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36–142 PDF 2007

S. HRG. 110–69

FUTURE OF COAL

HEARING

BEFORE THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

TO

RECEIVE TESTIMONY ON THE ‘‘FUTURE OF COAL’’ REPORT RECENTLY 

PUBLISHED BY THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY

MARCH 22, 2007

(

Printed for the use of the 

Committee on Energy and Natural Resources 
(II)

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

JEFF BINGAMAN, New Mexico, Chairman

DANIEL K. AKAKA, Hawaii 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

MARIA CANTWELL, Washington 

KEN SALAZAR, Colorado 

ROBERT MENENDEZ, New Jersey 

BLANCHE L. LINCOLN, Arkansas 

BERNARD SANDERS, Vermont 

JON TESTER, Montana 

PETE V. DOMENICI, New Mexico 

LARRY E. CRAIG, Idaho 

CRAIG THOMAS, Wyoming 

LISA MURKOWSKI, Alaska 

RICHARD BURR, North Carolina 

JIM DEMINT, South Carolina 

BOB CORKER, Tennessee 

JEFF SESSIONS, Alabama 

GORDON H. SMITH, Oregon 

JIM BUNNING, Kentucky 

MEL MARTINEZ, Florida

ROBERT M. SIMON, Staff Director 

SAM E. FOWLER, Chief Counsel 

FRANK MACCHIAROLA, Republican Staff Director 

JUDITH K. PENSABENE, Republican Chief Counsel 

MICHAEL CARR, Counsel 

FRANK GLADICS, Republican Professional Staff Member 
(III)

C O N T E N T S 

STATEMENTS 

Page

Bingaman, Hon. Jeff, U.S. Senator from New Mexico .......................................... 1

Deutch, John M., Institute Professor, Department of Chemistry, Massachusetts Institute of Technology, Cambridge, MA .................................................. 5

Domenici, Hon. Pete V., U.S. Senator from New Mexico ..................................... 34

Hannegan, Bryan, Vice President, Environment, Electric Power Research Institute, Palo Alto, CA ........................................................................................... 12

Lashof, Daniel A., Ph.D., Climate Center Science Director, Natural Resources 

Defense Council, New York, NY ......................................................................... 21

Moniz, Ernest J., Cecil and Ida Green Professor of Physics and Engineering 

Systems, Co-director, Laboratory for Energy and the Environment, Massachusetts Institute of Technology, Cambridge, MA ............................................ 11

Salazar, Hon. Ken, U.S. Senator from Colorado ................................................... 4

Sanders, Hon. Bernard, U.S. Senator from Vermont ........................................... 5

APPENDIX 

Responses to additional questions .......................................................................... 49

(1)

FUTURE OF COAL 

THURSDAY, MARCH 22, 2007 

U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. 

The committee met, pursuant to notice, at 2:33 p.m., in room 

SD–364, Dirksen Senate Office Building, Hon. Jeff Bingaman, 

chairman, presiding. 

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. 

SENATOR FROM NEW MEXICO 

The CHAIRMAN. Thank you all very much for being here. Why 

don’t we go ahead with the hearing? I should tell everyone that 

Senator Domenici is coming in a few minutes. He’s involved, with 

several other members of the committee, in the mark-up of the supplemental Appropriation Bill, which they’re doing in the Appropriations Committee, and so that’s a priority item that’s going to make 

some of them late. 

But, the purpose of this hearing today is to try to clarify people’s 

thoughts about the future of coal. The basis for the discussion, of 

course, is the recently-released report from MIT, giving conclusions 

and recommendations about the future of coal, based on an extensive review of the literature describing the current state of coal 

technology. 

As the title to this report makes clear, the underlying premise 

of the report is that we are quickly entering a period where greenhouse gas emissions will be a primary determining factor in choosing our energy sources. The concept was also reflected in the recent 

report of the Electric Power Research Institute, Electricity Technology in a Carbon-Constrained Future. 

Both of these reports reflect a growing sentiment in the public, 

both here and abroad, that the current path that we are on is not 

sustainable. The final shape of the policy that we are going to employ to control greenhouse gases is not clear. I’ve been working 

with others here in the Senate to flesh out ideas about how we can 

go forward. But, I do think that the discussion has moved beyond 

the question of whether we should constrain carbon, to more important questions of how we should do so, and when. 

What we lack, so far, in this area is not technological ability or 

investment interest, but the political will to move ahead and develop a framework that will allow these technologies to flourish. As 

I see it, a policy framework for coal needs to have as a minimum 

of two things. First, we need to give a clear price signal to markets 

on the value of adding greenhouse gases to the atmosphere, or the 
2

cost of adding those greenhouse gases to the atmosphere. Without 

this, it will never make good economic sense to spend the extra 

capital in emission controls or to invest in the necessary control 

technology. 

Second, I believe we need to accelerate the research and development, and importantly the demonstration, of large-scale carbon 

capture and storage technologies. This report explains, in some 

depth, this topic of carbon capture and storage and how central it 

is to the future of coal in the United States and in our future energy policy. 

Several of us here on the committee have been trying to take the 

lead in the Senate to outline some practical steps that can be taken 

to begin answering these questions. Earlier this month, Senator 

Salazar and Bunning introduced a bipartisan bill, S. 731, The National Carbon Dioxide Storage Capacity Assessment Act. There are 

five other Senators, including myself and Senator Tester, who are 

on the committee, as cosponsors. 

That bill outlines a process for determining potential geologic formations for the storage of carbon dioxide. I want to thank both of 

them for their leadership and their initiative. 

Today, Senator Domenici and I are introducing a bill that would 

complement that earlier bill, and this bill is called the DOE Carbon 

Capture and Storage Research, Development, and Demonstration 

Act. The bill will improve and expand carbon capture and storage 

program that we created as part of the 2005 Energy Bill. Specifically, it will build on DOE’s regional carbon sequestration partnerships, to ensure that we have the answers that we need for this 

key part of our energy future. We have a number of cosponsors on 

that legislation. I’m told Senators Tester, Bunning, Salazar, 

Obama, and Webb have all cosponsored the bill. 

I’d like to inform colleagues that we will hold a legislative hearing on those two carbon sequestration bills in the reasonably near 

future, both to examine their specific provisions and to hear from 

experts on what other steps we should be taking in the Senate to 

deal with these issues. It’s obviously an important piece of the puzzle, and I hope a good first step toward even more legislation to set 

us on a sustainable path forward in a carbon-constrained world. 

So, this hearing should be a very good introduction to the issues 

and a basis upon which we can begin legislative work here in the 

committee. Again, I thank our very distinguished panel of witnesses for their presence here today. Why don’t we go right ahead 

and start with testimony? Then when Senator Domenici comes, he 

may have an opening statement at that point. 

But I’ll start on my left with Professor John Deutch who is cochair of this study, a Professor of Chemistry at MIT and a former 

high-ranking official here in the Government in various important 

capacities. I’ve had the good fortune to work with him in many of 

those capacities and welcome him back to the Congress. 

With him is Ernie Moniz who is, of course, also co-chair of the 

study and a professor of physics and engineering systems at MIT, 

and former Deputy Secretary of Energy. 

Bryan Hannegan, who’s the vice president for environment at 

EPRI, the Electric Power Research Institute in Palo Alto, thank 

you very much for being here. 
3

Dan Lashof, who is a frequent testifier to our committee, a welcome one, the deputy director of the climate center for the Natural 

Resources Defense Council in New York, thank you very much for 

being here. 

Professor Deutch, why don’t you go right ahead? We will hear 

from each of you, if you can summarize your comments, and then 

we will have some questions. 

[The prepared statements of Senators Bingaman, Salazar, and 

Sanders follow:]

PREPARED STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW MEXICO

Thank you all for coming here to testify today and give us your thoughts on the 

future of coal. The basis for our discussion today is a recently released report by 

MIT giving their conclusions and recommendations based on an extensive review of 

the literature describing the current state of coal technology. 

The title of the report is, ‘‘The Future of Coal; Options for a Carbon Constrained 

World.’’ As this title makes clear, the underlying premise of this report is that we 

are quickly entering a period where greenhouse gas emissions will be a primary determining factor in choosing our energy sources. This concept also was reflected in 

the recent report from the Electric Power Research Institute, ‘‘Electricity Technology 

in a Carbon-Constrained Future.’’

It seems to me, that both of these reports reflect a growing sentiment among the 

public, both here and abroad, that the current path we are on is unsustainable. The 

final shape of the policy we will employ to control greenhouse gases is unclear. I, 

and others here, have some ideas about how we might go forward, but we seem to 

have moved beyond the question of ‘‘if,’’ to the more important questions of ‘‘how’’ 

and ‘‘when.’’

What we have lacked so far in this area is not technological ability or investment 

interest but the political will to develop a framework that will allow these technologies to flourish. And there are clearly opportunities in coal technologies. Considering the abundant coal resources we have here and the scale of the energy challenge we face in the future it is imperative that we do all we can to stimulate innovation to make coal use compatible with our carbon constrained world. 

As I see it, a policy framework for coal must, at a minimum do two things: First, 

we must give a clear price signal to markets on the value of adding greenhouse gasses to the atmosphere. Without this, it will never make economic sense to spend the 

extra capital in emissions controls or to invest in control technologies. Second, I believe we need to accelerate the research, development, and—importantly—the demonstration of large-scale carbon capture and storage technologies. 

As this report explains in some depth, the topic of carbon capture and storage is 

central to the future of coal in the United States and our future energy policy. That 

is why a number of Members of this Committee have been taking the lead here in 

the Senate to outline the practical steps that we must take to answer the questions 

that surround carbon capture and storage technologies and to develop a consensus 

on how they should be implemented. 

Earlier this month, Senators Salazar and Bunning introduced a bipartisan bill, 

S. 731, the National Carbon Dioxide Storage Capacity Assessment Act of 2007, with 

5 other Senators, including myself and Senator Tester on this committee. That bill 

outlines a process for determining potential geological formations for the storage of 

carbon dioxide. I want to thank them both for their leadership and initiative. Today, 

Senator Domenici and I are introducing a bill to complement the Salazar-Bunning 

bill. Our bill is called the DOE Carbon Capture and Storage Research, Development, 

and Demonstration Act of 2007. 

This bill will improve and expand the carbon capture and storage program that 

we created at the Department of Energy in the Energy Policy Act of 2005. Specifically, it will build on DOE’s regional carbon sequestration partnerships to ensure 

that we have the answers we need for this key element of our energy future. I am 

pleased to have a number of co-sponsors from both sides of the aisle on this bill, 

as well. 

I would like to inform my colleagues here that we will hold a legislative hearing 

on those two carbon sequestration bills in the near future, both to examine their 

specific provisions and to hear from experts what other steps we should be taking 

here in the Senate to advance the technology and utilization of carbon sequestration. 
4

This is obviously an important piece of the puzzle and I hope a good first step 

towards even more legislation to set us on a sustainable path forward in a carbon 

constrained world. 

Today’s hearing provides a good introduction to the issues and an informational 

base for that legislative work here in the committee. I’d like to thank all of you for 

your efforts in bringing us this information and I look forward to your views as we 

develop policy for the future use of coal. 

PREPARED STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR FROM COLORADO

Thank you Mr. Chairman and Ranking Member Domenici. 

My home state of Colorado is endowed with many natural resources, including 

vast coal resources. Coal is our most abundant domestic energy source. It provides 

more than 50% of our nation’s electricity needs, and America has enough coal to last 

more than 200 years. Unfortunately, CO2 pollution from coal combustion is a main 

cause of global warming, which threatens my state’s water resources, our economy, 

and our quality of life. 

Fortunately, as the MIT ‘‘Future of Coal’’ Study shows, there seems to be more 

than one way to reconcile coal use with protecting our climate, through new technologies such as Integrated Gasification Combined Cycle (IGCC) with Carbon Capture and Storage. I am proud of the work this Committee did in the Energy Policy 

Act of 2005 to promote new advanced coal technologies. We need low-carbon technologies like coal gasification and ultra-supercritical generation, with carbon capture 

and storage, to continue to power our homes and businesses without exacerbating 

the problems associated with global warming. 

Mr. Chairman, I believe that even in a carbon constrained economy, our use of 

coal from domestic sources will continue to grow. Indeed, the MIT Study suggests 

(as the Energy Information Administration has previously reported) that even with 

a price on carbon (starting at $25 per ton of CO2 emitted) coal use over the study 

period (through 2050) would go up by between 20% and 60% if carbon capture and 

storage technologies are deployed. Corresponding CO2 emissions from coal plants 

would be reduced by a half from today’s levels. In short, the new coal technologies 

that are the subject of this report offer a way to secure the future of coal in a carbon 

constrained world. 

My understanding is that all the elements of IGCC are known—there are dozens 

of gasification plants in operation in several industries. Likewise, companies are already doing geologic carbon sequestration. For example, in the oil fields we’re using 

CO2 for enhanced oil recovery. 

As the MIT report indicates, there is sufficient scientific evidence to conclude that 

carbon sequestration is a viable option. To ensure that it is technically feasible, several large-scale demonstrations must be conducted. Simultaneously, liability issues 

must be addressed and a regulatory structure developed to insure the success of this 

technology. 

The report also recommends, and together with Chairman Bingaman and several 

of our colleagues on this Committee, I have introduced legislation that would start 

us on the path to large-scale sequestration by directing the U.S. Geological Survey 

to conduct a national assessment of our sequestration capacity. Specifically, this national assessment would evaluate the potential capacity and rate of carbon sequestration in all possible sites throughout the United States, and would evaluate the 

various risk levels involved. 

Carbon sequestration also has the potential to enhance the recovery capabilities 

of certain oil, gas, and coal-bed reservoirs, increasing the efficiency with which we 

extract these important fossil resources. 

The Department of Energy has already established seven regional carbon sequestration partnerships. These partnerships have vital experience and understanding 

about the potential for storing carbon dioxide. Our legislation will build upon the 

existing work of these partnerships, and create a national database accessible to the 

public on the potential storage sites across the United States—enabling companies 

to make cost-effective decisions needed to make sequestration a viable option. 

Last month in the Finance Committee Montana’s Governor, Brian Schweitzer, 

also endorsed the future of coal. Montana has one-third of all the coal deposits in 

America—8 percent of all the coal in the world. But the Governor recognizes the 

signs of global warming in the west. ‘‘We don’t get as much snow in the high country as we used to... and the runoff starts sooner in the spring. The river I’ve 

been fishing over the last 50 years is now warmer in July by five degrees than 50 

years ago, and it is hard on our trout population.’’
5

Governor Schweitzer knows the only way we’ll be able to use our coal reserves 

is if we can burn coal without emitting the CO2. I agree and look forward, Mr. 

