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CARBON CAPTURE AND

SEQUESTRATION: AN OVERVIEW

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND AIR QUALITY

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 6, 2007

Serial No. 110–12

(

Printed for the use of the Committee on Energy and Commerce

energycommerce.house.gov

COMMITTEE ON ENERGY AND COMMERCE

JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, JR., New Jersey

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

DIANA DEGETTE, Colorado

Vice Chairman

LOIS CAPPS, California

MIKE 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

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

G.K. BUTTERFIELD, North Carolina

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

BARON P. HILL, Indiana

JOE BARTON, Texas

Ranking Member

RALPH M. HALL, Texas

J. DENNIS HASTERT, Illinois

FRED UPTON, Michigan

CLIFF STEARNS, Florida

NATHAN DEAL, Georgia

ED WHITFIELD, Kentucky

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff

GREGG A. ROTHSCHILD, Chief Counsel

SHARON E. DAVIS, Chief Clerk

BUD ALBRIGHT, Minority Staff Director

(II)

(III)

SUBCOMMITTEE ON ENERGY AND AIR QUALITY

RICK BOUCHER, Virginia, Chairman

G. K. BUTTERFIELD, North Carolina

Vice Chairman

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

ALBERT R. WYNN, Maryland

MIKE F. DOYLE, Pennsylvania

JANE HARMAN, California

TOM ALLEN, Maine

CHARLES A. GONZALEZ, Texas

JAY INSLEE, Washington

TAMMY BALDWIN, Wisconsin

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

JOHN D. DINGELL, Michigan (ex officio)

J. DENNIS HASTERT, Illinois,

Ranking Member

RALPH M. HALL, Texas

FRED UPTON, Michigan

ED WHITFIELD, Kentucky

JOHN SHIMKUS, Illinois

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

STEVE BUYER, Indiana

MARY BONO, California

GREG WALDEN, Oregon

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

MICHAEL C. BURGESS, Texas

JOE BARTON, Texas (ex officio)

PROFESSIONAL STAFF

SUE SHERIDAN, Chief Counsel

BRUCE HARRIS, Senior Advisor

LAURA VAUGHT, Policy Coordinator

DAVID MCCARTHY, Minority Chief Counsel

(V)

C O N T E N T S

Page

Hon. Rick Boucher, a Representative in Congress from the Commonwealth

of Virginia, opening statement ............................................................................ 1

Hon. J. Dennis Hastert, a Representative in Congress from the State of

Illinois, opening statement .................................................................................. 3

Hon. Mike Doyle, a Representative in Congress from the Commonwealth

of Pennsylvania, opening statement ................................................................... 4

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 5

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

prepared statement .............................................................................................. 7

Hon. Michael C. Burgess, a Representative in Congress from the State of

Texas, prepared statement .................................................................................. 8

WITNESSES

Thomas D. Shope, Principal Deputy Assistant Secretary, Fossil Energy, U.S.

Department of Energy ......................................................................................... 9

Prepared statement .......................................................................................... 142

William Wehrum, Acting Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency ................................................... 10

Prepared statement .......................................................................................... 174

John A. Fees, chief executive officer, Babcock & Wilcox Company, Lynchburg,

VA .......................................................................................................................... 41

Prepared statement .......................................................................................... 84

David G. Hawkins, director, Climate Center, Natural Resources Defense

Council, Washington, DC .................................................................................... 43

Prepared statement .......................................................................................... 102

Edward C. Loew, general manager, Gasification Market Development, GE

Energy, Schenectady, NY .................................................................................... 44

Prepared statement .......................................................................................... 122

S. Julio Friedmann, Carbon Management Program, Lawrence Livermore National Laboratory, Livermore, CA ....................................................................... 45

Prepared statement .......................................................................................... 95

Mark K. Schoenfield, senior vice president, operations; general counsel, Jupiter Oxygen Corporation, Schiller Park, IL ......................................................... 47

Prepared statement .......................................................................................... 137

Stu Dalton, Electric Power Research Institute, Palo Alto, CA ............................ 49

Prepared statement .......................................................................................... 70

Jay B. Stewart, attorney, Hance Scarborough Wright Woodward & Weisbart,

L.L.P., Austin, TX ................................................................................................ 50

Prepared statement .......................................................................................... 166

(1)

CARBON CAPTURE AND SEQUESTRATION: AN

OVERVIEW

TUESDAY, MARCH 6, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND AIR QUALITY, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC.

The subcommittee met, pursuant to call, at 10:06 a.m., in room

2322 of the Rayburn House Office Building, Hon. Rick Boucher

(chairman) presiding.

Members present: Representatives Melcanon, Barrow, Markey,

Wynn, Doyle, Harman, Gonzalez, Inslee, Dingell, Hastert, Hall,

Upton, Whitfield, Shimkus, Walden, Sullivan, Burgess, Matheson,

and Barton.

Staff present: Sue Sheridan, Laura Vaught, Lorie Schmidt, Bruce

Harris, Chris Treanor, David McCarthy, Kurt Bilas, Tom

Hassenboehler, and Peter Kielty

OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH

OF VIRGINIA

Mr. BOUCHER. This morning the subcommittee continues its series of climate change hearings with an overview of carbon capture

and storage methods. Our witnesses will discuss the state of technology development, the costs that are associated with the use of

the technology, the status of research efforts to improve the technologies, and time frames for expected commercialization of the

technologies. These are key considerations for the subcommittee as

we prepare to draft climate change legislation.

Coal is America’s most abundant domestic fuel with reserves of

250 years within our borders. We have greater coal reserves than

any other nation. Coal is also by a broad measure the Nation’s

least costly energy resource. Today coal accounts for 51 percent of

the fuel that is used for electricity generation and the Energy Information Administration predicts that by 2030 coal’s share of the

electricity generation market will grow to 57 percent. Given our

large coal reserves and its lower cost in comparison with other

fuels that are used by electric utilities, preservation of the ability

of electric utilities to continue coal’s use in a carbon-constrained

economy is desirable. The carbon capture and sequestration methods we are focusing on today are the means by which that result

can be achieved.

In drafting climate change legislation, our goal will be to have

a nation which makes a substantial contribution to resolution of

2

the global problem while not dislocating any domestic economic sector. We should enable electric utilities that desire to use coal to

have the continued ability to do so after the carbon control provisions that we will write become effective.

The technologies for carbon capture and sequestration we will

discuss this morning will be essential to our ability to meet that

test. If carbon controls take effect before the capture and storage

technologies are available, there could be a rapid switch from coal

to other fuels, and that rapid switch could prove unbearable for the

Nation’s economy. Fuel switching away from coal would significantly increase electricity prices to the detriment of both residential and industrial electricity consumers. Fuel switching from coal

would probably result in far greater uses for natural gas by electricity generators, severely straining our already constrained natural gas supplies. At the present time, one-half of homes in the Nation are heated with natural gas. Industries, notably including the

chemical sector, rely on natural gas for chemical feed stocks and

some are already leaving the United States because of the high and

volatile pricing for natural gas at the present time. That flight of

jobs would certainly worsen if fuel switching from coal to natural

gas occurs, and many other natural-gas-dependent industries

would also suffer including farmers who use fertilizer manufactured in a natural-gas-intensive process. To avoid these problems,

we must protect the ability of electric utilities to continue coal use.

In a very real sense, therefore, the technologies that we are discussing today will be the enablers of a successful climate change

program for the United States.

The average coal-fired utility emits approximately 3 to 4 million

tons of carbon dioxide annually. While carbon storage projects are

underway in research, demonstration and in limited commercial

phases, none has attempted to store that much carbon dioxide. In

addition, much of the work done to date is with the purpose of enhanced oil recovery. While that is a viable use for injected carbon,

we also need to store large quantities of it underground indefinitely, and on that front, further research, development and demonstration is clearly called for.

We need to learn more about how the carbon behaves once it is

injected underground in large quantities. Are there seepage issues

or groundwater concerns? What kind of regulatory regime do we

need to have in place to permit carbon injection? Are there liability

issues that are associated with these projects? Most importantly,

when will we have the capture and storage technologies available

for both reliable and widespread use? Is the current flow of research dollars to these projects sufficient? Would larger allocations

of research monies speed the availability of the technologies?

I want to welcome our witnesses this morning and thank them

for sharing with us information regarding the status and expected

future development of carbon capture and storage methods, and we

very much look forward to their testimony.

I am pleased to recognize the ranking Republican member of the

Energy and Air Quality Subcommittee, the gentleman from Illinois,

Mr. Hastert.

3

OPENING STATEMENT OF HON. J. DENNIS HASTERT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. HASTERT. Thank you, Chairman Boucher, for holding this

hearing today. I want to recognize your work over the last few decades in trying to find environmentally friendly ways to use the

huge coal reserves that we have under the surface of this Nation.

I remember in 1992 when we took on kind of an oversight, where

are we going to go on energy, and the conclusion in 1992 was, well,

we have enough natural gas; natural gas will be the end-all for all

things. We found out that is not necessarily true. The supply isn’t

there. So we have to think of new ways, more inventive ways to

use the resources we have in an environmentally friendly way.

This is the first of three hearings this week so we are going to

be busy looking at these issues. Carbon capture and sequestration

is probably a good way to start off this week’s hearing. Whether or

not you agree with the science behind the claims of human-caused

global warming, at the end of the day we are going to have to deal

with the proposed real-world solutions. We cannot legislate the

science. We can only try to understand its uncertainties and nuances in order to inform our decisionmaking. We can, however, propose policies to deal with the emissions suspected of contributing

to global warming.

Carbon capture and sequestration is put forward as one such solution. Carbon capture and sequestration is a new technology. It

has never been attempted on the scale required to alter the climate-affecting emissions which accompany the generation of electricity. Initially it will be expensive. Although the price may drop

as we gain experience, but in the short term, make no mistake, it

will increase the price of electricity. That is why before we jump

into anything, we need to know how much we are asking the American people to pay and what we will get in return. We cannot ask

the American people to pay a heavy price in jobs and consumer

costs in the name of solving global warming only to discover that

there is almost no environmental benefit. This is exactly what the

Europeans have done with the Kyoto Protocol, paying a high price

and still not meeting their emissions targets and seeing almost no

environmental benefit.

Carbon capture and sequestration is usually discussed in the

context of the burning of coal. I am a strong supporter of coal. The

United States has the greatest coal reserves of any nation on the

planet. My State of Illinois has a lot of that coal. So does Virginia,

so does Kentucky, so does a place like Gillette, Wyoming, where

they claim they have enough coal to supply our energy needs for

centuries into the future of this Nation.

Clean coal technology is good for the United States. It offers a

secure source of domestic energy for our homes and our jobs. By

increasing our use of coal through coal-to-liquids technology, for example, we can decrease our dependence on foreign sources of energy and no doubt, we need to expand its use in a way that increases the efficiency of these plants and decreases their environmental consequences. I also support the expanded use of renewables such as ethanol. These alternative fuels also increase our energy independence.

4

We have two very good panels today. I look forward to hearing

from the Department of Energy and the Environmental Protection

Agency about the work they are doing on the carbon capture and

sequestration. I believe our Government must lead the way on the

development and deployment of these new technologies. I am also

looking forward to the discussion of the various coal combustion

technologies needed for carbon capture and sequestration. I want

to learn more about what is coming in the form of new combustion

technologies and also what can be done to make our current fleet

of coal-fired power plants cleaner and more efficient. I also want

to hear about the legal and regulatory issues associated with longterm storage of carbon dioxide underground. While the technology

is important, in today’s society the legal and regulatory structure

could be just as important in determining whether technology is

ever going to be widely deployed.

Carbon capture and sequestration can get a lot of attention as an

available solution to reduced carbon dioxide. However, there is still

quite a bit of research and testing to do before these technologies

are ready for large-scale commercial deployment. We should be

mindful in any proposed legislation that we do not set up a system

guaranteed to fail because we mandated technology that is not

deployable. If we do, Americans will get all cost and no benefit.

I want to make sure that whatever we do, we do not overburden

consumers, chase industry overseas, lose jobs and see no appreciable reduction in global emissions. That would be a lose-lose situation. I want to see a situation where new technology as it becomes

available is deployed so that Americans reap the benefits of both

a safer environment, a better future and affordable electricity. That

is win-win.

Thank you, Mr. Chairman.

Mr. BOUCHER. Thank you very much, Mr. Hastert, for an excellent statement.

Pursuant to the rules of the committee, any Member who waives

making an opening statement will have 3 minutes added to his

time for asking questions of our witnesses.

The Chair is now pleased to recognize the gentleman from Texas,

Mr. Gonzalez, for 3 minutes.

Mr. GONZALEZ. I waive.

Mr. BOUCHER. Mr. Gonzalez waives.

Mr. Inslee for 3 minutes.

Mr. INSLEE. I will waive.

Mr. BOUCHER. Mr. Inslee also waives.

Mr. Doyle for 3 minutes.

OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. DOYLE. Thank you, Mr. Chairman.

I want to start my remarks with a review of a few things that

I believe are absolute fact. One, global warming is real; two, man’s

actions have contributed to it; three, that it can be slowed and reversed; and finally, that it will take a real determined and comprehensive strategy through which American innovation is proVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
5

vided the tools and the environment necessary to succeed if we are

ever going to fully address this threat.

It is clear that carbon dioxide is one of the many contributors to

global warming. As more continues to be pumped into our atmosphere, global warming grows worse. It is important that this committee and the American industry work together to craft a solution

that is clearly defined, obtainable and allows our spirit of innovation to flourish. We have seen this begin with the Energy Policy

Act and now it is time to redouble our efforts.

There is no doubt that carbon sequestration is a very real and

near-term technology that we can encourage here on this committee. By capturing the carbon dioxide that otherwise would have

blown out of the smokestacks, we can today take one step towards

our shared goal of eliminating the threat posed by global warming.

The questions before us are: what are the technologies that are out

there, what are the risks, what are their costs and how soon can

they be deployed. We are beyond the point of asking if carbon dioxide has an impact. We must look at how we are going to manage,

reduce and eventually eliminate that impact. This doesn’t mean

that we should simply pick winners and losers from the various

methods of sequestration that are being deployed or currently

being demonstrated. Instead, we should look at each for what they

are and what they can deliver while also looking at the environment in which they will be deployed to ensure that obstacles to

success are not already standing in their way. This is one piece of

the greater puzzle and it is critical that we get this piece in place.

I look forward to hearing from each of our panelists explain what

successes they have had and what results they can clearly demonstrate. I am also interested in hearing what obstacles in current

law may impede their progress as well as what incentives government should champion to encourage continued advancement in the

field of carbon sequestration. This is clearly one place where government and industry can work hand and hand.

Mr. Chairman, I yield back.

Mr. BOUCHER. The Chair thanks the gentleman and recognizes

the gentleman from Michigan, Mr. Upton, for 3 minutes.

Mr. UPTON. I am going to waive. Thank you.

Mr. BOUCHER. The gentleman waives.

Mr. Walden from Oregon for 3 minutes.

Mr. WALDEN. I waive as well.

Mr. BOUCHER. Mr. Walden waives.

I am pleased now to recognize the chairman of the full committee, the gentleman from Michigan, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. DINGELL. Mr. Chairman, thank you, and I want to commend

you and thank you for calling this hearing and for the remarkable

vigor with which you have been addressing the very serious questions which are the subject of today’s hearing and related matters.

Today, as we all know, we are continuing our series of hearings

on climate change with an overview on the topic of carbon capture

and sequestration, commonly referred to as CCS. CCS refers to the

6

system of separating CO2 from either the fuel source, usually coal,

or the flue gas that results from combustion and then storing that

CO2 in an underground geologic formation. CCS will be a critical

component of any policy that restricts and reduces carbon dioxide

emissions due to the simple fact that coal is and will continue to

be a major part of America’s energy resource base. It is also extremely important to us for many reasons, not the least of which

is the impact it will have on communities where this is a major

part of the industrial base and the industrial activity.

The United States has an estimated 250 years’ worth of coal. According to the Energy Information Administration, coal provides

fuel for 50 percent of our electrical generation needs today. We

must, however, also recognize that coal-fired generation is a major

source of CO2 emissions. The challenge we face then is how to continue to use this country’s abundant coal supplies to meet our energy needs while at the same time limiting the amount of CO2 that

we add to the atmosphere. I look forward to hearing from our experts today about how CCS can help us meet that challenge.

Capturing CO2, transporting it and storing it to some same place

in the ground or elsewhere is one of the basic components of CCS

policy. The subcommittee’s work today will focus on the challenge

of capturing and storing CO2 because these areas present the

greatest difficulty. But I must note that the transportation is not

without challenges. The U.S. currently has some 1,500 miles of

pipeline devoted to CO2 transport, mainly in Texas, where it is

used for enhanced oil recovery. The amount of CO2 that would be

needed to be sequestered under mandatory CO2-reduction policy

would likely dwarf that capacity. We hope that we can explore this

aspect of CCS at a later date.

With regard to the capture of CO2, we have several excellent witnesses here today who can speak on the specific technology options,

their state of readiness for commercial deployment and their costs,

and I thank them for their presence and their assistance. I hope

our witnesses will be able to inform us how a climate policy could

take technology readiness into account. Can we achieve significant

reduction in greenhouse gas emissions before carbon capture technologies are fully mature? Will we be able to retrofit existing coal

generation facilities with any of these technologies or will they

apply only to new plants?

On the issue of sequestration, we also have distinguished witnesses who can inform us as to the availability of storage sites in

the U.S., the capacity of such sites and the legal issues that arise

from storing huge volumes of CO2 underground for long periods of

time. To date, the committee has not spent a great amount of time

studying carbon capture and sequestration but the issues raised by

CCS are familiar to our work on hazardous waste and environmental contamination issues. How do we know that CO2 injected

underground will stay there? Will it affect underground water resources? What do we need to know to assure the public that this

is a safe way to proceed? I would also like our witnesses’ response

on who should manage these locations, who should hold title to the

CO2 after it is captured? The Federal Government, the States, private entities?

7

Another issue that I hope all witnesses will illuminate for us including our guests from EPA and the Department of Energy is the

issue of costs associated with CCS. The Department of Energy currently estimates the cost of capturing and sequestration using current technologies is between $100 and $300 per ton of carbon emissions avoided. This is a rather wide range. It could make a significant difference in the effectiveness of CCS policy. What do we need

to do to get better understanding of costs? Will costs come down as

a result of technology maturation?

I look forward to the testimony of our witnesses today. I thank

them for their presence, and I thank you, Mr. Chairman, for your

vigor and your diligence in addressing these questions.

I yield back the balance of my time.

Mr. BOUCHER. Thank you, Chairman Dingell.

The gentleman from Illinois, Mr. Shimkus, for 3 minutes.

Mr. SHIMKUS. Mr. Chairman, I will waive for questions.

Mr. BOUCHER. The gentleman waives.

That completes the opening statements from all Members

present. Other statements from members of the subcommittee may

be included in the record at this time.

[The prepared statements of Messrs. Barton and Burgess follow:]

PREPARED STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF TEXAS

Thank you, Chairman Boucher, for holding this hearing and thanks to our witnesses for sharing their expertise on this important topic.

The stated purpose of these hearings is to produce legislation concerning global

warming. Although I understand the political pressure to legislate on this issue, I

hope we don’t rush to judgment. This is a complex subject involving economics, the

environment, energy, science and national security, and getting the balance right is

critical.

Long-term problems don’t need short-term solutions. We can hit the gas and

produce a bill, but legislating like it’s a drag race will do what it always does—more

harm than good. I’d rather be right than fast.

I think we have agreed that any thoughtful legislation must ensure four things:

that the lights stay on, that driving a car stays affordable, that natural gas prices

stay low, and that we protect people’s jobs. If we think we can achieve those goals

without a continuing role for domestic fossil fuels, we’re kidding ourselves.

We need to keep promoting renewables, because of their benefits for clean air and

energy security. But unless we want to abandon millions of jobs, we must also use

our fossil resources until the next great energy source arrives to power our homes,

cars, schools and factories. We struck that balance between fossil fuels and renewables in the Energy Policy Act of 2005, and it was the right balance.

Looking at domestic fossil fuels in the context of our own energy security means

looking carefully at coal. We have hundreds of years worth of coal in the ground,

and provides half our electricity. We’re making great strides in cleaner-coal technologies and, looking ahead, we need some that are even cleaner and more efficient

than today’s.

One of those technologies is carbon capture and sequestration. I have supported

this technology in the FutureGen program. In fact, two possible Future Gen sites

are in Texas and two are in Illinois. I prefer the one in my district, but I’ll support

the program wherever it lands because no matter where it is, it will good for America.

Other technologies such as integrated gasification combined cycle, supercritical

combustion and oxy-fuel show promise. We have witnesses here today to detail the

status of all three.

I welcome the administration. DOE and EPA are working on the promise of a

cleaner and more energy secure future.

I am pleased that Jupiter Oxygen is here. I am told the Jupiter Oxygen technology is the only one that can allow for carbon capture on existing coal plants.

I am also pleased to welcome Mr. Jay Stewart who works with the Texas

FutureGen team on legal issues related to the long-term storage of CO2. We should

8

understand legal questions that may arise if facilities with carbon capture and sequestration spring up around the country.

I also welcome the other witnesses and look forward to their testimony.

Finally, I hope to hear a discussion of the costs of these technologies and related

regulatory programs. We learned in a hearing last May before this subcommittee

that carbon capture and sequestration can spike the cost of electricity produced from

coal.

At a hearing last month, we learned that a cap and trade program added 40 percent to the wholesale cost of electricity in Germany and that was, I believe, without

any of these technologies. Combined, carbon capture and sequestration and a cap

and trade program could lead to a real rate shock for electric consumers. High electricity costs will only drive manufacturers overseas, and American jobs along with

them.

Thank you, Mr. Chairman.

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS

Thank you, Mr. Chairman for convening today’s hearing on carbon capture and

sequestration.

As we’ve begun to debate the issue of global climate change, there has been a lot

of discussion about carbon capture and sequestration and the potential promise that

it holds for reducing the amount of carbon in our atmosphere.

These discussions, however, have focused on the carbon capture portion of the

equation, and seemed to assume that the sequestration technology is available.

One of the things that I hope to learn during today’s hearing is whether that assumption is well founded.

There are several different possibilities for carbon storage: depleted oil wells,

unmineable coal seams, injection into the ocean, or storage in saline solutions.

