocate for coal 

recognize the existence of this industry depends on actually having 

auctions and having the revenues that can save this industry for 

a future for the United States. 

So I know that seems counter-intuitive to some of my friends of 

coal, but until we realize the necessity of those revenues, we are 

not going to get this job done. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from Louisiana, Mr. Scalise. 

OPENING STATEMENT OF HON. STEVE SCALISE 

Mr. SCALISE. Thank you, Mr. Chairman. I look forward to hearing the testimony from the panel as we continue the process of exploring all of the various pieces that are involved in coming up 

with a comprehensive national energy policy. I think as many of 

these issues are discussed it shows the problems that are created 

by the fact that our country doesn’t have a comprehensive strategy. 

But we have got to also recognize that coal is still a very viable and 

inexpensive source of energy, and in fact, is a backup source of energy for many of these renewable sources as we advance more wind 

and solar technologies, and I encourage us to do that. We all know 

that the wind doesn’t blow all the time. We all know that the sun 

isn’t shining all the time and that coal is a backup source for many 

of those renewable sources of energy, and some people do have a 

desire to bankrupt the coal industry. We have heard those comments. 

I think we need to be much more pragmatic about encouraging 

clean coal technologies to advance as opposed to literally bankrupting an industry that provides so much of our power in an inexpensive way and in a way that can be captured in a much more 

clean and economic process. And so, I think as we look at some of 

these proposals, and especially the cap and trade proposals that are 

before us which in essence is an energy tax, a tax on energy, that 


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by some estimates would cost American families up to $1,300 a 

year more in increased energy costs. I think that is a very dangerous road to go down as we are talking about economic shortfall 

where we are trying to get our economy back on track. Let us make 

sure that we don’t create policies that cost our economy thousands 

more jobs and cost American consumers up to $1,300 a year more 

in energy taxes. 

There is a better way to do it. There is a cleaner way to do it, 

and let us pursue those technologies instead of trying to bankrupt 

some at the benefit of others, so look forward to hearing the panel. 

I yield back the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from California, Mr. McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman. Well, we clearly need 

to include coal in our national energy mix, but I am not really sold 

on carbon sequestration technology. We have the geologic formations. We probably have the technology, but are we going to be able 

to do this cost effectively. That is what I am hoping you all can sell 

me on. I am open-minded about it. I want to see what we can do 

here, but I am a person that is going to have the same sort of skepticism that my friend from Washington State has, so I look forward 

to your testimony. I yield the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from Pennsylvania, Mr. Pitts. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS 

Mr. PITTS. Thank you, Mr. Chairman. I would like to thank you 

for convening this hearing today. The role of coal in climate change 

discussions is an important one. As most people know, coal is the 

most abundant energy resource in the United States and is particularly plentiful in my home State of Pennsylvania. It plays a crucial 

role in Pennsylvania’s economy and will continue to do so as long 

as economically stifling climate change legislation does not force 

many coal-fired electricity plants out of business. While I believe it 

is essential to protect our environment and atmosphere, I do not 

believe it is prudent to bankrupt an industry that not only produces nearly 50 percent of our electricity today, but also provides 

jobs to countless Pennsylvanians and Americans throughout the 

country. 

Passing cap and trade legislation right now would certainly have 

a negative effect on the coal industry and on consumers who pay 

low prices for coal-generated electricity. It is essential that we work 

towards utilizing clean coal technology. We must take decisive action to insure that coal generation can continue while taking steps 

to improve the process of carbon capture and sequestration. We 

must ensure that liability issues are resolved so that carbon capture and sequestration projects can forge ahead. Investors, owners, 

and operators need to have confidence that litigation will not 

squander their investments. We also need to continue to work towards reducing the cost of carbon capture and sequestration 

projects so that it becomes a practical and economically sensible 

process. If people truly believe we need to mitigate the effects of 

carbon in the atmosphere. 


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It is every bit as important to pursue ways to use coal in a clean 

manner. I look forward to hearing the testimony today, and I yield 

back. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from Virginia, Mr. Boucher. 

Mr. BOUCHER. Thank you, Mr. Chairman. I am going to waive 

opening statement and reserve time for questions. 

Mr. MARKEY. The gentleman reserves time. The Chair recognizes 

the gentleman from Nebraska, Mr. Terry. 

Mr. TERRY. Thank you, Mr. Chairman. I am an interloper on this 

subcommittee today. Obviously, Nebraska is about 70 percent dependent on coal, so I want to hear what the industry has to say, 

and I will yield back. 

Mr. MARKEY. We thank the gentleman, and now we will turn to 

our witnesses, and we begin by welcoming Mr. David Hawkins who 

is the director of the Natural Resources Defense Council’s Climate 

Center. He is also a former assistant administrator of the EPA and 

has more than 30 years of experience on air quality, climate 

change, and energy policy issues. We welcome you, sir. Whenever 

you are ready, please begin. 

STATEMENTS OF DAVID HAWKINS, DIRECTOR, CLIMATE CENTER, NATURAL RESOURCES DEFENSE COUNCIL; DAVID 

CRANE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NRG 

ENERGY, INC.; IAN DUNCAN, ASSOCIATE DIRECTOR FOR 

EARTH AND ENVIRONMENT SYSTEMS, BUREAU OF ECONOMIC GEOLOGY, UNIVERSITY OF TEXAS AT AUSTIN; FRANK 

ALIX, CHIEF EXECUTIVE OFFICER, POWERSPAN CORP.; HAROLD P. QUINN, JR., PRESIDENT AND CEO, NATIONAL MINING 

ASSOCIATION; AND LINDENE PATTON, CHIEF CLIMATE 

PRODUCT OFFICER, ZURICH FINANCIAL SERVICES 

STATEMENT OF DAVID HAWKINS 

Mr. HAWKINS. Thank you, Mr. Chairman. Thank you for inviting 

me back to the committee. I would like to highlight six points in 

my prepared testimony. The first is that to prevent a climate catastrophe, we simply cannot keep using coal the way we use it today. 

Coal is so abundant that even if we put a small fraction of the carbon that it contains into the air global temperatures would rise to 

dangerous levels. New coal plants now on the drawing board 

around the world would put more carbon dioxide into the air over 

their operating lives than all the CO2 emitted from previous use of 

coal in human history. 

The second point is that carbon capture and disposal is ready for 

commercial deployment today, but without a strong climate protection law this deployment simply will not happen. Third, the failure 

to enact climate protection legislation would be disastrous for the 

climate, but ironically it would not assure a sustainable role for 

coal in the United States. Today regulators and investors are saying, wait a minute, when it comes to new coal. The most recent Energy Information Administration forecast flashes projected coal 

builds for new coal builds in the United States by 60 percent from 

the forecast that it issued just a year ago. Other than plants already under construction, the EIA projects that essentially now 


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new coal plants would be built for over a decade if climate policy 

remains unresolved. 

The fourth point is that coal needs more than carbon capture and 

disposal for it to serve as the 21st century fuel. Shameful practices 

like mountaintop mining removal, conventional air pollution, coal 

ash management, these things have to be fixed as well, but carbon 

capture and disposal could make coal and climate protection compatible. The fifth point is that carbon capture and disposal could 

help reduce our dependence on imported oil as well. NRDC estimates that the CO2 captured in a robust carbon capture and disposal program could support an expanded, enhanced oil recovery 

industry large enough to back out about 2 million barrels of imported oil every day by 2020 and about 5 million barrels per day 

by 2025. In addition, electricity made from coal plants with carbon 

capture and disposal could back out more oil by powering plug-in 

hybrids. 

The sixth point I will make is that business leaders and environmental groups are coming together and have proposed a policy 

package that would both help protect the climate and speed deployment of carbon capture and disposal in the United States. In January of this year, the U.S. Climate Action Partnership, USCAP, 

issued its Blueprint for Legislative Action. In addition to an economy wide cap on global warming pollution, the Blueprint recommends a four-part package for using carbon capture and disposal to cut coal plant emissions. The first recommendation is to 

direct EPA and other agencies to adopt rules required for CO2

transport and disposal, second, to fund 5 gigawatts of coal plants 

with carbon capture and disposal by 2015, third, to enact CO2

emission standards for new coal plants now, and, fourth, to provide 

direct payments to create incentives for carbon capture and disposal in the early period of the cap program. 

Enactment of this package, Mr. Chairman, and members of the 

subcommittee, would make carbon capture and disposal a reality in 

the United States in the next few years and would show leadership 

to the world. Thank you. 

[The prepared statement of Mr. Hawkins follows:] 


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Mr. MARKEY. Thank you, Mr. Hawkins. Our next witness is 

David Crane. Mr. Crane is President and CEO of NRG Energy, a 

leading wholesale power generation company. He has many years 

of experience and was previously the CEO of International Power. 

We welcome you, sir. Whenever you are ready, please begin. 

STATEMENT OF DAVID CRANE 

Mr. CRANE. Thank you, Mr. Chairman. Thanks to members of 

the committee and particularly Congressmen Barton and Green for 

their kind words to me. And I want to start by thanking you for 

addressing climate change and combating climate change which we 

believe is the critical task before us. We think clean coal is the key 

to successful combating of climate change and carbon capture and 

sequestration is the key to clean coal, so again we applaud you 

shining a spotlight on this technology, this issue which unfortunately remains obscure to the American public. 

NRG is a company that owns power plants. We own 24,000 

megawatts of power plants across the country. That is enough to 

power 20 million American homes. About 1/3 of our generation is 

coal. I think we are the fifth largest consumer of Powder River 

Basin coal, and we span the great expanse of red states to blue 

states in that we have coal-fired power plants in Texas, Delaware, 

New York State, and, Chairman Markey, in your home state of 

Massachusetts. 

We are not a rate-based utilized. We are not able to socialize the 

cost that we bear to the public but they are borne by our shareholders, and since 2006 we have been investing our shareholders’ 

money in decarbonizing generation. We built 270 megawatts of 

wind in Texas. We announced last week an intent to build 500 

megawatts of solar thermal plants in California and New Mexico, 

and we believe we will be the first company to build a new nuclear 

plant in the United States having filed with the NRC a year and 

a half ago to build a 2,700 megawatt nuclear plant in Texas, which 

our company has already spent close to $200 million on just to file 

the permit. 

All told, what we have going so far would be about a $10 billion 

investment and create about 9,000 high paying jobs. If we succeed 

in all we do, we would achieve a significant reduction in our carbon 

intensity. As a company currently we produce about 64 million tons 

of carbon emissions in the United States in order to make about 

70 to 80 million megawatt hours of production. But when you hear 

the list of things we are doing, noticeably absent from that list is 

clean coal, and if I say one thing that this committee remembers 

one of the things I have been saying to our investors when they 

say, David, are you really able to develop nuclear power plants, I 

say developing nuclear power plants in this environment is easier 

than doing clean coal. That is the part that is really a challenge. 

But this is not for want of trying on our behalf. In 2006 we won 

an award from the State of New York to build an integrated gasification combined cycle plant. Two years later after spending over 

$10 million of our shareholders’ money, that project which was 

started by the Pataki Administration was cancelled by the Patterson Administration and in fairness to the Patterson Administration 

it just proved that doing a full-blown IGCC project with CCS was 


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just beyond the reach of any private company working with any 

state at this point in time so again we heartily support the federal 

government’s effort to support this. I would just like to quickly list 

what we see as the five main obstacles to going forward with commercial scale CCS. Obviously, the first one is there is no price on 

carbon in the United States right now. The second would be even 

if there was a price it would be unlikely be set at a level that would 

incent carbon capture and sequestration. 