Chairman, to working with you and our colleagues in the Congress to help American 

companies—in partnership with government—take advantage of opportunities to 

lead the world in developing new clean coal technologies. 

The report states that one of the major challenges we face is to develop, deploy 

and demonstrate commercially viable technologies for CCS. The report recommends 

federal spending of $500 to $550 million per year for 10 years on R&D and another 

$300 million per year over 10 years on ‘‘first of a kind’’ demonstrations of carbon 

capture and storage technologies. I will work with Senator Dorgan and you, Mr. 

Domenici, to make sure DOE has the necessary funding to invest in low- or zeroemission gasification and liquefaction technologies, and in developing the technologies necessary to sequester the carbon dioxide. Working together, we can identify the best technologies and move down the innovation curve faster to ensure coal 

is a part of this country’s clean energy future. 

PREPARED STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM VERMONT

Chairman Bingaman, Ranking Member Domenici, we now live in a carbon-constrained world, or one in which carbon should be constrained in our production of 

energy. I thank the authors of this MIT study that is the topic of today’s hearing 

for educating us on this issue. 

Vermonters look forward to a world where we are not addicted to fossil fuels, including coal, because coal brings with it mountain top removal, acid mine drainage, 

and air pollution, including global warming gases. It also results in the concentration of wealth and power in the hands of corporations that for over a century have 

been known for their ruthless disregard for human dignity. We look forward to a 

country and a world where energy efficiency and renewable energy are the principal, 

if not the only, ways we power our society. To the extent that this study assists in 

bringing that cleaner future to our people, it is welcomed. 

I am concerned that many of the coal plants that are in the process of being permitted/constructed today are using old technology which is not easily retro-fitted 

with Carbon Capture and Storage (CCS) technology. Therefore, we may be locking 

ourselves into a more expensive solution when we should be requiring Integrated 

Gasification Combined Cycle (IGCC) technology, now, even without CCS, so that 

when this technology is better demonstrated, we can easily install it on coal plants 

equipped to accept it. 

I also want to thank the other witnesses from the Electric Power Research Institute and the Natural Resource Defense Council for their analyses of this study and 

their perspectives on coal and CCS.

STATEMENT OF JOHN M. DEUTCH, INSTITUTE PROFESSOR, 

DEPARTMENT OF CHEMISTRY, MASSACHUSETTS INSTITUTE 

OF TECHNOLOGY, CAMBRIDGE, MA 

Mr. DEUTCH. Thank you very much, Mr. Chairman. 

As I came here this afternoon, I realized that it was almost to 

the day and certainly to the month, that I first appeared in front 

of this committee, 30 years ago. That’s how old I am. So, I want 

to tell you, it’s good to be back, but it started 30 years ago, and 

Senator Domenici was here for that hearing. 

Let me very briefly point to six or seven main conclusions or 

points about our Future of Coal in a carbon-constrained world. 

These are the main conclusions that I think should be of interest 

to the committee, and I know that my friend, Ernie Moniz, will add 

a few points after that. 

The first is that a significant carbon charge is required to give 

the market signals to permit us to stabilize greenhouse gas emissions, let’s say, by mid-century. That market signal, whether it’s in 

the form of a carbon charge through attacks or through a capturerate system, has three effects. 
6

The first effect, is it reduces demand significantly for energy, for 

electricity. It shifts from carbon-rich carbon, high-carbon sources of 

electricity and other fuels to low-carbon fuels—for example, wind or 

nuclear power. 

Very importantly, it opens the door to new technologies, which 

make coal use a carbon-free emissions, so it has those three effects. 

Less demand, a shift to lower carbon-intensity fuels, and new technologies such as carbon capture and sequestration. Our estimate is 

the level of charge necessary is about $30 per ton of CO2, which 

would add 20 to 25 percent to the retail price of electricity for U.S. 

consumers. 

Our second principle conclusion is that carbon capture and sequestration is the critically-enabling technology to prepare coal for 

the future. Carbon capture and sequestration permits the use of 

coal to capture the CO2 that is used, that is formed in combustion, 

its pressurization, and transportation to a sequestration or storage 

site. 

Our highest priority recommendation and objective is to recommend three to five at-scale—that means 1 million ton per year—

sequestration projects in different geologies in the United States, 

managed in such a manner that they demonstrate the practical—

the practical, the practical—practical demonstration of this technology with respect to economics, with respect to technical performance, and very importantly, an accompanying regulatory framework that will command public confidence. Each one of those projects would cost about $15 million a year, 

if they are properly instrumented with the appropriate monitoring 

and verification, plus the cost of CO2, but in our minds, doing that 

now, immediately, provides a practical option for coal, going forward in the future. If carbon capture and sequestration is available, our estimate is there will be more coal use, even with a very, 

very severe carbon-control policy, because carbon capture and sequestration will be economically viable. 

Our third point is that it is too early to pick a technology winner 

for coal use. As you know, Mr. Chairman, there are two leading 

technologies for use in coal today. One is pulverized coal—you 

would have oxygen-driven pulverized coal plants if there was carbon capture and sequestration—or integrated gasification-combined 

cycle. These are the two large alternatives that are presently on 

the menu today. 

In our view these technologies should be pursued, and there are 

other interesting technologies as well, that should be pursued, and 

it is too early for anyone—an investor—to pick a technology winner. Depending upon coal type and upon circumstances, depending 

upon how much technology advance there will be, depending about 

all these matters, one project or another may choose to use a particular gassifier or a particular pulverized coal plant. 

The next point, Mr. Chairman, is that the 2005 Energy Act authorizes Government assistance to a wide range of coal technology 

projects. We believe that Federal assistance should only be given 

to coal projects with CO2 capture and sequestration. That whether 

it’s pulverized coal plant, whether it’s an IGCC fuel plant, whether 

it’s a synthetic fuels plant, whether it’s a retro-fit of some kind of 

plant, no matter how it’s done, we think it’s appropriate and nec-
7

essary for the Government to provide such assistance to show the 

private investment community that these technologies are practical, but it is important that it be done with carbon capture and 

sequestration. There is not the same justification for Federal assistance to these kinds of technologies where there is not carbon 

capture and sequestration. 

This leads me to my next point, that it is our engineering judgment that the prospects for retro-fitted plants, which are designed 

for one purpose—to later do carbon capture and sequestration, or 

to do pre-investment for plants that you’re building today for one 

purpose, assuming that you can easily retro-fit them for carbon 

capture later—but that window of opportunity is very narrow, indeed. It is likely to be quite expensive and difficult to do the retrofit. The reason is quite easy to explain—a plant with a carbon capture and sequestration is a very different plant than a plant that 

has been built for optimum performance without carbon capture 

and sequestration. The notion that you can just bolt on a device 

which will do the carbon capture for you ignores the many other 

changes in the processes that have to take place to make it work. 

So, our view is the push for Government assistance today should 

be where there is unknown. The unknown is in the integration of 

carbon capture and sequestration to the efficient operation of a carbon capture, fishing operation to that conversion, coal-conversion 

plant. 

Mr. Chairman, there’s also another problem which we see and 

draw to your attention, and that is the possibility of a perverse incentive today for man, many people, to commit to a coal-conversion 

plant, without CO2 capture today under the expectation that such 

plants will be grandfathered, that they will not be subject to any 

future carbon constraints that may be placed, they will be granted, 

for example, granted emission allowances, or granted waivers from 

emission taxes in the future. We believe that such grandfathering 

loopholes should be closed, with enough notification to the industry, so that you don’t catch people unaware, or else you’re going to 

find people building many plants in anticipation of a carbon-control 

regime. 

My final remark has to do with the worldwide prospects for stabilization of carbon emissions. We want to recognize that dealing 

with global warming requires global adherence to emission constraints. The real issue here is what will be happening going forward, not in the United States or in Europe or the developed world 

where we see the economies, but what will happen in the large, 

emerging, rapidly growing economies, which are projected to be the 

biggest users of coal, and the biggest emitters of greenhouse gases 

in the future. 

I will remind you that, last year, China put online the equivalent 

of 80 large coal plants. None of them, of course, with carbon capture and sequestration. Their electricity use is projected to grow at 

three or four times the rate of increase of the United States or of 

Europe, or OECD countries, in general. 

So some way must be found of reaching an accommodation with 

these emerging economies, or else the actions that we take will 

have no significant effect on greenhouse gases, on global warming 

worldwide. We are making very slow progress at that step of en-
8

gaging those countries, and finding a way to come to some sort of 

an agreement with them about what will be the control of these 

emissions going forward. 

Our study did a particular in-depth look about the challenges 

facing China, if they were even to consider doing such a CO2 constraint policy, adopting them and then implementing them. There 

are very good reasons why they believe they should be given a 

much longer, a different set of rules for the developing countries, 

but if we don’t come together about some set of incentives for these 

countries to adopt carbon capture and sequestration, the actions we 

take will not prove productive in controlling greenhouse gas emissions. 

The central message of this study is that the demonstration of 

technical, economic and institutional features for carbon capture 

and sequestration at commercial scale and coal combustion and 

coal-conversion plants will give policymakers and the public the 

confidence that practical carbon mitigation options exist. It will 

shorten the deployment time and reduce the costs of carbon capture and sequestration to occur, should a carbon emission and coal 

policy be adopted, and I think inevitably it’s going to be. Third, it 

will maintain opportunities for the lowest cost, and most widely 

available energy form, coal, to be used to meet the world’s pressing 

energy needs in an environmentally acceptable manner. 

Thank you very much, Mr. Chairman. I look forward to your 

questions, and the questions from the members. 

[The joint prepared statement of Mr. Deutch and Mr. Moniz follows:]

JOINT PREPARED STATEMENT OF JOHN M. DEUTCH, INSTITUTE PROFESSOR, DEPARTMENT OF CHEMISTRY, AND ERNEST J. MONIZ, CECIL AND IDA GREEN PROFESSOR OF

PHYSICS & ENGINEERING SYSTEMS, CO-DIRECTOR, LABORATORY FOR ENERGY AND

THE ENVIRONMENT, MASSACHUSETTS INSTITUTE OF TECHNOLOGY, CAMBRIDGE, MA 

Mr. Chairman, and members of the committee, thank you for the opportunity to 

appear before you today to summarize some of the key findings and recommendations in the MIT study on the future of coal. We carried out the study with eleven 

colleagues from various disciplines, over a three-year period, with the benefit of advice from an external group with diverse perspectives. We request that the Executive Summary of the report be entered into the record. 

The study examines the role of coal as an energy source in a world where constraints on carbon emissions are adopted to mitigate global warming. Our first 

premise is that the risks of global warming are real and that the United States and 

other governments should and will take action to restrict the emission of carbon dioxide and other greenhouse gases. 

Our second and equally important premise is that coal will continue to play a 

large and indispensable role in a greenhouse gas constrained world. 

Our purpose is to identify the measures that should be taken to assure the availability of demonstrated technologies that would facilitate the achievement of carbon 

emission reduction goals while continuing to rely on coal to meet a significant fraction of the world’s energy needs. 

Carbon dioxide capture and sequestration (CCS) is the critical technology enabler 

for this purpose, and the priority objective with respect to coal should be the successful large-scale demonstration of the technical, economic, and environmental performance of the technologies that make up all of the major components of a largescale integrated CCS system—capture, transportation, and storage. 

The United States and other nations may need a vast scale of carbon dioxide sequestration. By mid-century, annual sequestration of several gigatonnes of carbon 

dioxide is the scale needed for a major impact on climate change mitigation, given 

the expectation that coal use will grow substantially. This translates into sequestration of the CO2 emissions from many hundreds of utility scale plants worldwide. 
9

Each plant will need to capture millions of metric tonnes of CO2 each year. Over 

a fifty-year lifetime, one such plant would inject about a billion barrels of compressed CO2 for sequestration. We have confidence that megatonne scale injection 

at multiple well-characterized sites can start safely now, but an extensive program 

is needed to establish public confidence in the practical operation of large scale sequestration facilities over extended periods and to demonstrate the technical and 

economic characteristics of the sequestration activity. 

An important additional objective of the demonstration program is to create an 

explicit and rigorous regulatory process that gives the public and political leaders 

confidence in effective implementation of very large scale sequestration. A regulatory framework needs to be defined for sequestration projects including site selection, injection operation, and eventual transfer of custody to public authorities after 

a period of successful operation. 

Present government and private sector sequestration projects are inadequate to 

demonstrate the practical implementation of large scale sequestration on a timely 

basis. 

Thus we believe that the highest priority should be given to a program that will 

demonstrate CO2 sequestration at megatonne scale in several geologies, following 

‘‘bottom-up’’ site characterization. For the United States, this means about three 

megatonne/year projects with appropriate modeling, monitoring and verification 

(MMV), focusing on deep saline aquifers. Each demonstration project should last 

about eight to ten years. We estimate the cost for the total program to be about 

$500M over a decade, not including the cost of CO2 acquisition. The CO2 costs are 

likely to be considerable and highly variable depending on the acquisition strategy 

(natural reservoirs, capture from existing plants, supply from large scale demonstrations of new coal combustion and conversion plants). 

In addition to the value of the scientific and engineering data that will emerge 

from this sequestration demonstration program, we should not underestimate the 

value of demonstrating the ability to successfully manage the program over an extended time. Such practical implementation experience will be important for public 

confidence in committing to very large sequestration over many decades. 

To explore the prospect of very large scale sequestration, our study employed the 

Emissions Prediction and Policy Analysis (EPPA) model, developed at MIT, to prepare scenarios of global coal use and CO2 emissions under various assumptions 

about the level and timing of CO2 emissions pricing, whether through a tax, a cap 

and trade system, or some other mechanism. 

An important threshold is the CO2 price that leads to economic choices that result 

in stabilization of CO2 emissions. The economic adjustments caused by a CO2 charge 

are reduced energy use, a shift to lower-carbon emitting technology, improved efficiency of new and existing coal power plants, and importantly introduction of CCS. 