Yet many of these are still in the initial stages of being tested. The world’s first

commercial deep saline carbon dioxide capture and storage project was started in

Norway’s North Sea during 2006. That’s not that long-ago.

I look forward to hearing from our witnesses on the status of carbon capture and

sequestration technology.

One final note before I yield back. Two of the final four sites selected for the location of FutureGen are located in my home State of Texas.

I’m extremely supportive of FutureGen and am hopeful that the FutureGen Alliance will ultimately chose to site the plant in its logical place—the Lone Star

State—but let’s not forget that this is a demonstration project.

A 10-year, $1 billion demonstration project. And in the end, is only expected to

produce 275 Megawatts of electricity, as compared to the 600 Megawatts capacity

of most commercial power plants.

There is an enormous amount of time and money being spent to show that this

technology is even possible. And I think that it’s a sound investment in future technology.

Now, I know that the most difficult part of this project is the hydrogen production

component, but it still raises an important question: how far off in the future is the

technology of carbon capture and sequestration and how expensive will it be?

Mr. BOUCHER.We are now pleased to welcome our first panel of

witnesses: Mr. Thomas Shope, representing the Department of Energy. Mr. Shope is the Principal Deputy Assistant Secretary for

Fossil Energy. We welcome him. Mr. William Wehrum and Mr.

Benjamin Grumbles represent the Environmental Protection Agency. Mr. Wehrum is the Acting Assistant Administrator in EPA’s Office of Air and Radiation, and Mr. Grumbles is the Assistant Administrator for Water.

We welcome each of our witnesses on the first panel, and without

objection, your prepared written statements will be made a part of

the record. We would welcome your oral summaries of approximately 5 minutes.

Mr. Shope, we will be pleased to begin with you.

9

STATEMENT OF THOMAS D. SHOPE, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY, WASHINGTON, DC

Mr. SHOPE. Thank you, Mr. Chairman, and members of the committee. It is my pleasure to appear before you today to testify on

the Department of Energy’s carbon sequestration program. The

overarching goal of this program is to deliver practical lower-cost

ways for our Nation to integrate large-scale reductions of the

greenhouse gas CO2 where none now exist.

First, let me be clear about carbon capture. We can capture CO2

today. What we cannot do is capture the CO2 of combustion and

maintain prices that we can afford for electricity and other energyintense consumer products. What we do not yet understand fully,

and I emphasize the word yet, is how to develop the capacity to initiate and maintain safe, large-scale geologic storage for hundreds

and thousands of years. Finally, we need to develop a nationwide

infrastructure to align the CO2 sources being captured with the

available storage sites or sinks.

The sequestration program of the Office of Fossil Energy addresses these questions. It began 10 years ago as a small-scale investigation of technical viability. Then the administration made it

a critical component of the President’s technology initiatives to provide concrete means of dealing with concerns about climate change.

Program investment to date is in excess of $300 million. In fiscal

year 2008, the President has requested an additional $79 million.

That represents a four-fold increase from the $18 million appropriated in fiscal year 2001. Today the program is dedicated to preparing America to reduce CO2 from fossil energy use without detriment to our energy security or economic well-being. It seeks to

eliminate the harmful effects of using our most abundant and lowest cost energy, coal. It recognizes that coal is the backbone of our

electric power supply which is the backbone of the economy. Today

we are engaged in pioneering and world-class research, development and demonstration of technologies for affordable CO2 capture

and for safe long-term storage.

The carbon sequestration program has two main parts: the core

research and development element and the deployment and demonstration element. The core research element includes capture, sequestration, breakthrough concepts and the monitoring, mitigation

and verification of CO2 in geologic storage. It also includes mitigation of non-CO2 greenhouse gases. The portfolio contains more than

70 projects designed to find solutions. Lowering the costs of capture

is a critical driver of our efforts. Our focus is on pre- and post-combustion capture and oxycombustion, which produces a flue gas

strain composed largely of CO2 and water vapor. It includes providing retrofit capability for pulverized-coal plants, currently in use

and for those that are planned. Our overall goal is 90 percent capture and 99 percent storage permanence by 2012 with no more

than a 10 percent increase in the cost of energy services. We want

to have ready by 2012 a portfolio of technologies capable of market

penetration after 2012. Objectives to achieve this goal include postcombustion capture and a cost of power no more than 20 percent

above that of a non-capture plant and pre-combustion capture for

10

IGCC generation at no more than 10 percent above the non-capture

plant.

The second element of our program, our deployment and demonstration element, centers on the seven regional carbon sequestration partnerships. These partnerships involve more than 400 entities in 41 States, four Canadian provinces and three Indian Nations. Their mission is to develop sequestration capacity and infrastructure, and their work is critical to technical achievement and

public acceptance of CO2 capture and storage. The partnerships

have already assisted our National Energy Technology Lab in compiling the National Carbon Sequestration Atlas. These efforts have

helped us identify all large-point sources of CO2 as well as what

may be the biggest prize in carbon capture and storage, the vast

potential geologic CO2 storage locations that exist. In this country

alone, we have deep underground formations sufficient to store

hundreds of years worth of CO2 emissions, not just from the power

sector but from all sources of CO2. Current regional partnership activities also involve 11 projects dealing with terrestrial sequestration and 25 diverse field tests in geologic storage. As we move from

characterization to validation, we look forward to expediting the

demonstration of large-scale tests. Our large-scale testing phase

will involve up to seven large-volume tests and could identify candidates for the class of new near-zero-emission power plants in the

future modeled on FutureGen. FutureGen will integrate various

technologies of capture and storage in the world’s first-of-a-kind

coal-based power with near-zero emissions. It will deliver electric

power, hydrogen fuel and other byproducts. It will also test subsequent advances from the core research effort, and most important,

FutureGen will be the prototype for a line of zero-emission plants

based on coal gasification here in the U.S. and around the world.

In conclusion, our program is demonstrating that while there is

no practical alternatives to continued use of fossil fuels in the foreseeable future, coal in particular, carbon capture and storage technologies coupled with our array of clean coal efforts will allow fossil-fuel use in a carbon-constrained world without harming the environment and without constraining economic growth.

Mr. Chairman, members of the committee, that concludes my

spoken remarks.

[The prepared statement of Mr. Shope appears at the conclusion

of the hearing.]

Mr. BOUCHER. Thank you, Mr. Shope.

Mr. Wehrum.

STATEMENT OF WILLIAM WEHRUM, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, DC

Mr. WEHRUM. Good morning, Mr. Chairman, members of the

subcommittee. Thanks for the opportunity to testify on behalf of

EPA. My name is Bill Wehrum. I am the Acting Assistant Administrator for EPA’s Air Office. With me this morning is Ben Grumbles,

the EPA’s Assistant Administrator for Water.

As you know, the President and his administration are firmly

committed to taking sensible action on climate change. The administration’s policy is science-based, encouraging research breakVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
11

throughs that lead to technological innovation and harnesses the

power of markets to commercially deploy those technologies. As my

colleague from DOE explained, the administration is actively investigating the prospects for carbon dioxide capture from power plants

and other industrial sources and long-term storage and geologic

formations. Our testimony today will focus on EPA’s role in ensuring the carbon capture and storage is developed and deployed in a

manner that safeguards the environment. We are focusing that effort on two fronts, which I will explain.

But before discussing each of these efforts, I would like to briefly

discuss the role of coal in our Nation’s energy future. As you know,

coal is an essential fuel to achieve energy security and increase economic prosperity in the United States. Currently, about 50 percent

of electricity in the United States is generated from coal and at

current rates of consumption, U.S. coal reserves are large enough

to meet our energy needs for more than 200 years. To achieve our

goal of energy security, coal must continue to play a major role in

the generation of electricity in this country. Carbon dioxide capture

and storage can potentially make a significant contribution to reducing greenhouse gas emissions from coal-fired electricity generation while allowing continued use of our ample coal reserves.

To address the potential environmental impacts of coal-fired

power plants, EPA, DOE and others are exploring technological innovations that would allow coal to be burned more efficiently and

with lower emissions. Recognizing the importance of advanced coal

technology, EPA is already working to ensure that these new technologies are deployed in an environmentally responsible manner.

EPA is examining how we can facilitate the use of advanced coal

technologies through the efforts of a recently convened work group

of private and public stakeholders. At the recommendation of the

Clean Air Act Advisory Committee, EPA established the Advanced

Coal Technology Work Group in January of this year to discuss and

identify potential barriers and opportunities to create incentives

under the Clean Air Act for the development and deployment of advanced coal technologies. The work group includes widely diverse

participants. The work group is developing a set of recommendations that could be undertaken to accelerate the development and

use of advanced coal technology. In its work to date, the work

group has discussed a wide range of issues associated with commercial use of advanced coal technologies.

With respect to carbon dioxide capture and storage, key issues

identified by the work group include the availability and cost of

capture technologies for new and existing pulverized coal and IGCC

power plants, measures to accelerate the pace of carbon capture

and storage, the siting of power plants including availability and

location of pipeline capacity, monitoring and verification to ensure

storage of carbon dioxide is effective, liability concerns associated

with carbon capture and storage, legal issues involving property

rights and other issues.

EPA is also developing risk management strategies to ensure

that carbon dioxide injection and long-term geologic storage are

conducted in an environmentally responsible manner. The underground injection of carbon dioxide is subject to the Underground

Injection Control program, or UIC program, of the Safe Drinking

12

Water Act. In carrying out our responsibilities under the Safe

Drinking Water Act, the EPA’s goal is to ensure protective, effective storage of carbon dioxide injection in suitable geologic formations.

EPA has more than 30 years of experience working with its State

partners to implement the UIC program. There is a significant

amount of expertise in transporting and injecting carbon dioxide,

particularly in the oil and gas sector. Approximately 35 million

tons of carbon dioxide are injected annually and in the Southwest

United States, there is an extensive infrastructure to transport and

inject carbon dioxide for enhanced oil and gas recovery. The knowledge gained from these activities is extremely useful but we still

need to gain experience with integrated carbon dioxide capture and

storage technologies on a commercial scale for coal-fired power

plants.

DOE’s research efforts to integrate and demonstration carbon dioxide capture and storage will go a long way toward reducing costs

and providing needed data. My DOE colleague’s testimony lays out

the Department’s plans to develop this critical technology including

implementation of field tests throughout the country in a variety

of geologic settings and a smaller number of larger tests and ultimately commercial-scale projects such as FutureGen.

To support these efforts, the EPA has developed UIC guidance

that recommends treatment of injection wells associated with R&D

projects as class V experimental technology wells which are covered

under our existing regulations. Our goal is to provide guidance that

facilitates permanence while encouraging environmentally responsible injection activities. Another goal of the guidance is to promote

information exchange between project proponents and regulators

which will eventually support the development of a long-term management strategy and answer public questions about the emerging

technology. The guidance recommends a workable UIC permitting

approach for the next several years while more data are gathered

to determine the most appropriate management framework.

Thank you once again for the opportunity to be here. Mr. Grumbles and myself will be happy to answer any questions you may

have for us.

[The prepared statement of Mr. Wehrum appears at the conclusion of the hearing.]

Mr. BOUCHER. Thank you, Mr. Wehrum. Mr. Grumbles, do you

have a statement for us at this time?

Mr. GRUMBLES. No.

Mr. BOUCHER. All right. Thank you.

I would like to thank both Mr. Shope and Mr. Wehrum for their

testimony this morning.

Mr. Shope, let me begin my questioning with you. You mentioned

that you have a target date of 2012 in order to have determinations

made by the DOE with regard to the adequacy of technology for

CO2 storage. How confident are you that we will have that information by that date?

Mr. SHOPE. I am very confident in the 2012 time frame that we

will have at that period a portfolio of technologies that are available. The 2012 time frame again does not envision the wide-scale

deployment at that time. That means we have the technology that

13

is then available, that portfolio, and a portfolio that is available at

a reasonable cost, the targets I had indicated to you, no more than

a 20 percent cost increase for PC, or post-combustion capture of

CO2, and a 10 percent cost increase for IGCC-type technologies,

pre-combustion capture. But we are on the path to meet that 2012

portfolio.

Mr. BOUCHER. What we are interested in is having a projected

date when we can have the assurance that reliable geologic storage

is available for the quantities of CO2 that will be emitted by the

Nation’s coal-fired power plants. I can say that my goal is to make

sure that electric utilities under whatever carbon constraints we

adopt have the ability to continue to use coal pretty much the same

way they are using it today in those quantities, and my personal

goal also is to protect the ability of coal to continue to grow as a

percentage of the total fuel mix for electricity generation. So I am

particularly very interested in making sure that we team the arrival of regulations with the availability of these technologies for commercial deployment.

So when are we going to have that assurance? Is that 2012 or

is that some later date?

Mr. SHOPE. Well, I wish I could provide exact dates, Mr. Chairman, but I will tell you that again we are on that path from the

2012 time frame, but in addition to that, that would allow us to

have that portfolio technology available. That also marries up well,

as I indicated in our testimony, our FutureGen project, which ties

them together not only the sequestration opportunities but then

IGCC capture, energy production with hydrogen co-production and

the storage, marrying that all together. We would have in the 2012

time frame getting the first testing of our FutureGen plants. Down

the road from that, it would be approximately 10 years before that

technology is then widely available for commercial deployment and

you could envision full-scale the technology of choice deployment in

the 2045 time frame.

Mr. BOUCHER. So are you saying that it would be 10 years beyond 2012 before the technology would be available for wide-scale

deployment?

Mr. SHOPE. That is correct.

Mr. BOUCHER. OK. That is a longer time frame than others have

suggested. Let me ask you this. How much money is now being devoted to your R&D efforts? You have seven regional partnerships.

How much money is being devoted to those at the present time?

Mr. SHOPE. Our 2008 request is for $79 million. To date we have

already spent $300 million on the sequestration piece. Now, of

course, that is a subset of our larger clean coal budget, and again,

there is some overlap obviously between all the technologies that

we are working on under the clean coal program are directly applicable and they are all driving towards the same goal, which is that

zero-emissions power plant, carbon capture and storage. But in our

sequestration piece alone, we have used $300 million to date. Again

the 2007 request is currently being discussed right now for our operating plans and will be submitted soon. Our 2008 request is $79

million.

Mr. BOUCHER. And you are getting about $60 million in 2007. Is

that right?

14

Mr. SHOPE. Well, again, Mr. Chairman, those operating plans are

being discussed right now at the Department in light of the continuing resolution.

Mr. BOUCHER. What did you have in 2005?

Mr. SHOPE. It was 60.

Mr. BOUCHER. So it is roughly 60 presently and you are anticipating 80-plus for 2008.

Mr. SHOPE. That is about right.

Mr. BOUCHER. If more money were provided for this effort, could

you accelerate your time frame for the arrival of these technologies

with commercial reliability?

Mr. SHOPE. Of course, I support the budget that we have that is

on——

Mr. BOUCHER. I understand that but——

Mr. SHOPE. But in answer to the hypothetical question is yes, of

course, there are some technology constraints, particularly in the

testing area. We are engaging in our 25 geologic tests looking to

expedite our larger-scale tests. If we had additional funds, then we

could develop—hypothetically speaking, if you were to double our

program budget, we could reduce the amount of time for that full

deployment, so the answer is yes.

Mr. BOUCHER. Thank you, Mr. Shope. I assumed that was going

to be the answer.

My time has expired. I have some further questions which we

will defer to a later time.

I am now pleased to recognize for 5 minutes the gentleman from

Illinois, Mr. Hastert.

Mr. HASTERT. Thank you, Mr. Chairman. I have a series of short

questions, and if you could be as explicit in the answers as possible, we will get through them.

First of all, back two decades ago when we needed to clean these

plants up and you did the scrubbers and those types of things, that

was technology that you put on top of old plants. Basically this

technology means that you have to build new plants, right?

Mr. SHOPE. Well, we are working on existing plant technology as

well as far as capture goes, that is, post-combustion capture on existing PC plants.

Mr. HASTERT. Well, let me lead into a sub-question off that then.

You say you have a 12,000-megawatt plant. Isn’t this stuff coming

out so fast and so quick that it is really hard to capture all the CO2

coming out of the stacks?

Mr. SHOPE. That is correct. Also, you have a much lower concentration of CO2 so you have a larger volume to process and it is

expensive. That is correct. It is expensive to add on technology to

existing plants.

Mr. HASTERT. When you carry out these studies, I know you are

far enough into it, what effect do you think this has on retail electric prices? For instance, if you put a new plant in and you put it

in the right base, what do you see the increase in prices roughly?

Mr. SHOPE. Under our current scenario, for a PC plant, you are

looking at a cost of electricity penalty anywhere from 40 to 85 percent. Now, on an IGCC, a plant with hydrogen co-production today,

you are looking at a price penalty of 20 to 55 percent. Our targets

are to drive those obviously much lower.

15

Mr. HASTERT. So we could be hypothetically paying half again increase in the price of electricity, whatever our price may be.

Mr. SHOPE. Based on current technology, that is correct.

Mr. HASTERT. I think you said this, but I want to make sure it

is clear. Time-wise to have these plants in place, to have a plant

in place would probably almost be 16 to 17 years. Is that what you

are talking about?

Mr. SHOPE. Approximately. That is correct. Now, when I mentioned the 2045 time frame, that would the technology of choice,

full-scale deployment. That would be the out year. FutureGen will

be coming online in 2012, 3 years of testing, about 10 years following that, you are looking at a 2025, 2026 time frame for deployment.

Mr. HASTERT. I have a couple questions I want to ask about sequestration. I have limited time here but first of all, the science of

this sequestration. You drive this gas deep into the ground, 5,000,

6,000, 7,000 feet and it is ingested by the chemicals, whether it is

brine, whether it is existing coal beds, and absorbed. Is that correct?

Mr. SHOPE. It stays in place, and it is important to note, sir, that

it would be a liquid so when you put it down, you are putting a

liquid down although we refer to it as gas. Under those pressures

and depths, it becomes a liquid.

Mr. HASTERT. So it is liquid carbon dioxide but it is not frozen

carbon dioxide? It is not dry ice, for instance?

Mr. SHOPE. That is correct.

Mr. HASTERT. OK. Then what could happen? Today we are talking about Yucca Mountain where people want to make sure that

that thing is absolutely safe for 10,000 or 20,000 or I don’t know

how many years, a lot of time. What happens now when this gas

is down there? Is there any adverse effect that we have to worry

about, liability issues, for instance?

Mr. SHOPE. Well, there is always going to be concerns about liability but I would say first and foremost, the important measure

is that it is CO2. It is not a hazardous substance. In fact, it is a

commodity right now. We use CO2 in various processes from

carbonation on out. The concerns of course would be what happens

to it in those deep formations. Does it spread out, how far does it

spread out, is there any leakage associated with it. These are all

the things that we are looking at through our validation phase

right now with our 25 geologic tests that are going throughout the

country in different formations, different geologic formations, different areas of the country. Those are the things that we are exploring right now.

Mr. HASTERT. One of the things that they say that you can take

the CO2 out of the atmosphere. That is one of the technologies you

are looking at. So you are taking this huge amount of just air and

you are taking CO2 out of it, putting it in the ground. The byproduct of that is oxygen. Is that one of the things you use the fluidize

or to burn, or what is happening?

Mr. SHOPE. I am not sure I understand the question or have the

scientific background. The director of our national lab happens to

be here. I would let the director of our national lab answer that.

16

Mr. BOWER. Congressman, thank you for the question. When you

take the CO2 out of the flue gas, it has already come through the

combustion process, or if it high pressure from a gasifier, it is already part of the process. When you talk about the oxycombustion,

you would actually separate oxygen off and put it through from the

air, instead of pure air going into combustion, you shoot pure oxygen. So either way you are taking the CO2 at a high concentration.

It doesn’t make oxygen. It actually just is a separate component of

the air. You take it, pressurize it, put it in the ground. At that

depth you are below solid layers of rock. It is not a void it is going

into but it is permeating with other rock down there so it is like

putting it into a sponge more likely, and the chance of it going anywhere is part of what we are evaluating. It looks very solid right

now that it is going to stay where it is. We just have to confirm

some of those things as far as transport.

Mr. HASTERT. So the effluent from that process, there is absolutely no CO2 or hardly any CO2?

Mr. BOWER. The effluent from the flue gas or the gasifier stream,

the CO2 is taken off. Whatever else is left will go into the atmosphere. If there is some nitrogen, it will be left off in the atmosphere. If there were some other elements, they would go off. We

would clean out the sulfur obviously and all the other things that

we are concerned about in our normal regulatory process.

Mr. HASTERT. Thank you, Mr. Chairman.

Mr. BOUCHER. Thank you, Mr. Hastert. And let me ask the director of the national lab if he would identify himself for our record,

please.

Mr. BOWER. I am sorry, Mr. Chairman. My name is Carl Bower,

director of National Energy Technology Laboratory.

Mr. BOUCHER. Thank you very much.

The gentleman from Massachusetts, Mr. Markey, is recognized

for 8 minutes.

Mr. MARKEY. Thank you, Mr. Chairman.

Mr. Shope, the testimony submitted by the Natural Resources

Defense Council witness who will be appearing on our panel, Mr.

Hawkins, argues that we need to limit CO2 emissions through a

cap and trade system and adopt a performance standard for emissions of CO2 from coal-burning plants in order to transform the economics of the coal utility industry so that instead of choosing to

build a dirtier coal plant that releases carbon pollution into the air,

it makes economic sense to build plants that do carbon capture and

sequestration. Do you agree?

Mr. SHOPE. Congressman, I am going to defer on the question

just because again, my expertise is on the technology——

Mr. MARKEY. Please don’t defer. We have a deadline that is very

closely approaching. Can you please give us an answer?

Mr. SHOPE. Again, the focus of the Office of Fossil Energy is on

the technology end of the program, regardless of the particular

emissions strategy that you are going to pick, we all have a common technology goal and that is whatMr. MARKEY. Do you think changing the economic structure here

of the incentives for the coal industry would make a big difference

in terms of telescoping the time frame it would take to get an affordable technology that the coal industry would in fact play?

17

Mr. SHOPE. Again, Congressman, the problem that we see, we

perceive it as a technology problem and there is a technology path

forward that is needed.

Mr. MARKEY. Your testimony says, sir, that the technology is already there.

Mr. SHOPE. What I testified to was that we do capture carbon

today through EOR. That is enhanced oil recovery. The problem is

that those technologies have different goals, different motivations.

In an EOR situation, you are capturing the carbon dioxide with the

number one goal of pushing out the oil, enhancing the oil recovery.