The lack of a proper legal and regulatory scheme proved to be 

an enormous impediment to us with our New York project. The 

fourth point would be that the normal government incentives, production tax credits, loan guarantees are not particularly useful in 

the course of CCS, particularly when you are talking about postcombustion carbon capture, which of all forms of carbon capture is 

by far the most important because of its ability to be retrofitted on 

existing plants. My colleague, Mr. Alix, will, I am sure, talk about 

that more. And the fifth point, which in this day and environment 

there is actually no money available from our normal sources for 

anything much less new technologies. 

So I would like to just a few thoughts for the committee to consider. One is I think that the big bang approach to going with CCS 

as maybe reflected by FutureGen is not going to be the quickest or 

the most cost-effective way to go forward. I have nothing against 

FutureGen, but I think there are other things that the committee 

can incent. I think that when looking at brown field coal plants, I 

think one thing the committee should recognize is that our analysis 

indicates that the best use for those plants is not to be retrofitted 

for post-combustion carbon capture but probably to be converted to 

gas so that they confirm renewables on a basis. And the last point 

I would make, and I respectfully would disagree with Congressman 

Inslee, whose book I have read and who I respect in his opinions 

but we don’t support 100 percent auction because we think that the 

best people to get the carbon out of coal are coal companies and 

coal-using power general companies, so we support the USCAP 

Blueprint which calls for transitional and partial allocations plus 

auction for early funding. So thank you, Mr. Chairman. 

[The prepared statement of Mr. Crane follows:] 


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Mr. MARKEY. Thank you, Mr. Crane, and thank you for the shout 

out for Mr. Inslee’s book as well. We appreciate that, and that is 

why we have these cameras working again. Our next witness is 

Mr. Ian Duncan, who is the Associate Director for Earth and Environmental Systems for the Bureau of Economic Geology at the University of Texas at Austin. Dr. Duncan was the geologic sequestration lead for the Texas FutureGen team and focuses on the technical and legal aspects of long-term carbon storage. We welcome 

you, sir. Whenever you are ready, please begin. 

STATEMENT OF IAN DUNCAN 

Mr. DUNCAN. Thank you, Mr. Chairman. I am part of the Gulf 

Coast Carbon Center at the University of Texas which is dedicated 

to doing the science, engineering, and policy research necessary to 

establish a successful sequestration industry in the Gulf Coast. My 

personal research is in the business operational and long-term 

risks associated with CO2 sequestration. I am going to organize my 

remarks around the four questions that you asked, Mr. Chairman, 

in your invitation. The first question was what experience do we 

have from CO2 enhanced recovery and other experience to help determine the feasibility of large scale CO2 sequestration. The CO2

EOR industry in the U.S., over 80 percent of it in Texas, has transported 600 million tons of CO2 over the last 37 years. It has injected 1,200 million tons into oil reservoirs in west Texas. 

Just to give you an example, the sack rock field currently injects 

about 30 million tons of CO2 and each year 6 to 7 million tons of 

that is retained in the reservoir, and by that mark this is the largest sequestration project in the world if it was using anthropogenic 

CO2. Only part of it is. The safety record of the industry is stellar. 

There are no deaths, no serious injuries related to the injection of 

this CO2 or the transportation. As a scientist, that is somewhat 

problematical to me in that it is very difficult to calculate statistics 

from the set so I got some challenges as to how to do this. The second question, what degree of confidence can we have in the feasibility and safety of CO2 sequestration? Let me first define risk. 

Risk is likelihood or probability times consequence. 

Risky things typically have a probability of about 10 to minus 3. 

Things that we perceive as being not risky such as driving on the 

road and air travel have risks of about 10 to minus 4 or 10 to the 

minus 5. Most of the risks that I have evaluated and associated 

with CO2 sequestration so far have risks in the order of 10 to the 

minus 5 to 10 to the minus 7, so there are several orders of magnitude, less risky than flying in a plane. Now that is not to say 

that CCS and carbon sequestration is going to be risk free. However, if it is done in a proper way if it is regulated well, I think 

the risk is comparable to other industrial operations. The one that 

we know least about is the long-term risk to contamination of 

water, and this risk is clearly site dependent. In other words, there 

are some sites where one could infer that the probability would be 

higher. 

There are other sites where the consequences, the water resources are more valuable. This leads to the third question what 

are the principal regulatory obstacles. I would assess that the EPA 

has done a commendable job in its draft rules for class six wells, 


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however, there is no mechanism in the EPA rules to identify the 

best sites for sequestration. The regulations are purely binary, sort 

of like a pass-fail exam. The EPA does not in my opinion have the 

authority to drive a mechanism to select best sites. 

Final question, what role can CCS play in expanding enhanced 

oil recovery and impact of U.S. oil supply. In Texas if we were capturing CO2, we could gather an extra 3.8 billion barrels of oil. This 

is equivalent to discovering a giant field in Texas. However, there 

is an issue. There is no currently considered regulation of CO2 EOR 

in terms of sequestration. I would think that a class 2A regulation, 

A being anthropogenic, would help to introduce sequestration as 

part of enhanced oil recovery, and this would help develop CCS in 

conjunction with enhanced oil recovery. Thank you. 

[The prepared statement of Mr. Duncan follows:] 


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Mr. MARKEY. Thank you, Dr. Duncan, very much. Our next witness is Mr. Frank Alix, CEO, and co-founder of Powerspan, a New 

Hampshire-based company, currently working on carbon dioxide 

capture technology for electric power companies. We welcome you, 

sir. 

STATEMENT OF FRANK ALIX 

Mr. ALIX. Thank you, Mr. Chairman, for the opportunity to share 

my perspective on the future of coal under climate legislation. My 

testimony today will focus on the prospects for commercial deployment of carbon capture technologies on coal-fired power plants. 

Powerspan has been developing and commercializing advanced 

clean coal technology since 1994. Our approach to CO2 capture, 

called ECO2, is a post-combustion process designed to capture 90 

percent of CO2 emissions. The technology is suitable for retrofit to 

the existing coal-fired generating fleet for new coal-fired plants. 

Pilot scale testing of our ECO2 technology began in December of 

2008 at FirstEnergy’s Burger Plant in Southeastern Ohio. The 

ECO2 pilot was designed to treat a 1 megawatt flue gas stream and 

capture 20 tons of CO2 per day. 

Initial testing has demonstrated 80 percent CO2 capture efficiency which is a promising start. We recently completed two minor 

design modifications that we expect will increase the CO2 capture 

rate to 90 percent. The pilot plant was built using the same type 

of equipment that we plan to use in commercial systems. Therefore, 

successful operation of the pilot unit will confirm our design assumptions and cost estimates for large-scale CCS projects. Although commercial scale CCS projects still have some risk, that 

risk is manageable because the major equipment used in the ECO2

process has been used in other commercial applications at the scale 

required for CCS. Our experience in the emerging market for commercial scale CCS projects supports our optimism. In 2007, Basin 

Electric Power Cooperative conducted a competitive solicitation for 

a post-combustion C)s capture technology to retrofit their Antelope 

Valley Station, which is a coal-fired power plant located in Beulah, 

North Dakota. The Antelope Valley project will install CO2 capture 

equipment on a 120 megawatt flue gas slipstream taken from a 450 

megawatt unit. Basin Electric has targeted 90 percent CO2 capture 

efficiency to provide 1 million tons of CO2 annually for enhanced 

oil recovery. 

Six of the leading CO2 vendors for post-combustion capture technology responded to the Antelope Valley solicitation and after a detailed evaluation, Basin Electric selected Powerspan. This commercial CCS project is scheduled to start up in 2012. Since being selected for the Antelope Valley project, a feasibility study has confirmed that there are no technical limitations to deploying ECO2 at 

the plant. The study estimated cost of less than $40 per ton for 90 

percent CO2 capture and compression. A similar study of ECO2 recently conducted for a new 760 megawatt super critical coal plant 

estimates CO2 capture costs of under $30 per ton. A third engineering study focused on ECO2 scaling risks determined that our pilot 

plant will provide sufficient design information to confidentially 

build commercial scale systems up to 760 megawatts. 


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Independent engineering firms led the feasibility, cost, and scaling studies for our prospective customers. As a sign of our confidence, we will back our commercial ECO2 installations with industry standard performance guarantees. Despite the promise indicated by the Basin Electric project, strong government action is 

needed to ensure timely deployment of CCS technology to support 

climate change mitigation goals. Government actions should focus 

on three areas: 1, a strong, market-based cap on greenhouse gas 

emissions; 2, a CO2 emission performance standard for new coalbased power plants; 3, early deployment incentives for commercial 

scale CCS systems. 

Incentives are needed to ensure early deployment of CCS because 

CO2 capture technology is not yet commercially proven on large 

coal plants and early CO2 prices will not be sufficient to offset CCS 

costs. To be most effective, CCS incentives must provide long-term 

CO2 price certainty to facilitate project financing and must be 

awarded competitively, preferably by reverse auction in order to 

minimize cost while also providing a market signal on the real cost 

for early CCS installations. Early deployment of CCS technology 

will also create jobs and promote economic growth. 

CCS projects require 3 to 4 years to implement and create significant economic activity over their duration. In addition, by 

incentivizing early deployment of CCS, the U.S. can assume a leading position in this critical sector and create a thriving, high-tech 

export business, and the quality jobs that come with it. In summary, CO2 capture technology is commercially available from several qualified vendors with standard commercial guarantees. Independent studies show that early commercial installations of CO2

capture technology are likely to be successful. The cost of widespread deployment of these technologies appear manageable, particularly when compared to the cost of other low-carbon electricity 

solutions. 

The most important reason to promote early deployment of CCS 

is that post-combustion CO2 capture technologies will preserve the 

huge investment in existing coal-fired power plants and allow us to 

effectively use abundant, low cost, coal reserves in the U.S. and developing nations, even in a climate constrained world. Thank you, 

Mr. Chairman. 

[The prepared statement of Mr. Alix follows:] 


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Mr. MARKEY. Thank you, Mr. Alix, very much. Our next witness 

is Mr. Hal Quinn, who is the President and CEO of the National 

Mining Association. The National Mining Association represents 

coal, metal, and industrial mineral producers, as well as equipment, manufacturers, and suppliers. We welcome you, sir. 

STATEMENT OF HAROLD P. QUINN, JR. 

Mr. QUINN. Thank you, Mr. Chairman, good morning, and good 

morning to the members of the subcommittee. I would just like to 

make several points this morning. Several of them have been well 

documented in your opening statements. The first point is coal is 

indispensable for meeting our energy needs here and worldwide for 

the foreseeable future. It is precisely because of the virtues of coal 

that were stated this morning in many of the opening statements, 

its abundance and affordability and it supplies over half the electricity in this country, and because of those virtues it also provides 

125,000 high paying jobs for U.S. coal miners, as well as thousands 

of other jobs for many of the businesses and industries that depend 

on affordable and reliable electricity to remain competitive worldwide. 

Globally coal has been the most rapidly growing fuel in the 

world. Countries such as China and India already rely upon coal 

to meet over 70 percent of their electricity needs. They, like us, depend on coal to sustain their economies and to raise their standard 

of living. The second point is as follows. Neither this Nation nor 

the global community can address climate effectively without advance clean coal technologies including, and most importantly, carbon capture and storage. Between 2007 and 2030 global energy demand is projected to increase by 50 percent. CO2 emissions are projected to increase by 57 percent according to the International Energy Agency. Virtually all of this emissions growth will come from 

non-OECD nations, and the point being is if the United States and 

every OECD nation completely stopped using coal 75 percent of all 

CO2 emissions would remain untouched and unaddressed. 