The EPPA model and our engineering analysis of alternative coal technologies suggests that a carbon charge of approximately $30/tonne-CO2 is needed (most of this 

comes from capture, not sequestration). However, if the CO2 emissions price remains low compared with this threshold price for an extended period, CO2 emissions 

are significantly higher and CCS plays a minor role in reducing cumulative CO2

emissions in this half-century. The CCS demonstration program needs to be carried 

out with urgency or the United States runs the danger of adopting a carbon constraint policy without a practical alternative for use of coal. 

Our highest priority recommendation is that the Congress, the Department of Energy, and other private and public sector entities work to launch as soon as possible 

a sequestration demonstration program with the characteristics identified above, including those associated with development of the regulatory system. A sense of urgency has been absent and this needs to change. 

Our second recommendation is for the U.S. government to provide incentives to 

several alternative coal combustion and conversion technologies that employ CCS. 

At present, Integrated Gasification Combined Cycle (IGCC) is the leading candidate 

for electricity production with CO2 capture because it is estimated to have lower cost 

than pulverized coal with capture. However, neither IGCC nor other coal technologies have been demonstrated with CCS at large scale. 

It is critical that the government RD&D program not pick a technology ‘‘winner’’ 

for several reasons. First, technology advances will undoubtedly lower the cost of 

all coal utilization technologies with capture—IGCC, pulverized coal, and potentially 

novel approaches. Some advances, such as much lower cost oxygen separation from 

air, could remove the IGCC cost advantage. Second, there are very different coal 

types (high ash content, high moisture content, . . . ) and local conditions for specific projects that affect technology choice. 

Indeed, the DOE program needs considerable strengthening and diversification in 

looking at a range of basic enabling technologies that can have major impact in the 
10

years ahead, particularly in lowering the cost of coal use in a carbon-constrained 

world. This work needs to be done at laboratory or process development unit scale, 

not as part of large integrated system demonstrations. 

Both industry and the government would benefit from an extensive modeling and 

simulation effort in order to compare alternative technologies and integrated systems as well as to guide development. A significant increase in the DOE coal RD&D 

program is called for, as well as some restructuring. 

Government assistance is needed for a portfolio of coal combustion and conversion 

demonstration projects with CO2 capture—IGCC; oxyfuel retrofits; coal to synthetic 

natural gas, chemicals and fuels are examples. Given the technical uncertainty and 

the current absence of a carbon dioxide emissions charge, there is no economic incentive for private firms to undertake such projects at any appreciable scale. The 

DOE coal program is not on a path to address our priority recommendations—enabling technology, sequestration demonstrations, coal combustion and conversion 

demonstrations with capture. The level of funding falls far short of what is required 

and the program, perhaps as a result, is imbalanced. 

The flagship project FutureGen is consistent with our priority recommendation to 

initiate integrated demonstration projects at scale. However, we are concerned that 

the project needs more clarity in its objectives. Specifically, a project of this scale 

and complex system integration should be viewed as a demonstration of commercial 

viability at a future time when a meaningful carbon policy is in place. Its principal 

call on taxpayer dollars is to provide information on such commercial viability to 

multiple constituencies, including the investment community. To provide high fidelity information, it needs to have freedom to operate in a commercial environment. 

We believe that the Congress should work with the Administration to clarify that 

the project objectives are commercial demonstration, not research, and reach an understanding on cost-sharing that is grounded in project realities and not in arbitrary 

historical formulas. In thinking about a broader set of coal technology demonstrations, including the acquisition of the CO2 needed for the sequestration demonstration projects, we suggest that a new quasi-government corporation should be considered. 

The 2005 Energy Policy Act contains provisions that authorize federal government 

assistance for coal plants containing advanced technology projects with or without 

CCS. We believe this assistance should be directed only to plants with CCS, both 

new plants and retrofit applications on existing plants. 

There is the possibility of a perverse incentive for early investment in coal-fired 

power plants without capture, whether pulverized coal or IGCC, in the expectation 

that the emissions from these plants would potentially be ‘‘grandfathered’’ by the 

grant of free CO2 allowances as part of future carbon emission regulations and that 

(in unregulated markets) they would also benefit from the increase in electricity 

prices that will accompany a carbon control regime. Congress should act to close this 

‘‘grandfathering’’ loophole before it becomes a problem. 

Success at capping CO2 emissions ultimately depends upon adherence to CO2

mitigation policies by large developed and developing economies. We see little 

progress to moving towards the needed international arrangements. Although the 

European Union has implemented a cap-and-trade program covering approximately 

half of its CO2 emissions, the United States has not yet adopted mandatory policies 

at the federal level. U.S. leadership in emissions reduction is a likely prerequisite 

to substantial action by emerging economies, and recent developments in the American business sector and in Congress are encouraging. 

A more aggressive U.S. policy appears in line with developing public attitudes. 

Our study has polled the American public, following a similar poll conducted for the 

earlier MIT study on nuclear power. Americans now rank global warming as the 

number one environmental problem facing the country, and seventy percent of the 

American public think that the U.S. government needs to do more to reduce greenhouse gas emissions. Willingness to pay to solve this problem has grown 50% over 

the past three years. 

The situation faced by large, rapidly growing, emerging economies is difficult. We 

studied a number of cases in China, looking at the ‘‘real’’ decision-making process 

for construction and operation of coal plants in several provinces. 

These case studies suggest that it will be some time until China (or India) is willing and able to mitigate CO2 emissions. We examined, with the EPPA model, the 

consequences of a lagged compliance with CO2 mitigation measures by non-OECD 

countries. While a long lag, say 40-50 years, precludes any realistic possibility of 

meeting prudent global greenhouse gas concentrations, we found that a more modest lag, say 10 years, is potentially manageable from the point of view of incremental accumulated emissions. That is, the challenge of stabilizing emissions is exacerbated but not qualitatively altered. 
11

This suggests a step-by-step international approach to the climate challenge, one 

that requires U.S. leadership both in advancing meaningful carbon policy and in 

demonstrating as early as possible the effectiveness and cost performance of technologies such as sequestration. 

Absent substantial reductions in CO2 emissions relative to ‘‘business-as-usual’’ expectations, substantial global warming will occur. At some point, nations would then 

face accepting the high economic cost and social disruption of adapting to climate 

change or the more problematic prospect of geo-engineering the climate by active 

measures. We do not dismiss the possibilities of adaptation and/or geo-engineering. 

But we do believe that it is less risky and ultimately less costly for the U.S. to lead 

the way in adopting emissions constraints today and in developing and demonstrating the technologies that will constrain emissions without significantly impacting economic development. 

Mr. Chairman, thank you again for inviting our testimony. We appreciate the 

leadership of this committee in moving forward our nation’s approach to global 

warming risks, and we welcome further discussion.

The CHAIRMAN. Thank you very much. 

Professor Moniz, we’re glad to have you here, thank you. 

STATEMENT OF ERNEST J. MONIZ, CECIL AND IDA GREEN 

PROFESSOR OF PHYSICS AND ENGINEERING SYSTEMS, CODIRECTOR, LABORATORY FOR ENERGY AND THE ENVIRONMENT, MASSACHUSETTS INSTITUTE OF TECHNOLOGY, CAMBRIDGE, MA 

Mr. MONIZ. Thank you, Mr. Chairman. 

I cannot claim this is my 30th-year anniversary, only my 10th. 

Mr. DEUTCH. Not bad, not bad. 

Mr. MONIZ. Given the obvious conclusion about John and me. 

Mr. Chairman and members of the committee, thank you for the 

opportunity. What I will do is, since John has given this kind of 

overview of the report, just emphasize three features, briefly. 

One is there is sometimes some confusion over the words ‘‘largescale’’ and ‘‘sequestration.’’ And I think that’s partly because, there 

are in some senses, three different uses of the word. One is of the 

mega-ton per-year scale, associated with a utility-sale plant, one 

plant. Another is the lifetime accumulation of emissions from one 

utility-scale plant, which is then on the 100-mega-ton scale, or 

equivalently, billion barrels of compressed CO2 sequestration. The 

third is the giga-ton scale, which is where we have to get to, say, 

by mid-century, for sequestration to be one of the technologies 

making a large impact in mitigating climate change risks. 

I think the important thing to emphasize, so there’s no confusion, 

is that we feel very, very confident about the wisdom of going 

ahead now with those mega-ton per-year projects. And while the 

program described in the Report, and by John, practical implementation will be essential for generating public confidence, generating 

the regulatory regimes needed to reach those other very large cumulative scales for large plants, and for the globe. 

Second point would be a brief statement about the Department 

of Energy RD&D program. First, we believe that the program is 

under-funded, and perhaps as a consequence, rather unbalanced. 

We need a much more aggressive, what I would call, basic science 

and engineering effort, in terms of looking for the breakthrough 

technologies, at bench-scale, and at process development unit-scale. 

That could be transforming in the future. 

These are things like oxygen separation, advanced capture technologies, to give a whole list of them—these are not getting the at-
12

tention that we will need, to really get new ideas and new cost reduction some decades down the road. 

Second is that the sequestration program that John just described, is of course, in some sense, our highest priority for immediate implementation, and we welcome the bill that you just announced, that you filed today for sequestration, and of course would 

be delighted to help in any way that we can to help shape those 

programs, to address the key issues. 

Third, is we also recommend that we need a portfolio of coal 

technology-demonstration programs. Starting with IGCC—I’m 

sorry, always with capture—starting with IGCC, it makes perfect 

sense. But we also need to be thinking about a demonstration program, for example, of an oxygen-firing retro-fit of an existing plant; 

of a coal-to-synthetic natural gas plant, or a coal-to-chemicals 

plant. We need a portfolio. 

Those demonstration projects themselves may be the sources of 

the possibly very expensive carbon dioxide needed for the sequestration demonstrations. On the other hand, we should not have the 

sequestration demonstrations hostage to exquisite timing of these 

demonstration projects to the sequestration projects. 

We believe these large projects should have a clear focus on demonstration of commercial viability as the point of these demonstration programs. Large, billion dollar-integrated programs are not 

the place for ‘‘research,’’ they are for demonstrating commercial viability, and as one supports those programs, it will be very important to provide high-fidelity information, which means having the 

projects run in as commercial a manner as possible. We can delve 

into that in more detail. 

Finally, my third point, very briefly, is that another aspect of the 

study was to look at a continuation of our polling of the American 

public, that started with our earlier report, and there we would 

just note one fact that emerged, and that is that in 3 short years 

between the two polls, climate change went from the bottom of the 

list to the top of the list in terms of environmental concerns of the 

American public, and that was associated as well, with the public’s 

willingness to contemplate, frankly, paying a somewhat larger 

amount than they were several years ago for addressing climate 

change. 

Consequently, of course, we look forward to the continued leadership of you, Mr. Chairman, and the committee as you move forward 

on climate change legislation. Thank you. We also look forward to 

questions. 

The CHAIRMAN. Thank you very much. 

Mr. Hannegan, we’re glad to have you here. 

STATEMENT OF BRYAN HANNEGAN, VICE PRESIDENT, ENVIRONMENT, ELECTRIC POWER RESEARCH INSTITUTE, PALO 

ALTO, CA 

Mr. HANNEGAN. Thank you, Mr. Chairman, and members of the 

committee. 

I’m Bryan Hannegan, vice president, environment at the Electric 

Power Research Institute, a non-profit, collaborative, R&D organization, headquartered in Palo Alto, California. 
13

EPRI appreciates the opportunity to provide testimony to the 

committee on the MIT report, and it’s a great personal honor for 

me to be back in this committee room, and on this side of the witness table. 

My comments today reflect our Institute’s work with our talented 

scientists and engineers who are working on the many issues associated with electric power generation and use. 

But today I want to focus my comments on two subjects. First, 

I want to provide to you EPRI’s view on the MIT report which, at 

the outset, I want to say we believe is an important foundation on 

which to consider future energy policy. 

Second, I want to highlight some of the recent work that we’ve 

done. You mentioned in your opening statement, Mr. Chairman, 

emphasizing the importance of CO2 capture and storage, as part of 

an overall low-cost, low-carbon portfolio of options that we’ll need 

to address climate change. 

As you’re well aware, coal currently provides half or over half of 

the electricity used in the United States, and most of the forecasts 

show that this will continue to be dominant in our energy future. 

By displacing otherwise-needed imports of natural gas or fuel oil, 

coal plays a critical role in our energy security, and it helps address our trade deficit with respect to energy. 

The challenge is this, though. By 2030 EIA projects that total 

electricity demand in the United States will go up by 40 percent. 

At the same time as we think about dealing with climate change, 

we’re looking at a substantial reduction in our future greenhouse 

gas emissions, and we want to do that in a way that allows for continued economic growth, and the benefits that all of the energy 

that we use, provides. 

I want to stress to the committee, that this is not a trivial matter. It implies a substantial change in the way that we produce and 

consume electricity, all throughout our economy. The technologies 

like we’ll discuss today on carbon capture and storage from coal are 

just one part of a necessarily economy-wide solution that includes 

greater efficiency at the end-use, increasing renewables, more efficient use of natural gas, and expanded role for nuclear power and 

similar transformations in all of our other sectors from transport 

to commercial and residential use. 

It’s this context in which I encourage you to consider the MIT 

study that my colleagues here just recently summarized. EPRI 

agrees with many of the study’s main points, but we differ on a 

couple. 

In particular, we agree that carbon capture and storage is going 

to be a critically enabling technology for coal going forward, and as 

Professor Deutch noted in his comments, the key will be the successful demonstration of CCS at the large-scale—one million tons 

of CO2 per year. We believe this is important for both pre-combustion, as well as post-combustion technologies. Both pulverized coal 

as we know it today in the United States, and IGCC technologies 

going forward. We also must demonstrate storage in a variety of 

geologies, to take advantage of the full richness that we have available here in the United States. 

As I mentioned, we agree with MIT’s view that we should avoid 

choosing between coal technology options. While the technology for 
14

pulverized coal is well-established, the method for capturing and 

storing the CO2 from those plants is not, and needs significant 

demonstration work. 

But, in contrast, while there are proven methods for capturing 

and storing the CO2 from IGCC, the plants that we’re thinking 

about building, going forward, will have larger components, and a 

degree of integration that has not yet been demonstrated affordably 

and reliably at a commercial scale. In that vein, we disagree with 

comments in the MIT Report, limiting the application of your DOE 

programs to just IGCC; we think there’s a role for pulverized coal 

for capture and storage going forward. 

Both of these areas are going to require work to reduce the cost 

penalty and energy demands associated with current coal technologies, and we view the existing FutureGen programs, and the 

regional carbon sequestration programs at DOE, as good examples 

in this regard. 