Mr. MARKEY. I appreciate that, but the basic technology already

exists, sir?

Mr. SHOPE. That is correct.

Mr. MARKEY. And that is what your testimony indicates?

Mr. SHOPE. That is.

Mr. MARKEY. And I just think that it is one more example of the

Bush administration avoiding the central question that America

wants to know the answer to, which is whether or not they are

going to use technology and a cap and trade system in order to accomplish the goal, and your testimony is not helpful towards getting the answer to that question.

Mr. Wehrum and Mr. Grumbles, in the NRDC testimony, Mr.

Hawkins suggests that operating a coal-burning plant with carbon

capture and disposal can be done safely, ‘‘if an effective regulatory

regime is put in place to license and monitor operations of disposal

sites.’’ He further notes that EPA already has the authority to

write such rules but that direction from Congress is needed to ensure they are written in a timely manner and suggests that this

committee direct EPA to write rules governing large-scale carbon

injection and sequestration facilities within the next 2 to 3 years.

Would EPA support such legislation?

Mr. GRUMBLES. Congressman, what we are focused on right now

is in working together with the environmental community and the

States and Department of Energy, is taking an adaptive management incremental step forward aggressively to first get guidance

out. We have issued guidance regulating the injection of CO2 under

class V UIC programs under the Safe Drinking Water Act under

the experimental technology wells provision. We are also going to

be convening workshops and bringing in——

Mr. MARKEY. Would you support legislation to advance that goal,

sir?

Mr. GRUMBLES. My recommendation right now would be, we are

on the best path working with Congress——

Mr. MARKEY. So you are on a better path than legislation so

right now you don’t support legislation. Is that correct?

Mr. GRUMBLES. I think as we learn more about this proven——

Mr. MARKEY. How much more time do you need?

Mr. GRUMBLES. Well, when I look at the aggressive roadmap that

we are laying out——

Mr. MARKEY. What is aggressive under the Bush administration?

Mr. GRUMBLES. I would say when it comes to carbon sequestration, we have an aggressive roadmap and that is, it is going to

take—we are just now issuing——

18

Mr. MARKEY. All right. You are 6 years in so does that aggressiveness indicate that you will get an answer before the next President is elected?

Mr. GRUMBLES. Well, I think the science drives the results and

the technology is promising but it is unproven.

Mr. MARKEY. Sir, science does not drive the decisions of President Bush and Vice President Cheney. Politics does. Ideology does.

I am afraid that your evasiveness is just a continuation of——

Mr. GRUMBLES. Congressman, I would respectfully disagree and

just simply say——

Mr. MARKEY. I would say that your testimony at that juncture

on that subject is completely at variance with the facts.

Does the other gentleman wish to answer?

Mr. WEHRUM. Thank you, Congressman. I will reiterate what my

colleague said. We made a very crucial determination recently that

is directly relevant to your question. We had to ask and answer

whether we believe we have legal authority under the UIC program to regulate carbon injection and sequestration in geologic formations, and we determined the answer is yes and that was very

important because what that allowed us to do is issue guidance,

which has just been signed, that calls for the permitting of these

activities under the program right now under an existing classification called class V. So what we are now committed to do is exactly

what you described, which is develop a set of regulations specifically for CO2 injection and——

Mr. MARKEY. And when will those regulations be coming out?

Mr. GRUMBLES. What we are committed to is a management

framework that looks at the long-term——

Mr. MARKEY. Give me a timetable. How many months?

Mr. GRUMBLES. Well, I think it depends on public dialog.

Mr. MARKEY. July?

Mr. HALL. Mr. Chairman, regular order, please.

Mr. MARKEY. Can you get it done by July? Can you get it done

by July?

Mr. GRUMBLES. What we can get done by July is having informed

debate and dialog with——

Mr. MARKEY. That doesn’t help us. Let me move on.

Mr. Shope, some of the testimony that we received for today’s

hearing raises concerns about provisions of the 2005 Energy Policy

Act that provides significant subsides for coal plants that don’t actually capture CO2 but merely have a carbon capture capability. It

has been suggested that this provision of the law is not being implemented in a way that distinguishes between an ordinary integrated gas combined cycle plant and one that actually has been designed with early integration of carbon capture and sequestration

in mind. There are also concerns that some of the language relating to loan guarantees allows loan guarantees for carbon sequestration optimized coal plants but fails to define what that means.

What is the Department doing to ensure that these provisions of

law are only used for plants that are actually being designed and

built in anticipation of early adoption of a full carbon capture and

sequestration capability so that we aren’t subsidizing dirty plants

with the provision designed to promote clean ones?

19

Mr. SHOPE. Well, I would say, Congressman, that there is a technology path. You have to learn how to capture the carbon effectively. You can’t immediately get to the end goal. It is a technology

path forward and that is what the Department is working on. That

is what our solicitations have given, the loan guarantees——

Mr. MARKEY. If I were a utility executive and I built a standard

pulverized-coal-burning plant but with a big open building attached

to it that I claimed was designed to accommodate installation of

carbon capture technologies, do I quality for the subsidy?

Mr. SHOPE. Well, I would have to look at the particular.

Mr. MARKEY. So maybe——

Mr. SHOPE. Each of the projects——

Mr. MARKEY. Saint Augustine used to say: Oh, Lord, make me

chaste but not just yet. These utility executives are saying oh,

Lord, make me carbon-free but not just yet; I am getting ready to

be carbon-free but I will leave a space there, maybe in another 20

years. That is what Saint Augustine used to say about chastity.

So we are going to need more specifics from each of you in terms

of what the deadline is in order to accomplish these goals.

I thank the chairman.

Mr. BOUCHER. The Chair thanks the gentleman and is pleased

now to recognize the gentleman from Texas, Mr. Barton, the ranking Republican member of the full committee, for 5 minutes.

Mr. BARTON. Thank you, Mr. Chairman. I am delighted to be at

this particular hearing. I know we have had it scheduled and postponed but I am still looking forward to the hearing where we actually try to talk about the science a little bit before we rush to judgment on all these proposed solutions. I am still not convinced that

this is quite the earthshaking, earth-changing problem that it is

presented to be. But having said that, I think it is important to

have a discussion of some commonsense carbon capture mechanisms, so I welcome this hearing.

My first question is to Mr. Wehrum, who is the air and radiation

representative from EPA. Can you tell me what the pollutants are

that the Clean Air Act currently regulates?

Mr. WEHRUM. Yes, Congressman. We primarily regulate the six

criteria pollutants. Most importantly for power generation, they include SO2 and NOx and particulates, I should add. We made a determination a couple years ago that those——

Mr. BARTON. Can you enumerate them? That is three of them.

What are the other three?

Mr. WEHRUM. Lead—I knew you were going to put me on the

spot here.

Mr. BARTON. Particulate matter is one.

Mr. WEHRUM. SO2, NOx——

Mr. BARTON. Mercury. You just added mercury.

Mr. WEHRUM. Well, we regulate mercury as an air toxic, not as

a criteria pollutant. So the answer is, we actually regulate a wide,

wide variety of pollutants.

Mr. BARTON. CO2 is not one of them, is it?

Mr. WEHRUM. No. We made a determination that CO2 is not a

pollutant that we regulate.

Mr. BARTON. COs is not a pollutant. Now, why are these others

regulated? Why do we regulate the ones that we regulate?

20

Mr. WEHRUM. Because the Clean Air Act directs us to do so.

Mr. BARTON. No, but why do we do that in the Clean Air Act?

It is because they are harmful to public health, to individual

health. People get sick. They have an adverse health reaction because of that if they are subjected to large amounts of whatever the

pollutant is. But you don’t have that with CO2, do you?

Mr. WEHRUM. Well, again, Congressman, we made a determination a couple years ago and now in fact the question is currently

before the Supreme Court as to whether the Clean Air Act requires

us or authorizes us to regulate CO2.

Mr. BARTON. No, that is a lawsuit by some of the radical environmentalists but the point of fact is, under current law we don’t regulate CO2 because it is not a health hazardous.

Mr. MARKEY. That is the State of Massachusetts you are talking

about.

Mr. BARTON. I rest my case.

Mr. MARKEY. It is Mitt Romney that brought the case.

Mr. BARTON. I think that is an important point. SO2 and mercury, lead are directly harmful to human health. CO2 is not. It is

not. There is this theory that CO2 somehow over time is increasing

the temperature and increased temperature does things to the climate that over time might be harmful to human habitation of the

Earth. That is a theory. It is not a fact. It is also a fact that if we

pick one of these carbon capture methods, the most benign estimate we have right now is a 50 percent increase in cost. Now, a

50 percent increase in cost is going to cost somebody their job. In

fact, it is going to cost a lot of somebodies their job. That is a fact.

I am just totally tied up in knots that our new Speaker wants a

bill out of this committee by June 1. That is an artificial deadline.

It is also in my opinion wildly unrealistic. The same people that

are now pushing for a bill are some of the same people that were

telling me when I was chairman not to even hold hearings on this

issue because of how difficult it would be to find consensus.

My second question on CO2 is, can any of our panelists tell us

the volume, just the volume of CO2 that comes out of a smokestack

that is using coal as a fuel source of the emissions? What percentage of those emissions coming out of a smokestack in the average

plant in the United States is CO2?

Mr. SHOPE. I can tell you on total, the total just by way of——

Mr. BARTON. I don’t want a total number. I want a percent number. We hear all these tons and tons and tons. We never hear what

the percentage is.

Mr. SHOPE. On a PC, a pulverized-coal plant, you are looking at

about 10 percent.

Mr. BARTON. Ten percent. Is that average?

Mr. SHOPE. That is average for a pulverized-coal plant. That is

correct.

Mr. BARTON. So one of the problems we have as you are going

to capture it is, it is just not a high percentage of the smokestack.

Mr. SHOPE. That is correct, Congressman. It is a very low concentration per volume of emissions.

Mr. BARTON. We also might want to put in the record, and I see

my time has expired, that of the total percentage of the atmosphere, the number I have for CO2 is 0.03 of 1 percent, 0.03 of 1

21

percent. It is very, very hard to imagine that 0.03 of 1 percent of

anything is causing some of these catastrophic problems that are

credited. I am told that of the total greenhouse gases, 95 percent

of all the greenhouse gas is water vapor and that 90 percent of that

is created by the oceans.

With that, I yield back, Mr. Chairman.

Mr. BOUCHER. Thank you, Mr. Barton.

The gentleman from Texas, Mr. Gonzalez, for 8 minutes.

Mr. GONZALEZ. Thank you very much, Mr. Chairman. I was engaged here with Mr. Markey and it is always an interesting conversation but I didn’t have the microphone on. But in essence he

said blaming the oceans, it was nice to have an alternative to Ronald Reagan’s trees. I think that is what he was saying.

Anyway, let me ask Mr. Shope real quick, I was reading in the

materials that were provided us and it said in 2005 the Intergovernmental Panel on Climate Change, the IPCC, estimated there

were 128 operating gasification plants worldwide. How many of

those are in the United States? I don’t have the answer. I am really

asking in good faith.

Mr. SHOPE. Most of them operating are not IGCC.

Mr. GONZALEZ. In the United States, how many of the 128 gasification plants identified by the panel on climate change are located

in the United States? I mean, if you don’t know, you don’t know.

Mr. SHOPE. There are two IGCC plants operating in the United

States right now.

Mr. GONZALEZ. All right. And then they went to the next statement which address what you are saying. Integrated gasification

combination cycle, IGCC, is a form of gasification and there are

only four identified by the IPCC as existing worldwide, and you are

saying that two of those are in the United States?

Mr. SHOPE. There are two in commercial operation in the United

States.

Mr. GONZALEZ. With the present technology, I look at these as

kind of the Holy Grail of coal-fired plants. Would you agree?

Mr. SHOPE. The next generation of them. You can have an IGCC

plant that is air blown. What we are looking for, what the real

prize would be an oxygen-blown IGCC plant with hydrogen co-production.

Mr. GONZALEZ. I guess I am getting to the overall plan that you

have, but realistically, what is being built, licensed and regulated

and permitted today in the United States as it relates to coal-fired

plants? None of this, right? Not of what I just referred to.

Mr. SHOPE. Under our CCPI program, there are plants that are

being built now that are ready to take on that pathway, which is

the IGCC pathway getting back towards our FutureGen plant,

which would be again the culmination of all these technologies

which would have electricity generation as with hydrogen co-production and sequestration, and that is——

Mr. GONZALEZ. What percentage of plants that are being built or

in the planning stages or in the permitting stages would you say

would meet the criteria that you were just outlining?

Mr. SHOPE. The FutureGen-type plant with——

Mr. GONZALEZ. How many FutureGen-type plants do we have

right now?

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Mr. SHOPE. There are none. That is why we are heavily engaged

in that research because we are driving to that conclusion.

Mr. GONZALEZ. Who permits and licenses the building of these

new plants, the ones that are on the drawing boards, the ones that

are being proposed, the ones that are part of the initiative by any

particular energy company. That would be the State, wouldn’t it?

Mr. SHOPE. Congressman, a wide variety of legal and regulatory

approvals are needed to site and construct a power plant including,

for instance, air permits that are necessary under the Clean Air

Act.

Mr. GONZALEZ. All right, but primarily wouldn’t you say it is a

State regulatory commission entity that the process goes through,

I mean, starts with and pretty much is dependent on getting the

green light?

Mr. WEHRUM. Congressman, I can speak for the environmental

side, and what I know is that getting an air permit for a new coalfired power plant is one of the most critical approvals that is necessary and something we as an agency spend a lot of time and energy focusing on.

Mr. GONZALEZ. I actually have plenty of time if you guys want

to discuss this. I think we need to deal with what you have on the

table. No one here is espousing that we stop dead in its tracks the

building of coal-fired plants. Is that correct?

Mr. SHOPE. Again, the problem that we are getting at is that current plants, the technology, yes, we can capture that carbon dioxide

but you are looking at almost up to 80 percent of a price penalty,

and that is where the rubber meets the road. That is why the technology path forward is the solution to bringing those costs down so

that it becomes more much of an occurrence so that the next time

we have these percentages they would be much higher but it

doesn’t exist yet today at a reasonable cost.

Mr. GONZALEZ. Well, two things that we need to be working on,

Congress and the administration, that we don’t present unrealistic

expectations. Nothing worse than dashed hopes because that really

does equate to misrepresenting and misleading the American public, and that is my fear as we engage in this particular debate that

we are on the fringes of this thing rather than trying to come to

the middle and figuring out of course addressing the environmental

needs and concerns and yet the economic realities out there of providing energy for the consumer, the citizen, the constituent. All I

am saying is, we are identifying the technologies. Where are we

now? If you really believe—and you may have to clarify this because I wasn’t sure. DOE, the program on the initiatives the Federal Government is taking, one, to ensure 90 percent capture of

CO2 from power plants to store 99 percent of the sequestered CO2

for over 100 years and add no more than 10 percent to cost. That

is the objective?

Mr. SHOPE. That is correct.

Mr. GONZALEZ. And you would like to have all that in place for

adoption or as we adopt it by 2012?

Mr. SHOPE. That is correct. We want to have that portfolio available so that someone building a plant in 2012 would have those

technologies available at those costs.

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Mr. GONZALEZ. I am going to go back to where I started. In the

interim, all the permitting, all the licensing, all the building really

will not be meeting that goal. It may be somehow built in a way

that it might accommodate it more easily but this is something

truly that you won’t have in place until 2012 for adoption prospectively?

Mr. SHOPE. That is correct. Now, I will state of course there is

going to be incremental gains along the way. We are going to continue to gather the requisite data where the small-scale are going

to be coming to completion. We are looking to expedite large-scale

testing. All that information will then be available for people who

are building these plants along the way.

Mr. GONZALEZ. And I do thank you, and I thank the panel that

will follow you. Unfortunately, I will only be here for about 45 minutes of it. They may have some strong disagreement with the timetable and the manner in which the administration is attempting to

accomplish this. But thank you all for your testimony today.

I yield back.

Mr. BOUCHER. Thank you, Mr. Gonzalez.

Mr. Walden from Oregon is now recognized for 8 minutes.

Mr. WALDEN. Thank you, Mr. Chairman. I appreciate that.

I know you all are looking principally at power plants and ways

to reduce carbon emissions from power plant, but as I read through

some of the literature, it appears there are other things that could

be attempted and I wondered if either of your agencies are looking

at things, especially involving America’s forests or global forests. I

know in my State, we had a fire a few year ago at the BMB complex, fire that the scientists now have estimated produced six times

the level of carbon dioxide into the atmosphere as the entire State

for that year, and there are other discussions about other facilities

that emit carbon: cement production, rice paddies that produce

methane. And then we have this whole issue of how this is a global

problem with I think India and China planning to put 650 coalfired plants online in the next few years that will emit more carbon

that the entire Kyoto Accords combined hope to reduce. Can you

address some of these issues?

Mr. SHOPE. Sure, I will take an initial stab at it. First you were

talking about the forests. There are of course terrestrial sequestration as something we look at. It is a smaller part of our program

yet it is an element. We have 11 terrestrial projects that are ongoing right now. The reason the majority of our focus is on carbon

capture and storage from power plants is just because that is the

biggest chunk that we have to focus our efforts on, and I will say

that all the technologies we are developing in this area certainly

are applicable to all the other segments of industry, not just for

coal power. Now, that is where our focus is, particularly on the capture side of that. We are spending an inordinate amount of effort

on those but even in the storage end of things, those will directly

be applicable to CO2 regardless of the source.

Mr. WALDEN. Mr. Wehrum?

Mr. WEHRUM. And if I may, Congressman, the administration

has a wide variety of programs that address many of the issues

that you described and I will just touch on a couple of them without trying to be comprehensive. For instance, energy efficiency is

24

a key piece of our domestic energy security strategy and the Energy Star program that EPA and DOE jointly implement is a great

example of how much success we can have by focusing on reducing

the demand for energy in the first instance as a way of managing

power generation.

Mr. WALDEN. Sure.

Mr. WEHRUM. Another good example, you mentioned methane

and non-CO2 greenhouse gases. We have very successful domestic

methane programs focused on oil and gas production and distribution, agricultural emissions, coal mines and a wide variety of other

sources and we in fact are trying to leverage the success that we

have had domestically to an international partnership group where

we hope similar opportunities can be found throughout the world.

Mr. WALDEN. Mr. Shope?

Mr. SHOPE. That reminded me as well, speaking of the international partnerships, to address your question about internationally. The United States is the Chair of the Carbon Sequestration

Leadership Forum. That is something the Department of Energy

helped to get moving and is actively participating in now. We have

21 countries plus the European Commission that meet on a regular

basis to look at these technologies, look at carbon capture and storage issues associated with them to make sure that they are widely

deployed throughout the world, not just here in the United States.

Mr. WALDEN. But I want to get back to this issue of forests because I think it is important, and I of course come from an area

that has very productive forests, and global forests currently store

just over half of the carbon residing in the terrestrial ecosystems.

The total biosphere carbon pool is estimated at 2,190 petrograms.

Of this, approximately 1,000 petrograms is in forests. It is roughly

50 percent more carbon that now resides in the atmospheric pool

and about 20 to 25 percent of the carbon pool stored in the remaining accessible fossil fuels, and I guess the point is, as you read

through some of the scientific literature, we are losing something

on the order of 45 million acres of forests across the globe every

year and yet forests seem to be one of the great carbon sinks we

have, and I am just wondering why we are not focusing more on

both forest health, fire prevention, managing for old-growth characteristics, the things that the scientists say will help remove carbon

and produce oxygen in the atmosphere.

Mr. SHOPE. Again, Congressman, we are spending some effort on

that and our regional partnerships also each have an element and

particularly the ones that would cover your State are certainly

probably looking at that heavier. I could get you more information

on that. I would be happy to do that. Again, the problem with terrestrial sequestration though is in the long geologic scale of things,

it is a temporary holding so that is why we are really focusing on

the long-term permanent storage issues, the deep saline reservoirs

and formations, because that is securing that carbon dioxide

through eternity.

Mr. WALDEN. And I am not saying not to do that. Don’t misread

me at all. I am just saying it looks to me like as I read some of

this literature there are some other opportunities out there that

this Congress has addressed in some measure and not in others

that could help reduce—I mean, if one forest fire in Oregon puts

25

out six times the amount of carbon dioxide as the entire State’s

automobiles, manufacturing, you name it, for a year, it seems to

me we could be doing a better job on that front.

Mr. SHIMKUS. Would the gentleman yield on your forestry question?

Mr. WALDEN. Sure.

Mr. SHIMKUS. Because you said temporary. Can you explain the

temporary nature of terrestrial carbon sequestration?

Mr. SHOPE. We are talking over geologic time. The trees eventually are going to decay and rot and give off the CO2.

Mr. SHIMKUS. And they give up what they have consumed, so you

pay for it. The only reason why I mentioned this is, there is a big

buzz now about zero carbon footprint. It is all the rage out in Hollywood. But they are not going to be there. First of all, their math

is wrong. Secondly, that carbon will eventually get emitted.

Mr. WALDEN. And if I could reclaim my time. U.S. forests currently offset about 12 percent of annual U.S. greenhouse gas emissions from all sectors.

Mr. SHOPE. Absolutely. I am talking about geologic time as opposed to——

Mr. WALDEN. Sure. And of course now we are seeing as temperatures are rising in Alaska and elsewhere, some of these stored carbons are now starting to come to light literally as the permafrost

melts and so some of what has been stored is now being released

and it is a real push-pull relationship. And so it is just an issue

I think we need to address.

The other question I want to get to, you mentioned this international organization you are involved in. Are China and India

part of that?

Mr. SHOPE. Yes, China and India are both active member of the

CSLF.

Mr. WALDEN. One of the disadvantages of being out in the west

coast and on the Pacific Rim is the polluted air that is being generated in those countries comes right over us. There is another

story today about it in the Oregonian. And I am just trying to figure out how come they get off apparently scot-free while a lot of

us are trying to do the right thing for the environment. They are

not under the Kyoto Accords, are they?

Mr. SHOPE. That is correct.

Mr. WALDEN. So we could in effect do incredible things here that

we all do in the name of improving air quality, some of which we

probably should continue to do, and meanwhile people who are

competing against us economically are somehow free to go ahead

and add carbon and other pollutants into the atmosphere and in

effect even hurt the forest health in the Northwest. Is that right?