In other words, without CCS, we deprive ourselves of the most 

effective tool for addressing climate change, particularly in the developing world. In other words, no climate policy will be successful 

without coal and CCS. This leads me to my third point. The United 

States must do much more to support accelerated development and 

deployment of CCS technologies. $3.4 billion including coal technologies including CCS provided for the American Recovery and 

Reinvestment Act is a good first step, but we need to push the 

technology as hard and fast as we can as noted by many members 

of the subcommittee this morning, and this will require further investment by the government and the industry. 

As the World Resources Institute has pointed out, CCS technologies not only have to be tested and brought up to scale, but 

also have to be integrated on a series of electricity generation platforms. That is a challenge beyond the sole scope of first-adopters 

in the coal-based generation community. Similarly, as others have 

pointed out, a carbon price signal alone is insufficient. There has 

to be a push as well as a pull to get the job done. The Carbon Capture and Storage Early Deployment Act sponsored by Representatives Boucher, Barton, Upton, Whitfield, and Shimkus provide such 


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a push through mechanism for sustained funding to support development and deployment of the enabling CCS technology. 

This brings me to my fourth point for your consideration. The solution we all seek requires that we harmonize the timing when controls are placed on emissions with the commercial availability of 

the critical CCS technologies needed to reduce them. The consequences of getting this policy wrong could be dire. The period of 

time between when promising technologies are developed and successful commercialization is often referred to as potential valley of 

death. By extension industries may confront a valley of death but 

they are trapped in the period between the mandate requiring a 

certain level of performance and availability of the technology enabling them to meet the requirement. The same fate could befall our 

economy if we impose harsh restrictions that jeopardize our ability 

to meet electricity demand before we have the necessary tools to 

meet future emissions requirements. 

Our current economic crisis reminds us all the more the importance of structuring any actions responsibly so we can meet both 

our environmental and economic goals. In short, the solution must 

be sustainable in every respect, environmentally, economically, and 

politically. To sum up, Mr. Chairman, let me just make the following—sum up my points. First, coal is indispensable for meeting 

our energy needs domestically and globally. No climate policy will 

be successful without coal with CCS. We must accelerate the development and deployment of CCS, and the policy solutions must harmonize the expectations of commercial availability of enabling technology. Thank you very much for the invitation. 

[The prepared statement of Mr. Quinn follows:] 


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Mr. MARKEY. Thank you, sir. And our final witness is Lindene 

Patton. She is the Chief Climate Product Officer with Zurich Financial Services. Ms. Patton works on developing insurance products that address the risk associated with climate change. We welcome you. 

STATEMENT OF LINDENE PATTON 

Ms. PATTON. Thank you. Chairman Markey, distinguished members of the Energy and Environment Subcommittee, my name is 

Lindene Patton and I serve as the Chief Climate Product Officer 

for Zurich Financial Services. Zurich is a global insurance company 

providing insurance and risk management solutions to customers 

in 170 countries. We have been serving customers in the United 

States since 1912. We are the third largest commercial propertycasualty insurer in this country with over 20,000 employees in the 

U.S. I would like to begin my testimony by thanking you for holding this critical and timely hearing because immediate, concrete 

and responsible actions including the commercial-scale deployment 

of carbon capture and sequestration should be taken to reduce the 

risks associated with climate change. 

Zurich is in the business of risk management. In 2008, Zurich 

announced as part of its climate initiative, that it would dedicate 

significant resources and apply its skills in the area of risk management to assist stakeholders in adapting to and mitigating the 

risks of climate change. Zurich has applied these skills specifically 

to commercial deployment of CCS. The focus of my testimony today 

will be identification of the essential risk management components 

of a legislative framework necessary to ensure the commercial deployment of CCS in an environmentally and economically sustainable manner. The role of an insurer in a CCS context is to assess 

risk, price risk, and create risk management best practices. Insurance imposes quality underwriting restrictions which are not only 

in the interest of the insurer but are in the interest of public good, 

reducing risk of property damage, bodily injury, environmental 

damage, and other economic loss. 

Insurance performs a role like no other in society, sending price 

signals to incentivize risk-reducing behavior. To ensure that commercial deployment of CCS occurs in a sustainable manner with respect to natural resources, the environment, and public safety, the 

following four elements of a risk management framework are critical. First, estimating the expected. Appropriate analysis is needed 

to estimate the expected value of financial consequences that may 

arise from each individual CCS site. Specialty insurers are expert 

at estimating these low frequency, potentially catastrophic risks. 

Second, proper identification and quantification must inform permitting, operation and maintenance requirements. No amount of 

insurance, trust fund, or other financial risk management system 

can overcome poor siting or inappropriate operating techniques. 

Third, establishment of a CCS safety board. With respect to siting, 

operational oversight and long-term stewardship of CCS facilities, 

a private/public government corporation should be chartered and 

vested with the authority to oversee the siting and design of CCS 

facilities and the management of CCS facilities in the event of conflict of law or resources. 


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Fourth, establishment of a CCS National Trust. A trust managed 

by the CCS safety board should be established to pay long-term 

stewardship costs only after the CCS facility is released from postclosure. Finally, it is critical that policymakers avoid the establishment of any liability scheme that would provide first dollar indemnity for liability during operational, closure or post-closure periods. 

No first dollar indemnity should be provided for sovereigns for 

risks manifesting from CCS activities during operational closure or 

post-closure periods because indemnity separates actions from consequences and masks risk price signals. Simply put, first dollar indemnity removes one of the greatest incentives to deploy CCS in 

an environmentally and economically sustainable manner. 

With respect to international action and implication of commercial scale deployment of CCS in the U.S., I have a few observations. 

If we as a global community are to meet 2050 emissions reductions 

recommended by the IPCC scientists, the U.S., Europe, Australia, 

China and India must reduce emissions from coal-fired power 

plants. Ultimately, it may be necessary not only to export U.S. CCS 

technologies to China and India, but also our risk management 

frameworks and policies. Countries in the EU and Australia are 

moving forward with CCS deployment now. 

In closing, Mr. Chairman, Zurich strongly believes private insurance has a critical role to play in the deployment of CCS, and we 

look forward to working with you, members of the committee, and 

your staffs to make this happen. 

[The prepared statement of Ms. Patton follows:] 


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Mr. MARKEY. Thank you, Ms. Patton. The Chair will now recognize himself for a round of questions. Mr. Crane, Mr. Hawkins outlined the USCAP proposal for a package of incentives and regulations to drive deployment of CCS. Do you believe that that package 

can work? 

Mr. CRANE. Yes, Mr. Chairman. I do believe it works. I think the 

real—would work. I mean I think the real focus is how you get the 

5 gigawatts, in particular what we call the rapid demonstration 

projects how to get them up and running. Certainly the idea is to 

get up enough scale so that some of the costs of these projects come 

down because I think everyone on the panel probably has their 

view on how much carbon capture and sequestration is going to 

cost, but until we do a few of these projects it is all guesswork. 

Mr. MARKEY. Thank you, Mr. Crane. Under the Obama Administration, there is an expectation that the EPA finally will follow the 

law and move forward with regulating CO2 emissions from coalfired power plants under the Clean Air Act. Given those facts, it 

seems to me that coal is only going to have a future in the United 

States if we enact comprehensive climate legislation that provides 

the financial incentives and regulatory drivers to make CCS technology a reality. Would each of you respond to whether you agree 

with that assessment? Mr. Hawkins. 

Mr. HAWKINS. Yes. 

Mr. MARKEY. Mr. Crane. 

Mr. CRANE. Yes. 

Mr. MARKEY. Mr. Duncan. 

Mr. DUNCAN. Not really my field, I am afraid. 

Mr. MARKEY. OK, fine. Mr. Alix. 

Mr. ALIX. Yes. 

Mr. MARKEY. Mr. Quinn. 

Mr. QUINN. Yes. It is in our interest to get this issue resolved. 

Mr. MARKEY. OK. Thank you. Ms. Patton. 

Ms. PATTON. From an insurer’s perspective insurance can accommodate the legal scheme of choice that is supplied. 

Mr. MARKEY. Mr. Alix, how significant is the potential of CCS 

technology to create jobs here in the United States? Are we at risk 

of losing this market to Europeans and others if we fail to follow 

it aggressively? 

Mr. ALIX. I think that technology is being developed in many nations. When we competed in Canada, we competed against Japanese companies, French companies, Canadian companies, and certainly an individual project probably creates 500 jobs at its peak 

in construction and another 100 to operate the system so certainly 

a danger that if others moved before us that they will develop technology that will create jobs abroad instead of in the U.S. 

Mr. MARKEY. Now I heard you describe your technology, Mr. 

Alix. I met recently with Brent Constantz, who is a Stanford scientist who is the founder of Calera Corporation. Calera proposes to 

use CO2 capture from power plants and other sources to make cement simultaneously sequestering the CO2 and reducing cement’s 

carbon footprint. I was very impressed with that technology’s potential. Are you familiar with that technology, Mr. Crane? 

Mr. CRANE. Yes, Mr. Chairman. In fact, the application that 

Calera has in front of the DOE for a loan guarantee is actually 


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with our company at one of our coal plants. And, you know, we 

wouldn’t be doing that if we weren’t impressed with the technology 

but I just want to caution the chairman that Mr. Alix’s technology 

needs to be scaled up from 1 megawatt to probably 100 megawatts. 

I will let him speak for himself but the Calera technology is almost 

at the test tube stage. They don’t even have a continuous process 

going. They are mixing it in batches right now. So when you think 

of the millions of tons of carbon that come out of a 500 megawatt 

power plant, it is a great promising technology that the government should support, but scaling up to utility size power plants is 

not around the corner when it comes to the Calera technology. 

Mr. MARKEY. But if we had a cap placed upon carbon, would that 

not create a lot of market incentives for the development of technologies like that that might completely surpass anything that we 

are now contemplating? 

Mr. CRANE. I agree with you completely, Mr. Chairman, that putting a cap on a cap and trade system, I mean, yes, to stimulate all 

sorts of innovation and disruptive technologies, you are exactly 

right. 

Mr. MARKEY. What do you think the likelihood of that happening, Mr. Crane, that a disruptive technology would in fact 

emerge as it did—You Tube and Google only have emerged because 

we changed from a narrow band to a broad band policy. If we move 

to a cap and trade system, do you think that that would encourage 

the private sector—— 

Mr. CRANE. Mr. Chairman, I am not a probability analysis guy. 

I am just a poor businessman, but Dr. Duncan may have a better 

view on that, but I would say that over 20, 30 years, I would be 

pretty confident that there would be disruptive technologies. I 

would not be confident over the next 5 to 10 years. I think the next 

5 to 10 years we are going to be slogging forward with what we 

have and demonstrating at scale. 

Mr. MARKEY. Mr. Hawkins, would you like to comment on that 

briefly? 

Mr. HAWKINS. I would agree completely with Mr. Crane that 

adoption of the economic signal from a cap and trade program will 

unleash all sorts of interest in exploring technologies and systems 

that will keep greenhouse gases out of the atmosphere, and in the 

next 5 or 10 years we have lots of tools we can work with. The 

challenge is to get them deployed and create the market conditions. 

After that, we are going to see ideas coming out of the woodwork, 

and the regime for controlling global warming pollution 25 years 

from now is probably going to look very different than any analysis 

today would suggest. 

Mr. MARKEY. Thank you, Mr. Hawkins. My time has expired. 

The Chair recognizes the gentleman from Michigan, Mr. Upton. 

Mr. UPTON. Thank you, Mr. Chairman. It has been noted that I 

think since 1990 we have built about or we have put on line about 

12 plants, 12 coal plants, which is slightly more than one per year. 