But others are needed, and we also think that many of the programs at DOE do need to significantly increase their scope, and accelerate the schedules of the work that they’re doing to enable CCS 

capability as soon as possible. 

In our view, however, an even greater impediment than the technology, than the financing, the even greater impediment to expanded CCS may be the development of public acceptance and the 

regulatory and legal frameworks going forward. Absent a consistent and predictable approach to siting and permitting facilities 

that have carbon capture and storage, the capital costs and the 

risks associated with these projects will simply be too large to allow 

them to move forward. 

There are also questions of ownership of the stored CO2, the liability when it leaks—if it leaks—back into the atmosphere, and 

questions regarding the environmental fate of the CO2 once you put 

it in the ground. These issues bear further study and work at EPRI 

is underway, but more work needs to be done. 

Let me make another point about the MIT study—we disagree 

with their view that pre-investment in capture-ready features is 

categorically un-economic. In many ways, whether or not you’re 

retro-fitting an existing plant or you’re building a new plant with 

an eye toward capture and storage, that’s going to be a decision 

that’s dictated by the availability of the technology, how soon you 

think limits on CO2 emissions will come—in the event that the limits become more likely, the prospect of pre-investment could become worthy of consideration. But if you do it in the near future, 

it’s a higher-cost option of compliance with CO2 limits going forward. 

Let me turn now to the recent work that we’ve done at EPRI 

that illustrates the promise of CCS as part of the solution to satisfying our energy needs in an environmentally responsible manner. 

Mr. Chairman, you mentioned our electricity technology in a carbon-constrained future work, and it does suggest that with aggressive R&D, demonstration, and deployment of advanced energy technologies, and more importantly, with aggressive assumptions on 

how those technologies can be deployed, we can slow down and halt 

the increase in CO2 emissions from the electric sector, and then 
15

eventually reduce them, even as we simultaneously meet the increased demand for electricity. 

However, as shown on this chart, I note that the pace at which 

we can do so, using EPRI’s professional judgment and technical expertise, is substantially slower than some of the proposals that 

have been discussed in this body, and some that have been envisioned by this committee. 

The chart to my right shows the net change in CO2 emissions, 

relative to EIA’s base case in their 2007 annual energy outlook, 

that results from specific technology deployment targets identified 

in seven areas, from NG sufficiency at the top in blue, down to 

plug-in hybrid vehicles and distributed energy resources at the bottom, in purple. 

As I mentioned, the most encouraging aspect of the study is, that 

as we move toward 2030, we see CO2 emissions from the electric 

sector can be falling fairly dramatically. However—and I must 

stress this—it will require a long-term commitment of billions of 

dollars in energy research, development, and deployment in every 

aspect of electric generation, transmission and consumption. It will 

not be cheap, and it will not be easy to accomplish. 

As you see on the chart, the largest area there is in orange, and 

that’s carbon capture and storage. We believe that those technologies offer the greatest promise, particularly if—as we assume 

in our work—you apply them to every new coal plant coming online 

after 2020. 

As my colleagues from MIT have just pointed out, this is not an 

all-assured, given the technology development that we’re engaged 

in, and the pace at which we expect things to come about. 

Let me make one final point about our work. We’ve done some 

preliminary economic analysis, looking at the cost of achieving the 

emissions trajectory implied by the grey area both with, and without, capture and storage and advanced nuclear technologies, and 

we estimate that the cost to the U.S. economy without those technologies roughly triple, to a total of $2 trillion over 50 years, if you 

don’t have capture and storage, and if you don’t have advanced nuclear. They triple relative to the cost that would be incurred if you 

did have those technologies. Instead of having carbon capture and 

storage, and nuclear at the ready, you would instead meet the grey 

emissions requirement, by massive fuel-switching to natural gas, 

and price-induced conservation, driven by very large carbon prices, 

in our economic model. 

The bottom line of this work suggests that as you consider legislation going forward, you should probably take into account the 

pace at which you expect technologies to be deployed realistically 

and cost-effectively in the economy. If you have a constraint before 

technology, you may incur larger costs than if you had the technology before you applied the constraint. 

In summary, we’re continuing with further technical and economic analysis on this work, and I’d be pleased, Mr. Chairman, to 

update the committee as our work evolved in the weeks and 

months ahead. I want to thank you and Senator Domenici, and 

your colleagues on the committee for the opportunity to speak, and 

I look forward to your questions. 

[The prepared statement of Mr. Hannegan follows:]
16

PREPARED STATEMENT OF BRYAN HANNEGAN, VICE PRESIDENT, ENVIRONMENT, ELECTRIC POWER RESEARCH INSTITUTE

Thank you, Mr. Chairman, Ranking Member Domenici, and Members of the Committee. I am Bryan Hannegan, Vice President—Environment for the Electric Power 

Research Institute (EPRI), a non-profit, collaborative R&D organization 

headquartered in Palo Alto, California. EPRI appreciates the opportunity to provide 

testimony to the Committee on the MIT ‘‘Future of Coal’’ report, and it is a great 

personal honor for me to be back in this Committee room on this side of the witness 

table. My comments today reflect the work of the talented scientists and engineers 

we have working across our Institute on the many issues associated with electric 

power generation and use. 

I want to focus my comments today on three subjects: (1) EPRI’s views on the 

MIT report, which we believe provides an important foundation on which to consider 

future energy policy; (2) a detailed view from EPRI on the principal challenges facing coal-based generation in the decades ahead; and (3) highlights of some recent 

analytical work that EPRI has published emphasizing the importance of advanced 

coal technologies as part of an overall low-cost, low-carbon portfolio of options to reduce carbon dioxide emissions associated with climate change. 

BACKGROUND

Coal currently provides over half of the electricity used in the United States, and 

most forecasts of future energy use in the United States show that coal will continue 

to have a dominant share in our electric power generation for the foreseeable future. 

Coal is a stably priced, affordable, domestic fuel that can be used in an environmentally responsible manner. Through development of advanced pollution control 

technologies and sensible regulatory programs, emissions of criteria air pollutants 

from new coal-fired power plants have been reduced by more than 90% over the past 

three decades. And by displacing otherwise needed imports of natural gas or fuel 

oil, coal helps address America’s energy security and reduces our trade deficit with 

respect to energy. 

By 2030, according to the Energy Information Administration, the consumption of 

electricity in the United States is expected to increase by approximately 40% over 

current levels, at the same time, to responsibly address the risks posed by potential 

climate change, we must substantially reduce the greenhouse gas emissions intensity of our economy in a way which allows for continued economic growth and the 

benefits that energy provides. This is not a trivial matter—it implies a substantial 

change in the way we produce and consume electricity. Technologies to reduce CO2

emissions from coal will necessarily be one part of an economy-wide solution that 

includes greater end-use efficiency, increasing renewable energy, more efficient use 

of natural gas, expanded nuclear power, and similar transformations in the transportation, commercial, industrial and residential sectors of our economy. In fact, our 

work at EPRI on climate policy has consistently shown that non-emitting technologies for electricity generation will likely be less expensive than technologies for 

limiting emissions of direct fossil fuel end uses in other sectors. Paradoxically, as 

we seek greater limits on CO2 across our economy, our work at EPRI suggests we 

will see greater amounts of electrification—but only if the technologies to do so with 

near-zero emissions are at hand. 

THE MIT STUDY

Let me first make some general remarks about the MIT study which is the topic 

of today’s hearing. I should note that while none of the EPRI staff were formally 

involved in the development of the report, we did comment on earlier drafts of it 

provided to us by the study’s authors. In addition, our former President and CEO, 

Kurt Yeager, served on the study’s Advisory Committee. 

We agree with many of the main points of the MIT study:

• In particular, we agree with the study’s main finding that CO2 capture and sequestration (CCS) will be the critical enabling technology that provides for continued coal use even as we reduce our CO2 emissions. 

• We agree that the key to proving CCS capability is the demonstration of CCS 

at large-scale (>1 million tons CO2/year) for both pre-and post-combustion capture with storage in a variety of geologies. The scope of the program described 

in the MIT report is appropriate. 

• We share the view expressed by the MIT report that absent these successful 

demonstrations at the large scale, CCS will be confined to a narrow set of uses 

for enhanced oil recovery, and coal’s share of future electricity production will 

decline dramatically as a result. 
17

• We concur with the MIT report that we should avoid choosing between coal 

technology options—rather, we should foster a ‘‘portfolio of technology options’’.

—While there are well proven methods for capturing CO2 resulting from coal 

gasification, IGCC plants will have larger components and a degree of integration that has not been demonstrated at the commercial scale. 

—In contrast, PC technology is well proven commercially in the power industry, 

and here the need is for demonstration of post combustion capture at a commercial and affordable scale.

• We agree that there will inevitably be additional costs associated with CCS. 

EPRI’s latest estimates suggest that the levelized cost of electricity (COE) from 

new coal plants (IGCC or supercritical PC) designed for capture, compression, 

transportation and storage of the CO2 will be 50-80% higher than the COE of 

a conventional supercritical PC (SCPC) plant. • EPRI’s technical assessment work indicates that the preferred technology and 

the additional cost of electricity for CCS will depend on the coal type, location 

and the technology employed.

—Without CCS, supercritical pulverized coal (SCPC) has an advantage over 

IGCC. However, the additional CCS cost is generally lower with IGCC than 

for SCPC. 

—Some studies show an advantage for IGCC with CCS with bituminous coal, 

but with lignite coal SCPC with CCS is more generally preferred. With subbituminous coals, SCPC with CCS and IGCC with CCS appear to show similar costs.

• At the same time, our initial work with post-combustion CO2 capture technologies suggests we can potentially reduce the current 30% energy penalty associated with CCS to something closer to 10% over the longer-term. Improvements in IGCC plants offer the same potential for reducing cost and energy 

penalty as well. • We also concur with MIT’s assessment of the need to consider the entire integrated system for capture, transportation and storage of CO2 at scale, and note 

that the existing FutureGen program is one good example of how this can be 

done. FutureGen is recognized around the world as a meaningful carbon sequestration project, and it has become a model for similar projects in other parts 

of the world. Others are needed, and we welcome the recent 10 MW pilot plant 

and the 200-MW plant announcement by AEP in that regard. • We believe that the greater impediment to expanded CCS may be the development of public acceptance and suitable regulatory and legal frameworks. Absent 

a consistent and predictable approach to siting and permitting facilities for the 

transport and storage of CO2, the capital costs and risks associated with these 

projects will likely prevent them from moving forward. The question of ownership of the stored CO2 and the liability for any release or leakage is also not 

well understood. And most notably, the environmental fate of the captured and 

stored CO2 is also an open scientific area worth further study. 

• We see value in the approach taken by the various DOE Regional Carbon Sequestration Partnerships and do not agree with MIT’s assessment that these existing programs are ‘‘completely inadequate’’. However, we do see the need to 

significantly accelerate the schedules and increase the scope of these programs 

to allow large scale tests and demonstrations of the full range of CCS technologies. 

• We view the question of whether to retrofit an existing coal-based plant for CCS 

as a matter of economics and reliability: if the technologies exist to do so at a 

cost low enough to keep the plant in operation reliably, the owner may incorporate CCS retrofits particularly as they make additional modifications to the 

system to meet new stringent air pollution controls. EPRI is initiating analytical work in this area to better understand the potential for retrofits on existing 

coal-based generation units. 

• With respect to the construction of new coal-based generation units, we disagree 

with the MIT report’s categorical conclusion that pre-investment in ‘‘captureready’’ features is uneconomic. EPRI views this as a matter of perception on 

when and how restrictions on CO2 emissions may occur: as the prospect of limits becomes more likely, such pre-investment becomes more worthy of consideration. 

• The rapid pace of expansion in global coal generation capacity (105 GW added 

in China last year alone) underscores the need to focus on enabling large-scale 

CCS technology as soon as possible, regardless of discussions on domestic or 

international policy frameworks to reduce CO2 emissions.
18

In the paragraphs that follow, we provide further detail on EPRI’s view of the 

critical needs for coal-based generation in a carbon-constrained world. 

INCREASING COAL PLANT EFFICIENCY

In the 1950s and ’60s, the United States was the world’s pioneer in power plants 

using thermodynamically efficient ‘‘supercritical’’ and ‘‘ultra-supercritical’’ steam 

conditions. Exelon’s coal-fired Eddystone Unit 1, in service since 1960, still boasts 

the world’s highest steam temperatures and pressures. Because of reliability problems with some of these early units, U.S. designers retreated from the highest 

supercritical steam conditions until the 1980s and ’90s when international efforts 

involving EPRI and U.S., European, and Japanese researchers concentrated on new, 

reliable materials for high-efficiency pulverized coal plants. Given the prospect of 

potential CO2 regulations (and efforts by power producers to demonstrate voluntary 

CO2 reductions), the impetus for higher efficiency in future coal-based generation 

units has gained economic traction worldwide. In fact, the majority of new pulverized coal (PC) plants announced over the last two years will employ high-efficiency 

supercritical steam cycles, and several will use the ultra-supercritical steam conditions heretofore used only overseas (aside from Eddystone). 

EPRI is working with the Department of Energy, the Ohio Coal Development Office, and major equipment suppliers on an important initiative to qualify a whole 

new class of nickel-based ‘‘superalloys,’’ which will enable maximum steam temperatures to rise from an ultra-supercritical steam temperature of 1100 °F to an ‘‘advanced’’ ultra-supercritical steam temperature of 1400 °F. Combined with a modest 

increase in steam pressure, this provides an efficiency gain that reduces a new 

plant’s carbon intensity (expressed in terms of CO2 emitted per megawatt-hour 

(MWh)) by about 20% relative to today’s state-of-the-art plant. If capture of the remaining CO2 is desired, improved efficiency will also reduces the required size of 

any necessary equipment. 

However, realization of this opportunity will not be automatic—in fact, it will require a renewed, sustained R&D commitment and substantial investment in demonstration facilities to bring new technologies to market. The European Union has 

embraced such a strategy and is midway through its program to demonstrate a pulverized coal plant with 1300 °F steam conditions, which was realistically planned 

as a 20-year activity. 

Efficiency improvements will also be important for other coal power technologies. 

The world’s first supercritical circulating fluidized-bed (CFB) plant is currently 

under construction in Poland. The greatest increase in efficiency for integrated gasification combined cycle (IGCC) units will come from increases in the size and efficiency of the gas turbines and improvements in their ability to handle hydrogen rich 

‘‘syngas’’ that would be produced in IGCC plants designed for CO2 capture. 