Mr. SHOPE. That is correct and that is certainly a concern when

we talk about fuel switching in this country because even if the

United States were to stop emitting, certainly the developing nations are going to continue to use those fossil fuels that are available to them.

Mr. WALDEN. So this is either a global issue or it is not.

Thank you, Mr. Chairman.

Mr. BOUCHER. Thank you, Mr. Walden.

Mr. Inslee for 8 minutes.

26

Mr. INSLEE. Thank you.

I didn’t think it was possible but I think the administration has

simultaneously spent way, way too little on carbon sequestration

and way, way too much on carbon sequestration simultaneously,

which is quite a feat, and the reason I say that is, is that this

budget proposes to spend less than we spend in Iraq in 2 days on

one of the largest national challenges we have in the entire U.S.

economy which is to find a way to sequester carbon dioxide. You

are spending about 379, we spent about 502 days in Iraq. This is

not even close to cutting the mustard to this national challenge and

I have to take issue with Mr. Barton. He said this is not a health

impact. Tell it to the people who are getting infected by malaria

with malaria increasing in Africa, moving up in elevation because

of increasing exposure to these mosquitoes. People are dying today

because of global warming. So we are not spending enough to get

this job done but we are also spending way, way too much because

your $379 million is a total waste of money because nobody is ever

going to build one of these plants under your policies, because

under your policies these plants can continue to put CO2 up the

stack for nothing. They don’t have to pay a dollar to do it because

you are against a cap and trade system. And even though you

waste my taxpayer’s money for $370 million and you actually developed this technology, it will never be deployed because there is

no reason to do it as long as somebody can build a dirty plant and

put the CO2 up the stack.

Now, I just want to give you a chance to respond to that. Why

would anyone ever spend money, the 10 percent for the CGCC and

the 20 percent you project on pulverized coal, why would anybody

ever spend that if the Bush administration policies of allowing pollution for free would continue?

Mr. SHOPE. Well, let me start by just suggesting that the technologies that we are talking about also bring efficiency along with

them, that is, lower the cost. Aside from carbon capture and storage, they are lowering the cost of electricity. So I think that there

is a market incentive to provide cost-efficient, effective electricity

and I believe that if the technology is there, it will be used, it will

be deployed.

Mr. INSLEE. So what you are telling me is that the only justification for your technology is to the extent that it can improve efficiencies? Is that what you are telling me?

Mr. SHOPE. No, I am telling you that the technologies that we

are working on are going to lower the cost of carbon capture and

storage and are going to increase the reliability of the technologies

that will——

Mr. INSLEE. So what you are telling us if we do implement a cap

and trade system, it will actually not cost the U.S. economy anything because you are going to develop efficiencies in the system

and everything the President has been telling us, that a cap and

trade system is going to wreck the U.S. economy, is a bunch of

bunk? Is that what you are telling us?

Mr. SHOPE. No, that certainly is not what I am telling you.

Mr. INSLEE. Well, which horse do you want to ride?

Mr. SHOPE. I would like to ride the technology path forward.

27

Mr. INSLEE. Right, and I agree with that, and I agree with that

horse which is not the one George Bush is riding right now. He is

riding a horse that says we are too stupid to figure out how to sequester CO2 in an economically efficient way so that if we do a cap

and trade system, it will wreck the U.S. economy. Now, what you

are telling me is, you agree with me that there is a good likelihood

that we can sequester CO2, have a cap and trade system, leave an

environment for our kids and now wreck the U.S. economy. Is that

what you are telling me?

Mr. SHOPE. No, I am suggesting that the technology path forward regardless of the emission-reduction strategy that you choose,

whether it is cap and trade or regulation or whatever in a carbonconstrained world, whatever the mechanism that we follow to get

to that emissions-reduction strategy is dependent upon technology.

Mr. INSLEE. And I am not going to let you off this hook this easy.

I just heard you tell me that you were going to develop efficiencies

that would reduce the cost of these plants so that they could do

carbon sequestration using their efficiencies and not cost any more

money. Now, if that is true, the principal objection of the President

of the United States to a cap and trade system that is going to cost

Americans all this money and everybody is going to go bankrupt

is bunk. Now, do you agree with that?

Mr. SHOPE. No, I do not.

Mr. INSLEE. OK. Then apparently you agree that your previous

statement that we are going to do this and increase efficiencies so

there is no more cost is wrong. Is that what you are doing?

Mr. SHOPE. I never said there would be no more costs. I said we

are going to increase the efficiencies which would increase the cost

of electricity——

Mr. INSLEE. Now you are back to telling me that these plants are

going to cost more money if we do this.

Mr. SHOPE. That is correct.

Mr. INSLEE. OK. And if they are going to cost more money, then

my original statement is, nobody is ever going to do it unless we

have a cap and trade system. Now you agree with that statement?

Mr. SHOPE. Again, my comment to you is that we need to follow

the technology. We need to get the technology developed. We need

to lower the cost of that technology. We need to increase the reliability of those technologies to make them available.

Mr. INSLEE. By the way, I don’t hold you personally responsible

for the President’s position. I was sort of using your language to

articulate my position.

I want to make sure we understand that when we are talking

about carbon sequestration, we are not talking about a coal-to-liquids technology, and I want you to clarify that because a lot of people in Congress think that if we do a coal-to-liquids plant, to use

liquid fuel, for instance, in cars or even in various turbines, that

that is going to be net CO2 neutral. I have been advised that although you can do some CO2 removal in the process, when you

eventually end up burning the liquid in a coal-to-liquid transformation, you then release CO2 and you do not get any net CO2

benefits except very marginal ones. Is that the case?

28

Mr. SHOPE. The technology for coal-to-liquids can be used. Gasification technology certainly can be used and that is the path forward that the administration is looking for.

Mr. INSLEE. Right. I want to make sure that we understand that

the coal-to-liquid-fuel technology, not hydrogen, we are talking

about some other non-hydrogen fuel, and people are talking about

a massive increase in that industry in this country right now. That

technology does not help us on CO2 because when you burn the

gas, the non-hydrogen gas, you then release essentially the same

equivalent amount of CO2 as you do from a gallon of gasoline. Isn’t

that the situation? And the reason I ask you this is I asked Governor Schweitzer about this last week and he agreed with me on

this.

Mr. SHOPE. Yes. Again, we need to separate the two issues. That

is correct. When you are creating, making the coal-to-liquid fuel,

you can do that cleanly with gasification technologies. Once you

have the fuel, it would be equivalent to petroleum products.

Mr. INSLEE. Now, the reason I point this out is, I think it is very

important for Members of Congress to understand this fundamental distinction between a coal-to-hydrogen technology with sequestration, which we have been talking about this morning, which I

believe has the capability of getting close to zero CO2, and I believe

research in this area is important and critical and I support it. But

a secondary distinct technology, which is coal-to-liquid fuels, which

somehow gets wrapped up in the first one, which is entirely separately, that second technology has benefits of energy independence

but does not have any benefits on CO2 emissions. Is that a fair

statement?

Mr. SHOPE. No, I would disagree with that.

Mr. INSLEE. Well, let me rephrase my question to see if we can

get one you agree on. Compared to burning gasoline, compared to

going from a gasoline-based transportation sector, for instance, to

a coal-to-liquid gasification process, according to the best research,

which is a DoD study—I can’t find any DOE studies on this but

a DoD study indicated there is about 2 to 3 percent reduction in

the cycle production CO2. Is that your understanding?

Mr. SHOPE. What I know is that if you are producing the coalto-liquid fuels and using gasification for it, you are going to be

much—that is a very clean technology just as the technology we

have been discussing this morning and cleaner than any of the

emissions that are given off during a normal——

Mr. INSLEE. Well, I will try to send you the DoD study. Their

conclusion was, no net benefit.

Thank you.

Mr. BOUCHER. Thank you very much, Mr. Inslee.

Mr. Hall for 5 minutes.

Mr. HALL. Mr. Chairman, thank you, and I thank you, Mr. Shope

for mentioning the word ‘‘cost.’’ That is a word they don’t want to

hear. That is the one thing that none of them that are pushing

global warming now don’t want to mention is cost and what is the

cost that the world’s greatest polluter, China, won’t pay. What is

the cost that Russia won’t pay. What is the cost that Mexico won’t

pay, India won’t pay. Those are necessary parts of solving all these

major problems, and there is today is a major assault on energy all

29

over this country, assault on fossil fuels, assault on coal and some

of them are just trying to get some kind of an international award

and I think, Mr. Shope, despite Mr. Markey’s remarks that you are

not helpful, I think what he really means is, you are not helpful

to his testimony and I thank you for the testimony the three of you

are giving.

I want to ask this question, something that involves my State.

As I understand it, current permit practice as taken by States such

as my State, these current permit practices classify carbon capture

and geologic sequestration as class V experimental technology

wells, right? Has the EPA taken any further actions regarding

classifying such wells as a subclass of class II or even a new classification altogether?

Mr. GRUMBLES. Congressman, we have been working and I know

in particular with State of Texas on a couple issues, the one you

mentioned and also on the pass-the-salt initiative looking at ways

of safe and acceptable ways to dispose of brine. We are looking at

that. We also recognize that as we move forward with this new

guidance under class V UIC program, a regulation under the Safe

Drinking Water Act, that we want to work very closely with States

and Texas in particular has shown leadership in using class II for

enhanced oil recovery and also for a particular project under class

V. So we are working with the State and I think we can learn a

lot by working with all of the States on future regulatory approach

to carbon sequestration using the UIC program.

Mr. HALL. And we thank you for that.

Does the EPA believe that the inclusion of non-enhanced oil recovery carbon capture and geologic sequestration wells under class

I or class V of the UIC program would be appropriate?

Mr. GRUMBLES. I heard you say class I.

Mr. HALL. Yes. Would it be class II or would it be classified such

as wells as a subclass of class II or as a new classification altogether?

Mr. GRUMBLES. Well, we certainly want to take that very seriously. I don’t have a specific answer to you other than to say that

as we are issuing this guidance on the use of class V, we also want

to work with the States on class II enhanced oil recovery. Congressman, we intend to have a process that involves the public and

the States to help us decide what is the best long-term management strategy to help us move from the pilot stage of these carbon

sequestration projects to longer-term potential commercial application and I think the point you are making about looking at different types of classes under the UIC program is very important

to keep our eyes open to regulatory flexibility.

Mr. HALL. And you do these through partnering with industry

and the carbon sequestration program?

Mr. GRUMBLES. Yes, sir.

Mr. HALL. Who are some of the major partners for the record?

Mr. GRUMBLES. The first partner that I think of is the partner

that EPA has a memorandum of agreement with, and that is the

Interstate Oil and Gas Compact Commission, the associations, the

agencies that regulate oil and gas but also some of the different industries as well as industry trade associations, Edison Electric, also

the Groundwater Protection Council and also important partner

30

are the non-governmental organizations including the environmental organizations.

Mr. HALL. What is the current status of the FutureGen project

and when do you anticipate it might break ground?

Mr. SHOPE. Congressman, the FutureGen project is on path on

our projected schedule. We are working on the NEPA requirements

right now. We hope to issue the Record of Decision this summer.

We are looking forward to site selection this fall and moving forward with construction would begin in approximately 2009 after we

finalize all the site selection and characterization and permitting

work that is associated with it.

Mr. HALL. I thank you.

I yield back my time.

Mr. BOUCHER. Thank you very much, Mr. Hall.

The Chair will recognize Mr. Doyle for 5 minutes.

Mr. DOYLE. Thank you, Mr. Chairman.

Mr. Shope, the President’s budget request for 2008 is seeking to

take $257 million from the clean coal technology account and place

$108 million of those funds into this pie-in-the-sky FutureGen program. In fact this concept program is being funded at the expense

of clean coal power initiatives and core fossil energy and R&D programs. Unlike the concept of FutureGen, these programs have the

very real potential for making a major impact in the near term as

well as the long term. At best, FutureGen is a high-risk initiative

that is still years away from becoming a reality. If it becomes a reality at all, it will require continued appropriations from Congress

as well as a real commitment from industry, a commitment that I

believe is far from present today. By providing $108 million for

FutureGen and canceling the remaining $149 million in the clean

coal account, the administration is also reneging on previous commitments to existing clean coal power initiative projects and jeopardizing their success. This robbing Peter to pay Paul mentality

that we have seen in this administration and this Department has

got to stop. It isn’t even so much that I am against FutureGen.

What bothers me is that we steal money from accounts that have

the potential to benefit us right now today and see deployment. We

take the money right as we are getting close to deploying these

new technologies and we shift that money into a project that is

years and years down the road that we don’t even know is going

to happen.

I think you answered the question I was going to ask, and that

is in a perfect world where money wasn’t the culprit and you could

fund FutureGen but not by stealing the money off of the clean coal

power initiative programs, what could you do and how could we

have deployment sooner if money weren’t the issue and you weren’t

shifting these funds like you do every year?

Mr. SHOPE. Well, let me address first the pie-in-the-sky nature

of FutureGen, which I would flatly reject. I think FutureGen is a

very promising technology. There is plenty of industry support to

go along with that. There is international support to go along with

that. We have 12 alliance partners on the private side that are providing substantial dollars for the project.

31

Mr. DOYLE. If that is the case, why not fund it then? Why are

you taking money out of the clean coal technology programs to fund

it?

Mr. SHORE. The clean coal technology programs, any of the

projects that were issued under the clean coal technology program

are still ongoing. They have been funded. The remaining balance

that is unused under that technology program has been moved forward to support our clean coal power initiative. Those are the same

types of projects that we are talking about that are more in the

near term that would lead up to the FutureGen project as well as

FutureGen. It is again a technology path forward so we are looking

at all the different time frames along the way. But those dollars

are being used for clean coal research, and again, the President has

made good on his promise to put in $2 billion over 10 years. We

have delivered on that promise early and have used——

Mr. DOYLE. You are taking money out of programs that are—I

will give you an example. Right in eastern Pennsylvania, the

WMPI project, you almost pulled the plug on that. We had Secretary Bodman here a couple weeks ago and——

Mr. SHOPE. That project was awarded under the CCPI program.

Mr. DOYLE. Yes, and then you pulled the plug on it, $100 million

interest-free loan which you pulled the plug on until we made an

issue of it just 2 weeks ago and now it has been re-examined and

I understand the money has been restored. The situation that we

have in the Department where money and clean coal technology

programs are always the—you know, those are the monies that get

taken first and put into these projects that are down the road. It

is important if FutureGen is the technology down the road and I

believe it can be, then we should be funding both of them. We

shouldn’t be stealing money from one program to fund these programs that are further down the road. There should be a commitment on this administration to say this is important to America

and this is important to our future and we ought to put our money

where our mouth is, and our complaint isn’t so much the programs,

is this constant robbing Peter to pay Paul that goes on. I know that

is not your call in your Department. That is above your pay grade.

But it is frustrating to hear people say how important this is to our

country and then when it comes time to put our money where our

mouth is, we don’t fund the projects.

I want to ask you another question. I understand that DOE is

currently planning on conducting 25 field validation tests under its

regional carbon sequestration partnership program. What if instead

of doing that, large-volume tests like the type we really need to test

this process were conducted in the seven regions involved in the

partnerships? Would the validation test still be needed, and how

will these projects help us understand sequestration in our country,

and finally, will the NETL continue to have the lead in conducting

these partnerships?

Mr. SHOPE. Yes.

Mr. DOYLE. An answer I enjoy hearing.

Mr. SHOPE. We need to walk before we can run, and that is why

these geologic tests are so vitally important to us. The 25 tests are

important. We are going to gain important information from those

tests, the validation of the modeling, again what happens to the

32

CO2 once it is put into the ground, what happens under different

geologic formations and that is why the real attractiveness of the

regional partnership because it is going to be looking out throughout the United States including into Canada, what are our best potential for these larger-type sites. Once we have that information,

then we will lead right into the larger-scale tests. In our 2008

budget, I think you probably have seen in there that we looking to

expedite those large-scale tests. We want to get to them as much

as anyone does but we want to do it in the right way. So are looking for in 2008 to start using dollars to lay the groundwork for

those larger-scale tests.

Mr. DOYLE. And NETL will have the lead on that?

Mr. SHOPE. Yes. NETL has the cooperative agreements, holds the

cooperative agreements with the regional partnerships, and we are

very proud of that fact.

Mr. DOYLE. Thank you, Mr. Shope.

Mr. BOUCHER. Mr. Shimkus is recognized for 8 minutes.

Mr. SHIMKUS. Thank you, Mr. Chairman. What is going to be fun

is watching the Democrats give a consistent position on this because here they are saying go faster, faster than technologically

available because that is what FutureGen is about is to prove sequestration. That is what this hearing is about. But then on Yucca

Mountain they say oh, go slow, we need more time. We can’t have

it both ways. This is a very frustrating hearing for many of us.

And I have to respond on the coal-to-liquid issues. I think Honda

did a study in 2004 which says when you change from gas to diesel,

there is a 30 percent reduction in carbon dioxide.

And the other part of this debate is they would rather burn Arab

carbons or Venezuelan carbons than U.S. carbons. I mean, that is

kind of the premise of the debate. We are a carbon-based economy

and so the coal-to-liquid application, which is what—I don’t want

to speak for the chairman but I do on this—that we are going to

be pushing for is energy independence, cleaner, and also in particulate matter. So I hope we get some consistency across the board we

move this issue. And it is very important because we do think we

can sequester carbon, having FutureGen as successful, which I believe it will be, and then on the coal-to-liquid applications, then we

can sequester the carbon in the coal-to-liquid production. So I am

very excited about what the administration has been doing. You

don’t get enough credit.

The President announced FutureGen in 2005 long before the

change in Congress, long before—he keeps getting beat up on this

global warming thing which Chairman Barton has issues with but

FutureGen is designed to start addressing that, not just within the

United States but it is a consortium. It addresses the for-profit entities because they are part of the FutureGen. They have buy-in.

It addresses the international debate because you have foreign

countries involved in FutureGen, and so if FutureGen is successful,

it can then he shared to our competitors in India, to our competitors in China, to other countries that want to use the same, addressing an international concern, and if it is an international concern, that is why FutureGen has to continue and move forward.

The funding issue, my understanding, the funding issue is primarily projects that have been completed or projects that no longer

33

have an application. Yes, it is true. We want our cake and we want

to eat it too. We want to go to zero carbon emissions but we still

want low-cost power. Even in your evaluation, and I am glad you

didn’t take the bait on a lot of my colleagues, we are still saying

a 10 percent increase by 2012 or maybe a 20 percent increase.

There is still going to be an increase in moving in this direction.

So let us talk about the manufacturing base. Let us talk about jobs.

If you have a foreign country that is not complying with these

standards and having low-cost power, you just give them another

reason to move overseas. Low-cost power is a critical component in

this whole debate, and that is why it is important for us to continue to address this.

Let me ask a question on FutureGen. FutureGen will sequester—

and that is the reason why we have it—that is to permanently

store in geological terms, which we talked about, a large portion of

carbon dioxide emitted from the demonstration project. Could you

describe for the committee the various technological uncertainties

and the costs currently associated with the sequestration of carbon

dioxide?

Mr. SHOPE. Costs associated with the capture technology, the additional costs that are in there, again, we have to prove out the

technology that we have today with increasing our turbines, costs

associated with hydrogen membranes and developing the efficiency

way of handling the gas streams that are involved within gasification and improving the technology along those lines from the capture standpoint, increasing our efficiency of those. On the storage

end of things, we have to again examine what kind of measuring

and monitoring and verification technology is available, enhance

those tools that are available to us, take a good look at what will

happen to the CO2 once it gets into the ground, the element of permanence, the element of seepage, where the CO2 could migrate to

once it is underground. All these different elements have to be—

we have to progress along the path in order to pull them all together for our FutureGen project.

Mr. SHIMKUS. You said carbon dioxide was stored as in essence

a liquid. Natural gas, does that turn in a liquid also at those levels?

Mr. SHOPE. Under those pressures, then it would be in liquid formation.

Mr. SHIMKUS. Because we obviously store natural gas in this

country. We have done so for decades. If some type of regulatory

program to govern carbon dioxide emissions is enacted, is there

needed a uniform Federal program to govern carbon dioxide sequestration or could this be addressed by each State?

Mr. GRUMBLES. Congressman, from an EPA perspective, and I

am speaking on behalf of the water program, when we look at the

carbon sequestration, right now where we are is that we have

made the determination that the Safe Drinking Water Act provides

regulatory framework based on what we know in using the Underground Injection Control program, and we think that the guidance

that we are issuing will be extremely helpful in learning, providing

information and also having the regulatory flexibility for States

who are our partners in the UIC program to learn more and develop more information about these promising but unproven techVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
34

nologies. So we will see as we have workshops and have public and

scientific input on the longer-term future of the control program

but we think the framework under the Safe Drinking Water Act is

a good one.

Mr. SHIMKUS. I like the way you said that: promising but

unproven. So it is important for us to make sure it is proven before

we mandate, and that is FutureGen. That is why we have it.

With that, my time is close to expiring. I can’t get in another

question. I will yield back.

Mr. BOUCHER. Thank you very much, Mr. Shimkus.

The gentlewoman from California, Ms. Harman, for 5 minutes.

Ms. HARMAN. I hail from Los Angeles where a little movie starring Vice President Al Gore just won an Oscar, and a lot of attention is now being paid to ‘‘An Inconvenient Truth.’’ I just would observe that the answers to an inconvenient truth are also inconvenient and we need to face up to that, and that is why I applaud you,

Mr. Chairman, for holding this hearing on carbon capture and sequestration because I do think that coal is a big part of the answer

and we have to face up to it and we have to understand what is

good, what is bad, where we can push technology, what the environmental impacts are, et cetera. But I think we are going to have

to move on carbon capture and sequestration of coal. We are going

to have to do it. As inconvenient as it may be, as expensive as it

may be, we are going to have to do it. So hopefully this committee,

which does have the right jurisdiction, will learn a lot about this,

and obviously some Members know a lot more about this than I do,

and we will figure out the right path forward together, at least I

hope and would believe we would.

I just want to focus on a few real-life examples because maybe

we can sort of come down to Earth and see how we are doing. I

do know that in the next panel, which I am probably going to have

to miss, we are going to hear about a coal gasification plant with

carbon capture technology which is being designed for construction

in Carson, California, which is just outside my Congressional district, and I would like to know more about it. If any of you know

about that, please speak up.

But what about the Wayburn project? That is something you all

know about. Why don’t you just assess it? How is it going? What

problems have you encountered in construction and operation and

what is the promise of the Wayburn project?