At the same time, China is bringing on a new coal plant virtually 

every single week. Wall Street is not financing any of the projects 

unless they have carbon capture as part of the long-term goal. And 

I would just like to comment on the last question that the chairman asked, and that is as I look at cap and trade, I am a very 


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strong supporter of CCS. We need legislation to do that. But the 

last thing that we want to do is embark on cap and trade without 

knowing whether in fact it is going to work for sure and it is in 

place or not as those years commence. 

Mr. Crane, you made the comment that nuclear would be a lot 

easier than clean coal from your experience in New York, and I 

know that as you were embarking on a project in New York State 

your CCS project virtually collapsed. The question that I have is 

you said that this technology is promising carbon capture but it is 

not around the corner. How long do you think it is until it can be 

in place whether it is using Mr. Alix’s technology, when is the date 

that we can look at it—— 

Mr. CRANE. Well, I am actually not a technology—I think we are 

ready to go forward with scale demonstration projects right now. I 

think every element of the CCS chain is ready to go at scale whether it is with Frank’s technology, and we have carbon pipelines 

down on the Gulf Coast in Mississippi and up in the Big Sky country. So, no, I am a big believer that it is ready to go, but in New 

York State it wasn’t that we didn’t think that we knew how to do 

it. It was just too expensive. And, you know, keep in mind that the 

greatest stimulant in the electric industry to doing other things 

apart from having money available from Wall Street, which there 

is none for anything, is high natural gas prices. 

So in a low natural gas price environment the trouble that you 

see with clean coal, solar, wind, everything, is that the price of natural gas is now so low that that is by far the cheapest way of producing electricity. 

Mr. UPTON. Were there liability concerns in New York as well? 

Mr. CRANE. Yes. Yes. Liability with the carbon migrate underground, and we had the geological studies to show that it would 

stay very contained and it did not propose a threat, but there is 

a big difference between having that in a study and making people 

comfortable. And we didn’t even get out into the public with that. 

That is just making the public policymakers comfortable. 

Mr. UPTON. Dr. Duncan, I know that Texas is not a Great Lake 

state. How do you get away with or how do you proceed with liability issues in Texas as it relates to ground water and the whole 

NIMBY factor? Is there a special law that Texas has that other 

states or Oklahoma may have that we don’t have in places like 

New York and Michigan? 

Mr. DUNCAN. Well, there are some differences in the common law 

tradition in Texas that are different than other states. I think that 

the attitude in Texas was portrayed when the Texas legislature 

voted unanimously to take on the liability related to FutureGen 

CO2. So I think there is a high degree of comfort in Texas both 

amongst the general public and legislators as to the safety and efficacy of CO2 injections, which comes from the long record that we 

have there. During the FutureGen project, I was out in the communities where we were considering FutureGen sites, and I think that 

there was a large degree of public acceptance. We found that there 

was a negative reaction towards new coal power plants that didn’t 

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Mr. UPTON. Last year there were certainly a lot of us that were 

encouraged that we would actually move the CCS legislation that 

Mr. Boucher and many of us were co-sponsors of. Have each of you 

had a chance to look at that legislation and what comments would 

you have as we look to have it moved this year in terms of changes 

that we might want to make to that legislation. Does anybody have 

a suggestion? Mr. Hawkins? 

Mr. HAWKINS. We did review Mr. Boucher’s legislation and commented favorably on it last year. This year we think it would be 

a good contributor to what we would call a two track proposal on 

CCS. Deployment is the top priority. Some of the concepts that are 

in the Boucher legislation would provide additional resources for 

research that could be done along with that deployment to advance 

some of the technologies that are further behind. 

Mr. UPTON. I know my time has expired so I will ask my last 

question which may not require an affirmative answer. Is anyone 

on the panel against our legislation? That is a good answer. I yield 

back. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from Pennsylvania Mr. Doyle. 

Mr. DOYLE. Thank you, Mr. Chairman. I want to for all the panelists just first given the power makeup of the United States today 

and for the near future and given the prior makeup for developing 

countries like China and India, is there anybody here on the panel 

that thinks we can meet our greenhouse gas reduction goals without widespread development of CCS technology? Is there a way to 

do this without CCS? Does anybody think that? So it is critical that 

this technology be developed and deployed if we are going to have 

any chance of meeting these targets. 

Now here is my question for all of you. I heard Mr. Hawkins said 

that this technology is ready to go today. I have seen television 

commercials that says it is a complete myth and doesn’t exist and 

won’t be ready for 50 years, and I heard all of you talk a little bit 

about it, but I still don’t have a clear—could each of you tell me 

in your opinions how long you think, how many years are we talking about until we have widespread deployment where we can go 

to our coal-fired utility plants here in this country and start to export this technology to countries like China and that. Are we 10 

years away from that? Are we 20 years away from that? Is it ready 

today or is it a myth? Could each of you just tell me what your 

opinion of that is? Yes, go ahead. 

Mr. HAWKINS. Yes. Mr. Doyle, I think what I would say is that 

with respect to the question of readiness it is ready today. My view 

is that if the comprehensive climate legislation were enacted, we 

would see contracts of the first commercial scale projects being 

firmed up within months, less than a year from enactment. That 

is my view. In terms of widespread deployment, that is more difficult to predict, but in terms of—you know, we build power plants 

one at a time, and the first ones could be on line within the normal 

construction time path of a power plant without carbon capture 

and disposal if you get the legislation and the economic conditions 

to support it. 

Mr. DOYLE. Mr. Crane. 


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Mr. CRANE. My view is that the quickest way to go forward, and 

I agree with David’s time table, is to split the carbon capture and 

the sequestration, prove carbon capture and combine it with enhanced oil recovery. You can do that now. Frank’s technology is one 

of the leaders scaled up to the 100 megawatt size. Prove up sequestration sides by just putting off the shelf gasifiers from the chemical industry on top of the geological formations that you want to 

prove it in. And if you do that, you can be going within a year and 

you prove it up over the next 5 years, and you can be exporting 

at scale within a decade. 

Mr. DOYLE. In a decade you think we can be to scale and deploy 

these things? 

Mr. CRANE. Yes. And the huge market here obviously is all the 

newer coal plants, not the 50-year-old coal plants in the United 

States, which are reaching the end of their useful life anyway. 

Mr. DOYLE. Mr. Duncan. 

Mr. DUNCAN. I believe from a technical viewpoint and a technological viewpoint we are ready to start now. I think there are some 

policy issues and regulatory issues that need to be worked out. 

Mr. ALIX. Assuming the policy and regulatory issues are worked 

out, I think 3 to 4 years in a build cycle is about right, and as both 

Mr. Hawkins and Mr. Crane said, we are ready to go, so really the 

financial incentives have to be in place and we can see commercial 

units come on line 2012, 2013, then I would think a year or two 

on line is sufficient to demonstrate that it is commercially ready at 

any scale so I am a little bit more optimistic. I would say by 2015 

we should be ready to do this everywhere at whatever scale is 

needed if we get going in the next year with the incentives needed 

to get commercial scale units deployed. 

Mr. DOYLE. Very good. 

Mr. QUINN. My understanding of the consensus would be that a 

widespread deployment, commercial deployment, is 2020, 2025 for 

CCS. That is not to say there can’t be breakthroughs that some of 

the panel just mentioned that can accelerate that even—— 

Mr. DOYLE. You are saying the year 2020. You are not saying 20 

to 25 years. 

Mr. QUINN. No, the year 2020, between the year 2020 and 2025 

with widespread commercial deployment. 

Ms. PATTON. I think the time frames which have been outlined 

are consistent with our understanding from the insurance industry 

perspective. At Zurich in January of this year we announced the 

availability of insurance capital that is immediately deployable in 

this context. And, in fact, we have been asked to and have provided 

an indication for coverage already so from my perspective not only 

is this technology technically ready to go but there are indications 

in the marketplace that the business is ready to go. 

Mr. DOYLE. Very good. So basically the consensus is certainly 

within the decade or shortly thereafter we would be ready for widespread deployment of this technology. Is that what I am hearing? 

OK. Thank you very much. I think that is important to have on 

the record. Thank you. 

Mr. MARKEY. We thank the gentleman. The Chair recognizes the 

gentleman from Texas, Mr. Barton. 


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Mr. BARTON. Thank you, Mr. Chairman. I would ask unanimous 

consent to put two documents in the record for this hearing. Both 

are from the Energy Information Administration. One is the last 

updated price of coal per short ton in the United States. It is February of 2009. The other is a chart of coal prices per kilowatt hour 

by state that is from the EIA, and it is January of 2007. 

Mr. MARKEY. Without objection, it will be included. 

[The information appears at the conclusion of the hearing.] 

Mr. BARTON. Thank you, Mr. Chairman. The reason I put those 

two documents in the record is because we are having a nice warm 

touchy feely discussion about CCS and all that, and I am on the 

Boucher bill. I am supportive of it. But consumers make decisions 

based on price and utilities make decisions on what kind of plants 

to build based on the price of the fuel. If I heard Mr. Alix correctly, 

he said that his technology is going to cost $40 a ton of CO2, which 

is the equivalent of $120 a ton of coal, so he is going to—the base 

load price of coal in the United States according to the EIA is 

around between $26 and $30 a ton. So he has just added 400 percent to the cost of coal if I understand him correctly. Now Mr. 

Doyle asked the question, and it is a good question, does anybody 

think that we can meet all of our environmental challenges without 

using CCS technology for coal, and you all answered no. 

But the real answer is yes. You don’t use coal. You use natural 

gas or you use nuclear or you use some other alternative. Natural 

gas prices are falling like a rock. Last month in Texas in the 

Barnett Shale, which is partially in my district, you could buy all 

the natural gas you wanted at about between $4 and $5 a thousand 

cubic feet. Now there is a formation up through Pennsylvania and 

New York called the Marcellus Shale. It is estimated that it has 

so much natural—it could have 500 trillion cubic feet of natural 

gas. Now to put that in perspective, we use about 22 trillion cubic 

feet of natural gas a year. The Barnett Shale, which is the largest 

new producing formation of natural gas in the world last year produced about a trillion cubic feet. 

So we have this formation up in Pennsylvania and New York 

that has so much natural gas potentially that we can’t even estimate how much we have, so there is a way to do this without using 

coal, but having said that I think we need to use coal. Now my 

question to Mr. Crane and to Mr. Alix if we really, really, really 

study this CCS under Mr. Boucher’s bill, what is a reasonable expectation of how much lower you can get the cost of this technology 

so that it really is cost competitive with natural gas and nuclear? 

Mr. Crane. 

Mr. CRANE. Congressman, it is not clear to us that the house 

load of post-combustion carbon capture, it is difficult to see from an 

engineering perspective how it ever gets below sort of taking up 20 

percent of the production of the power plant itself, so while we expect—— 

Mr. BARTON. It takes that much electricity just to run the technology? 

Mr. CRANE. Yes. 

Mr. BARTON. Twenty percent of the output? 

Mr. CRANE. Yes. 

Mr. BARTON. OK. 


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Mr. CRANE. So our view is that Mr. Alix’s $40 a ton, I mean can 

it get down to $30 a ton? Maybe it can. We don’t believe it will ever 

go—— 

Mr. BARTON. That is per ton of CO2? 

Mr. CRANE. Yes, per ton of CO2. We don’t believe it will ever get 

to—the economy is such that we don’t believe it ever gets to $5 a 

ton or $10 a ton, so it becomes an inconsequential portion of the 

whole. When you talk about the cost of carbon for a coal-fired 

power plant on a deliberate basis $40 a ton is a little bit more than 

doubling the cost of coal because the $8 a ton of coal that you are 

talking about of course is up in Wyoming. You still have to get it 

to where you are using it. So it is a big adder but maybe not quite 

as large as you said. 