CO2 CAPTURE TECHNOLOGY

Carbon capture and storage (CCS) technologies can be feasibly integrated into virtually all types of new coal-fired power plants, including IGCC, PC, CFB, and 

variants such as oxy-fuel combustion. For those constructing new plants, it is unclear which type of plant would be economically preferred if it were built to include 

carbon capture. All have relative competitive advantages under various scenarios of 

available coal types, plant capacity, location, sales of by-products, etc. 

Although carbon capture appears technically feasible for all coal power technologies, it poses substantial engineering challenges (requiring major investments in 

R&D and demonstrations) and comes at considerable cost. However, analyses by 

EPRI and the Coal Utilization Research Council suggest that once these substantial 

investments are made, the cost of CCS becomes manageable, and ultimately coalbased electricity with CCS can be cost competitive with other low-carbon generation 

technologies. 

Post-combustion CO2 separation processes (placed after the boiler in the power 

plant) are currently used commercially in the food and beverage and chemical industries, but these applications are at a scale much smaller than that needed for power 

producing PC or CFB power plants. These processes themselves are also huge energy consumers, and without investment in their improvement, they would reduce 

plant electrical output by as much as 30% (creating the need for more new plants). 

CO2 separation processes suitable for IGCC plants are used commercially in the oil 

and gas and chemical industries at a scale closer to that ultimately needed, but 

their application necessitates development of modified IGCC plant equipment, including additional chemical process steps and gas turbines that can bum nearly 

pure hydrogen. 
19

EPRI’s most recent cost estimates suggest that for PC plants, the addition of CO2

capture using the currently most developed technical option, amine solvents, along 

with drying and compression, pipeline transportation to a nearby storage site, and 

underground injection, would add about 60-80% to the net present value of life-cycle 

costs of electricity (expressed as levelized cost of electricity, or COE, and excluding 

storage site monitoring, liability insurance, etc.). This translates into a potentially 

large hike in consumers’ electric bills. 

The COE cost premium for including CO2 capture in IGCC plants, along with drying, compression, transportation, and storage, is about 40-50%. Although this is a 

lower cost increase in percentage terms than that for PC plants, IGCC plants initially cost more than PC plants. Thus, the bottom-line cost to consumers for power 

from IGCC plants with capture may be comparable to that for PC plants with capture. 

A utility’s choice between these technologies will depend on available coals and 

their physical-chemical properties, desired plant size, the CO2 capture process and 

its degree of integration with other plant processes, plant elevation, the value of 

plant co-products, and other factors. For example, IGCC with CO2 capture generally 

shows an economic advantage in studies based on low-moisture bituminous coals. 

For coals with high moisture and low heating value, such as sub-bituminous and 

lignite coals, a recent EPRI study shows PC with CO2 capture being competitive. 

It should be noted that IGCC plants (like PC plants) do not capture CO2 without 

substantial plant modifications, energy losses, and investments in additional process 

equipment. As noted above, however, the magnitude of these impacts could likely 

be reduced substantially through aggressive investments in R&D. Historical experience with the development of environmental control technologies for today’s power 

plants suggests that technological advances from ‘‘learning-by-doing’’ will likely lead 

to significant cost reductions in CO2 capture technologies as the installed base of 

plants with CO2 capture grows. An International Energy Agency study led by Carnegie Mellon University suggested that overall electricity costs from plants with 

CO2 capture could come down by 15% relative to the currently predicted costs after 

about 200 systems were installed. Furthermore, despite the substantial cost increases for adding CO2 capture to coal-based IGCC and PC power plants, their resulting cost-of-electricity is still usually less than that for natural gas-based plants 

at current and forecasted natural gas prices. 

Engineering analyses by EPRI, DOE, and the Coal Utilization Research Council 

suggests that costs could come down faster through CO2 capture process innovations 

or, in the case of IGCC plants, fundamental plant improvements—provided sufficient RD&D investments are made. EPRI pathways for reduction in capital cost and 

improvement in efficiency are embodied in two companion RD&D Augmentation 

Plans developed under the collaborative CoalFleet for Tomorrow program. Efforts toward reducing the cost of IGCC plants with CO2 capture will focus on adapting 

more advanced and larger gas turbines for use with hydrogen-rich fuels, lower-cost 

oxygen supplies, improved gas clean-up, advanced steam cycle conditions, and other 

activities. 

For PC plants, the progression to advanced ultra-supercritical steam conditions 

will steadily increase plant efficiency and reduce CO2 production. Improved solvents 

are expected to greatly reduce post-combustion CO2 capture process. EPRI is working to accelerate the introduction of novel, alternative CO2 separation solvents with 

much lower energy requirements for regeneration. Such solvents—for example, 

chilled ammonium carbonate—could reduce the loss in power output imposed by the 

CO2 capture process from about 30% to about 10%. A small pilot plant (5 MW-thermal) is being designed for installation at a power plant in Wisconsin later this year; 

success there would warrant a scale-up to a larger pilot or pre-commercial plant. 

An EPRI timeline (compatible with DOE’s timeframe) for the possible commercial 

introduction of post-combustion CO2 capture follows. 

The introduction of oxy-fuel combustion may allow further reductions in CO2 capture costs by allowing the flue gas to be compressed directly, without any CO2 separation process and reducing the size of the supercritical steam generator. Boiler suppliers and major European and Canadian power generators are actively working on 

pilot-scale testing and scale-up of this technology. 

EPRI stresses that no single advanced coal generating technology (or any generating technology) has clear-cut economic advantages across the range of U.S. applications. The best strategy for meeting future electricity needs while addressing climate change concerns and economic impact lies in developing multiple technologies 

from which power producers (and their regulators) can choose the one best suited 

to local conditions and preferences. 

Assuring timely, cost-effective coal power technology with CO2 capture entails simultaneous and substantial progress in RD&D efforts on improving capture proc-
20

esses and fundamental plant systems. EPRI sees the need for government and industry to pursue these and other pertinent RD&D efforts aggressively through significant public policy and funding support. Early commercial viability will likely 

come only through firm commitments to the necessary R&D and demonstrations 

and through collaborative arrangements that share risks and disseminate results. 

TRANSPORTATION AND GEOLOGIC STORAGE

Geologic sequestration of CO2 has been proven effective by nature, as evidenced 

by the numerous natural underground CO2 reservoirs in Colorado, Utah, and other 

western states. CO2 is also found in natural gas reservoirs, where it has resided for 

millions of years. Thus, evidence suggests that depleting or depleted oil and gas reservoirs, and similar ‘‘capped’’ sandstone formations containing saltwater that cannot 

be made potable, are capable of storing CO2 for millennia or longer. Geologic sequestration as a strategy for reducing CO2 emissions is being demonstrated in numerous 

projects around the world. 

Three relatively large projects—the Sleipner Saline Aquifer CO2 Storage (SACS) 

project in the North Sea off of Norway; the Weyburn Project in Saskatchewan, Canada; and the In Salah Project in Algeria—together sequester about 3 to 4 million 

metric tons of CO2 per year, which approaches the output of just one typical 500 

megawatt coal-fired power plant. With 17 collective years of operating experience, 

these projects suggest that CO2 storage in deep geologic formations can be carried 

out safely and reliably. Furthermore, CO2 injection technology and subsurface behavior modeling have been proven in the oil industry, where CO2 has been injected 

for 30 years for enhanced oil recovery (EOR) in the Permian Basin fields of west 

Texas and Oklahoma. Regulatory oversight and community acceptance of injection 

operations are well established. 

In the United States, DOE has an active R&D program (the ‘‘Regional Carbon Sequestration Partnerships’’) that is mapping geologic formations suitable for CO2

storage and conducting pilot-scale CO2 injection validation tests across the country. 

These tests, as well as most commercial applications for long-term storage, will compress CO2 to a liquid-like ‘‘supercritical’’ state to maximize the amount stored per 

unit volume underground. As a result, virtually all CO2 storage applications will be 

at least a half-mile deep, helping reduce the likelihood of any leakage to the atmosphere, which would defeat the purpose of sequestering the CO2 in the first place. 

DOE’s Regional Carbon Sequestration Partnerships represent broad collaborative 

teaming of public agencies, private companies, and non-profits; they would be an excellent vehicle for conducting larger ‘‘near-deployment scale’’ CO2 injection tests to 

prove specific U.S. geologic formations, which EPRI believes to be one of the keys 

to commercializing CCS for coal-based power plants. Evaluations by these. Regional 

Partnerships and others suggest that enough geologic storage capacity exists in the 

United States to hold several centuries’ worth of CO2 emissions from coal-based 

power plants and other stationary sources. However, the distribution of suitable 

storage formations across the country is not uniform: some areas have ample storage capacity whereas others appear to have little or none. 

Thus, CO2 captured at some power plants would be expected to require pipeline 

transportation for several hundred miles to suitable injection locations, which may 

be in other states. While this adds cost, it doesn’t represent a technical hurdle because CO2 pipeline technology has been proven in oil field FOR applications. As 

CCS is applied commercially, EPRI expects that early projects would take place at 

coal-based power plants near sequestration sites or an existing CO2 pipeline. As the 

number of projects increases, regional CO2 pipeline networks connecting multiple 

sources and storage sites would be needed. 

There is still much work to be done before CCS can implemented on a scale large 

enough to significantly reduce CO2 emissions into the atmosphere. In addition to 

large-scale demonstrations at U.S. geologic formations, many legal and institutional 

uncertainties need to be resolved. Uncertainty about long term monitoring requirements, liability, and insurance is an example. State-by-State variation in regulatory 

approaches is another. Some geologic formations suitable for CO2 storage underlie 

multiple states. For private companies considering CCS, these various uncertainties 

translate into increased risk. 

THE PROMISE OF CCS

Recent EPRI work has illustrated the necessity and the urgency to develop carbon 

capture and storage (CCS) technologies as part of the solution to satisfying our energy needs in an environmentally responsible manner. Our ‘‘Electricity Technology 

in a Carbon-Constrained Future’’ study, which I am pleased to have led, suggests 

that with aggressive R&D, demonstration, and deployment of advanced electricity 
21

* Graphic has been retained in committee file. 

technologies, it is technically feasible to slow down and stop the increase in U.S. 

electric sector CO2 emissions, and then eventually reduce them over the next 25 

years while simultaneously meeting the increased demand for electricity. However, 

even under the most aggressive technology assumptions, the pace at which we can 

do so is substantially slower than that envisioned under several of the pending bills 

currently before this Committee and the Congress as a whole. 

To develop this analysis, we compiled data on the currently and likely future cost 

and performance of various electricity technologies from our Technical Assessment 

Group work, various public-private technology R&D roadmaps, and expert opinions 

from academia, industry, and the NGO community in the published literature. From 

this information, EPRI established specific technology deployment targets in seven 

areas: efficiency, renewables, nuclear generation, advanced coal generation, carbon 

capture and storage (CCS), plug-in hybrid electric vehicles (PHEV) and distributed 

energy resources. We then calculated the net change in CO2 emissions from the electric sector which would result from achieving each of those technology targets compared to the underlying assumptions in the Base Case of the 2007 Annual Energy 

Outlook published by the Energy Information Administration (EIA). The results are 

shown in Figure 1.* 

The most encouraging aspect of the study is that, as we move toward 2030, CO2

emissions levels from the U.S. electric sector can begin falling fairly dramatically. 

However, this will require the long-term commitment of billions of dollars in energy 

research, development and deployment in every aspect of electric generation, transmission and consumption. It will not be cheap, nor will it be easy to accomplish. 

While one could argue that CO2 reductions from some of these targets could be 

slightly higher or somewhat lower, the overall picture is clear—we can get to a lowcarbon future, but only with substantial consistent investment, smart policy choices 

and a realistic timeline. 

Of the seven options we analyzed, we believe that the greatest reductions in future U.S. electric sector CO2 emissions are likely to come from applying CCS technologies to nearly all new coal-based power plants coming on-line after 2020. In fact, 

the longer we delay in developing the capability to deploy CCS technologies that can 

be deployed at a commercial scale, the longer we will have to wait for the resulting 

substantial reductions in CO2 and correspondingly, reductions in the risk of future 

climate change. 

Furthermore, preliminary economic work conducted by EPRI to extend this study 

shows that absent both CCS and advanced nuclear technologies, achieving these aggressive CO2 emissions reductions would be extremely costly. We estimate that the 

costs to the U.S. economy would roughly triple—to nearly $2 trillion over the next 

50 years—compared to costs if CCS and advanced nuclear technologies were commercially available. This large difference in economic cost arises from the lack of 

low-cost, low-carbon technologies to reduce future CO2 emissions growth on a large 

scale: in a world without CCS and nuclear, we rely instead on massive fuel switching to natural gas (with attendant price increases and import dependence) and on 

price-induced conservation driven by very large carbon prices (which would more 

than likely trigger any ‘‘safety valve’’ set in legislation). Our preliminary economic 

work suggests that the timeline for any cost-effective program of CO2 emissions reductions should be dictated by our expectation of technology development and deployments in the decades ahead. 

We are continuing with further technical and economic analysis, and we expect 

to release our final economic analysis later this year. I would be pleased to update 

the Committee as our work evolves in the weeks and months ahead.

The CHAIRMAN. Thank you very much. 

Mr. Dan Lashof is our final witness on this panel, and we’re glad 

to have you here. 

STATEMENT OF DANIEL A. LASHOF, PH.D., CLIMATE CENTER 

SCIENCE DIRECTOR, NATURAL RESOURCES DEFENSE COUNCIL, NEW YORK, NY 

Mr. LASHOF. Thank you very much, Mr. Chairman. It’s a pleasure to be back before the committee. 
22

Members of the committee, I am Daniel Lashof, I am the science 

director, and deputy director of the Climate Center at the Natural 

Resources Defense Council. 

Mr. Chairman, I went to school at the other end of Massachusetts Avenue from the esteemed professors from MIT, so I dare not 

really question the technical judgments that they make about the 

readiness of carbon capture and storage technology. I do have some 

questions about the completeness of their policy recommendations, 

which I’ll come to in a minute. 

But, indeed, I agree strongly with their first premise, which is 

simply that the risks of global warming are real, and the United 

States and other countries need to take action to restrict emissions 

of carbon dioxide and other global warming pollutions, that certainly is essential. 