Mr. SHOPE. Well, the Wayburn project is an enhanced oil recovery—basically an enhanced oil recovery project where in North Dakota, lignite is being gasified and the CO2 is being captured and

shipped approximately 200 miles into Canada to be displaced into

the Wayburn field to enhance oil recovery. Again, as I mentioned

in my opening remarks, enhanced oil recovery has been going on

for some time. However, the goals are somewhat different. In enhanced oil recovery, the main goal is to get additional oil out of the

ground. The focus is not placed on permanence of the CO2 underground. So that being said, Wayburn presents us with an excellent

opportunity to take a look at a field where they are putting in approximately a million tons a year of CO2 into these formations and

we can use that for testing, for monitoring, measuring and verification. We are involved with that, that is, the Department of Energy

35

is involved with that project in the sense of looking at some tools

and techniques that we can use to measure and monitor the CO2

underground so it provides an excellent opportunity for laboratory

essentially.

Ms. HARMAN. And what are we learning? And I would welcome

the EPA witnesses commenting on this too. And if you know anything about the Carson design and construction project in my last

minute and 16 seconds, I would welcome your answer.

Mr. SHOPE. Again, preliminarily from the Wayburn project—I

will just address that and pass it on—there are very optimistic

signs that CO2 can be stored permanently underground, and that

is a very optimistic sign.

Mr. WEHRUM. I would just say I think our colleague from the Department of Energy adequately addressed Wayburn. We have caucused very quietly here. We are not familiar with the Carson

project but we will be more than happy to answer questions on the

record further with regard to that project.

Ms. HARMAN. Well, I will appreciate that, and I know that the

next panel of witnesses is more familiar but it is a collaboration between General Electric and BP and it is being built in southern

California where there are a lot of cars and a huge demand for fuel.

I think it may have some good lessons for us.

Mr. SHOPE. Yes, they are producing CO2 for other applications.

Again, a little bit of a change of focus than what we were talking

about as far as FutureGen where our main focus is to make electricity along with hydrogen and their focus is producing CO2 for

other purposes. So while there are certainly synergies, there are

differences as well.

Ms. HARMAN. But there will be sequestration, so I would welcome answers for the record, and if I have to miss the second

panel, I will try to catch up with it.

I thank you, Mr. Chairman, for exploring all of these issues, however inconvenient the answers may be. Thank you.

Mr. BOUCHER. Thank you, Ms. Harman.

Mr. Sullivan for 5 minutes.

Mr. SULLIVAN. Thank you, Mr. Chairman. I appreciate everyone

on the panel for being here today.

Also, we are talking about a lot of complex environmental issues.

The Democratic leadership and Speaker Nancy Pelosi says they

want to get something done by I believe June. I would like to ask

each of you, do you think we can address all these concerns adequately by June and address these complicated issues by June?

Mr. WEHRUM. I will just start by saying, I think as you well

know, the administration’s position is that mandatory measures

are not appropriate at this time. We do believe, in response to

many of the comments that have been made today, that we have

an aggressive and a coherent strategy for dealing with the issues

as we see them today that involves significant investment in basic

research, significant investment in technology development, which

is most of what we have talked about today. We are very, very active on the international front in a wide variety of forums and we

are taking prudent actions domestically against the President’s

goal of an 18 percent reduction in greenhouse gas intensity. So I

believe the administration has a very focused and effective policy

36

in place and we are happy to have the opportunity to talk about

it today.

Mr. SULLIVAN. What do you think, sir? Do you think June we can

get it all done by then?

Mr. SHOPE. I will agree with Mr. Wehrum’s comments and leave

it at that. From a technology standpoint, there are a lot of issues

that are yet to be addressed and that is why we are again focusing

our efforts on a technology basis.

Mr. SULLIVAN. It would be difficult, wouldn’t it?

Mr. SHOPE. It would be difficult.

Mr. SULLIVAN. And sir, I am sorry, I can’t see very well.

Mr. GRUMBLES. I would agree with Mr. Wehrum. What we are

committed to within EPA is laying out a roadmap that involves

science and public sector and the regulated community and the

State groundwater protection officials and oil and gas regulators

and identifying the most promising technologies and learning more

and continuing to be committed to advancing carbon sequestration

in particular and ensuring that it protects underground sources of

drinking water and also helps make significant progress in confronting serious challenges in the environment.

Mr. SULLIVAN. I appreciate those approaches, working through it,

and it does take time, I know.

I guess, Mr. Grumbles, this will be directed to you or anyone else

that wants to add anything, but in 2006, it started in 2006, a

project, I can’t pronounce the project name but in Norway’s North

Sea is the world’s first commercial deep saline carbon dioxide capture and storage project. What have we learned from this, if you

know? Have Government subsidies been involved in this project,

and what would it take to become economic?

Mr. GRUMBLES. I think locally and globally we are all learning

more and doing more to confront the serious challenge of global climate change. I know a lot of research, international research is

being carried out. I know of the Norwegian North Sea research and

development project. They have operated a geologic sequestration

project successfully for over 10 years, injecting millions of tons of

CO2 deep in formations beneath the North Sea. The volumes

though are still small, relatively small compared to what we can

expect with full-scale implementation of geosequestration activities

in the U.S. so I think the point for us is that we are all still very

much on the learning curve internationally and domestically but

we are optimistic just as the Intergovernmental Panel on Climate

Changed recognized. We are optimistic about the technologies this

approach of geosequestration compared to risks of other activities.

We think the risks are not great but of course, we are committed

to analyzing that risk and also the potential and promising technologies to manage geosequestration.

Mr. SULLIVAN. I agree, we are on a learning curve, that is good,

but it does show great promise, wouldn’t you agree?

Mr. GRUMBLES. I would.

Mr. SULLIVAN. Also, sir, can you explain how the EPA’s 30 years

of regulatory experience with the UIC program correlates with the

States 30 years of regulating injection of CO2 in the subsurface for

enhanced oil recovery? For instance, does EPA have any expertise

37

regulating the disposal of acid gas or the storage of natural gas in

the subsurface?

Mr. GRUMBLES. Thank you, Congressman. I would say that the

States, as you noted, have decades of experience with permitting

the class II enhanced oil recovery wells. I think one of the areas

where EPA can really step in and help though is when you recognize that no State currently has experience with long-term largevolume storage of CO2, for example, commercial sale

geosequestration in the U.S., and because those activities are significantly different with respect to the risks they present to underground sources of drinking water and public health, we believe that

a combined approach, a Federal and State approach, working together using the regulatory tools under the Safe Drinking Water

Act is the way to go and it will be essential in developing a cogent

management framework for the long-term success of these promising but unproven technologies.

Mr. SULLIVAN. I think that is good, a combined approach but

don’t you think there are some States that have greater expertise

and experience in this than the EPA? Wouldn’t you agree with

that?

Mr. GRUMBLES. I would agree, for instance, we embrace the fact

that the States, 34, 35 States are the primary implementers of the

Underground Injection Control program under the Safe Drinking

Water Act. They do so under the national standards that EPA sets

so definitely there is opportunity for continued State leadership but

we think it is very important from an EPA perspective to lay out

an overall framework to help manage this area.

Mr. BOUCHER. The gentleman’s time has expired.

Mr. Wynn from Maryland for 5 minutes.

Mr. WYNN. Thank you, Mr. Chairman.

Mr. Grumbles, you confirmed that EPA has authority under the

Safe Drinking Water Act Underground Injection Control program

over the injection of CO2. Is that correct?

Mr. GRUMBLES. Yes.

Mr. WYNN. Now, have you developed a regulatory concept with

respect to how the Federal Government would regulate this injection to protect our consumers?

Mr. GRUMBLES. Thank you, and that is the key question, and the

answer is, yes, we are working on an overall management framework. The first and more critical step that Mr. Wehrum and I described was that the two offices, the Air Office and the Water Office, working together are issuing guidance to help oversee and

maintain the success and safety for pilot projects, experimental

projects under the class V Safe Drinking Water Act UIC program.

Mr. WYNN. This guidance, does that rise to the level of absolute

regulations or are these——

Mr. GRUMBLES. It is guidance to the regulators using their authorities under the Safe Drinking Water Act so it is a regulatory

framework. The goal though for anything that is experimental and

early in terms of the promising but not yet proven technology stage

is to provide some flexibility for the regulators to experiment and

see what works on a small scale. We are committed to that.

38

Mr. WYNN. All right. Thank you. You said that you favored a

combined regulatory approach between the States and the Federal

Government. How does that work?

Mr. GRUMBLES. Our success over the years with the Underground Injection Control program of the Safe Drinking Water Act

is that it works by EPA issuing overall guidance and regulatory

framework and then having a process where States meet certain

criteria and then are delegated the authority to run the program.

Mr. WYNN. So EPA would set the minimum standards for the

State? Is that basically the bottom line?

Mr. GRUMBLES. We would set the basic standards under the Safe

Drinking Water Act.

Mr. WYNN. OK. Now, has there been any study of whether any

other contaminants might travel with the CO2 as it is injected?

Mr. GRUMBLES. Well, I know that there is a lot of research that

is going on about the potential risks of CO2. I think one of the

things that was important to me was that when the Intergovernmental Panel on Climate Change looked at the issue, the potential

for carbon sequestration, geosequestration, they concluded that carbon sequestration offered minimal risk, that we all need to learn

more about the potential for——

Mr. WYNN. Minimal risk to drinking water specifically?

Mr. GRUMBLES. That is correct. While everyone agrees further research is needed but the basic statement was is that they estimate

CO2 could be trapped for millions of years and that formations are

likely to retain over 99 percent of the injected carbon dioxide over

1,000 years.

Mr. WYNN. But the length of actual testing is only about 2 years?

The longest we have actually tested this injection process in terms

of the possibility of leaking is only 2 years, right?

Mr. GRUMBLES. Well, it underscores the point that——

Mr. WYNN. Well, is that true? We have only tested for 2 years?

Mr. GRUMBLES. Well, I am not sure what the 2-year——

Mr. WYNN. Well, it says that this North Sea project has been in

operation since 2005. Is there a test or an example that is longer

than two——

Mr. GRUMBLES. The North Sea example, my information indicates 1996, over 10 years they have been successfully——

Mr. WYNN. Ten years?

Mr. SHOPE. Yes, or 11 years. We have been following it for about

5 years but they have been injecting for about 11 years.

Mr. BARTON. Will the gentleman yield?

Mr. WYNN. Yes.

Mr. BARTON. I don’t know what kind of test you are talking

about but they have been injecting CO2 for enhanced oil recovery

for decades. I don’t know that that is under the kind of the conditions the gentleman from Maryland wants to allude to in terms of

specific tests but it has been done for decades in Texas, Colorado

and New Mexico, I know.

Mr. WYNN. Thank you.

I yield back the balance of my time.

Mr. BOUCHER. The Chair thanks the gentleman and recognizes

Mr. Whitfield for 5 minutes.

39

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

you all for being with us today. I think it goes without saying that

coal is going to by necessary continue to play a major role in the

production of electricity in this country and today I guess it is producing around 52 percent of all the electricity we use in our country, and I think Mr. Shimkus pointed out an important point, and

that is that with China and India and a lot of other developing

countries continuing to build coal-fired plants and for the U.S. to

start penalizing itself for doing that, making us less competitive in

the worldwide economy is something that many of us will find unacceptable. So all of us are quite excited about the FutureGen process, Mr. Shope, and just for clarification, of course, it is a production of emission-free coal, sequester all the CO2 and produce hydrogen, and it is my understanding that in the U.S. now, sites have

been reduced to four. Is that correct?

Mr. SHOPE. That is correct.

Mr. WHITFIELD. And when do you anticipate a final decision will

be made on a site?

Mr. SHOPE. We are undergoing the NEPA process right now and

we hope to have that Record of Decision out this summer. That

would lead us to making site selection this fall.

Mr. WHITFIELD. And how many other countries are involved with

the private sector in exploring the FutureGen possibility?

Mr. SHOPE. The FutureGen, it is set up in a private alliance.

There are the 12 companies that I mentioned previously. They are

actually operating the FutureGen facility. The counties are involved in what is called the Government Steering Committee.

Right now we have commitments from India that has already made

contributions to the Government Steering Committee. The governments of South Korea, China and Japan have also expressed interest as well as some other governments that we are currently working with.

Mr. WHITFIELD. And do you anticipate that a FutureGen project

would ever be constructed in those countries?

Mr. SHOPE. Well, that would certainly be the hope at the end of

the day. That is why we are doing FutureGen, to get this technology out and in place, not just here in the U.S. but around the

world so that again their global emissions are taken care of.

Mr. WHITFIELD. But in your discussions with them, are you finding them really engaged in this, the other countries, or is it——

Mr. SHOPE. Absolutely. This is not just a commitment. This is a

financial commitment on behalf of these governments, $10 million

from each government just to be a part of the Government Steering

Committee. That doesn’t put them into the private FutureGen alliance that is actually operating the plant so they are paying $10

million just to be a part of the effort and to obtain as much information as they can and share with us, to have a front-row seat to

the entire project. So yes, there is certainly significant interest.

Mr. WHITFIELD. And Mr. Wehrum, you referred to the Supreme

Court case on whether or not the EPA had authority to regulate

CO2 emissions under the Clean Air Act. Is that correct?

Mr. WEHRUM. That is correct.

Mr. WHITFIELD. When do you anticipate that decision will be

made?

40

Mr. WEHRUM. The issues were briefed up late last year. Oral argument has already occurred and we are waiting for a decision

from the court.

Mr. WHITFIELD. Now, if you were in the rotary club in Hopkinsville, how would you explain for a layman the decision of the Federal Court of Appeals on that issue?

Mr. WEHRUM. Well, the DC circuit upheld our determination and

each of the judges on the panel expressed a bit of a different view

with one dissent of course but voted to uphold our decision. So our

determination was based on a careful reading of the Clean Air Act

and consideration of the relevant policy issues and our ultimate

conclusion was, we don’t believe we have authority under the Clean

Air Act to regulate CO2 for its impact on global climate change.

Mr. WHITFIELD. So it is your position that it would require legislation for you to be given authority to regulate CO2 emissions, correct?

Mr. WEHRUM. That is correct.

Mr. WHITFIELD. Now, are any of you on the panel aware, of all

the CO2 emissions throughout the world today, what percent of

those emissions are manmade?

Mr. GRUMBLES. We would be happy to dig into it and get back

to you on the record. I don’t have that information in front of me

right now.

Mr. WEHRUM. Just to hazard a guess, about 3 percent.

Mr. WHITFIELD. Three percent?

Mr. WEHRUM. But we would put something on the record for you

to give you more——

Mr. WHITFIELD. Well, I mean, I heard anywhere from 2 to 5 percent, so of all the CO2 emissions that we are talking about, only

a minute part is manmade, correct?

Mr. SHOPE. That is correct.

Mr. WHITFIELD. Thank you, Mr. Chairman.

Mr. BOUCHER. The Chair thanks the gentleman and recognizes

the gentleman from Illinois, Mr. Hastert, for a motion.

Mr. HASTERT. Mr. Chairman, I move that all Members have 5

business days to submit written questions and ask that the panel

would respond to those.

Mr. BOUCHER. Without objection, so ordered.

I want to say thank you to this panel of witnesses for your presence here today and for your answers to what have been probing

questions from the members of this subcommittee to you. The information you have provided will be very helpful. There will be followup questions sent to you. I have some. I know that other Members

do. And your attention to those and your timely response would

also be appreciated.

So with that, we will dismiss this panel and welcome to the table

the second panel of witnesses for this afternoon.

Our next panel has seven witnesses beginning with Mr. John

Fees, who is the chief executive officer of the Babcock and Wilcox

Company. Mr. David Hawkins is the director of the Climate Center

for the National Resources Defense Council. Following Mr. Hawkins will be Mr. Edward Lowe, who is the general manager for

Gasification Market Development for the General Electric Company. Dr. S. Julio Friedmann from the Carbon Management ProVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
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gram at the Lawrence Livermore National Laboratory. We have

Mr. Mark Schoenfield, the senior vice president and general counsel for Jupiter Oxygen Corporation. Mr. Stu Dalton represents the

Electric Power Research Institute on today’s panel. And finally, we

will hear from Mr. Jay Stewart, an attorney with the firm of Hance

Scarborough Wright Woodward and Weisbart in Austin, Texas.

The prepared written statements of all of the witnesses will be

made a part of the record and we will welcome your oral summary

and we would ask that you keep your oral summary to approximately 5 minutes.

Mr. Fees, we will be happy to begin with you.

STATEMENT OF JOHN A. FEES, CEO, THE BABCOCK & WILCOX

COMPANY, LYNCHBURG, VA

Mr. FEES. Thank you, Mr. Chairman, Mr. Hastert and members

of the subcommittee, my name is John Fees and I am the chief executive officer of the Babcock and Wilcox Companies which employs

over 20,000 people working on advanced energy solutions worldwide. I have a degree in industrial engineering and operations research from the University of Pittsburgh and a master’s of engineering from George Washington University.

Mr. Chairman, it is a particular pleasure to come before you representing the Babcock and Wilcox Companies with our headquarters in Southwest Virginia, Lynchburg specifically, where we

employ nearly 2,500 employees and where my wife, Jill, and I have

made our home for the last 28 years.

Congressman Hastert, the Babcock and Wilcox Company also has

the privilege of working with the University of Chicago at the Argonne National Lab as we develop advanced nuclear technologies

for the future.

Today, however, I am here to testify before you on combustionbased technology alternatives available to limit carbon dioxide

emissions from electrical power plants. I am also here to ask Congress to ensure that any draft legislation on carbon capture promotes achievable solutions, allows the market to select technologies

through competition and to set standards that will allow the emergence of improved technologies.

B&W has a long history of providing technology solutions for efficient base load electrical generation throughout the United States

and North America and around the globe. Babcock and Wilcox was

founded in 1867 and the first utility plant in the United States had

a boiler designed and supplied by B&W. B&W has literally written

the book on steam, which is here, ‘‘Steam, Its Generation and Use

for Power Generation.’’ This is the longest continually published

engineering textbook of its kind in the world, first published in

1875. In the 1950’s, B&W became a major supplier of components

for the Navy’s fleet of nuclear-powered ships and submarines and

we are the only United States manufacturer of the heavy components required for the emerging civilian nuclear power renaissance.

B&W understands that we must provide realistic solutions to the

climate challenge on a timely basis, and we are doing just that.

Coal-fired and nuclear power plants provide over two-thirds of all

domestic-generated electricity and they are the foundation for our

economic competitiveness, our energy security and a basis of our

42

standard of living. With coal, B&W has been an environmental

technology leader at the forefront of developing solutions for mercury, SOx and NOx emissions and particulates.

In power generation, B&W has recently been awarded a number

of new highly efficient supercritical coal-fired power plant projects

in the United States and the first ultra-supercritical coal-fired

power plant in the United States in many decades. These plants

with their higher efficiencies enable the production of electricity at

lower carbon intensity than older subcritical plants and ongoing efforts will deliver even higher performance in the future.

B&W is also working on an array of potentially significant breakthroughs for carbon-friendly technologies. Some of these technologies could dramatically lower the cost of carbon capture and

storage.

B&W is working to commercialize oxy-coal combustion technology that inherently produces carbon dioxide with no needs for

a separate capture technology. Oxygen combustion produces a concentrated stream of carbon dioxide that is ready for enhanced oil

recovery or geological storage. We expect to deploy this technology

as the first commercial-scale near-zero-emission coal-fired plant

with carbon storage in North America, and let me repeat that. It

is the first commercial-scale, near-zero-emission coal plant with

carbon storage in North America and we are confident that oxycombustion technology can provide the most cost-effective solution

for many new power plants and for retrofitting some existing fossilfired plants. The first wave of near-zero-emission coal plants will

start operation around 2012 and improvements will inevitably follow and oxy-coal will be among the first of these first-wave

projects.

There is a building consensus that Congress should establish

practical emission targets and that CO2 reduction will be most effective if there are a portfolio of technologies. Congress should establish targets within the industry grasp and permit the market

forces to work here.

We believe that regulatory and technological obstacles to the

long-term storage of carbon dioxide for electrical power plants could

be the limiting factor in reducing carbon emissions. Legislation

therefore should support the acceleration of R&D associated with

carbon storage, clear policies regarding the legal ownership and liability of the injected CO2, and overcoming local concerns with

large annual injections at storage sites.

I thank you for the privilege to testify before the subcommittee,

and I have also provided a written statement and ask that it be

included in the record. Thank you.

[The prepared statement of Mr. Fees appears at the conclusion

of the hearing.]

Mr. BOUCHER. Thank you very much, Mr. Fees. We appreciate

your testimony today, and also let me acknowledge how much we

appreciate your presence in the western part of Virginia, not my

congressional district but close enough. We are glad to have you

here.

Mr. Hawkins.

43

STATEMENT OF DAVID G. HAWKINS, DIRECTOR, CLIMATE CENTER, NATURAL RESOURCES DEFENSE COUNCIL, WASHINGTON, DC

Mr. HAWKINS. Thank you, Mr. Chairman.

Four years ago, I testified in this room before this committee

under then-Chairman Barton on the same topic and a lot has happened in the last 4 years, not as much as needs to happen but a

lot has happened. First, we have an increasing awareness of the

urgency to act on global warming. Second, we have a lot more

knowledge about CO2 capture and disposal from coal-fired power

plants. And third, the growth rate in new coal plants in the pipeline in the U.S. and globally has increased dramatically, and that

is because coal is very abundant. Right now coal plants are being

built somewhere in the world about ten large coal plants every

month. Unfortunately, those ten coal plants are not equipped to

capture their CO2, and to make coal use and climate protection

compatible, we have to begin to capture CO2 for geologic disposal

at new coal plants without further delay.

Some of the statistics are pretty startling. The new coal plants

that are forecast to be built just in the next 25 years, if they are

not equipped with CO2 capture systems, will emit about 750 billion

tons of CO2 during their operating life. That is about 30 percent

more CO2 than had been released from all previous human use of

coal just from a 25-year period of investments. If we don’t apply

CO2 capture and disposal to these coal plants, we are going to

make protesting the climate very much more expensive, if not impossible.

The good news is, we know enough today about how CO2 capture

and disposal works in order to be able to apply it right now to

plants that are being designed. Capture systems have been demonstrated at commercial scale for some coal processes and others

are being developed, as Mr. Fees just testified. Experts appointed

from our Government and others under the Intergovernmental

Panel on Climate Change have conclude that based on existing experience, disposal operations can be conducted safely if we have an

effective regulatory regime. That effective regulatory regime we believe should be carried out by EPA and we believe that if this committee presses on EPA to get the job done, it can be done quite

quickly.