But the issue with gas is that if it turns out that the country has 

an infinite amount of gas in these shell formations then probably 

the future for coal isn’t that great anyway. I think all of us in the 

power generation industry remember what happened the last time 

the power industry plunged wholesale at the gas which was that 

the price of gas went from $3 per million BTU to 15 last June, so 

I think we really think there needs to be a balance. I know that 

you agree with that. 

Mr. BARTON. I agree with it. My time has—could I let Mr. Alix 

answer? 

Mr. MARKEY. Yes. 

Mr. BARTON. How low can you bring the cost of your technology 

if you really refine it and expand it? 

Mr. ALIX. I think we are looking at between $20 and $30 a ton 

as a reasonable goal based on what we know today for an advanced 

coal plant. I think that adds about 2 to 3 cents per kilowatt hour 

if you look at advanced coal plants. I think it is important to note 

that natural gas plants have about half CO2 of a coal plant, so CO2

emissions from natural gas plants would not be free under a cap 

and trade bill and they would increase as well, so under many scenarios we have seen even adding that 2 to 3 cents per kilowatt 

hour to coal, if you look at gas historically more in the 8 to 10 per 

million BTU and the CO2 emissions of gas coal still remains quite 

competitive. 

Mr. BARTON. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. The Chair recognizes the gentleman from Utah, Mr. Matheson. 

Mr. MATHESON. Thank you, Mr. Chairman. I thank the panel as 

well. We may have covered this a little bit in Mr. Barton’s questioning. I just want to say one of my concerns about moving too 

quickly on climate change in terms of whether the key technologies 

are really developed or not, you have heard in fact a lot of the 

members on the panel ask you questions about when is this going 

to be ready, when are we going to be viable. But beyond being viable, I guess the question is how much is it really going to cost? You 

know, 2 years ago a witness before this subcommittee noted the 

new technologies at that point predicted the total cost of a new 

coal-fired plant would increase by 60 to 70 percent. 

Do these new costs—what level of concern do you have about the 

potential cost impacts if we are going to employ carbon capture and 


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sequestration? I just ask that to the panel in general. How much 

do these new costs concern you? 

Mr. HAWKINS. Well, I pay electricity bills and so I can certainly 

relate to the concerns about cost. What I would say is that the first 

generation of these plants is likely to cost more and the percentage 

increase that you are describing is what is called the production 

cost of electricity. That is not going to translate into that kind of 

a price rise in retail electricity prices for several reasons. First, coal 

is half of the power production in the U.S. Second, production cost 

is about 60 percent of the electricity bill you pay, but most importantly we are not going to deploy this technology on all 330 

gigawatts of coal-fired power plants overnight. It is going to happen 

gradually. The first ones are going to be somewhat clunky. I remember the first portable computer that I had. It was about the 

size of a carry on bag on an airline, and it had a lot less computing 

power than this cell phone. So we are going to get better at this, 

and we are going to get better faster if we start right away. 

Mr. MATHESON. Do people think cap and trade legislation, that 

there is going to be a way to provide cost mitigation to consumers 

that feel this? Is that a piece of this equation as well? 

Mr. CRANE. Well, yes, at least that is part of the USCAP Blueprint is to provide cost mitigation through some of the proceeds 

from the auction to the hard-pressed consumers. 

Mr. MATHESON. I would suggest that doing so is more complicated than it sounds. About half the states in this country have 

primary reliance on coal as their electric and fuel source, about half 

the states don’t, and one of the concerns I have coming from one 

of those states that about 90 percent of its electricity comes from 

coal is we are going to have a regional wealth transfer, if you will, 

in this country based on who pays more on the utility bills and how 

the cost mitigation funds are directed to consumers who are affected by it. So I don’t know if anyone on the panel has expertise 

on that issue but I would just suggest to you that this is a lot more 

complicated than people are making it out to be I think in terms 

of how you do cost mitigation in a fair and equitable way. 

Let me move to—I mentioned that mid-term action—I mentioned 

that quote earlier. The witness in the 2007 hearing was Jeff 

Sterba, who is the CEO of PNM Resources. I know he can’t be here 

today but at that same hearing in 2007 he said that it is only 

through the steady and judicious advancement of these applications 

during the course of the next decade we can start to bring the costs 

down. It seems to me we have a long way to go in terms of making 

the advances we need to make between 2007 and 2017. We thought 

we made some progress in the bill, the legislation that passed Congress in 2007, the Energy Independence and Security Act, but from 

the policymaker’s side of the equation what more do we need to be 

doing? 

I am a co-sponsor of last Congress—the Boucher bill, as you 

heard before. Is that the approach we need to take? What are your 

suggestions policy wise for how we can move this technology along? 

Mr. CRANE. Well, just even on your regional wealth transfer 

point, I agree with you that there is the potential for that, and 

right now absent support for clean coal in particular, but also for 

nuclear there will be a wealth transfer to the parts of the country 


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that have more solar, wind resources or more gas-fired generation 

than ones that depend on coal and nuclear, and we think all of 

those technologies, solar, wind, gas, nuclear, and clean coal need to 

be supported, so I would say to answer your last question what you 

can be doing is exactly what you are talking about which is early 

funding to get clean coal going because that is definitely the laggard of all those technologies right now in terms of, you know, 

ready for commercial deployment. So to prevent that regional 

wealth transfer, I think pushing forward the way you are is the 

way to go. 

Mr. HAWKINS. And I would add we would recommend this USCP 

Blueprint, which has a series of proposals to address all the concerns that you mentioned, both in terms of regional impacts and 

in terms of the serious program to deploy carbon capture and disposal. 

Mr. MATHESON. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Kentucky, Mr. Whitfield. 

Mr. WHITFIELD. Thank you, Mr. Chairman. I guess after hearing 

all this testimony and reading it, I am not particularly optimistic 

about carbon capture and sequestration myself, but I noticed recently, Mr. Hawkins, that the NRDC in partnership with Alliance 

for Climate Protection produced some TV ads, and they focused on 

an employee of a plant using coal, and basically the commercial 

ends with a caption stating in reality there is no such thing as 

clean coat. Now does that ad, does that apply to a plant using CCS 

or not? 

Mr. HAWKINS. Unfortunately, it does today, and that is the reason that we co-sponsored these ads. Today we don’t have a commercial scale electric power plant in the United States that is using 

carbon capture and disposal. 

Mr. WHITFIELD. But you would be supportive of the coal industry 

if it did have CCS in a commercial—— 

Mr. HAWKINS. As I have testified, NRDC is a strong supporter 

of CCS deployment and we have supported it for a number of years 

now and continue to support it. We would like to be able to run 

an ad very soon saying in reality there is such a thing as coal with 

carbon capture. 

Mr. WHITFIELD. Now say by the year 2030 just from the NRDC’s 

perspective, what would you like to see the fuel mix used worldwide to produce electricity, say about 2030? 

Mr. HAWKINS. We don’t think that it is appropriate for Congress 

or for an organization like ours to dictate the fuel mix. We think 

it is important for the Congress to set criteria for environmental 

performance, and we think the environmental performance of the 

global power sector has to be a lot better in terms of carbon dioxide 

pollution than it is today. You say by 2030? Globally, we should be 

trying to reduce emissions on the order of 30 percent or more. In 

the United States, we would like to see reductions on the order of 

40 percent or more reflecting our large historic contributions to the 

CO2 in the atmosphere. 

Mr. WHITFIELD. Ms. Patton, one of the issues relating to commercial use of carbon capture and storage certainly relates to liability 

issues, and you touched on insurance policies in your testimony, 


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but from the liability side of this companies that are first using 

commercial grade CCS and storing this the post-injection liability 

issue, is that something that you all are willing to cover? 

Ms. PATTON. Absolutely. Our customers came to us and asked us 

for some assistance specifically in managing risk associated with 

carbon sequestration, especially the post-injection issues. From our 

perspective, we evaluated the existing suite of technologies in this 

case, and as I indicated in my written testimony we announced the 

availability in January of two policies that are designed to provide 

liability coverage during the operational closure and post-closure 

periods. The first policy addressed is the core risks were identified 

to us as unique for the sequestration activity, so clearly existing in 

the insurance industry already there was capital available to address construction liability associated with constructing capture 

ready facilities. 

With respect to the injection component our customers identified 

five areas which we developed a policy around. They were concerned about pollution liability for underground sequestration activities so what would happen, as Dr. Duncan noted, if there was 

a migration of stored CO2 into ground water. Our policy does respond to that. They were concerned about liabilities associated with 

transportation, whether that was a short distance or a long distance. Our policies respond to that. With respect to injection activities itself potentially that a well could go out of control, we were 

able to respond to that. There was concern about a geo-mechanical 

event so basically the active putting the gas into the ground causing a geo-mechanical event, a seismic event. We are able to respond 

and provide coverage for that. 

And, finally, there were concerns about business interruption. 

What would happen if after this project was constructed there were 

circumstances where the plant had to—had a business interruption 

and they might have to buy carbon credits or some other equivalent in that process. We are prepared to extend coverage to address 

that during that period. The second area of policy looks at the specified activities that may be imposed by a permitting system if one 

is implemented, which will dictate the terms under which those facilities will be closed and released in a post-closure context. So 

what must an operator do to prove that that site is stable enough 

for a long-term stewardship, and we have a second policy which addresses those issues. So, yes, we stand ready today to commit capital now for those applications. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Washington State, Mr. Inslee. 

Mr. INSLEE. Thank you. My compliments to the panel too. This 

has been one of the best panels. We have had about two dozen 

hearings and this has just been a great panel. I have 1,000 questions. I will start with one to the whole panel. Does anyone believe 

that the coal industry has an ownership right in the atmosphere 

that gives it right to use the atmosphere? Does anybody believe 

that? No one said yes so far. OK. Does anybody believe that the 

coal industry should have the right to put unlimited amounts of 

carbon dioxide at zero cost into the atmosphere? Does anybody believe that? 


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Mr. QUINN. Congressman, I am not sure of the point of your 

questions whether the coal industry has that right. Aren’t we just 

talking about whether society in terms of how—— 

Mr. INSLEE. Yes, that is a good point. Let me rephrase the question. Does anybody at the table believe that anyone, any industrial 

group, utility or coal-based using industry have the right to put unlimited amounts of carbon dioxide which is causing global warming 

into the atmosphere at zero cost? Does anybody believe that? So far 

nobody—— 

Mr. QUINN. Well, again I just think the question is a little narrow. It keeps invoking the coal industry, and we are talking about 

society and economic activity, and there is a lot of different activity 

that has carbon contribution. 

Mr. INSLEE. Do you think a utility that has a coal plant that is 

spewing tons of CO2 into the atmosphere that is causing global 

warming, do you think that utility has a property right to put that 

CO2 into the atmosphere in unlimited amounts at zero cost? Does 

anybody believe that? OK. Nobody believes that, so there is a consensus that we should have a legal framework that does not allow 

that to happen so now here is my next question on how to form 

that consensus. Does anybody believe that the cost of developing 

this technology that I think there is broad consensus in this room 

needs to be developed to figure out a way to sequester carbon dioxide, does anybody believe that the cost of developing that technology should fall exclusively on the public as opposed to those industrial entities that are using the coal that are putting the CO2

into the atmosphere? In other words, does anybody believe that 

cost should be exclusively on the taxpayers who would have to fund 

that research? 

OK. Now one has said yes to that question, so that means there 

is someone else going to have to fund this research, so now I want 

to ask for your opinions about that. I have suggested, others on 

this committee have suggested, that we have a cap and trade system that auctions off the right to put carbon dioxide in the atmosphere and uses at least a substantial portion of the auction revenues to go to research and development activities, some of which 

would be through the utilities of actually doing this work. Some of 

this would be through the companies developing this coal-generating technology. Some would be from academic institutions but basically this fund would help fund this new technology. 