They’re finding that retro-fitting existing coal plants with carbon 

capture and storage, whether they be integrated gasification 

plants, or more conventional pulverized coal plants, would be very 

complex and expensive, and unlikely to occur. It is also a very important finding in my view. 

Third, I agree with their conclusion that mega-ton scale injection 

at multiple wealth characterized sites can happen safely now. Indeed, that conclusion is also shared by Dr. Julio Friedman of Lawrence Livermore National Lab, who testified before the House Energy & Commerce Committee last month, that the technology, the 

understanding of the geology for doing carbon capture is at a stage 

where we should really start learning more by doing it, rather than 

just doing research in a laboratory mode. 

Fourth, I agree strongly with many of their policy conclusions, 

including one that Profession Deutch mentioned, which is that Federal assistance for coal projects should only go to projects that actually incorporate carbon capture and storage, as a central part of 

their design. 

But I do have some issues with the policy recommendations; in 

particular, I believe that they are incomplete. In my view, the most 

important policy recommendation stemming from their technical 

analysis is that Congress should immediately require that any new 

coal-fired power plants be designed and operated with carbon capture and storage, starting right away. Their analysis shows that is 

technically feasible, and it is very important to establish that as a 

policy matter. 

The reason it’s so important is that if you take a typical 500–

megawatt coal plant, and build it without carbon capture and storage, emissions are about 4 million tons of CO2 a year—that plant 

can be expected to operate for 50 years or more. That means it’s 

a commitment to emitting 200 million tons of CO2 into the atmosphere over its lifetime. Simply put, the 100 or so conventional coal 

plants that are on the drawing board in the United States and the 

thousands or more that are on the drawing boards worldwide—if 

they are built without carbon capture and storage, it will make it 

impossible to meet the climate protection goals that I know you 

share, Mr. Chairman. 

In one conclusion of the MIT Report that I think has been widely 

misinterpreted, their analysis finds that the private sector does not 

now have the incentive to build plants that have carbon capture 
23

and storage technology built into them, and that’s true. But that’s 

precisely why Congress needs to act. It needs to create a legal requirement that future coal plants have this technology. 

Some may suggest that we don’t need to have a specific performance standard for new coal plants if we have an overall cap-andtrade system—let the price go in there, and if people want to build 

plants without carbon capture, they have to pay for the permits, 

that should be enough. But the MIT study shows why I don’t think 

that is enough. They conclude that the price of carbon allowances 

has to reach about $30 per ton of CO2, before carbon capture and 

storage technology would be the economic choice. That’s a relatively 

high number. 

Indeed the EIA analysis, which was the last time I was before 

the committee, considering their analysis of your discussion draft 

proposal, concluded that because of the price caps that were built 

into that proposal, at least through 2030, there would be no investment in carbon capture and storage, driven economically by the 

private sector. So, even with more stringent caps, there’s no guarantee that the price of CO2 allowances would quickly reach the 

point where the private sector would choose to build new plants 

with carbon capture and storage built in. 

So, I think there would be a large risk that we would see dozens, 

if not hundreds, of additional plants built in the United States that 

would then commit us over 50 years or more to excessive levels of 

CO2 emissions that would be very difficult to control in the future. 

Certainly, your leadership with Senator Boxer in putting developers on notice that shouldn’t expect to get any grandfathered allowances if they go ahead and build plants without carbon capture 

and storage, I think, has been very, very important. But, I don’t 

think that, by itself, is enough. Because even without the expectations of grandfathered allowances, without a carbon price of $30 a 

ton or higher, many utilities may conclude that they should just go 

ahead and try to build plants quickly, and get their money out before the price of allowances goes very high. 

An additional policy idea, I would suggest, to go along with a 

CO2 new source performance standard for new power plants, is a 

low-carbon generation obligation. This would require that an increasing fraction of all of the electricity generated by coal, come 

from plants that employ carbon capture and storage. The idea behind this, as a complement to a new source performance standard, 

is to spread the cost and the risk of building this new technology 

across the coal-based industry, rather than concentrating only on 

the developers of new plants. So, I think that’s an idea I would 

urge you to consider. 

Finally, to address Professor Deutch’s point about the need to 

deal with the many power plants that are being built in China and 

at a somewhat slower pace in India, but a really, truly dizzying 

pace in China, building conventional coal plants. I think it’s really 

essential for the international community to step up and develop 

a dedicated fund that would pay for the incremental costs of building those plants with carbon capture and disposal as soon as possible, so as they’re building out that infrastructure, it’s built in a 

way that’s consistent with where we need to go on global warming. 
24

1Online at http://mit.edu/coal/. 

2Online at www.nrdc.org/globalWarming/coal/contents.asp. 

It’s actually a commitment that the international community 

made, in principle, back in 1992 at Rio, and it’s never been fulfilled. Now is the time to step up, we have the technology that this 

report and others show that we know how to keep the CO2 out of 

the atmosphere, by putting it underground, starting now. So in my 

view, there’s no time like the present—let’s get started. Thank you. 

[The prepared statement of Mr. Lashof follows:]

PREPARED STATEMENT OF DANIEL A. LASHOF, PH.D., CLIMATE CENTER SCIENCE

DIRECTOR, NATURAL RESOURCES DEFENSE COUNCIL, NEW YORK, NY 

INTRODUCTION

Thank you for the opportunity to share my views regarding MIT’s ‘‘Future of 

Coal’’ report.1 My name is Daniel A. Lashof, and I am the science director of the 

Climate Center at the Natural Resources Defense Council (NRDC). I was a coauthor 

(with David Hawkins and Robert Williams) of a September 2006 Scientific American 

article titled ‘‘What to do about Coal.’’ David Hawkins of NRDC served on the advisory committee for the MIT study and NRDC has prepared a brief response to the 

MIT report, which is attached to my testimony and available online.2

NRDC is a national, nonprofit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. 

Founded in 1970, NRDC has more than 1.2 million members and online activists 

nationwide, served from offices in New York, Washington, Los Angeles and San 

Francisco. 

CAPTURING AND SEQUESTERING CARBON IS POSSIBLE TODAY

MIT’s report on the Future of Coal correctly recognizes the imperative for prompt 

action on global warming and the critical role that use of carbon dioxide (CO2) capture and geologic storage (CCS) must play in reconciling protection of the climate 

with expected global dependence on coal. Yet the report’s examination of policies to 

promote immediate deployment of CCS systems is incomplete and it fails to address 

the most urgent problem facing U.S. policymakers: what CO2 performance requirements should be applied to proposed new coal power plants? 

While the facts set forth in the report provide ample justification for a recommendation to require all proposed new coal plants to capture CO2 for geologic disposal, the report is silent on this question. 

Rather than recommending performance requirements to capture and store CO2

from all new coal plants, the report proposes an incomplete policy response that 

would likely fail to prevent the construction of new high-emitting coal plants and 

result in much larger taxpayer costs and higher abatement costs when climate protection policies are adopted. The report recommends that government grants be 

made to energy companies to fund use of CO2 capture at a few new coal plants, that 

government fund several large-scale geologic injection projects, and that Congress 

not ‘‘grandfather’’ new proposed power plants from future CO2 control legislation. 

While each of these recommendations is a useful complement to a direct requirement for new coal plants to use CCS, by themselves they are inadequate. 

Some industry proponents of old-technology coal plants that will not capture CO2

have claimed that the MIT study suggests that CCS systems are not ready for use 

at proposed new coal plants. In contrast, the report itself states that there is no reason for Congress to delay adoption of a carbon emission control policy and finds that 

construction of new supercritical pulverized coal plants without CCS ‘‘will raise the 

cost of future CO2 control.’’ One reason is that retrofits of plants built without CCS 

are not likely. The MIT report finds that: ‘‘[ . . . ], retrofitting an existing coal-fired 

plant originally designed to operate without carbon capture will require major technical modification, regardless of whether the technology is SCPC or IGCC.’’ (Executive Summary, p. xiv) Yet the report fails to recommend (or even discuss) the most 

obvious direct policy measure a requirement that new coal plants employ CCS. 

IS CCS READY FOR NEW COAL PLANTS TO USE TODAY?

While the Findings and Recommendations chapter of the MIT report states there 

is no reason for Congress to delay adoption of a carbon emission control policy and 

finds that construction of new supercritical pulverized coal plants without CCS ‘‘will 
25

raise the cost of future CO2 control,’’ the report’s Executive Summary discusses the 

choice of whether to apply CCS from the point of view of private sector developers, 

concluding that it is difficult to choose between Integrated Gasification Combined 

Cycle (IGCC) technology and supercritical pulverized coal (SCPC) technology. 

The critical flaw in this discussion, which I expect will be widely quoted by conventional coal plant developers, is that it implies that the only rational approach 

to new coal plant investments is to permit private developers to choose between two 

different types of coal plants, both of which release their CO2 rather than capturing 

it. However, the premise of significantly delayed requirements to control CO2 emissions that underlies this discussion is inconsistent with other findings in the report 

that CCS is ready for application today and that there is no reason for Congress 

to delay adoption of limits on CO2 emissions. 

Is it technically feasible for new coal power plants to capture and sequester their 

carbon? The MIT study itself supports an affirmative answer. The study finds that 

commercial capture systems exist:

Of the possible approaches to separation [with pulverized coal plants], 

chemical absorption with amines, such as monoethanolamine (MEA) or hindered amines, is the commercial process of choice. (page 24) 

In applying CO2 capture to IGCC [ . . . ] a weakly CO2-binding physical 

solvent, such as the glymes in Selexol, can be used to separate out the CO2. 

Reducing the pressure releases the CO2 and regenerates the solvent, greatly reducing the energy requirements for CO2 capture and recovery compared to the MEA system. (page 34)

The study also finds that ‘‘large-scale CO2 injection projects can be operated safely’’ (Executive Summary, p. xii). Dr. Julio Friedman of Lawrence Livermore National Laboratory agrees. Testifying before the House Energy and Commerce Committee on March 6, 2007, Dr. Friedman concluded that:

Opportunities for rapid deployment of [geological carbon sequestration] 

GCS exist in the U.S. There is enough technical knowledge to select a safe 

and effective storage site, plan a large-scale injection, monitor CO2, and remediate and mitigate any problems that might arise (e.g., well-bore leakage). This knowledge derives from over 100 years of groundwater resource 

work, oil and gas exploration and production, studies of geological analogs, 

natural gas storage site selection and operation, and hazardous waste disposal. A careful operator could begin work today at a commercial scale and 

confidently select and operate a site for 30 to 50 years. (pages 6-7)

The MIT study notes that existing projects do not employ the rigorous monitoring 

that is needed for a fully implemented CCS program and that permitting regulations need to be written. However, if begun now, these requirements can be developed in a few years, shorter than the period required to plan, finance, and build 

new coal plants now in preliminary development stages. Such requirements will 

need to be adopted to carry out the large demonstration injection projects recommended by the report in any case. As the report states, ‘‘What is needed is to 

demonstrate an integrated system of capture, transportation, and storage of CO2, 

at scale. This is a practical goal but requires concerted action to carry out’’ (Executive Summary, p. xi) Rather than carry out a set of demonstrations unconnected to 

newly built coal plants, the obvious alternative is to integrate the construction of 

new coal plants with the initial large-scale injection projects. 

CONCLUSION

The MIT study does not examine in any detail the key issue surrounding new coal 

plant construction: would it be better to vent CO2 from new coal plants in the next 

decade or two rather than capture it. The report notes that if significant new coal 

capacity without CCS is built the costs of CO2 control programs would increase for 

all. Another outcome, not discussed in the report, is that such new coal investments 

will be cited by their owners as reasons to delay the pace of programs to limit CO2

emissions. That result would foreclose options to stabilize CO2 concentrations at 

adequately protective levels. 

While the authors of the MIT report decline to say so directly, the information 

presented in the report supports a straightforward policy recommendation: Congress 

should require planned new coal plants in the United States to employ CCS without 

further delay. 
26

NATURAL RESOURCES DEFENSE COUNCIL’S RESPONSE TO MIT’S

‘FUTURE OF COAL’ REPORT

By David Hawkins and George Peridas, Natural Resources Defense Council 

ABOUT NRDC

The Natural Resources Defense Council is an international nonprofit environmental organization with more than 1.2 million members and online activists. Since 

1970, our lawyers, scientists, and other environmental specialists have worked to 

protect the world’s natural resources, public health, and the environment. NRDC 

has offices in New York City, Washington, D.C., Los Angeles, San Francisco, and 

Beijing. Visit us at www.nrdc.org. NRDC President: Frances Beinecke; NRDC Director of Communications: Phil Gutis; NRDC Publications Director: Alexandra 

Kennaugh; NRDC Editor: Lisa Goffredi. 

SUMMARY

MIT’s report on the Future of Coal correctly recognizes the imperative for prompt 

action on global warming and the critical role that use of carbon dioxide (CO2) capture and geologic storage (CCS) must play in reconciling protection of the climate 

with expected global dependence on coal. Yet the report’s examination of policies to 

promote immediate deployment of CCS systems is incomplete and it fails to address 

the most urgent problem facing U.S. policymakers: what CO2 performance requirements should be applied to proposed new coal power plants? 

While the facts set forth in the report provide ample justification for a recommendation to require all proposed new coal plants to capture CO2 for geologic disposal, the report is silent on this question. 

Rather than recommending performance requirements to capture and store CO2

from all new coal plants, the report proposes an incomplete policy response that 

would likely fail to prevent the construction of new high-emitting coal plants and 

result in much larger taxpayer costs and higher abatement costs when climate protection policies are adopted. The report recommends that government grants be 

made to energy companies to fund use of CO2 capture at a few new coal plants, that 

government fund several large-scale geologic injection projects, and that Congress 

not ‘‘grandfather’’ new proposed power plants from future CO2 control legislation. 

While each of these recommendations is a useful complement to a direct requirement for new coal plants to use CCS, by themselves they are inadequate. 

Based on leaks of early drafts of the report’s executive summary, industry proponents of old-technology coal plants that will not capture CO2 are already claiming 

the MIT study suggests that CCS systems are not ready for use at proposed new 

coal plants. MIT’s Howard Herzog, one of the MIT study participants, in a November 2006 presentation, provides a more accurate summary of the facts:

Is CCS feasible? Yes, all major components of a carbon capture and sequestration system are commercially available today. Why is CCS use limited today? It is almost always cheaper to emit to the atmosphere than sequester. Therefore, opportunities are limited to niche areas until carbon 

policies are put in place.