Experts have also concluded that we can have confidence that if

we properly select and operate a disposal site, that the CO2 that

we put there will stay there. Storage capacity in the United States

and globally is very substantial, likely enough to be able to accommodate all of the CO2 from 100 to 200 years worth of global fossil

power operation, depending on just how much fossil fuel we burn

over the next 100 years or so. But policies to limit CO2 emissions

and set performance standards are the key here. They are essential

to promote a market reason to actually use CO2 capture and disposal technologies at the required scale and pace. Those policies we

believe can and should be enacted in this Congress. Well-designed

measures can phase in CO2 capture and disposal on new coal

plants with only very modest impacts on retail electricity prices.

One approach I discuss in my testimony is a low-carbon-generation obligation that would phase in a very small fraction of kilowatt

44

hours initially from coal resources that would be equipped with

CO2 capture and storage in order to meet a performance standard

without specifying a particular technology. Combined with a cap

and trade program, such an approach could result in quite rapid

deployment of carbon capture and disposal and provide new American technology leadership while dramatically cutting emissions.

So I would say that my key message here is that we really have

to avoid building new coal plants without CO2 capture and disposal. There is no reason to delay that. There is no reason to build

additional capacity without applying those techniques. We know

how to do it. Cost reductions are going to be driven by learning

from commercial experience. They are not going to be driven by

R&D expenditures by the Federal Government.

Finally, I just would say in closing that CO2 capture and disposal

is an important tool but it is one of several tools available to cut

global warming emissions. The fastest and cheapest method to attack global warming remains energy efficiency and increased reliance on renewable energy resources is another important tool.

Thank you very much.

[The prepared statement of Mr. Hawkins appears at the conclusion of the hearing.]

Mr. BOUCHER. Thank you, Mr. Hawkins.

Mr. Lowe.

STATEMENT OF EDWARD C. LOWE, GENERAL MANAGER,

GASIFICATION MARKET DEVELOPMENT, SCHENECTADY, NY

Mr. LOWE. Good afternoon, Mr. Chairman and members of the

committee. I am Edward Lowe, general manager of Gasification

Market Development at GE Energy. GE appreciates the invitation

to participate in this hearing.

I would like to thank this committee for recognizing the need for

cleaner coal in the 2005 Energy Policy Act. Three coal IGCC

projects and a petroleum-coke hydrogen-to-power IGCC project

were recently awarded investment tax credits. These projects are

a vital first step to accelerating the deployment of IGCC and positioning coal as an economic fuel in a carbon-constrained world.

Today I will, one, discuss the differences between pulverized coal

technology and IGCC; two, show that IGCC is proven and cleaner;

and three, address why technology has not been rapidly deployed

and what is needed for it to achieve its potential. The first slide,

please.

[Refer to slides beginning on page 133.]

A diagram of a PC plant and an IGCC plant is shown on the

screen. In PC plants, coal is ground and burned in a boiler. Pollutants such as particulates, sulfur dioxide and mercury are captured

in large post-combustion pollution control systems. IGCC is fundamentally different than PC. It converts the coal into a high-pressure natural-gas-like fuel that is then burned in a gas turbine. Precombustion removal of pollutants in an IGCC plant is more efficient and less costly because only one one-hundredth the volume of

gas needs to be treated compared to a PC plant.

Next slide.

[Slide shown.]

45

IGCC is proven. GE technologies are used in over three

gigawatts of IGCC plants around the world. IGCC is also cleaner

than pulverized coal technology. GE’s 630 megawatt IGCC plant

will have 93 percent lower sulfur, 75 percent lower nitrogen oxides

and 33 percent lower particulate emissions than the average of recently applied for and permitted PC plants plus it will consume 30

percent less water. You can turn off the screen.

CO2 can also be removed pre-combustion with IGCC. According

to a 2006 Department of Energy study, achieving 90 percent capture in a bituminous coal plant with IGCC will have a 23 percent

lower cost of electricity compared to a pulverized-coal plant using

currently available technologies. With all of these advantages, it is

fair to ask why isn’t IGCC being widely deployed. First, an IGCC

plant is currently estimated to be 20 to 25 percent more expensive

than a PC plant. IGCC is beginning to move down the experience

cost learning curve but more plants need to be built in the near

term to accelerate the cost reduction.

Second, IGCC’s ability to cost-effectively capture carbon has no

value in today’s marketplace. In summary, carbon capture-ready

IGCC is commercially available now. All of the key processes and

equipment required for carbon capture in IGCC are being used in

the chemical and refinery gasification applications today.

For low-carbon coal power to be deployed, a national policy is

also required. Without long-term clear, consistent policy direction

that creates a market price for carbon, low-carbon coal technologies

including IGCC will not be widely adopted.

What is needed are, first, an expansion of current Government

incentives to get the first 12 plants built, thus driving down the

capital cost of IGCC, and second, a policy that includes a cap and

trade program to establish a value for carbon.

We hope that the information that we have provided today will

give you confidence to move forward with legislation to address climate change and the role that coal can play in a carbon-constrained world.

Thank you for the opportunity to address this committee.

[The prepared statement of Mr. Lowe appears at the conclusion

of the hearing.]

Mr. BOUCHER. Thank you, Mr. Lowe.

Mr. Friedmann.

STATEMENT OF S. JULIO FRIEDMANN, CARBON MANAGEMENT

PROGRAM, LAWRENCE LIVERMORE NATIONAL LABORATORY, LIVERMORE, CA

Mr. FRIEDMANN. Thank you, Mr. Chairman, Representative

Hastert and members of the committee. I thank you for inviting me

to testify today on the technical aspects of carbon capture and sequestration. I am pleased to be here in the capacity as the leader

of the Carbon Management Program at the Lawrence Livermore

National Laboratory.

Carbon capture and sequestration can be a vital element of a

comprehensive energy strategy that includes efficiency gains, conservation and carbon-free energy supplies such as renewable or nuclear power. It can also support environmentally sound developVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
46

ment of domestic transportation fuels including biofuels, coal-to-liquids and hydrogen.

To summarize my testimony upfront, opportunities for rapid deployment of geological sequestration exist in the United States

today. There is enough technical knowledge to select a safe and effective storage site, to plan a large-scale injection, to monitor CO2

and to remediate and mitigate any problems that might arise such

as well bore leakage. However, national deployment of commercial

CCS poses technical challenges and concerns due to the operational

scale. An aggressive research, development and deployment program could answer all key technical questions, especially those

that could advise a regulatory and legal framework to protect the

public without undue burden to industry.

Carbon capture and sequestration has two components. The first

is the separation and concentration of CO2 from point source flue

gases like power plants. The other panelists in the previous panel

talked about that. The second step is geological carbon sequestration, or geologic storage, which involves injection of CO2 into porous rock formations below the surface. I will focus my testimony

on that.

The most promising reservoirs are porous and permeable rock

bodies at depth generally greater than 1 kilometer, where pressures and temperatures where CO2 to act like a dense liquid-like

gas. The potential reservoirs include saline formations, depleted oil

and gas fields, and unminable coal seams. Saline formations are

likely sites for most geological sequestration because of broad distribution and large capacity. However, initial projects will probably

start with depleted oil and gas fields due to the quality of existing

data and the potential for economic return through enhanced oil recovery. Available pore space and suitable formations is a new natural resource, and I would like to repeat that: available pore space

and suitable formations is a new natural resource. Once the CO2

is injected into the subsurface, it remains there indefinitely because of physical and chemical properties of the Earth’s shallow

crust. Four different mechanisms trap CO2 in place: physical trapping, capillary trapping, dissolution and mineral precipitation.

What this means is that over time, CO2 sequestered in the crust

becomes less mobile and more permanently bound into the rocks

themselves.

Geological disposal is very similar to oil and gas production, natural gas storage, hazardous waste disposal and enhanced oil recovery, as other members have mentioned. A key difference is the goal

which is to keep CO2 in the ground and out of the atmosphere.

Therefore, careful pre-injection site characterization and monitoring and verification programs are important to avoid hazards, to

detect unexpected leakage from the formation and to properly credit effective storage.

Today the U.S. emits annually 7 billion tons of carbon dioxide totaling 2.2 billion tons of this from large point sources, mostly coal

power. The volumes of CO2 at depth represented by this mass exceed current U.S. oil and natural gas production combined. Just 1

billion tons of anything is more mass than all the human beings

on this planet. It is the necessary scale of sequestration deployment

that represents the challenges we face.

47

The good news is that the U.S. appears to have more than

enough capacity to deploy CCS at large scale. Conservative estimates are that the U.S. has over 2,000 billion tons, 2 trillion tons

of capacity, enough capacity to comfortably inject all of our current

point source CO2 emissions for more than 100 years. Large sequestration resource occurs in the Midwest, in Texas, the intermountain West and substantial opportunities also exist in California, the Dakotas, Michigan and offshore the eastern United States.

The costs of geological storage are much lower than the costs of

capture and sequestration. Estimated costs of storage in the U.S.

range from only one to 12 bucks a ton but in most cases range from

about $5 to $8 a ton. This is roughly 10 percent of the cost of capture and separation. The cost of monitoring the CO2 is much lower

than that, with estimates of about 25 cents to $1 per ton. The cost

of the geological assessment and site characterization are even less,

estimated to be much less than one cent per ton.

I was asked to comment on what we know about carbon sequestration as an option for addressing climate change, what we don’t

know, what work needs to be done and understanding those things

we don’t know. I won’t have time to go into it, but from a technical

basis, the potential for successful CCS deployment is only limited

by the local geology.

Thank you again for the opportunity to present.

[The prepared statement of Mr. Friedmann appears at the conclusion of the hearing.]

Mr. BOUCHER. Thank you, Mr. Friedmann.

Mr. Schoenfield.

STATEMENT OF MARK K. SCHOENFIELD, SENIOR VICE PRESIDENT, OPEERATIONS, JUPITOR OXYGEN CORPORTATION,

SCHILLER PARK, IL

Mr. SCHOENFIELD. Thank you, Mr. Chairman, Mr. Hastert, members of the committee.

Carbon capture requires technologies that can effectively, efficiently and economically actually capture carbon, keep our coalfired power plants running and give us affordable power. I am the

senior vice president of operations and general counsel of Jupiter

Oxygen, a small energy technology company that is privately held,

which has developed a particular oxy-fuel, that is, using oxygen

without air, with coal or other fossil fuels, technology process that

makes it both practical and cost-effective for coal-fired power plants

to be truly capture-ready now. It also can be used for retrofits,

which makes it different than many of the other approaches that

have been tried. The ability to retrofit the existing fleet of coalfired power plants is essential for our economic and energy needs

and our energy security, and although our focus may be coal, I just

want to note that this technology also can address natural-gas-fired

plants which also emit CO2 and have NOx issues.

The Jupiter oxy fuel combination technology uses pure oxygen as

the combustion agent instead of air, which contains nitrogen. The

resulting exhaust gas contains almost no NOx and concentrates the

CO2 for efficient capture. In other words, you don’t have to separate out from all that nitrogen in the air because air is 80 percent

nitrogen. That makes it much more efficient and much less costly

48

to do, and by having an undiluted high-flame-temperature process,

you save fuel. At the same time, you can address the NOx, SOx,

mercury and particulate issues effectively.

Now, this process actually began in the 1990’s in an aluminum

recycling and manufacturing plant. Strictly it started out for fuel

efficiency purposes. At that plant, however, what was learned was,

in aluminum re-melting you cut your fuel usage by 70 percent by

using this and therefore you have 70 percent CO2 avoidance because when you don’t burn the fuel, you avoid making the CO2.

Since 2001, Jupiter Oxygen has tested its technology and moved

from industrial furnaces to power plants, working under research

agreements with the National Energy Technology Laboratory. In

2002, we tested our technology in a steam boiler, making good

steam sufficient to make electricity while firing both natural gas

and coal, so we are talking about a technology that has been tested

with actual firing in an up to half-a-megawatt size unit. This is not

tabletop research. It is not a simulation. And what we found was,

that you create fuel efficiencies, you burn less fuel, and then we

combined our technology with an integrated pollutant removal

technology called IPR, which kind of follows that name, developed

by the National Energy Technology Lab itself at its Albany research center. Our technology with its fuel efficiencies and other

benefits enables that system to perform in an economical and efficient manner to capture the CO2 and to do it in a cost-effective

way. This means that coal supplies can be used in an environmentally friendly fashion now and that we can use coal into the future.

Now, the problem we have is that utilities are reluctant to anything and be first, so we have started a retrofit project with the Department of Energy to do about a 25-megawatt retrofit project

which could be done now which would actually use oxy fuel firing

and have a truly capture-ready plant because capture-ready ought

to mean that you have all the equipment on it and all you got to

do is hook up a pipeline and you are good to go with the CO2 if

that is what we decide to do.

The problem we have is that the administration’s budget and the

Department of Energy have not made this a priority. The administration’s budget has nothing in it for retrofit of coal-fired power

plants, does not address oxy fuel combustion, and we need the continued support of Congress. You have passed section 1407 of the

Energy Act of 2005 which authorized $100 million of funding for

undiluted, high-flame-temperature oxy fuel work and yet nothing

has been appropriated under that. We need the funding. We are

just a little company. We need funding from the Federal Government to bridge between the research that has been done and an

R&D retrofit project which will provide the data so that utilities,

the Government, consumers and everyone else can see what this

technology combination can do for the American public.

Thank you.

[The prepared statement of Mr. Schoenfield appears at the conclusion of the hearing.]

Mr. BOUCHER. Thank you, Mr. Schoenfield.

Mr. Dalton.

49

STATEMENT OF STU DALTON, ELECTRIC POWER RESEARCH

INSTITUTE, PALO ALTO, CA

Mr. DALTON. Thank you, Mr. Chairman and members of the subcommittee. I am Stu Dalton. I am the director of generation for the

Electric Power Research Institute headquartered in Palo Alto, California. EPRI appreciates the opportunity to provide testimony to

the subcommittee on the topic of carbon capture and sequestration.

We are a non-profit and collaborative R&D organization.

I plan to make the following points in the testimony today. Carbon capture technologies can feasibly be integrated into virtually

all types of new generation after the scale-up and storage is demonstrated. CO2 capture can be added to integrated gasification combined cycle to pulverized coal, and circulating fluidized bed combustion, and it can be incorporated in processes like oxy fuel combustion.

Although CO2 capture appears technically feasible for all technologies, it represents substantial engineering challenges, requiring

investments in R&D and in demonstrations, and it comes at considerable cost. Analysis by EPRI and the Coal Utilization Research

Council suggests that once the substantial RD & D investments are

made, the cost of capture and storage becomes manageable. Geologic storage has been proven effective by nature, and evidence suggests that depleted oil and gas reservoirs and similar capped sandstone formations as has been discussed containing saltwater and

nonpotable water, have been capable of storing CO2 for millennia

or longer. Licensing and regulatory requirements for these are uncertain, however.

There is still much work to be done before CO2 storage can be

implemented on a large scale enough to significantly reduce CO2

emissions into the atmosphere. Regarding CO2 capture, the technologies can feasibly be integrated into all types of power plants

with integrated gasification, pulverized coal and fluidized bed and

variance. We believe that several will need to be demonstrated at

large scale and CO2 stored to prove the technology. For those building new plants, it is unclear which type of plant would be economically preferred if built to include CO2 capture. All may have relative competitive advantages under various scenarios based on

available coal types, plant capacity, location and opportunities for

byproduct sales.

Although CO2 capture appears technically feasible for all these

technologies, there are substantial challenges requiring scale-up in

size and major investments. Analysis by EPRI and the Coal Utilization Research Council suggests that once these are made, the

cost can come down to approximate the current cost of electricity

in constant dollars. That is a long-term prospect. It is not today’s

situation.

Where is it now? Post-combustion CO2 separation processes

placed after the boiler in the power plant are currently used commercially in very small-scale food and beverage and chemical industries, literally to make the CO2 for soda pop, for freezing chickens and to make sodium bicarbonate. Those are actual installations. They are very small, much smaller than needed for power

plants producing large-scale power. Current post-combustion procVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
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esses are large energy consumers and could reduce the power plant

electrical output by 30 percent.

CO2 separation processes for IGCC plants are also used commercially in the oil and gas and chemical industries at a scale closer

to that ultimately needed and they use less energy than current

post-combustion processes, but their application necessitates development of modified systems with integrated CO2 capture. EPRI’s

most recent cost estimates suggest that for pulverized-coal plants,

the addition of CO2 capture using the currently most developed

technical option would add about 60 to 80 percent to the wholesale

cost of electricity in life cycle terms. That is not including any storage site monitoring, liability insurance, et cetera, which is unknown at this point. The current cost premium for CO2 capture in

IGCC plants along with drying compression and storage is about

40 or 50 percent in our estimation. This is a lower cost percentage

increase than for PC plants but we estimate that IGCC plants initially cost more than PC plants, as you have heard testimony.

Thus, the bottom-line cost to consumers for power from IGCC

plants today is likely to be comparable to PC plants with capture.

The cost premiums listed vary depending on the coals and the

physical chemical properties, desired plant size, CO2 capture process and degree of integration and plant elevation and the value of

co-products. IGCC often shows economic advantages with bituminous coals such as in the State of Virginia, and PC often shows

advantages to low-rank coals, as you can see in some of the western coals.

EPRI stresses that no single advanced technology has clear-cut

economic advantages across all applications. The best strategy for

meeting future needs while addressing climate change concerns

and economic impact lies in developing several options to allow

choice by the power producers.

Let me just briefly mention a couple of the R&D——

Mr. BOUCHER. Well, why don’t we ask you those questions. You

are about a minute over, and we do need to move forward, so I intend to ask you about R&D requirements going forward. That is

question No. 3 I have listed here.

[The prepared statement of Mr. Dalton appears at the conclusion

of the hearing.]

Mr. Stewart.

STATEMENT OF JAY B. STEWART, ATTORNEY, HANCE SCARBOROUGH WRIGHT WOODWARD & WEISBART, LLP, AUSTIN,

TX

Mr. STEWART. Thank you, Mr. Chairman and members of the

committee. Thank you for the opportunity to discuss with you

today the State of Texas’s experience with legal issues regarding

injection and storage of carbon dioxide.

For the record, my name is Jay Stewart. I am an attorney who

practices regulatory law in Austin, Texas. As part of my practice,

I represent entities and individuals before the Railroad Commission of Texas and the Texas Commission on Environmental Quality

regarding oil and gas and injection activities. I have also been retained to work with the FutureGen Texas team regarding the

State’s efforts to site a clean-coal project in Texas.

51

I come before you today to discuss the Texas experience with CO2

injection and the existing and prospective regulatory framework

necessary to ensure successful and secure geologic sequestration of

CO2. Evaluating and licensing CO2 injection in Texas has a regulatory track record that spans back more than 30 years. The prolific Permian basin in West Texas began utilizing CO2 injection as

a recovery technology in 1973. Once the traditional extraction of oil

and gas has exhausted itself, secondary and tertiary recovery technologies are used to extract the vast remaining reserves. Recent

data indicates that up to 70 licensed enhanced oil recovery projects

utilizing CO2 were in operation in the Permian basin of West Texas

alone. Over 5,800 wells have reported injection of CO2 with a total

injection of 25 million metric tons per year. It is estimated that

more than 55 million barrels of annual crude oil production resulted from these enhanced recovery efforts. With more than 30

years of history of using CO2 as a commodity for oil recovery, these

operations have a safety record of no major accidents.

From a legal, regulatory and engineering standpoint, CO2 injection into geologic formations for productive use is nothing new in

Texas. The developed regulatory framework exists to evaluate and

judge each and every project. The Railroad Commission of Texas

regulates injection of water and CO2 for enhanced oil recovery operations. It also has decades of evaluating and regulating the common practice of brine and oil and gas waste injection into geologic

formations, ensuring that those formations are not productive of oil

and gas and they do not contain usable groundwater. The Texas

Commission on Environmental Quality regulates injection of nonhazardous waste, hazardous waste and experimental wells. Both

these agencies have experienced staff that routinely judge the

available technologies for injection and geologic evaluation. It is

only after these experts have approved an injection project that a

project license is allowed to proceed.

Acknowledging the experience in oil and gas and geologic evaluation of both the State’s regulators and its industry, Texas courts

have consistently developed case law that clearly delineates the liability of the actors and the neighbors of these projects. Evaluation

of legal liability rests primarily in the common law. Liability for

negligence or malfeasance in the construction and operation of a facility utilized for capture and injection of CO2 would rest in traditional tort law causes of action. There is no liability forgiveness for

bad actors that operate negligently. Legal challenges to the activity

of injection, however, have been thoroughly adjudicated in Texas

and those causes of actions are limited under the common law. Actions for trespass, nuisance and negligence are severely limited in

Texas so long as the operator has a valid license from the State

agency and that operator has acted in accordance with the license

and applicable regulations. Texas has adjudicated the public policy

implications of injection activities within its borders and has consistently ruled with the State agencies charged with enforcing

those requirements.

I have discussed the legal treatment of liability in Texas to the

practice of injection of CO2 and its use under existing regulatory

framework. Carbon sequestration intended to be permanent adds a

significant new component to the legal analysis. Liability for the

52

unlikely possibilities of release or migration of sequestered CO2

that could occur well beyond the time frames that are occasioned

by present operations should be evaluated. Proper geologic and

technical considerations are the first requirements to avoid possible

liability for long-term events. Carbon sequestration into proven,

confined geologic formations is paramount. Proposed storage of CO2

in depleted oil and gas formations, deep saline formations, salt caverns and unminable coal beds all have containment and absorption

characteristics that minimize the possibilities of any release or migration. Before a license is granted, the operator must prove to the

agency experts the radius of influence or plume that the injected

material will form in the injection formation. The pressures of the

injection and of the injection formation must be shown to be compatible with what is being injected and permanently stored. Thorough evaluation and study of the injection proposal and target formation is the first and foremost check on potential future liability

of permanent geologic storage of carbon. As with any good legal

analysis, the lawyer must then ask the question, ‘‘but what if’’. In

Texas, we answered this question by passing into law a transfer of

ownership of the CO2 from the FutureGen facility to the State of

Texas. Acknowledging the goal of permanence of carbon sequestration, the permanence of the State is the only entity that can provide the necessary notice and monitoring beyond what one could

expect in a private entity’s life span. The State is protected by the

principles of sovereign immunity while it cares for the injected

CO2, that is, by State law, its property and responsibility.