How many people think that at least in part is a good idea that 

we fund this new technological development at least in part to the 

auction revenues of a cap and trade system? I see a bunch of heads 

nodding. Why don’t we just go down the table? How many people 

think that is a good idea in general? 

Ms. PATTON. I think there are multiple methods for doing funding. I think the critical issue is that there needs to be funding. 

Mr. QUINN. I think in part an auction would assist in providing 

the push to funding, but I think it is also important that we allocate any allowances properly to protect any economic dislocation 

because after all we are talking about businesses that are going to 

have to adjust their cost structures to increase energy supplies, and 

if you are going to make them pay more some of their factories in 

your districts could be their last in the United States. 


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Mr. ALIX. I would support in part funding CCS technology with 

auction revenue. 

Mr. DUNCAN. This issue is outside my field of expertise, but I am 

in favor of funding. 

Mr. CRANE. Yes, we agree in part auction but we know the government has many different uses for funds and that often they 

don’t end up in the place where we would agree with you. 

Mr. HAWKINS. We support funding for deployment of this technology. It could be done either through an auction or it could be 

done through direct allocation of allowances, which would then be 

turned into money, so you can turn the allowances into money at 

the start of the process or one step down the chain but it is important to get the funds there. 

Mr. INSLEE. Thank you. And I just note Mr. Doyle and I are 

working on a provision that would allow a partial distribution of 

permits to energy intensive industries that compete in international commodities that would otherwise might have a difficulty 

of competing so at least I am proposing the bulk of these auction 

revenues to go to develop this new technology but that there be 

some assistance, if you will, to these energy intensive industries. 

Thank you very much to all the panelists. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Louisiana, Mr. Scalise. 

Mr. SCALISE. Thank you, Mr. Chairman. Mr. Crane, I think you 

had said your company, NRG, is the only company that is actually 

seeking a permit right now for nuclear plants? 

Mr. CRANE. Well, no, I was just expressing a high level of confidence that we would be the first to build, but I think there are 

something like 24 companies that have filed permits. There are 14 

that asked for the Department of Energy loan guarantees, and I 

think the Department of Energy is down to considering five and 

they will pick two to three. 

Mr. SCALISE. So you are close enough to where you think you— 

do you have any time table when you think you would—— 

Mr. CRANE. Well, close enough in the nuclear world. 

Mr. SCALISE. When do you think you would get that—— 

Mr. CRANE. Well, the Nuclear Regulatory Commission has published a schedule for our permit which would qualify for us getting 

the permit in 2011, and then if we proceed to build immediately 

we first would be on line in 2016. 

Mr. SCALISE. Now how long has this process been going on for 

your company to try to get—and how much does it cost? 

Mr. CRANE. We were a late start and we moved fast so it has 

been only 3 years for us so far but keep in mind we are permitting 

a nuclear design that has been previously designed certified by the 

NRC at a site that has been previously approved for four units and 

has two there now so—— 

Mr. SCALISE. It is not a new plant. It is not a new site or it is 

not a new model that you are using. 

Mr. CRANE. Well, it is advanced. It is far newer than any other 

nuclear plant currently existing in the United States thanks to the 

30-year lag, but it is not new by international standards. 

Mr. SCALISE. And how much have you spent so far? 


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Mr. CRANE. The application process has cost us close to $200 million. 

Mr. SCALISE. What do you think the reasons are for that high 

cost? There are a lot of barriers to entry—— 

Mr. CRANE. Nuclear plants are complicated, and the NRC takes 

their safety mission exceedingly seriously as they should. We have 

no criticism of the NRC in the way that they have been dealing 

with our application. 

Mr. SCALISE. I don’t want to put you on the spot because you are 

waiting for them to approve this but you have seen this across—— 

Mr. CRANE. Good point. 

Mr. SCALISE. There are many people, not mentioning you, but 

there are many companies that want to pursue nuclear but consider barriers to entry, not just cost but regulatory burdens in a 

proven technology. This is not something new. This is something 

that has been perfected. It is very widely used in Europe. They 

sure don’t put those same types of barrier to entry and have been 

able to get a carbon free energy product much more readily. It is 

much more widely used in other parts of the world. 

Mr. CRANE. I think the biggest barrier to entry to nuclear as a 

macro-economic or solution in the U.S. is that I don’t think in my 

life time there will be a nuclear plant developed in the United 

States that is not at an existing site, and since there are roughly 

60 some existing sites and probably half of them they can’t have 

expansion for various reasons, it limits—the limiting factor for nuclear as a solution is siting long term. 

Mr. SCALISE. Mr. Hawkins, I think you have talked about, and 

I will let you explain your real feelings on it, but in terms of coal, 

I think you have called for a moratorium on coal facilities, if you 

could expand on that. 

Mr. HAWKINS. Nuclear plants should be built with carbon capture and disposal. 

Mr. SCALISE. And so you are saying that that technology is not 

available today though, right? 

Mr. HAWKINS. No, we are saying the technology is available but 

the policies are not there to require it or to create an economic incentive for it. 

Mr. SCALISE. When would you foresee being in place where a facility could be built that would have that technology? 

Mr. HAWKINS. Well, Chairman Waxman has said he wants to get 

a bill out of his committee by Memorial Day. If that happens and 

if the Senate moves it could be before the end of this year. 

Mr. SCALISE. And how long would it take then to get those facilities built if, and assuming a lot of things, but—— 

Mr. HAWKINS. Well, the coal-fired power plant takes 3, 4, and 5 

years to build and as soon as the policy signals are straight, I 

think, as I said before, you would see contracts written, and 3, 4, 

5 years after that you would see projects that could come on line 

with this technology. 

Mr. SCALISE. We have had hearings on a number of renewables. 

I think we all support the continued development of those renewables to get them at a place where they could be even more reliable. I think the estimates I have seen on wind and solar is you 

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tricity generated through those methods, and everybody acknowledges that even then it is not a continuous source and so you would 

need backup power supplies and another method of providing continuous power because when we turn on our lights of course we are 

not going to just have the lights be on when the wind is blowing, 

and so you have to have that backup. Even if under those scenarios 

you laid out, how would you suggest solving that problem of the 

fact that you don’t have a continuous source just by using renewables? 

Mr. HAWKINS. As I said, we don’t propose a system that is 100 

percent renewables. We think that the most likely electricity system in the U.S. in the next several decades is going to be a mix 

of renewables. 

Mr. SCALISE. Nuclear, gas? 

Mr. HAWKINS. A mix of the technologies that we have today. 

With respect to renewables, I think we will see the development of 

storage technologies which will make renewables and the intermittent nature of renewables much less of an issue than it is today. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Virginia, Mr. Boucher. 

Mr. BOUCHER. Thank you very much, Mr. Chairman, and I want 

to commend you on organizing our discussion this morning on the 

future of coal. It is a critically important conversation for us to 

have as we consider cap and trade legislation direct funding legislation for carbon capture and sequestration and other measures 

that are related to climate change. And I agree with Mr. Inslee. 

This has been one of the more productive conversations we have 

had in this subcommittee very recently. The Electric Power Research Institute widely regarded for its expertise in energy technology tell us that if we had a dedicated funding stream of approximately $1 billion per year for a 10-year period that at the end of 

that 10-year period by approximately 2020 we would have available, reliable, and affordable carbon capture and sequestration 

technology available. And very shortly within a matter now of just 

a couple of days, as has been mentioned in the course of our discussion today, bipartisan legislation that would achieve that funding 

schedule and put those dollars in place for research development 

and demonstration for carbon capture and sequestration will be introduced. 

I have heard some interesting testimony today from a number of 

the members about perhaps there being carbon capture and sequestration technologies available in the nearer term, and I would like 

to explore that for just a moment, and I would ask for relatively 

brief answers to these questions because I have another train of 

questions I would also like to ask. My sense, and I would like your 

reaction to this, is that it is possible certainly today for a CO2 emitting facility to install carbon capture and sequestration technology. 

That would be possible, for example, if you were sitting on top of 

an oil field and you are using a gasification technology which is 

well understood, and as Mr. Crane indicated has been a commercial application in the chemical industry now for a number of years, 

and you are simply injecting that carbon dioxide directly into the 

gas or oil field. In fact, that is happening today in Canada at 

Wayburn with natural gas that is—with CO2 that is being genVerDate Mar 15 2010 02:45 Feb 05, 2012 Jkt 067098 PO 00000 Frm 00115 Fmt 6633 Sfmt 6633 E:\HR\OC\B098.XXX B098

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erated from a coal-fired power plant, I think it is in one of our 

Great Plains northern states. 

But there are some challenges, and that is what the funding is 

designed to address. First of all, we really don’t have storage caverns other than oil and gas fields, well characterized for CO2 sequestration. Secondly, we don’t have post-combustion technologies 

that are at hand for CO2 separation. There is an older technology 

but improvements are on the way that will yield a larger suite of 

technologies including chilled ammonia, including oxygen firing, 

and other processes that will make far more reliable, available, and 

affordable that full suite of CCS technologies, and it is the need for 

that, the characterization of fields other than oil and gas, that 

being, saw caverns or perhaps unmountable coal seams. It is the 

need for these next generation technologies for CO2 capture that it 

is essential we provide this funding for. 

So let me just ask if there is general agreement with the statement I have just made about the need for this legislation directed 

towards those objectives. Mr. Crane. 

Mr. CRANE. Well, Congressman, I agree with you completely. I 

would just be careful if you get the money, who is dispensing it because you are going to need someone with a bit of an entrepreneurial event, and the DOE has traditionally been exceedingly conservative in the way that they have—— 

Mr. BOUCHER. Thank you. I appreciate the answer that we need 

to do it. We do have in our legislation a comprehensive mechanism 

involving broad participation in the policy making about how it 

would be distributed. Mr. Hawkins, would you care to comment? 

Mr. HAWKINS. My view, Mr. Boucher, is that you would get a lot 

more bang for your buck if your legislation were incorporated into 

climate legislation that will make sure that the private sector is 

motivated to spend this money as effectively as possible to deliver 

results as quickly as possible. 

Mr. BOUCHER. Thank you very much, Mr. Hawkins. Mr. Quinn, 

would you care to comment? 

Mr. QUINN. Congressman, I agree totally with your statement, 

and we are supportive of your legislation. 

Mr. BOUCHER. All right. Does anyone have a different view? OK. 

I will take that as essentially unanimous agreement from the 

group. Mr. Hawkins, I would welcome your advice on the fundamental difference between research development and demonstration on the one hand which government typically funds because 

these are large scale projects often times beyond the scope of private industry in order to finance and the deployment of that technology once it is developed on the other hand. And my sense about 

how that division should be drawn is that a larger scale, longer 

term projects are deserving of government funding perhaps 

through a mechanism such as the legislation we are about to introduce that would speed those dollars to it. And then when it comes 

to deployment that should be a shared responsibility between the 

polluting—well, I don’t want to use that word, between the emitting sector, the industry that is emitting, and the government perhaps through a mechanism in our cap and trade legislation that 

would devote revenues from whatever share of the allowances we 


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decide to auction toward that purpose. Would that be essentially 

the right division? 

Mr. HAWKINS. Yes, sir. The U.S. has supported deployment of 

critical technologies in the past. The interstate highway system is 

one such example, and I think that one can say that with respect 

to the electricity sector support for deployment is a reasonable 

thing to do for energy security reasons and to attack this critical 

problem of climate change. 