The report states there is no reason for Congress to delay adoption of a carbon 

emission control policy and finds that construction of new supercritical pulverized 

coal plants without CCS ‘‘will raise the cost of future CO2 control.’’ Yet the report 

fails to recommend (or even discuss) the most obvious direct policy measure—a requirement that new coal plants employ CCS. 

Is CCS Ready for New Coal Plants to Use Today? 

While the Findings and Recommendations chapter of the MIT report states there 

is no reason for Congress to delay adoption of a carbon emission control policy and 

finds that construction of new supercritical pulverized coal plants without CCS ‘‘will 

raise the cost of future CO2 control,’’ the report’s Executive Summary inconsistently 

suggests that the choice of whether to apply CCS should be left to private sector 

developers:

From the standpoint of a power plant developer, the choice of a coal-fired 

technology for a new power plant today involves a delicate balancing of considerations. On the one hand, factors such as the potential tightening of air 

quality standards for SO2, NOX, and mercury, a future carbon charge, or 

the possible introduction of federal or state financial assistance for IGCC 

would seem to favor the choice of IGCC. On the other hand, factors such 

as near-term opportunity for higher efficiency, capability to use lower cost 
27

coals, the ability to cycle the power plant more readily in response to grid 

conditions, and confidence in reaching capacity factor/efficiency performance 

goals would seem to favor the choice of super critical pulverized coal 

(SCPC). Other than recommending that new coal units should be built with 

the highest efficiency that is economically justifiable, we do not believe that 

a clear preference for either technology can be justified. (Executive Summary, p. xiv)

The critical flaw in this excerpt, which we expect will be widely quoted by conventional coal plant developers, is that it implies that the only rational approach to new 

coal plant investments is to permit private developers to choose between two different types of coal plants, both of which release their CO2 rather than capturing 

it. However, the premise of significantly delayed requirements to control CO2 emissions that underlies this discussion is inconsistent with other findings in the report 

that CCS is ready for application today and that there is no reason for Congress 

to delay adoption of limits on CO2 emissions. 

Is it technically feasible for new coal power plants to capture and sequester their 

carbon? The MIT study itself supports an affirmative answer. The study finds that 

commercial capture systems exist:

Of the possible approaches to separation [with pulverized coal plants], 

chemical absorption with amines, such as monoethanolamine (MEA) or hindered amines, is the commercial process of choice. (page 24) 

In applying CO2 capture to IGCC [ . . . ] a weakly CO2-binding physical 

solvent, such as the glymes in Selexol, can be used to separate out the CO2. Reducing the pressure releases the CO2 and regenerates the solvent, greatly reducing the energy requirements for CO2 capture and recovery compared to the MEA system.’’ (page 34)

The study also finds that ‘‘large-scale CO2 injection projects can be operated safely’’ (Executive Summary, p. xii). The study notes that existing projects do not employ the rigorous monitoring that is needed for a fully implemented CCS program 

and that permitting regulations need to be written. However, if begun now, these 

requirements can be developed in a few years, shorter than the period required to 

plan, finance, and build new coal plants now in preliminary development stages. 

Such requirements will need to be adopted to carry out the large demonstration injection projects recommended by the report in any case. As the report states, ‘‘What 

is needed is to demonstrate an integrated system of capture, transportation, and 

storage of CO2, at scale. This is a practical goal but requires concerted action to 

carry out’’ (Executive Summary, p. xi) Rather than carry out a set of demonstrations 

unconnected to newly built coal plants, the obvious alternative is to integrate the 

construction of new coal plants with the initial large-scale injection projects. 

CAPTURING AND SEQUESTERING CARBON IS POSSIBLE TODAY

Capture of Carbon From Power Plants 

The 2005 Intergovernmental Panel on Climate Change (IPCC) special report on 

Carbon Dioxide Capture and Storage groups processes to capture or separate CO2

from power plant gas streams into three categories: post-combustion, pre-combustion and oxyfuel combustion. Today pre-combustion capture is the most economic option but other approaches show promise as well. 

Pre-combustion capture is applicable to processes that gasify coal. Coal gasification is widely used in industrial processes, such as ammonia and fertilizer production around the world. Hundreds of such industrial gasifiers are in operation today. 

Integrated Gasification Combined Cycle (IGCC), used for electric power production, 

is a relatively recent development—about two decades old and is still not widely deployed. 

Commercially demonstrated systems for pre-combustion capture from the coal 

gasification process are used in industrial plants to separate CO2 from natural gas 

and to make chemicals such as ammonia. Due to lack of CO2 control policies, most 

such systems simply release the separated CO2 to the air. An example where the 

CO2 from coal gasification is actually captured rather than vented is the Dakota 

Gasification Company plant in Beulah, North Dakota, which captures and pipelines 

more than one million tons of CO2 per year from its lignite gasification plant to an 

oil field in Saskatchewan. ExxonMobil’s Shute Creek natural gas processing plant 

in Wyoming, which strips CO2 from sour gas and pipelines several million tons per 

year to oil fields in Colorado and Wyoming, is another large industrial example. 

Today’s pre-combustion capture approach is not applicable to the installed base 

of conventional pulverized coal in the United States and elsewhere. However, it is 

ready today for use with IGCC power plants. The oil giant BP has already an-
28

nounced an IGCC project with pre-combustion CO2 capture at its refinery in Carson, 

California. The MIT executive summary statement that ‘‘[t]here is no operational 

experience with carbon capture from coal plants and certainly not with an integrated sequestration operation.’’ (Executive Summary, p. xiii), is not correct as the 

Dakota Gasification plant shows. 

The principal obstacle for broad application of pre-combustion capture to new 

power plants is not technical, it is economic: under today’s laws it is cheaper to release CO2 to the air rather than capturing it. The MIT report states that ‘‘at present 

Integrated Gasification Combined Cycle (IGCC) is the leading candidate for electricity production with CO2 capture because it is estimated to have lower cost than 

pulverized coal with capture’’ (Executive Summary, p. xiii). This is backed up in the 

main body of the study, which quotes the respective costs of electricity from a supercritical pulverized coal plant with capture and an IGCC with capture as 7.69 cents/

kWh and 6.52 cents/kWh (p. 30). 

Commercial post-combustion CO2 capture systems have been applied to very small 

portions of flue gases from a few coal-fired power plants in the United States that 

sell the captured CO2 to the food and beverage industry. However, industry analysts 

and the MIT report state that today’s systems, based on publicly available information, involve much higher costs and energy penalties than the principal demonstrated alternative, pre-combustion capture. New and potentially less expensive 

post-combustion concepts have been evaluated in laboratory tests and some, such as 

ammonia-based capture systems, are scheduled for small pilot-scale tests in the next 

few years. Under normal industrial development scenarios, if successful such pilot 

tests would be followed by larger demonstration tests and then by commercial-scale 

tests. These and other approaches should continue to be explored. 

Oxyfuel combustion is also in the early stages of development. Pilot studies for 

oxyfuel processes have been announced. As with post-combustion processes, absent 

an accelerated effort to leapfrog the normal commercialization process, it could be 

significant number of years before such systems begin to be deployed broadly in 

commercial application. 

Capturing emissions from new power plants is perfectly feasible. Is it possible 

then to sequester the CO2 in geologic formations? We examine that question below. 

Sequestration of Carbon in Geologic Formations Is Possible 

We have a significant experience base for injecting large amounts of CO2 into geologic formations. For several decades oil field operators have received high pressure 

CO2 for injection into fields to enhance oil recovery, delivered by pipelines spanning 

as much as several hundred miles. Today in the United States a total of more than 

35 million tons of CO2 are injected annually in more than 70 projects. In addition 

to this enhanced oil recovery experience, there are several other large injection 

projects in operation or announced. The longest running of these, the Sleipner 

project, began in 1996. But the largest of these projects injects on the order of 1 

million tons per year of CO2, while a single large coal power plant can produce 

about 5 million tons per year. And of course, our experience with human-made injection projects does not extend for the 1,000-year or more period that we would need 

to keep CO2 in place underground for it to be effective in helping to avoid dangerous 

global warming. Accordingly, the public and interested members of the environmental, industry, and policy communities rightly ask whether we can carry out a 

large-scale injection program safely and assure that the injected CO2 will stay 

where we put it. 

Do we have a basis today for concluding that injected CO2 will stay in place for 

the long periods required to prevent its contributing to global warming? The IPCC 

report concluded that we do, stating that ‘‘[o]bservations from engineered and natural analogues as well as models suggest that the fraction retained in appropriately 

selected and managed geologic reservoirs is very likely to exceed 99 percent over 100 

years and is likely to exceed 99 percent over 1,000 years.’’

The MIT study itself states that:

[although substantial work remains to characterize and quantify these 

mechanisms, they are understood well enough today to trust estimates of 

the percentage of CO2 stored over some period of time—the result of decades of studies in analogous hydrocarbon systems, natural gas storage operations, and CO2-EOR. [ . . . ] Additional work will reduce the uncertainties associated with long-term efficacy and numerical estimates of storage 

volume capacity, but no knowledge gaps today appear to cast doubt on the 

fundamental likelihood of the feasibility of CCS. [ . . . ] Our overall judgment is that the prospect for geologic CO2 sequestration is excellent. We 

base this judgment on 30 years of injection experience and the ability of the 

earth’s crust to trap CO2. (p. 44)
29

Although the report notes the existence of open issues about large-scale deployment, meaning a sequestration program on the order of billions of tons per year, 

Chapter 4 of the report makes clear that these issues are not obstacles to commencing numerous multimillion tonne per year injection projects today. Rather, the 

issues mentioned are ones that should be addressed to allow a large-scale program 

to be implemented in an economically optimized fashion. 

The report makes recommendations that include a comprehensive nationwide survey by the United States Geological Survey to map out storage capacity, the development of a regulatory framework for CCS, the adoption of long-term liability regimes for storage sites, and the acceleration of large-scale sequestration projects of 

at least 1 million tonnes of CO2 annually. All of these recommendations can be implemented before the commissioning of new coal power plants now in the development stage. 

The Cost of CCS 

CCS costs more than conventional power generation. Significantly more capital 

and equipment is required and the energy penalty that accompanies plants that 

capture and sequester their carbon is not trivial. However, deployment of CCS will 

have a minimal effect on the power sector, end-consumers, and the economy as a 

whole. 

With today’s off-the-shelf systems, estimates are that the production cost of electricity at a coal plant with CCS could be as much as 40 percent higher than at a 

conventional plant that emits its CO2. But the impact on average electricity prices 

of introducing CCS now will be very much smaller due to several factors. 

First, power production costs represent about 60 percent of the price that end-consumers pay for electricity—the rest comes from transmission and distribution costs. 

Second, coal-based power, which would initially be the source that would utilize 

CCS, represents just over half of U.S. power consumption. Third, and most important, even if we start now, CCS would be applied to only a small fraction of U.S. 

coal capacity for some time. Thus, with a properly designed trading approach, the 

incremental costs on the units equipped with CCS could be spread over the entire 

coal-based power sector or possibly across all fossil capacity depending on the 

choices made by Congress. Based on CCS costs available in 2005 we estimate that 

a low-carbon generation obligation large enough to cover all forecasted new U.S. coal 

capacity through 2020 could be implemented for about a 2 percent increase in average U.S. retail electricity rates. 

The MIT study notes that absent a value for carbon there is no economic reason 

from the firm’s perspective to employ CCS outside niche markets like enhanced oil 

recovery. However, the study does not demonstrate, or even argue, that a prompt 

deployment program would result in economically infeasible impacts on electricity 

prices. The added costs of CCS therefore do not constitute an argument that prompt 

deployment for new capacity now in the planning pipeline would be economically infeasible. 

Regulations Needed for CCS 

A regulatory framework is absolutely necessary to assure that CCS does not pose 

any significant risk to human health or the environment, to assure it is performed 

to high standards, and to enable the widespread adoption of the technology. 

The MIT study clearly calls for such a framework to be developed, and should be 

commended for doing so:

An explicit and rigorous regulatory process that has public and political 

support is prerequisite for implementation of carbon sequestration on a 

large scale. This regulatory process must resolve issues associated with the 

definition of property rights, liability, site licensing and monitoring, ownership, compensation arrangements and other institutional and legal considerations. Regulatory protocols need to be defined for sequestration projects 

including site selection, injection operation, and eventual transfer of custody to public authorities after a period of successful operation.[ . . . ] 

These issues should be addressed with far more urgency than is evidenced 

today (Executive Summary, p. xii).

With concerted effort by an agency with jurisdiction and capability, which we believe is the U.S. EPA, a regulatory framework for CCS can be in place in a few 

years. For new plants that are closer to construction, there will likely be a need for 

interim requirements and those should be set forth without further delay. 
30

POLICIES TO PROMOTE CCS

The MIT study recommends government grants to support installation of CO2 capture at several new coal plants (p. 100). 

Although this policy recommendation may make sense as a complement to a requirement for new coal plants to use CCS, by itself it is inadequate and likely to 

lead to wasted taxpayer expenditures. 

Research and development funding as well as direct government subsidies can be 

useful in assisting a technology’s widespread adoption, but cannot substitute for the 

incentive that a genuine commercial market for CO2 capture and storage systems 

will provide to the private sector. Government assistance needs to go hand in hand 

with policies that will make the adoption of low-carbon generation technologies 

mandatory. The amounts of capital that the private sector can spend to optimize 

CCS methods will almost certainly always dwarf what government will provide with 

taxpayer dollars. To mobilize those private sector dollars, Congress needs a stimulus 

more compelling than the offer of modest handouts for research. 

We have a model that works: intelligently designed policies to limit emissions 

cause firms to invest money to find better and less expensive ways to prevent or 

capture emissions. 

Where a technology is already competitive with other emission control techniques, 

for example, sulfur dioxide scrubbers, a cap and trade program like that enacted by 

Congress in 1990, can result in more rapid deployment, improvements in performance, and reductions in costs. However, a CO2 cap and trade program by itself may 

not result in deployment of CCS systems as rapidly as we need. Many new coal 

plant design decisions are being made literally today. Depending on the pace of required reductions under an emissions cap, a firm may decide to build a conventional 

coal plant and purchase credits from the cap and trade market rather than applying 

CCS systems to the plant. Although this may appear to be economically rational in 

the short term, it is likely to lead to higher costs of CO2 control in the mid and 

longer term if substantial amounts of new conventional coal construction leads to 

ballooning demand for CO2 credits. 