Finally, I would like to add that many States including Texas

through a task force of the Interstate Oil and Gas Compact Commission are very far along in developing a model legal and regulatory framework for the geologic storage of CO2. I understand that

the IOGCC hopes to have published within a year a guidance document for States which includes this model framework.

I have attached a legal brief discussing in more detail my testimony regarding applicable law and ask that it be entered into the

record. Thank you, sir.

[The prepared statement of Mr. Stewart appears at the conclusion of the hearing.]

Mr. BOUCHER. Thank you, Mr. Stewart, and thanks to all of the

witnesses for joining us here today.

I am going to defer to Mr. Hastert for his questions. He has a

very important meeting at 1:00 and I am going to recognize him

first for 5 minutes.

Mr. HASTERT. I thank the chairman for his courtesy.

Mr. Schoenfield, I listened to your testimony and I think maybe

what I heard isn’t what you meant. I just want to clarify that. You

made a statement that says if you don’t burn the fuel—I am kind

of summarizing— you don’t produce the effluent. It is not the fuel,

it is the combined air, right?

Mr. SCHOENFIELD. Well, whenever you burn fuel, even if you

don’t have air in there, you are going to produce CO2. That is why

with even oxy fuel firing, you do produce CO2, Congressman

Hastert. So it is the fuel reduction. In other words, there is a oneto-one relationship. If you don’t burn the fuel, you are not going to

make the CO2.

53

Mr. HASTERT. All right. Fine. Then let me go back on that. When

you burn this fuel with oxygen, the next step is, how do you get

the oxygen? Do you separate the oxygen from the air on site or——

Mr. SCHOENFIELD. We would recommend separating the air from

the oxygen on site although there are pipelines that produce oxygen.

Mr. HASTERT. If you do it on site, then in a sense you sequester

CO2 at the same time, right?

Mr. SCHOENFIELD. Well, air is 79 percent nitrogen, 21 percent

roughly of oxygen, so you are not sequestering the CO2. What you

have is, you are separating it into oxygen and then you have a nitrogen byproduct which is actually salable in parts of the country

as well.

Mr. HASTERT. What happens with the CO2 that is in there?

Mr. SCHOENFIELD. Well, you don’t start out with CO2. The CO2

is a product of combustion, so——

Mr. HASTERT. So there is no CO2 in the air prior?

Mr. SCHOENFIELD. Well, you have some but the amount of CO2

in the air, parts per million, is very, very small, as has been discussed, so there is some CO2 in there but——

Mr. HASTERT. But it is not worth trying to segregate that?

Mr. SCHOENFIELD. It is not worth trying to segregate that, no.

Mr. HASTERT. OK. Now, when you burn this oxygen in these

burners and you said you can retrofit, I would think if you burn

something with air, that is one degree of burning and efficiency

and heat. When you put pure oxygen in there, you are really kicking up the heat, aren’t you?

Mr. SCHOENFIELD. Absolutely, sir.

Mr. HASTERT. Will that be a danger of melting these boilers? I

mean, can you really retrofit these things?

Mr. SCHOENFIELD. We have done it successfully at that halfmegawatt level with a 1973 Keeler D boiler. What you have to do

is, you have to shape the flame properly, make sure the space is

proper, cut back the amount of fuel so that the amount of energy

that enters the water walls is exactly the same amount of energy

as there was with air firing.

Mr. HASTERT. So in a sense you are using less fuel and creating

the same amount of energy?

Mr. SCHOENFIELD. Yes, sir.

Mr. HASTERT. Then when you do this, you are having air come

in and you still have CO2, you go through that process. Do you get

less CO2 than you would—what I am getting at, when you bring

air in and you blow air in here and you burn the fire, you are really just burning the oxygen out of the air, right?

Mr. SCHOENFIELD. Yes, sir.

Mr. HASTERT. And all the rest of this effluent and a lot of the

effluent is the mass of air which happens to be nitrogen and other

things that are going up the stack and so if you are trying to get

this CO2 out of there, you have a lot of air moving through and

again the CO2 is a very small amount of what you are trying to

extract from that stack of effluent. Is that correct?

Mr. SCHOENFIELD. Yes. With oxy fuel firing, you don’t have to

separate out the nitrogen at the end. The flue gas stream is approximately 20 to 25 percent of what it would be with air firing.

54

Mr. HASTERT. And so are you saying the efficiency there, you are

still trying to get the CO2 out of the flue gas stream?

Mr. SCHOENFIELD. Well, you basically can compress it at that

stage depending on the grade you need, whether you have to remove sulfur or other things for food processing or other requirements but basically you have a pretty relatively pure CO2 stream

at that stage.

Mr. HASTERT. All right. That is helpful. Thank you.

The gentleman from Texas, Mr. Stewart. When you inject CO2

into the ground whether it is an old coal mine, whether it is forest

rock, whether it is saline solutions or saltwater, do you change the

physical nature of the host in any way?

Mr. STEWART. The CO2 is absorbed so yes, but also whatever you

are injecting the CO2 into, it binds up the CO2 so it doesn’t become

a new substance. It is a combination of whatever the two——

Mr. HASTERT. Otherwise you are not creating saltwater into

some kind of acid or something?

Mr. STEWART. No, sir.

Mr. HASTERT. Thank you.

Thank you, Mr. Chairman.

Mr. BOUCHER. Thank you very much, Mr. Hastert.

Mr. Dalton, let us go back to where we were with you. You wanted to talk about the research needs and I want to ask you about

that. It has been suggested that something on the order of $11 billion might be required in research funding over approximately the

next decade if we are to achieve within somewhat more than a decade reliable separation and storage technology. Is that the right

number or is there a different number?

Mr. DALTON. Thank you, Mr. Chairman. Mr. Chairman, I believe

that number represents the portfolio of work that was outlined by

the Coal Utilization Research Council and EPRI as a combined set

of efforts, not just the CO2 capture and storage work, but that is

a significant part of that. There are elements of that work that relate to almost every one of the technologies we have heard talked

about here—combustion work, oxy-fuel, gasification and also the

CO2 capture. It is putting the integrated system together that really makes it all work. In the written submission, I do have two

graphics and they show both the efficiency increase with time

against a series of time and cost decrease for both combustion technologies and for the gasification technologies. We believe both will

improve with time and learning.

Mr. BOUCHER. And you have numbers associated with the research requirements for that?

Mr. DALTON. Yes, sir. There are numbers associated with each of

the elements in the EPRI/Coal Utilization Research Council integrated plan.

Mr. BOUCHER. Thank you.

I would like to pose to the entire panel some questions regarding

time frames upon which we can expect the arrival of reliable technologies both for separation for capture of CO2 and also as a separate matter for storage of CO2. Let me start with capture and talk

about initially integrated gasification combined cycle.

I understand, Mr. Lowe, that from your testimony you believe

that technology to be available today. First of all, is it in fact availVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
55

able today? Second, at what cost in comparison to a pulverized-coal

facility, and for purposes of that comparison, would this be using

IGCC without the separation technology as compared to a pulverized-coal facility also without any sort of control technology for

CO2?

Mr. LOWE. OK. First of all, yes, this technology is available today

with IGCC. There are 25 gasification facilities operating around

the world that separate CO2 because that CO2 is valuable in a

number of processes.

Mr. BOUCHER. Well, what I am looking for immediately in the

first set of questions is, just the availability of IGCC without CO2

capture added to it, and the cost of that in comparison to today’s

generation of pulverized-coal plants. I understand it is more costly.

Mr. LOWE. Yes. As I indicated, the estimate today is that IGCC

is approximately 20 to 25 percent more expensive in capital costs.

Mr. BOUCHER. Now, how many IGCC units will have to be built

before you have comparable costs for IGCC and pulverized coal? I

understand after perhaps a dozen of these you reach that point. Is

that accurate?

Mr. LOWE. We would estimate that after a dozen of units you

could end up shrinking that premium by at least half so it would

be down to a maximum of 10 percent premium.

Mr. BOUCHER. Now, how much does adding the carbon separation component increase the IGCC cost?

Mr. LOWE. As I referenced in a DOE study that was done, the

indication was that the cost of electricity, the cost coming out of the

plant, would go up about 25 percent, and that was the same range

that DOE referenced.

Mr. BOUCHER. Mr. Fees, would you like to comment on your postcombustion separation technology where you take CO2 out of the

flue gas?

Mr. FEES. Well, I think there is two ways to think about this.

One is with oxy firing. There is no separate separation technology.

So what you have is, you have a pure stream of carbon dioxide that

comes out the backside that is ready for injection and/or other purposes. So there isn’t an incremental cost beyond the cost to deploy

that technology.

Mr. BOUCHER. And your technology is based on oxy firing?

Mr. FEES. On oxy firing.

Mr. BOUCHER. That is the same way that Mr. Schoenfield’s technology is?

Mr. FEES. It is different. We generate something that resembles

ambient air and in ambient you have 20 percent oxygen and 80

percent of other things.

Mr. BOUCHER. OK. Well, without diving into the technical differences, what is the cost of your oxy firing technology in comparison with the cost of IGCC with carbon separation? Can you make

that comparison?

Mr. FEES. Around 35 to 40 percent.

Mr. BOUCHER. Yours is more costly than the IGCC with carbon

separation?

Mr. FEES. Yes. However, if you take a look at pulverized coal

without oxygen firing with separation on the back end, there are

a lot of studies that compare those in many ways and right now

56

with the lack of development of commercial scale in either of those

circumstances, right now looking at their future, it looks like about

a wash.

Mr. BOUCHER. Mr. Lowe, when will we see commercial availability of IGCC with carbon separation? When do you think that date

arrives?

Mr. LOWE. There was a question earlier by Ms. Harman from

California regarding the BP project out in Carson, California, and

this is a project that utilizes petroleum coke instead of coal and an

IGCC process. The carbon is separated and the carbon will be put

into a pipeline for use in enhanced oil recovery, and GE and BP

have done initial design on that plan with an expected commercial

operation date of 2011.

Mr. BOUCHER. I am going to ask about storage in a second round

of questions to this panel.

I am now pleased to recognize for 5 minutes Mr. Hall.

Mr. HALL. I yield to the former chairman of Energy and Commerce, showing my good judgment to Mr. Barton for my time.

Mr. BARTON. I normally wouldn’t even mind but I am supposed

to managing the OBJ bill on the floor right now, so I appreciate

Mr. Hall’s yielding to me.

I have a confession to make before I get into my questions. It is

going to hurt my reputation I know, especially with my friends in

the environmental community, but I have long been a supporter of

carbon capture in the form of the FutureGen project. I also happen

to support the development of many of these technologies that you

gentlemen are talking about today and I put my money where my

mouth is back in the Energy Policy Act of 2005 and we made sure

that we authorized, which is all a committee like ours can do, we

can’t appropriate but we authorized specific sums of money in the

hundreds of millions and in some cases the billions of dollars to develop these technologies. So I am not quite the stick in the mud

maybe that I am portrayed to be. I do think there ought to be a

cost-benefit test to this technology because that is ultimately what

the ratepayers and the consumers have to pay.

My first question goes to a statement that Mr. Dalton made.

Does everybody on the panel generally accept that whichever these

technologies we decide to adopt, that in the beginning there is

going to be a substantial premium in terms of plant construction?

The EPRI gentleman said 60 to 80 percent. Does everybody accept

that it is going to cost more? Mr. Schoenfield is shaking his head

no. Your retrofit technology won’t cost more?

Mr. SCHOENFIELD. No, sir. I mean, the retrofit technology when

we project, for example, at 400 megawatts, is $170 million to fully

retrofit NOx, SOx, particulates, CO2, mercury, everything, and at

$180 a kilowatt or $1,600 a kilowatt, you are talking about new

plants at $640 million to $720 million so retrofitting is less.

Mr. BARTON. Your retrofit is about a 25 percent.

Mr. SCHOENFIELD. Right. On a new build plant against present

technology which doesn’t capture CO2, doesn’t address the rest of

the pollutants the same way, the projections we made with the Albany research group of the National Energy Technology Lab had

us in the same ballpark as present costs, that is, around 1.7 cents

57

a kilowatt production cost and about 5.1 cents a kilowatt fully loaded and amortized capital costs.

Mr. BARTON. Well, the chairman indicated in his first round of

questions, he was concerned about the cost. I too am concerned

about the costs. I don’t think this is a free lunch that we can technology our way to no cost increase to our rate consumers although

I do think over time as the learning curve comes down that we can

hopefully minimize that cost.

Mr. Hawkins, we are glad to have you back. You are certainly

one of the most distinguished leaders in the environmental community and also, in my opinion, one of the most commonsense ones,

which may mean you are the only one that shows any common

sense, but that is just a personal opinion of mine. Were you involved at all with the TXU proposal for the coal-fired power plants

down in Texas?

Mr. HAWKINS. Yes, Mr. Barton.

Mr. BARTON. OK. What technology were they proposing to use in

their plants?

Mr. HAWKINS. They proposed 11 plants initially, all of them

using pulverized-coal technology.

Mr. BARTON. Some sort of, as I understood it, supercritical combustion cycle that would reduce emissions. Is that correct or incorrect?

Mr. HAWKINS. Some of them were proposed as supercritical units,

which means a higher operating pressure and a slightly higher efficiency.

Mr. BARTON. But they did not propose the use of the Babcock

and Wilcox IGCC. Is that correct?

Mr. HAWKINS. They didn’t propose to use the Babcock and Wilcox

oxy-fuel technology nor IGCC.

Mr. BARTON. Or the GE.

So the environmental community just didn’t believe that their

plants would operate at the reduced emissions level. Is that fair to

say?

Mr. HAWKINS. The opposition to those plants had to do with both

the conventional pollutants as well as carbon dioxide and the modest reductions in carbon dioxide from a slightly more efficient plant

still meant that you would be building a new plant that would have

somewhere like 80 to 85 percent of the same plants that our grandfathers built and so that is not seen as acceptable progress.

Mr. BARTON. There is not a requirement that you build plants for

laws that haven’t been passed yet, is there?

Mr. HAWKINS. Well, in this area, Mr. Barton, the laws are lagging common sense and common sense in the business community

are actually getting out ahead of the laws and we hope with the

efforts of this committee that you will catch up soon.

Mr. BARTON. Well, I hope that we get a dose of common sense

at some point in this process because I too am an industrial engineer and have a master’s degree in various things like the Babcock

and Wilcox gentleman. We were taught that you base decisions

based on facts, not on theories, and it is yet to be proven to me that

CO2 is the cause of all the catastrophic things that is has been accused of. As these hearings go forward, we will have a chance to

58

get some of those scientists before us and hopefully get some of

that information out on the table.

My time has expired, Mr. Chairman. I appreciate your courtesy.

Mr. BOUCHER. Thank you very much, Mr. Barton.

Mr. Inslee for 5 minutes.

Mr. INSLEE. Mr. Barton had pointed out earlier that humans are

responsible, I think he uses the figure of 5 percent of the total CO2

emissions into the atmosphere, and one of my colleagues asked me

about that and I have heard numbers in that ballpark, and that

seems like no big deal but I want to ask about that. That is a 5

percent increase over what would have happened had we not had

an industrial revolution basically and 5 percent doesn’t sound like

much but I was thinking, if I weigh 200 pounds, which is close, and

I gain 5 percent weight a year, cumulative putting it into the atmosphere in my waist line, I would weigh over 400 pounds on 20

years. Now, I think that is kind of analogous to the situation we

have here where we are headed to at least twice CO2 pre-industrial

levels. That seems to be the target we are all trying to stop it at.

Mr. Hawkins, is that sort of a fair metaphor to this discussion?

Mr. HAWKINS. Thank you, Congressman. Actually the 5 percent

number is a very misleading number. The oceans and the terrestrial systems—trees—release CO2 into the atmosphere. That is correct. But that same CO2 is taken out of the atmosphere by the

same sources. So until we started mining fossil fuels a couple of

hundred years ago in significant quantities, the net emissions to

the atmosphere were zero. Just as much goes in as comes out. So

if the question is what are the actual net emissions to the atmosphere caused by human beings, it is 100 percent, sir.

Mr. INSLEE. And we are heading to double pre-industrial levels

by the end of the century. Is that our best estimate?

Mr. HAWKINS. We are headed to double pre-industrial levels by

about 2035 at the current pace.

Mr. INSLEE. And I am very glad you seven people—I compare you

to the Mercury Seven astronauts. I think you are heroes in trying

to figure out what to do about this because we have got to reduce

levels by probably on the order of 70 to 80 percent to be able to

get down to stop it. Even to stop it at double levels, we have got

to that level of reduction. So this technology is incredibly important.

I want to ask Mr. Fees and Mr. Lowe, I have this concern that

we are going to allow what I will just call dirty-coal plants with

no sequestration technology to be built in the next decade and lock

ourselves in to another horrendous amount of CO2, and I am just

wondering what you can advise us as to what we can realistically

do to insist that we in the plants as they go forward to embrace

this technology to not allow another 50 years of dirty coal to get

locked in. What can we do realistically in that regard?

Mr. LOWE. What I think we need to do, as I indicated in my testimony, is without some kind of policy that ends up putting a value

on carbon, that is exactly what is going to happen, and what we

think is a very strong approach would be a cap and trade approach

for CO2. Mr. FEES. I believe there is a timing issue in play. There is a

timing issue of what is available in the technology and what can

59

be done versus when we would like to get it deployed. If we start

making short-term requirements, we might not have all the technology to get there and it may get into fuel-switching issues on a

local basis that may affect economies and may affect us nationally.

If you take a look at the technologies that are being developed, I

think they are all good. I think it would be a cheap marketing ploy

for me to try to talk about IGCC versus pulverized coal because

they both have a chance and they have an equal chance under

where things are going, and we are going to invest in excess of $40

million of our money into R&D this year looking at how we can improve pulverized coal and how we can capture CO2 on the back

end. And the thing that I am trying to get to there is, I think this

body, it is very important that they have an unbiased approach relative to technology because I think it would limit what we might

accomplish.

Mr. INSLEE. Mr. Friedmann, I want to ask you about sort of projections. You made some projections about cost, and I wrote down

one figure, either 21 or 25 percent more with sequestration, but

does that take into consideration some of the projected improvements in efficiencies? There is a company called RamGen out in

Washington State that has a compression technology they have

told me they think they can reduce capital costs by 30 percent and

deal with some of the heat issues to actually put heat to use.

Mr. FRIEDMANN. I am actually familiar with RamGen and I am

familiar with other novel compression strategies that people are

trying. Those were not included in my cost estimates. Conventionally, the way that our community handles things is, we put capture

the separation piece, transportation, construction of pipelines and

shipping and the compression, all of those costs get integrated into

what we call the capture half; and then there is the storage half

when you basically go from the well head down, and those were the

costs I had talked about.

Mr. INSLEE. Mr. Chairman, would you indulge me one more

question? I am over my time.

Mr. BOUCHER. Sure.

Mr. INSLEE. Thank you. I appreciate that.

Could you give us some estimate of the existing coal plants

where they are located today, what percentage of them have a good

chance of having geology that would allow sequestration within

whatever X miles we think transportation will work out? Is there

any estimate you can give us today in that regard?

Mr. FRIEDMANN. It is very well documented that coal basins,

which is where coal plants tend to be built, are highly prospective

places to store CO2. The geology works well in terms of saline

aquifers, depleted oil and gas fields and coal seams, and all of them

occur generally in abundance where you have a lot of coal. So the

chance of finding within, say, 150 kilometers or 200 kilometers of

a power plant a good sequestration site is extremely high.

Mr. INSLEE. Thank you.

Mr. BOUCHER. Thank you very much.

Mr. Hall for 5 minutes.

Mr. HALL. Mr. Chairman, thank you.

Mr. Dalton almost answered the question I have when he said

all systems had to be put together if they are going to work, and

60

Speaker Hastert entered into a little bit about the cost and of

course you have to consider cost on everything because that is

going to be the final determination as to what is selected and how

well it works.

But Mr. Schoenfield, you addressed the issue of oxy-fuel in your

testimony and it has been kicked around here pretty well. I know

this committee heard testimony last year from MIT, I believe it

was a Dr. Katzer from MIT gave some testimony to Energy and Air

Quality Subcommittee on clean coal technology. I don’t know if you

were here and heard his testimony or have read it, but he gave testimony about the relative cost of various clean coal technologies.

Can you be more specific about the cost of oxy-fuel relative to other

technologies that we would have to compare them with?

Mr. SCHOENFIELD. I am familiar with the testimony, Congressman. I have also spoken to Professor Katzer. I think the presentation at MIT had to do much like EPRI’s with taking technologies

that they consider more conventional levels and analyzing those,

and I think their conclusion was that at this point there is not

enough known to have a clear cost winner. So we have done our

projections based on the testing today as I stated with those numbers and those I find it hard to compare because I am not sure

what reliable numbers there are on some of these other technologies either, just like Professor Katzer stated in his testimony.

Mr. HALL. Has DOE given any priority to having an actual retrofit with oxy-fuel on the grid so everybody can see how it really

works?

Mr. SCHOENFIELD. No, sir, and it has been very frustrating since

part of the technology is their own technology developed by their

lab.

Mr. HALL. In regard to their IPR system, explain why it works

with your oxy-fuel technology.

Mr. SCHOENFIELD. Yes, sir. Because there is no nitrogen to separate out and because there is less fuel used and there is less CO2,

their system can be smaller, more efficient, more economical. What

it basically does is compress that CO2. It has a series of wet and

dry heat exchangers to capture latent heat. It has filters to take

out the mercury and sulfur and the particulate and in the end you

get a CO2 stream that is as pure as you need it, depending on

whether you are doing food processing, enhanced oil recovery or

just plain old sequestration.

Mr. HALL. I thank you.

I yielded my time to Mr. Barton, and there are others to make

some inquiries, and it is a little past noon so I will yield back my

time, Mr. Chairman.

Mr. BOUCHER. Thank you very much, Mr. Hall.

Mr. Dingell for 5 minutes.

Mr. DINGELL. Thank you very much for your kindness.