Mr. BOUCHER. Thank you very much, Mr. Hawkins. Ms. Patton, 

one question for you as my time expires. I am very encouraged to 

see that the insurance industry is now offering products to insure 

against liabilities, short term, long term, operation closure, postclosure, for those who inject carbon dioxide for sequestration purposes. And that tends to resolve some of the issues that we have 

discussed over the last several years about that liability and who 

is going to bear it. Now the industry potentially can bear it because 

they will have insurance against it. 

What I think is absent from this conversation is the cost of that 

insurance, and can you give us a sense of what the premium is on 

the policy that you are now offering perhaps in terms of the unit 

of dollars or sense, I suppose, per ton of carbon dioxide that is 

stored? 

Ms. PATTON. In short, the answer is in the absence of a specific 

submission unfortunately, no, not in the amount of time that I 

have available. 

Mr. BOUCHER. So, in other words, you have a product available, 

price to be determined? 

Ms. PATTON. It is price based on the geologic conditions that are 

present and to the extent that we provided indications to customers, they have indicated that they can absorb that within their 

business model. 

Mr. BOUCHER. All right. So they have found it to be affordable? 

Ms. PATTON. Affirmative. 

Mr. BOUCHER. All right. Thank you very much. Thank you, Mr. 

Chairman. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Illinois, Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I apologize. We have 

a health subcommittee meeting going on. We met with local county 

officials, so you know I would rather be here 100 percent of the 

time, so I apologize for not being here. 

A couple of things. One is part of the memo from committee staff 

talks about, and I think, Mr. Hawkins, you referenced the fact that 

there is no really movement on fossil fuel in the capital market section. I would submit that it is more a fear of politics than the fear 

of—that fear is putting a high risk on raising capital for this because we are uncertain and we are not moving in the direction. In 

fact, I would talk about the new appointee to the Secretary of 

Health and Human Services, Governor Sebelius, who 3 times vetoed legislation for a coal-fired power plant in the State of Kansas. 

That is the signals that are going out there in the community 

that—and added by, I know Mr. Whitfield talked about your ads 

that there is no clean coal, and I would add based upon your web 

site you say there is no such thing as clean coal even with carbon 


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capture and sequestration. That uncertainty provides exactly what 

you all want is fear in the markets to move products. Now, fortunately, in Illinois we haven’t fallen to those fears. 

I just talked about the mechanical refinery expansion. I got the 

Prairie State campus that is employing thousands of workers. In 

fact, it is taking the jobs of laid off steelworkers because of this 

economy and putting the work in the power plant now in my district. We have Taylorville, Illinois. We have Decatur, Illinois. So I 

would say that we need to get this right and we need to bring certainty, and it is the politicians who are doing this. Mr. Chairman, 

I would like to for the record also submit the Wall Street Journal 

editorial from yesterday which raises the issue of who pays for cap 

and trade. And you know who pays? The Midwest. Mr. Doyle, it is 

going to be Pennsylvania. It is going to be Virginia. It is going to 

be Louisiana. It is going to be Illinois. It is going to be those fossil 

fuel states who are going to be paying to really transfer wealth 

from the Midwest to the coastal states. 

And if you allow it to be submitted, Mr. Chairman, I would appreciate it. I think it adds to this debate on the whole cap and 

trade regime. 

Mr. MARKEY. Without objection, the Wall Street editorial mentioning my name will be included in the record. 

[The information was unavailable at the time of printing.] 

Mr. SHIMKUS. You are on here. I didn’t know that. I didn’t read 

that far down, Mr. Chairman. You are always one step ahead of 

me. I want to go—Mr. Crane, I think you made a critical point on 

the nuclear power and expansion, so I agree with you 100 percent 

that site selection is a limiting factor. I wish the environmental 

community would get on board with helping us expand nuclear 

power. Let me address this current question as far as Yucca Mountain and the high level nuclear storage. If we don’t address the nuclear storage issue, does that inhibit the ability of expansion on site 

for nuclear power? 

Mr. CRANE. I don’t think so. I mean whether Yucca Mountain 

goes forward or not is a decision you all make. That is above my 

pay scale. We proceeded with nuclear development on the view that 

dry cast storage—— 

Mr. SHIMKUS. On site. 

Mr. CRANE. On site would be good for one or two centuries. 

Mr. SHIMKUS. But you would have to get permission to expand. 

There are nuclear power plants right now that in the current siting 

they are almost at capacity. 

Mr. CRANE. And I hate to be colloquial but that is someone’s else 

problem. Our nuclear power plant is on 15,000 acres. 

Mr. SHIMKUS. OK, but if you are talking about the expansion of 

nuclear power so what is not good for your competitors but nuclear 

power, which is important for the country to meet these caps, I 

hope that in this you would think better of the country than just 

your shareholders. 

Mr. CRANE. Well, no, certainly as an American I am a huge proponent of nuclear power and I think it ties directly with the electric 

car which is I think a service that nuclear power is tied to. The 

siting question though and the nuclear storage question, again that 

is more of a political public policy issue. 


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Mr. SHIMKUS. And, guess what, you are in front of politicians 

and the debate on public policy, and the Yucca Mountain debate is 

a current debate on how we deal with this, and there are nuclear 

power plants that are at capacity that will either have to expand 

their on site storage, and of course the State of Illinois is a big nuclear power state with 11 reactors in suburbia. My colleague who 

chairs this talks about the threat and the risk. However, we never 

seem to address a threat and risk of major metropolitan areas that 

have nuclear power facilities while we keep high level nuclear 

waste right in the backyards of suburbia. Mr. Chairman, I could go 

on for more but my time is up and I don’t want to push the limits. 

I yield back. 

Mr. MARKEY. Thank you. I thank the gentleman very much, and 

just a brief correction here that unless something has gone terribly, 

terribly wrong in the private sector, Mr. Crane, that decision on 

nuclear waste storage is actually way below your pay grade. We 

will make that note for the record. Let me turn now and recognize 

the gentleman from Florida, Mr. Stearns. 

Mr. STEARNS. Thank you, Mr. Chairman. Well, let me see if I can 

get through this and perhaps speak a little louder. I had the opportunity to have dialogue with the European Union and I get a lot 

of information from those meetings over in Europe and then they 

come over here to the United States. And recently I read that the 

European commissioners for energy last November said that coal 

with CCS, carbon capture sequestration, is the low cost, low carbon 

alternative. Reports published by the European Commission and 

the IEA, which is the International Energy Agency, last year made 

the direct statements that, A, the cost of achieving European climate goals could be 40 percent higher without CCS, the European 

EC, and, B, the cost of mitigation without CCS is 71 percent greater than coal with CCS. Given that position, is there an opportunity 

for large scale cooperation with the EU on large public-private CCS 

partnerships? Mr. Quinn and Mr. Hawkins. 

Mr. QUINN. Congressman, I think so, and I think it was the IEA 

that actually made the statement that in the long term that coal 

with CCS will be the most affordable, low carbon energy source for 

the world. Perhaps some of the panelists have better information 

than I do but there are sequestration demonstration projects currently proceeding in Europe. There are some American companies 

participating in Asia with carbon capture and storage projects in 

China, so there are opportunities on those I think that are underway in terms of those types of partnerships. 

Mr. STEARNS. Mr. Hawkins. 

Mr. HAWKINS. I would agree that there is great potential in these 

partnerships. Actually I am going to Europe on Saturday to have 

conversations in Brussels with European legislators about this very 

thing in addition to Europe, China, Australia or other places where 

this kind of work could pay off big benefits. 

Mr. STEARNS. Anyone else like to comment on it? Yes. 

Mr. ALIX. We have also been to Europe and asked to compete for 

projects in Europe and Australia, so I think the initiatives are in 

the national scope in terms of trying to bring the best technology 

to bear on the problem. 


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Mr. STEARNS. A study by a collaboration of both unions and industry leaders published last month estimate that 5 to 7 million 

jobs would be created during the construction process of CCS facilities, and that a quarter of a million permanent jobs would be needed in order to operate these facilities. With that said, in your opinion what is needed to jump start the CCS technology industry to 

ensure widespread commercial deployment of the technology and 

what can Congress do to make these jobs a reality? The same two 

individuals perhaps. Mr. Quinn. 

Mr. QUINN. Well, Congressman, I think what we have heard 

today is two things. We need a push. Congressman Boucher’s legislation provides part of that push in terms of sustained funding 

source for this technology. Probably also what we have heard today 

is that there needs to be a framework that establishes some certainty, a balanced framework in terms of carbon management. It 

provides a certainty we need to build out our existing coal-based 

generation source. Part of the discussion today has been about 

some of that uncertainty. Mr. Shimkus raised it. Uncertainty in 

terms of technology, operational uncertainty and policy uncertainty 

are all the enemy of investment and capital investment. 

Mr. STEARNS. What do you think are the biggest hurdles to 

reaching CCS commercialization? 

Mr. QUINN. We have three pieces there. We have the technology 

in terms of capture and use, and from what I have heard today it 

sounds like we have very promising demo projects and pilot 

projects underway or close on their way. Scaling those up and to 

be applied and integrated into commercially available electricity 

generation platforms, still there is a way to go on that particularly 

in terms of the economics. The transportation segment, transporting that to a storage facility and then the siting for storage and 

what is suitable for siting, and I think on the last part there is 

quite a bit of studying underway that sounds very promising, but 

I am not—I will defer to Dr. Duncan in terms of the status of that. 

And there is probably the issue that Ms. Patton talked about in 

terms of how we underwrite the risk for long term for that type of 

storage. So there are a number of different hurdles there we have 

to get through but I am very confident that in the time horizons 

we talked about today that we will overcome those. 

Mr. STEARNS. Mr. Hawkins. 

Mr. HAWKINS. In terms of what Congress can do again I would 

hold up for the cameras the USCAP Blueprint. It provides a cap 

on emissions and it provides a very structured program to get carbon capture and disposal systems into the market, emission standards and financial incentives to make sure that these first projects 

are economically affordable to build and fold into our power system. 

Mr. STEARNS. Mr. Duncan, is there anything you would like to 

add to this before I close? 

Mr. DUNCAN. Yes, thanks. I think that a number of the statements being made about cost of CCS and gas prices are a little 

misleading. First, all of the prices with regard to carbon capture 

are referred to retrofits of post-combustion capture. Capture can be 

much cheaper if you do it through an IGC plant or through oxy firing through new builds rather than just retrofitting. Another thing, 

if I might add just quickly, is the comments on natural gas prices 


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and the Barnett Shale and so on were very misleading because 

those gas productions will not continue under gas prices, and the 

average life time of the Barnett on the shale well is about 9 months 

in terms of its productivity so gas prices are going to go higher. 

Mr. STEARNS. Good point. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Hall. 

Mr. HALL. Mr. Chairman, can you hear me? 

Mr. MARKEY. Unfortunately, yes, very clearly. 

Mr. HALL. I just didn’t want you to cut me off like you did my 

friend from Florida. I am from a fossil fuel state, and I realize the 

importance of technology to address CCS, and I support nuclear 

power totally and completely, clean coal, of course. But I also recognize the presence of a thing that some of you seem to forget, and 

that is the presence of a cash register. You know, China doesn’t 

really want to go by the cash register. 

And you can, Mr. Hawkins, hold up all the periodicals that you 

have there in your whole briefcase and you can’t force China to 

change their mind. They are not only refusing to participate financially in the clean up but they are deteriorating daily and weekly 

as has been testified to here and none of you objected to that or 

disagreed with it. And about the same thing can be said for Russia, 

Mexico, India, and go right on down the line. They just don’t want 

to talk about the cash register. That is too plain. That is something 

that the American people can understand. 