Gentlemen, as you have all observed in your testimony, there are

a number of questions needing to be answered. The Department of

Energy’s witness has testified earlier that the goal of DOE’s carbon

sequestration program is for commercial deployment by 2012 of

capture technologies that achieve 90 percent CO2 capture at less

than a 10 percent increase in the costs of the energy. Now, starting

61

with Mr. Stewart, if you please, gentlemen, is that an achievable

goal, yes or no?

Mr. STEWART. Mr. Chairman, I can’t opine on the technology because I am not that experienced with it but I can tell you in Texas,

we have an established regulatory framework where we can today

permit at least the FutureGen project for sequestration. That does

not achieve your 90 percent goal, no, sir, but there is our experience and the regulatory framework and the experience of regulators does exist today to accomplish that.

Mr. DINGELL. Thank you.

Mr. Dalton?

Mr. DALTON. Technology can be built by that date but it will not

have established the long-term storage and the safety of that storage at that point.

Mr. DINGELL. Alright.

Our next witness?

Mr. SCHOENFIELD. Congressman, the retrofit project for oxy-fuel

technology that has been started can be completed in 18 to 24

months. It will require about 6 to 12 months of data collection and

then some dissemination of data, and assuming it works based on

the projections and the testing to date, it would then be ready for

deployment.

Mr. DINGELL. You said assuming it works.

Mr. SCHOENFIELD. Right. We are confident it will work, sir, but

I can’t sit here until it works to say for 100 percent certainty. I am

100 percent certain but I would say assuming because that is how

it has been presented when we have conversations with the DOE.

Mr. DINGELL. Thank you.

Our next witness, please, sir.

Mr. FRIEDMANN. The most outstanding questions associated with

deployment of storage technology can be answered with a handful

of large tests quickly. Currently, within the DOE’s program, they

are trying to accelerate some of those steps. That is one pathway

towards doing that. I think there are many ways that one could accelerate the deployment of large tests to provide the information

needed to operators and to regulators to develop standards.

Mr. DINGELL. Next witness, please, sir?

Mr. LOWE. Yes. I think that as I indicated, carbon capture technology will be demonstrated in 2011 at Carson for IGCC and I

think that it is entirely likely that we are going to see costs going

down both for the capture of carbon and also the sequestering of

it in something like saline aquifers going forward.

Mr. DINGELL. Thank you.

Mr. Hawkins.

Mr. HAWKINS. Thank you, Mr. Chairman. The performance goals

in the DOE program are already demonstrated. I mean, cost goals

can be achieved but not by the DOE program alone. To achieve

those costs, you need to engage the private sector. To do that, you

need the power of emission limits to move this forward at a required pace.

Mr. DINGELL. Last witness, please.

Mr. FEES. Yes, and if you take a look at it, we believe that what

is underway at DOE will work. However, our concern is that it will

not be enough, that the combustion technologies will be there much

62

earlier and a broader-based deployment of the combustion technologies may be limited by the availability of storage, and that is

our concern, that we may actually limit our ability to deploy new

plants with the new technologies because we won’t have anywhere

to put the CO2.

Mr. DINGELL. Now, gentlemen, I have so little time. It is so very

hard to do this and I have to verge on discourtesy here. If you

would, please, yes or no to this question. Will it be possible to deploy the leading CO2 capture technologies in the U.S. at a cost that

isn’t significantly going to increase the retail price of electricity and

if adoption of a carbon-constraint policy is speeded up, will that

help if we do that?

If you please, Mr. Stewart?

Mr. STEWART. It will increase the cost but a government policy

from the Federal Government certainly would inspire and order industry to respond.

Mr. DINGELL. Next witness, please, sir?

Mr. DALTON. I believe it will increase the cost but firm policies

on storage particularly would help.

Mr. DINGELL. Sir?

Mr. SCHOENFIELD. Our projections are that the cost of capture

can remain approximately the same as the cost of electricity today.

Mr. DINGELL. Same, sir, please?

Mr. FRIEDMANN. From a technical basis, the cost of storage will

be a very small component of the total aggregate cost of electricity.

Mr. DINGELL. Next witness, please, sir?

Mr. LOWE. Yes, there will be an increase initially in the cost of

electricity but with a carbon policy, we are going to see a stimulation of new technologies coming forward that will end up reducing

that cost.

Mr. DINGELL. Mr. Hawkins?

Mr. HAWKINS. Yes, the cost increase can be modest and yes, policies are needed to make it happen.

Mr. DINGELL. Sir?

Mr. FEES. It will cost more. Our R&D objective is to try to limit

that cost below 20 percent, and a policy would certainly stimulate

more development in R&D.

Mr. DINGELL. Thank you, gentlemen.

Mr. Chairman, I note that my time has expired. I have some

more questions but I thank you for your courtesy.

Mr. BOUCHER. Thank you, Chairman Dingell.

Mr. Shimkus for 5 minutes.

Mr. SHIMKUS. Thank you, Mr. Chairman.

Mr. Schoenfield, just following up on the chairman’s question,

you are not including the capture and storage of CO2 in your nonet increase in cost, are you?

Mr. SCHOENFIELD. I am including the capture——

Mr. SHIMKUS. But not storage?

Mr. SCHOENFIELD. But not storage or transport.

Mr. SHIMKUS. Because there is going to be a cost increase. Everybody needs to get prepared for that, and the question is how much.

Marginal? What is marginal? Twenty percent, 10 percent? Those

are things that will have to be addressed as we move this forward.

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Mr. Lowe, I appreciate this. I have been trying to understand,

and I visited a lot of plants in pulverized coal and IGCC, but Mr.

Schoenfield, your Jupiter oxygen would be kind of in between,

would it not? It is retrofitting pulverized coal plants with oxygen

to get a better return and the ability to capture the emittents and

then sequester them. Is that correct?

Mr. SCHOENFIELD. That is correct.

Mr. SHIMKUS. Can I ask, we addressed this in the EPAC bill in

2005 in section 1407. How are you using the funds that have been

provided by Congress in your rollout here?

Mr. SCHOENFIELD. Well, so far, Congressman, we have received

only the first $10,000 of 2005 money because since this is not a priority, it has been a very slow process to get through all the levels

of paperwork and everything else. We have received none of the

2006 money yet.

Mr. SHIMKUS. That is why I always talk to people who are coming to us for help because we are not really reliable partners in the

funding stream in the world in capital risk and deployment, and

I am sorry to hear that. We are trying to do our best to work with

DOE. So DOE in essence hasn’t been helpful with respect to the

EPAC legislation in that section yet?

Mr. SCHOENFIELD. They have not made it a priority, and in that

sense, that is correct.

Mr. SHIMKUS. Maybe I can ask our chairman to help me readdress the Department of Energy on this section.

Mr. BOUCHER. Yes. Well, let me just respond to the gentleman

by saying that we had Mr. Shope here earlier and he did not talk

about the loan guarantee provisions, which have been a major

source of discouragement for some of the applicants but the gentleman is right in saying that full partnership with DOE is going

to be necessary in order to achieve the goals we are discussing here

today.

Mr. SHIMKUS. Thank you.

Mr. Hawkins, I think your organization has said you want IGCC

with carbon sequestration. Is that correct?

Mr. HAWKINS. We want coal plants to meet CO2 performance

standards that can be achieved with CO2 capture. We don’t care

what the technology is to turn coal into electricity.

Mr. SHIMKUS. But you are really empowering this sequestration

issue in this debate.

Mr. HAWKINS. We believe that continuing coal use makes it essential to do CO2 capture and storage.

Mr. SHIMKUS. And you are still a supporter of using coal for electricity generation in this country, are you not?

Mr. HAWKINS. We think it is a fact of life that a lot of coal will

be used for a long period of time.

Mr. SHIMKUS. Do you also support nuclear power?

Mr. HAWKINS. Our position on nuclear power is that if there is

a level playing field and we get rid of some of the subsidies in current law, if we address the waste issue and if we address the nuclear proliferation risks, then it should play a role.

Mr. SHIMKUS. Wow. All right. Let me ask you about the permitting and transportation of carbon dioxide. Under what cirVerDate 11-SEP-98 11:27 May 28, 2008 Jkt 000000 PO 00000 Frm 00068 Fmt 6633 Sfmt 6633 Q:\DOCS\110-12 SCOM1 PsN: SCOM1
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cumstances would you support or oppose any transportation or sequestration issues?

Mr. HAWKINS. We think that the regulatory system to cover

transportation is already in place. Pipeline transportation regulations apply to existing commercial pipelines.

Mr. SHIMKUS. Have you ever opposed transportation and siting

of carbon dioxide sequestration projects in the country?

Mr. HAWKINS. No.

Mr. SHIMKUS. Would you support an expedited process for permitting and siting?

Mr. HAWKINS. I think an expedited process may not be the best

way to gain public confidence for a new technology. I think that a

good process that involves the affected communities is the best way

to get these technologies accepted.

Mr. SHIMKUS. I am always vague in expediting because as I said

earlier, we want to move quick but on some things we want to

move slow. Now we are saying we need to move quick but we also

hear that the Federal bureaucracy does not move quickly so once

I figure out what expedited means and if we can do it in a timely

and safe manner, then we may get a chance to visit it again. But

I understand your concerns.

Thank you, Mr. Chairman.

Mr. BOUCHER. Thank you, Mr. Chairman.

Mr. Markey for 5 minutes.

Mr. MARKEY. Thank you, Mr. Chairman.

Mr. Fees, Mr. Lowe, Mr. Schoenfield, all three of your companies

have developed new technologies that you say would allow us to

burn coal cleanly, capturing and disposing of the carbon pollution

that currently gets released into the environment. If I were an electric utility CEO and I wanted you to build one of those plants

today, could you build a 300-megawatt plant for me right now?

Mr. FEES. We are building a 300-megawatt oxy-fired plant and

we are in cooperation with Saskatchewan Power doing that today.

We have a third——

Mr. MARKEY. I could buy one right now?

Mr. FEES. Yes, sir.

Mr. MARKEY. And how much would it cost me?

Mr. FEES. It depends on the location and the coal and the development that is going on this summer.

Mr. MARKEY. Can you give me a range?

Mr. FEES. Not today.

Mr. MARKEY. Three hundred-megawatt plant?

Mr. FEES. Yes, we have a 300-megawatt plant.

Mr. MARKEY. No, I am saying, but you couldn’t give me any price

at all?

Mr. FEES. It depends on the location and the coal.

Mr. MARKEY. Mr. Lowe?

Mr. LOWE. Yes, we could build a 300-megawatt plant although

with the economies of scale, we would encourage going to approximately 600 megawatts.

Mr. MARKEY. And how much would it cost me?

Mr. LOWE. Again, that is very specific to what you have for the

location of the plant but right now approximately 20 percent more

than you have for pulverized-coal units.

65

Mr. MARKEY. OK, good, and Mr. Schoenfield?

Mr. SCHOENFIELD. Congressman, we would need to complete that

retrofit project before going up to 300 megawatts but the projected

cost based on the testing that has been done and all the firing

which are consistent for the process would indicate that the cost of

that 300-megawatt plant would be approximately the same cost it

would be to build it with conventional technology today.

Mr. MARKEY. So you are saying a plain old pulverized-coal plant

without any carbon capture or sequestration would be built for the

same prices you could build me one of these new plants right now?

Mr. SCHOENFIELD. That is what has been projected based on the

testing to date and the cost——

Mr. MARKEY. Well, let me ask the other two gentlemen. Can you

do that for me too? Could you build me the same plant for the price

of a pulverized-coal plant no matter where I am?

Mr. FEES. With carbon capture included for the same price?

Mr. MARKEY. Without any carbon capture. He just said he could

do it for me without carbon capture, same price with and without

carbon capture.

Mr. FEES. I can build a pulverized-coal plant and I do it every

day.

Mr. MARKEY. But can you do it for the same price you build one

of the new plants that would capture the carbon?

Mr. FEES. As I indicated earlier in my testimony, we thought

that our oxy fire technology which we are doing today and can be

back retrofit to existing pulverized-coal plants is about 35 to 40

percent more than the existing——

Mr. MARKEY. So it is 35 to 40 percent?

Mr. FEES. Which is about the same cost of IGCC, in our estimation.

Mr. MARKEY. And Mr. Lowe?

Mr. LOWE. Yes, I have indicated that it would be a premium versus what a non-carbon-capture plant is and IGCC with carbon capture would be about 20 percent.

Mr. MARKEY. Twenty percent. OK. And how would that compare

to the cost of building a modern combined cycle natural gas plant

to produce the same 300 or 600 megawatts?

Mr. LOWE. Any solid fuel coal plant is going to be substantially——

Mr. MARKEY. Can you give me a percent range generally?

Mr. LOWE. I would say that it is probably in the range of an additional 300 percent.

Mr. MARKEY. Three hundred percent.

Mr. Schoenfield?

Mr. SCHOENFIELD. I don’t know that range offhand but the cost

of the fuel difference makes a tremendous difference as well in the

operating costs.

Mr. MARKEY. Just give me a range.

Mr. SCHOENFIELD. I do not have the capital costs, Congressman,

on that one.

Mr. MARKEY. Mr. Fees?

Mr. FEES. You need to look at the cost of the fuel because today

they are——

66

Mr. MARKEY. We are trying to make some decisions here so factor in what you think is reasonable and give us a price comparison.

Mr. FEES. Right now today natural gas is not competitive in a

lot of markets because of the price of fuel and on a 20-year

levelized cost of electricity dollars per megawatt, pulverized coal

with CO2 capture is 62 bucks.

Mr. MARKEY. So you are saying for a CEO right now it is a rational decision to build a coal-fired plant with this new technology

as opposed to a natural-gas plant?

Mr. FEES. I think it is a rational decision to build existing technology as well as approach the new technology, yes, sir.

Mr. MARKEY. Mr. Hawkins, you heard DOE’s response to the

questions that I posed earlier regarding the potential for utilities

to exploit loopholes in the 2005 Energy Policy Act to get subsidies

for coal plants that don’t actually capture CO2 but are merely capture-capable or carbon capture- optimized. Did you find DOE’s answers reassuring?

Mr. HAWKINS. No.

Mr. MARKEY. What should we do about the loophole in the law?

Mr. HAWKINS. Well, I think in the appropriations bill, there

should be specifications that limit the appropriations authorities to

the top priority technologies which are those that actually do capture CO2.

Mr. MARKEY. Mr. Hawkins, in your testimony you say policies to

limit CO2 emissions and set performance standards are essential to

drive the use of CCD at the required scale and pace, and then you

say, however, a CO2 cap and trade program by itself may not result

in deployment of CCD systems as rapidly as we need. What sort

of performance standards do you envision in order to drive the deployment of carbon capture and sequestration technologies?

Mr. HAWKINS. Well, one that we think is quite interesting and

is in a bill introduced in the other body, it is 309, is a performance

obligation modeled on the renewable portfolio standards. It basically says that if you generate coal-fired power starting in 5 or 6

or 7 years from now, a certain small fraction of your total kilowatt

hours need to come from coal plants that meet a performance

standard.

Mr. MARKEY. And what fraction——

Mr. BOUCHER. The time of the gentleman has expired.

The Chair is going to recognize at this time the gentleman from

Texas, Mr. Burgess.

Mr. BURGESS. Thank you, Mr. Chairman.

Mr. Fees, let me just be sure that I understand this correctly. If

Mr. Markey’s 300-megawatt plant is built today but it uses natural

gas as a fuel, is carbon sequestration something that is going to

happen at that natural-gas plant as well?

Mr. FEES. We don’t build natural-gas-fired plants so I can’t really

comment on how they would capture carbon but I would think the

technologies that are being developed could be similarly applied.

Mr. BURGESS. Mr. Hawkins, is it necessary to capture the carbon

from the natural-gas plant?

Mr. HAWKINS. Eventually it will. BP is proposing to do that at

a plant that it operates in Scotland. It is going to send the CO2

under the North Sea to enhance oil recovery there.

67

Mr. BURGESS. Mr. Stewart, let me ask you, we had the Texas

Railroad commissioner up here last week and he was talking about

the FutureGen project if it were to come to Texas and he said

Texas had passed a statute taking title to carbon dioxide for that

sequestration project. Am I correct in that?

Mr. STEWART. Yes, sir.

Mr. BURGESS. Now, why did Texas do that? Were there any other

options available to the State other than simply taking title to the

CO2?

Mr. STEWART. Well, in the FutureGen process, there were multiple options promoted such as insurance and indemnification and

taking title, and what the decision makers in Texas decided was,

from a permanence standpoint, you need an entity that is going to

outlast any private entity because of the monitoring and eventual

care of the CO2 so they decided that a transfer once it has been

captured of the CO2 to the State is the best management technique

from a permanence standpoint.

Mr. BURGESS. Did they consider any other options?

Mr. STEWART. We consider all of them actually, sir.

Mr. BURGESS. Are there any situations in which that model crafted by the State of Texas would not be applicable to CO2 capture

where the State or the longest surviving Government entity were

to take title to that CO2?

Mr. STEWART. That is a public policy decision for each State or

the Federal Government to make. We thought it was the most appropriate technique to ensure against long-term liability for the

whole project.

Mr. BURGESS. Mr. Fees, is it possible to destroy carbon dioxide

rather than to have to pump it back into the Earth?

Mr. FEES. I am going to look at my R&D man behind me and

see what he has to say. There is a tremendous amount of energy——

Mr. BURGESS. Well, the reason I ask is because our anesthesiologist at the hospital used to have this little gizmo that trapped CO2

in these rebreathing circuits and would eliminate the CO2 from the

anesthesia machine but we can’t do that——

Mr. FEES. There is a tremendous amount of energy that gets put

forth to create CO2 at the point of combustion so reversing that

process is energy heavy. However, we are doing R&D where we

are, for example, taking the enzyme that exists inside of your and

my lungs and trying to engineer that enzyme in a wet condition

that we can put flue gas through it and use the same technology

that exists in our bodies to be able to capture that and to turn the

CO2 into calcium carbonate and other things that may be friendly

to be able to be used post combustion. But those things are way

off and we are doing R&D that is directed in that end, but there

are things that can be done.

Mr. BURGESS. Mr. Hawkins?

Mr. HAWKINS. Well, Mother Nature does this every day, Mr. Congressman. The problem is, we are putting CO2 into the air about

a million times faster than Mother Nature can handle it.

Mr. BURGESS. Let me come back to that in just a minute if I

could. I wanted to ask Dr. Friedmann, are there some parts of the

68

country that are better for carbon dioxide sequestration than others?

Mr. FRIEDMANN. Yes.

Mr. BURGESS. Which areas are well suited and which are poorly

suited?

Mr. FRIEDMANN. I described some of that in my testimony and

some of that information is——

Mr. BURGESS. I apologize. We took all morning to save Medicare

and I didn’t think I could do it, but I did, so I apologize for being

late.

Mr. FRIEDMANN. That is OK. Explicitly, I mean my written testimony too, but the Department of Energy has just put—the partnerships have put together an atlas that provides some useful information. From a technical basis in my own estimation, three places

stand out right away: Illinois, Texas and the central and northern

Rockies but there are actually many other places within the country which have a high capacity and they all look quite good for CO2

sequestration, and that resource is available there.

Mr. BURGESS. What makes an area of the country absolutely unsuitable for CO2 sequestration?

Mr. FRIEDMANN. Well, there are three things you need to have

a project. You need injectivity, which means you can inject at a

high rate; you need capacity, which means if you make 300 million

tons of CO2 you can put it someplace, and you need effectiveness,

meaning it has to stay in the crust a long time, and there are

places in this country that lack those characteristics. So one example and one that is pertinent is in central Minnesota and Wisconsin, there is a rift basin that goes through the middle of those

States that may have those characteristics but we don’t know yet.

The rest of those States lack those characteristics and could not

serve. So the States of Minnesota and Wisconsin are trying to find

out quickly whether they have that resource because they would

like to be able to use it.

Mr. BURGESS. And how deep do you have to put the CO2?

Mr. FRIEDMANN. Bare minimum is something like 800 meters. A

good rounding number is a kilometer, and the reason why is because otherwise the CO2 is not dense enough. It doesn’t have sufficient density to stay in place a long time. You use a lot of poor volume and it has a strong buoyant force. So at typical crustal conditions, 800 meters to a kilometer.

Mr. BURGESS. Very good. Mr. Hawkins, let me just ask you a follow-up on the CO2 question. Many more areas in the country in the

last 50 years, U.S. Fish and Wildlife and the U.S. Forest Service

have gone to great lengths to reestablish grasslands and forest

areas. Has this resulted in any accumulation of carbon in those

grasslands or forests that would otherwise just simply have remained in the atmosphere?

Mr. BOUCHER. Mr. Hawkins can answer this but this will be the

last question.

Mr. HAWKINS. The answer is yes.

Mr. BOUCHER. That was a very efficient answer.

This has continued for quite a time today and I actually have

meetings. There are additional questions I would like to ask. I am

going to submit those in writing for response by this panel. So let

69

me say thank you to each of the seven of you for the information

you provided to us. You have been very patient today in awaiting

your turn to testify, and the information you have offered here has

been extraordinarily beneficial to us and we appreciate your assistance. We will have two more hearings on climate change this week

and further hearings throughout this month and during the month

of April and so for those who are interested, there will be no shortage of conversation on this entire range of issues.

Mr. MARKEY. Mr. Chairman.

Mr. BOUCHER. Yes, Mr. Markey?

Mr. MARKEY. May I ask one question?

Mr. BOUCHER. Mr. Markey, yes, for 30 seconds.

Mr. MARKEY. OK. I thank the chairman.

Just back and forth between Mr. Hawkins and Mr. Fees, that is

under the contention that Mr. Fees made that his new 300-megawatt commercial plant using his new technology is already commercially available. So my question is, why aren’t people buying it?

Why aren’t people already investing in them and why aren’t they

avoiding, in other words, a cap and trade system and all the rest

of the headaches? Why isn’t the coal industry investing in right

now if they are already available and they are, as you are saying,

competitive with the alternative technology?

Mr. FEES. We are moving that technology forward through an

R&D to deployment phase and it will be deployed, operating and

running in 2011. We are in discussions with other customers for

the potential of applying the same technology whether it be retrofit

against existing boiler locations or for new boiler locations in the

United States. But to say that it is up and running and I can point

to one that is operating today, that is not correct.

Mr. MARKEY. I see. OK. That is a misunderstanding then.

Mr. Hawkins?

Mr. BOUCHER. Mr. Markey, thank you. Our time really has expired here today.

Gentlemen, thank you very much, and this hearing stands adjourned.

[Whereupon, at 1:45 p.m., the subcommittee was adjourned.]

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