I am a little bit sick of all the self-serving, worn out determination to push and rush to judgment when, you know, you don’t even 

say global warming anymore. You are saying global change. And of 

course we have to have global change, and we ought to have technology. We ought to be addressing it. And this young lady over 

here can give you a quick policy of insurance, the whole line, legal 

reserve, non-cancellable on global change. Now I wonder if that 

would also include global freezing. Sometimes up here I am about 

as afraid of global freezing as I am global warming, but you all 

don’t seem to notice that. 

I guess in the question by Mr. Inslee from Washington about unlimited amount of carbon dioxide, who has the right to do all that 

into the atmosphere and whether or not—I would really like to ask 

Ms. Patton a question but I think it would take too long to answer 

about your policy and how you arrive at a policy to insure against 

and what do you insure against on global warming, an occasion? 

Just yes or no. You insure the happening or the non-happening of 

an occasion, right? 

Ms. PATTON. We insure the happening of the triggering event. 

Mr. HALL. OK. I think you might have meant mechanical event, 

and would that to get to be more plain that something an American, that I could understand, does that mean devastating—is there 

something in the small print that describes what your mechanical 

might be? 

Ms. PATTON. A geo-mechanical—— 

Mr. HALL. Let me ask you, would that be when the Statue of Liberty is under water or the Sahara Desert becomes Sahara Ocean 

or what mechanical event has to happen before it triggers your pay 

off? 


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Ms. PATTON. Mr. Hall, in response to what coverage we are providing for the geo-mechanical issues, the covered event would be a 

resultant earthquake from the injection of gas. 

Mr. HALL. You have a board that can insure against earthquakes? 

Ms. PATTON. If, in fact, the CCS injection, the injection of the 

carbon dioxide, does cause that event, we are prepared to pay in 

response for any consequential—— 

Mr. HALL. I am pleased to know that it does exist, and do you 

sell many policies in China? 

Ms. PATTON. We do offer coverage in China. However, this particular coverage is—— 

Mr. HALL. I will get to my question before Mr. Markey turns me 

off like he did the guy from Florida here. I like Mr. Markey. Don’t 

misunderstand me. I just don’t like the way he votes. He has killed 

my vote for 28 years up here. Mr. Quinn, in your testimony you 

state that coal is not merely important to the United States and 

the world, it is indispensable for meeting our energy needs for the 

foreseeable future, and I sure agree with you to that effect. I am 

big on coal. Now only that, but coal could provide 125,000 direct 

high-paying jobs to the U.S. coal miners and support hundreds of 

thousands of additional jobs throughout the value chain and then 

companies and manufacturing operations that depend on reliable 

coal-based electricity to keep their energy costs down, and Mr. Barton alluded to that. 

What will happen to these jobs if we stop using coal-fired generation or we arbitrarily raise the price of coal-fired generation 

through cap and trade? 

Mr. QUINN. Well, if the wrong policy is chosen and coal is adversely impacted then those jobs would be gone. Those jobs happen 

to be the highest paying jobs in many of those regions including in 

your State of Texas as well. 

Mr. HALL. Do any of the other of you four who said yes, yes, yes, 

yes, have a different answer to that? I presume that you don’t. I 

yield back my time, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. By unanimous 

consent, Mr. Terry, who is not a member of this subcommittee, will 

be recognized to ask questions. 

Mr. TERRY. I appreciate it. Mr. Hawkins, in your booklet, the 

plan, does it state where the cap should be placed on CO2 emissions, at what level? 

Mr. HAWKINS. It does. 

Mr. TERRY. And what is that? 

Mr. HAWKINS. There are targets for 2012, for 2020, for 2030, and 

for 2050. 

Mr. TERRY. Just for 2012, what would that be? 

Mr. HAWKINS. It is a range of between 97 percent of 20205 levels 

to 102 percent of 2005 levels, so basically bracketing 2005 levels. 

Mr. TERRY. Very good. Then the follow-up question would be to 

Mr. Crane and Mr. Alix, for a coal-fired plant in Omaha, Nebraska 

sitting on the Missouri River, 500 megawatts, does technology exist 

that allows them to comply to the cap by 2012? 

Mr. CRANE. To take the carbon—to comply by not emitting the 

carbon as opposed to—— 


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Mr. TERRY. Right, that plant, starting up a new one and shutting 

down the current one. 

Mr. CRANE. My opinion is that the technology will not be ready 

so that by 2012 a 500 megawatt flue gas stream could all be 90 

percent carbon captured but Mr. Alix may have a different point. 

Mr. ALIX. I would agree with that. I would say it is available to 

confidently predict you can deploy it by that time frame. I would 

say it is not ready yet. It is available to demonstrate. It is not commercially proven. 

Mr. TERRY. And by 2012, will it be commercially proven in your 

opinion? 

Mr. ALIX. The current commercial demonstration project we have 

on track should be running in 2012. Generally, people want a year 

of operation to say it is commercially proven so I would say on that 

track by 2013 you might suggest it is commercially proven at that 

point. 

Mr. TERRY. So perhaps maybe part of our discussion is not only 

what the level of the cap should be in a cap and trade, but also 

what year it should take effect. Would any of you support or feel 

that a trigger that the technology exists before the cap would be 

enforced is a reasonable position? Any of you have an opinion on 

that? 

Mr. CRANE. Well, I have an opinion. I think it is a classic chicken 

and egg situation that you cannot wait for the technology to be 

proven or to put the cap and trade system in place or else it will 

never happen. Certainly that has been our history of progress over 

the last 10 years is there has been actually very little progress 

made in that regard, so I think you have to set the target out there 

and then set the private sector working with the government out 

there to get after it. 

Mr. TERRY. I am curious—I am sorry. You wanted to say something? 

Mr. QUINN. I just would add that I think Mr. Crane makes some 

good points. I think it is important to know you shouldn’t be picking a time frame that is arbitrary and then saying hopefully the 

technology catches up so somehow there has got to be integration 

in terms of figuring out what the time frame is based on what we 

know right now or in the near future about when that will be commercially available, and that is different than commercially—it has 

been commercially tested. I mean why leave available commercially 

is a whole different animal. 

Mr. TERRY. I think that is an excellent point. Do any of you, 

again probably Mr. Crane or Mr. Alix, have any idea or opinion 

about what the cost to the utility would be around 2012 to retrofit 

their coal-fired plant to be able to meet the requirements of the 

cap, what those costs would be, ballpark? We are guessing here but 

give me an educated ballpark. 

Mr. ALIX. We have done a number of studies both for retrofitting 

new at commercial scale 500 to 760 megawatts and they indicate 

capture costs in the vicinity at large scale plants of $30 a ton. 

When you add in sequestration if it is enhanced oil recovery you 

may recoup some of those costs. If you pay to inject it in general 

people—— 


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Mr. TERRY. Now is that the operating cost to do that or the upfront cost of the technology? 

Mr. ALIX. That includes capital and operating with some assumption of financing costs which today is a big assumption because current markets are not widely open as Mr. Crane pointed out. 

Mr. CRANE. I would agree with Frank. Normally you would express in our industry in dollars per megawatt, but in this market 

where you can’t get the money to fund a 500 megawatt power plant 

would be looking at $500 million or more in upfront cost. 

Mr. MARKEY. The gentleman’s time has expired. All time for 

questions has expired. What I am going to do now is ask each one 

of you to give us your 1-minute summation of what you want us 

to remember about your testimony as we move forward in drafting 

climate change legislation. We will begin with you, Ms. Patton. 

Ms. PATTON. Thank you very much. In closing, Zurich believes 

that commercial scale deployment of CCS must be achieved soon to 

meet the 2050 emission reduction goals. Zurich encourages this 

committee to proceed with legislation of whatever form you see fit 

that would provide the necessary funding and support to study and 

generate data that is necessary for us as an industry to properly 

underwrite risk and send price signals in the form of insurance 

premiums and otherwise support risk mitigating technologies. The 

more data that we have available, the better sites we can select 

and the lower fees that we can charge in terms of deploying our 

capital. 

Mr. MARKEY. Thank you, Ms. Patton. Mr. Quinn. 

Mr. QUINN. Thank you, Mr. Chairman. I say again several points 

I would like to leave you with are that coal is indispensable for 

meeting our energy needs here in the United States, as well as 

globally. No climate policy will be successful without coal with 

CCS. We must accelerate the development and deployment, widespread deployment, of carbon capture and storage. And, finally, the 

policy solutions to meet those needs must be harmonized so that 

expectations are harmonized with commercial availability of the 

enabling technology. 

Mr. MARKEY. Thank you, Mr. Quinn. Mr. Alix. 

Mr. ALIX. Thank you, Mr. Chairman. My point is that CO2 capture technology is commercially available today from several vendors with commercial guarantees. Studies suggest that they have 

a high likelihood of success upon deployment. To get those projects 

deployed, we need some type of financial incentive offered from the 

government either as part of a comprehensive climate bill or separately, and we suggest that those incentives be competitively 

awarded so we get the lowest cost solutions moving first at the best 

sites. Thank you. 

Mr. MARKEY. Thank you. Dr. Duncan. 

Mr. DUNCAN. I believe that CO2 sequestration and deep brine 

reservoirs and oil reservoirs can be done safely and effectively. I 

think that in order to do this, I think that Congress should develop 

some sort of regulatory mechanism that encourages the best sites 

to be selected, just not oK sites. I also think that they should encourage the development of regulations for CO2 sequestration in association with enhanced oil recovery. 

Mr. MARKEY. Thank you, Dr. Duncan. Mr. Crane. 


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Mr. CRANE. Thank you, Chairman Markey. What I would try and 

focus the committee on is as we go forward with looking at energy 

policy to not get distracted by wind, solar, smart grids, conservation efficiency. All those things are great, but what your focus on 

today, this is central, coal is central, carbon capture and sequestration is central, and as you turn to how to incent that focus on what 

we can do now. We need to get dirt turned. We have been studying 

this for so long. We need to get some metal in the ground to see 

what works and what is the cost of these various technological options. 

Mr. MARKEY. Thank you, Mr. Crane. Mr. Hawkins. 

Mr. HAWKINS. Yes, Mr. Chairman. Carbon capture and dispose 

technology is ready for commercial use today. The industry is waiting for a signal, and that signal has to come starting with this subcommittee. If you consider and adopt legislation that applies a cap 

to global warming emissions that applies, emission standards for 

new coal power investments, and that couples that with a financial 

incentive program to promote the early use of carbon capture and 

storage, you will make that happen. Thank you. 

Mr. MARKEY. Thank you, Mr. Hawkins. We thank each of you, 

and I couldn’t agree with all of your testimony more. This is—— 

Mr. HALL. Mr. Chairman. 

Mr. MARKEY. The gentleman from Texas. 

Mr. HALL. Since you are telling them that you agree with them, 

do I have the right to tell them that I am disappointed that none 

of them mentioned the taxpayers and how much it would cost and 

how soon we would know that it would help, whether it be 10 years 

or 50 years, whether we would know that we had had any—and 

why they didn’t mention China’s inability or unwillingness to come 

forward and participate, Mexico, India, and the others. I think they 

ought to take those into consideration when they go to recommend 

what the taxpayers of this country have to pay for something they 

will never receive. 

Mr. MARKEY. I think they assume that one of the members would 

mention all those facts and that they could keep their testimony on 

the subject that was at hand which is that we have to find a solution to the burning of coal not only here but around the world and 

only if we find the solution here can we export that solution to 

China and India and other countries, and so the burden is on our 

shoulders. We are the technological giants on the planet. The world 

is looking to us. We have to put in place the incentives to find the 

solution to these problems. Thank you. We thank each of the witnesses for being here today. 

[Whereupon, at 12:15 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


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