Moreover, delaying the start of CCS until a cap and trade system price is high 

enough to produce these investments delays the broad demonstration of the technology that the United States and other countries need if, as seems likely, we continue substantial use of coal. The more affordable CCS becomes, the more widespread its use will be throughout the world, including in rapidly growing economies 

like China and India. But the learning and cost reductions for CCS that are desirable will come only from the experience gained by building and operating the initial 

commercial plants. The longer we wait to ramp up this experience, the longer we 

will wait to see CCS deployed here and in countries like China. 

Accordingly, we believe the best policy package is a hybrid program that combines 

the breadth and flexibility of a cap and trade program with well-designed performance measures focused on key technologies like CCS. One such performance measure is a CO2 emissions standard that applies to new power investments. California 

enacted such a measure in SB1368 in 2006. It requires new investments for sale 

of power in California to meet a performance standard that is achievable by coal 

with a moderate amount of CO2 capture. 

Another approach is a low-carbon generation obligation for coal-based power. 

Similar in concept to a renewable performance standard, the low-carbon generation 

obligation requires an initially small fraction of sales from coal-based power to meet 

a CO2 performance standard that is achievable with CCS. The required fraction of 

sales would increase gradually over time and the obligation would be tradable. 

Thus, a coal-based generating firm could meet the requirement by building a plant 

with CCS, by purchasing power generated by another source that meets the standard, or by purchasing credits from those who build such plants. This approach has 

the advantage of speeding the deployment of CCS while avoiding the ‘‘first mover 

penalty.’’ Instead of causing the first builder of a commercial coal plant with CCS 

to bear all of the incremental costs, the tradable low-carbon generation obligation 

would spread those costs over the entire coal-based generation system. The builder 

of the first unit would achieve far more hours of low-carbon generation than required and would sell the credits to other firms that needed credits to comply. These 

credit sales would finance the incremental costs of these early units. This approach 

provides the coal-based power industry with the experience with a technology that 

it knows is needed to reconcile coal use and climate protection and does it without 

sticker shock. 
31

MISINTERPRETATIONS OF THE MIT REPORT

Some have misread the MIT to suggest that additional research and development 

is required before we could apply CCS to coal plants now being designed. For example, a recent press report cited a leaked draft of the report’s executive summary as 

follows: ‘‘[the study] concludes in a draft version that it is not clear which technology—the so-called integrated gasification combined cycle or pulverized coal—will 

allow for the easiest carbon capture, because so much engineering work remains to 

be done’’. This reference confuses two different issues: is CCS demonstrated today 

versus which approach to CCS may ultimately prove to be most effective and economical. As discussed above, the MIT report makes clear that demonstrated CCS 

methods exist today although private firms will not employ them absent a subsidy 

or a CO2 emissions performance requirement. 

The report urges that no single approach like IGCC should be anointed as the ultimate best system for use of coal with CCS. Adoption of policies that set a CO2 performance standard now for new plants will not anoint IGCC as the technological 

winner since alternative approaches can be employed when they are ready. If the 

alternatives prove superior to IGCC and pre-combustion capture, the market will reward them accordingly. Setting the policy now will create the market that will stimulate competition among competing approaches. 

Some industry developers who are seeking approval to build conventional CO2

emitting coal plants already have misstated the report’s conclusions as justifying 

their attempts to build new plants without CCS. For example, Sithe Global Power 

LLC, the developer of the proposed Desert Rock power plant, in a January 2007 brochure, cites the then unreleased report to imply that the report raises questions 

about ‘‘the viability of sequestration technologies’’.

Even if carbon capture technologies become available and affordable, 

many unanswered questions remain about the viability and impacts of sequestering carbon dioxide. While some technologies in the oil and gas industries use carbon sequestration today for additional development, no 

long-term storage data is currently available. An upcoming study from energy experts at the Massachusetts Institute of Technology (MIT) to be released in February 2007 is likely to cast further doubt on the viability of 

sequestration technologies. While Sithe Global and other developers believe 

the future is promising, carbon sequestration issues still remain a largely 

unknown factor because of these concerns.

In fact, the MIT report states the authors’ ‘‘confidence that large-scale CO2 injection projects can be operated safely,’’ even though current modeling, monitoring, and 

verification methods do not resolve all relevant technical issues. (Executive Summary, p. xii). Chapter 4 of the report, which discusses geologic storage in detail, 

states that

• geologic trapping mechanisms ‘‘are understood well enough today to trust estimates’’ made by the IPCC that more than 99 percent of injected CO2 will likely 

be retained for at least 1,000 years; and 

• ‘‘no knowledge gaps today appear to cast doubt on the fundamental likelihood 

of the feasibility of CCS.’’ (p. 44)

CONCLUSION: TIME IS OF THE ESSENCE

The study does not examine in any detail the key issue surrounding new coal 

plant construction: would it be better to vent CO2 from new coal plants in the next 

decade or two rather than capture it. The report notes that if significant new coal 

capacity without CCS is built the costs of CO2 control programs would increase for 

all. Another outcome, not discussed in the report, is that such new coal investments 

will be cited by their owners as reasons to delay the pace of programs to limit CO2

emissions. That result would foreclose options to stabilize CO2 concentrations at 

adequately protective levels. 

The report does state that there is no reason for Congress to delay action to limit 

CO2 emissions during the CCS demonstration program recommended by the study 

authors. There are ample reasons to avoid any such delay. If CO2 performance 

standards for U.S. coal plants were to be delayed until after the completion of the 

three to five recommended large-scale sequestration demonstrations, and other 

countries followed suit, it is likely that broad CCS would not happen until another 

20 years of coal capacity had been constructed—an amount of new capacity about 

as large as current global coal capacity. If that amount of sunk investment in noncapture coal capacity is made, either CO2 control programs will be much more cost-
32

ly, as the study notes, or worse, politicians will simply fail to put in place effective 

programs to protect against a climate catastrophe. 

The die is being cast for that catastrophe today, not decades from now. Decisions 

being made today in corporate board rooms, government ministries, and congressional hearing rooms are determining how the next coal-fired power plants will be 

designed and operated. Power plant investments are enormous in scale, more than 

$1 billion per plant, and plants built today will operate for 60 years or more. The 

International Energy Agency (IEA) forecasts that more than $5 trillion will be spent 

globally on new power plants in the next 25 years. Under IEA’s forecasts, more than 

1,800GW of new coal plants will be built between now and 2030—capacity equivalent to 3000 large coal plants, or an average of ten new coal plants every month 

for the next quarter century. This new capacity amounts to 1.5 times the total of 

all the coal plants operating in the world today. 

The astounding fact is that under IEA’s forecast, 7 out of every 10 coal plants that 

will be operating in 2030 don’t exist today. That fact presents a huge opportunity—

many of these coal plants will not need to be built if we invest more in efficiency; 

additional numbers of these coal plants can be replaced with clean, renewable alternative power sources; and for the remainder, we can build them to capture their 

CO2, instead of building them the way our grandfathers built them. 

If all 3,000 of the next wave of coal plants are built with no CO2 controls, their 

lifetime emissions will impose an enormous pollution lien on our children and 

grandchildren. Over a projected 60-year life these plants would likely emit 750 billion tons of CO2, a total, from just 25 years of investment decisions, that is 30 percent greater than the total CO2 emissions from all previous human use of coal. 

The MIT report concludes that retrofits of plants built without CCS are not likely: 

‘‘[ . . . ], retrofitting an existing coal-fired plant originally designed to operate 

without carbon capture will require major technical modification, regardless of 

whether the technology is SCPC or IGCC.’’ (Executive Summary, p. xiv) 

The IPCC stated in February 2007 that the warming of the plant’s climate system 

is ‘‘unequivocal’’, and that it is attributable to anthropogenic greenhouse gas emissions with more than 90 percent probability. Meanwhile, in its April 2007 release, 

the Panel reportedly will warn of starvation, water shortages, disease, floods, 

extinctions, and increased death rates, claiming that ‘‘[c]hanges in climate are now 

affecting physical and biological systems on every continent.’’ We must begin decreasing our greenhouse gas emissions now. The modest costs of deploying CCS 

today are completely overshadowed by the costs and risks of not doing so. 

While the authors of the MIT report decline to say so directly, the information 

presented in the report supports a straightforward policy recommendation: Congress 

should require planned new coal plants in the United States to employ CCS without 

further delay.

The CHAIRMAN. Thank you very much. Thank you all. 

We’ll do 5-minute rounds here, and let me start and ask a few 

questions. 

Let me ask Professor Deutch and Professor Moniz: on the issue 

of whether or not there’s going to be the capacity to actually capture and sequester—the capturing, I guess, is not the tough part, 

it’s the sequestering that’s more difficult, as I understand it. We 

have, as you said, Professor Deutch, 80 new coal plants constructed 

in China last year. We’ve got lots of coal plants ourselves, there are 

lots of coal plants around the world. Is it realistic to think that 

once this technology is perfected and commercialized on a large 

scale, that we then have the capacity, and geologic formations, to 

really sequester all of this carbon? It just strikes me that you’ve 

got a lot of carbon going into the atmosphere now, and I’m just 

wondering if all of that’s going to be going into geologic formations 

in the future, and do we have enough of them? 

Mr. DEUTCH. Mr. Chairman, the first point is, that we believe 

there is a vast capacity in deep saline aquifers in the United States 

for the foreseeable storage of this CO2 material. One of the recommendations of our study is, however, to do a bottom-up review, 

in this country, and elsewhere in the world, to really tie down what 

these capacities are. Our expectation is that the same will be found 
33

for China. India, on the other hand, has less-capable geology. But, 

we do think in the United States that storage capacity exists, and 

through some accidental piece of good fortune, which I don’t usually encounter, the places where we have coal plants, the places 

where these deep saline aquifers exist, are more or less close by. 

So, it’s not vast distances. 

The second point I would like to make is that I don’t think it is 

only the process of injection and monitoring the storage cites in 

this report. We need practical experience with the capture part, 

where we really haven’t done any work on capture from a coal 

plant. We need experience with the pressurization and transportation, and we need the coal-integrated system put together, in a 

regulatory framework. That practical experience is important. 

What about the pace? Yes, it’s a huge scale, as Ernie emphasized; yes, it will take time to make those investments; but I want 

to remind you that since the Congress put in new source performance standards on criteria pollutants, the coal industry and the 

utilities have shown a tremendous capacity to meet those more 

stringent environmental requirements. I am convinced that given 

time, and given the support, that the coal industry will gradually 

be able to introduce this into the operation of the United States. 

The CHAIRMAN. Let me just to try to better understand what people are recommending going forward here. 

As I understand, in the MIT Report that you’ve described, the 

recommendation there is that we should immediately, or as soon as 

we can, change the law or provide that Federal assistance will only 

go to projects that incorporate this capture and sequestration technology, coal projects. 

Mr. DEUTCH. That’s correct, Mr. Chairman, but let me emphasize, that we think it should be an array of projects. 

The CHAIRMAN. Right. 

Mr. DEUTCH. It should not just be IGCC——

The CHAIRMAN. Right, it——

Mr. DEUTCH. It should be all sorts of projects. 

The CHAIRMAN. Yes, use all possible technologies, but use capture and sequestration. 

Mr. DEUTCH. Each one of them would have to have capture and 

sequestration——

The CHAIRMAN. Right. 

Mr. DEUTCH [continuing]. Integrated in their design and operation. 

The CHAIRMAN. That’s your recommendation for what we do 

right now. 

Now, I understand that we’ve got a different set of ideas, Dr. 

Hannegan. You said that EPRI’s view was that beginning in 2020, 

you would anticipate we would have in place a requirement that 

carbon capture and sequestration be used if additional coal plants 

are to be constructed, as I understood it. Is that right? 

Mr. HANNEGAN. Actually, Mr. Chairman, it was one assumption 

that we made under the scenario here to the right. It was not—

EPRI is a 501(c)(3) non-profit, it doesn’t make policy recommendations per se—it was just one element of assuming, as would be assumed in the case of the MIT study, that if we invest substantially 

in the carbon capture and storage technologies, and we work on de-
34

ploying them and developing them at a commercial scale, our technical work shows that the earliest that they could be within the 

range of economic assistance to be commercializable on their own, 

is in the 2020 timeframe. Once you start from moving at the current pilot scale that we’re seeing today, through to some of the new 

announcements by AEP and others of a 200–megawatt project, just 

within the last week, to by the time you get to a commercial scale 

where you’ve tested and run that, and you develop the supporting 

regulatory structures, the earliest that we see it could be widespread, in terms of its availability, is by 2020. 

Let me say one other thing, and that is: we disagree with MIT’s 

view that you should only limit support to those projects that have 

carbon capture and storage built in. Those certainly should be preferred, because CO2 capture and storage is a necessary option, as 

we’ve demonstrated going forward, but there are issues associated 

with so-called Ultra Super Critical Pulverized Coal Plants, which 

are pushing temperatures and pressures that we’ve never done in 

the real world. Also with respect to IGCC at scale—I mentioned in 

my testimony—there’s a level of sophistication and integration that 

hasn’t been demonstrated above the two pilot programs at DOE. 

The CHAIRMAN. My time has run out, maybe I’ll come back and 

ask some additional questions in the second round. 

Senator Domenici, did you want to go ahead with a statement, 

or questions, or did you want me to skip over and call someone 

else? What’s your preference? 

Senator DOMENICI. I’m going to do what’s most accommodating 

to you all. 

The CHAIRMAN. I think we’re happy to hear your statement and 

questions at this point, if you’re ready. 

Senator DOMENICI. I won’t have any questions, but I do have a 

statement. 

STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR FROM 

NEW MEXICO 

Senator DOMENICI. First of all, I don’t know what it is, Senator 

Bingaman, I don’t get to see these two guys—Deutch and Moniz 

very often. One would think that they are actually hiding out in 

some foreign country and just show up every now and then and 

peek at us, because they look so different. I mean, they’re getting 

grey, bald-headed——

[Laughter.] 

Senator DOMENICI. I mean, the whole thing, huh? 

Mr. MONIZ. Shall we go? 

Senator DOMENICI. Do you guys work together or at different 

places? 

Mr. DEUTCH. Senator, I remember how you looked 30 years ago, 

too. 

[Laughter.] 

Senator DOMENICI. Well, Senator Bingaman tells me I still look 

pretty good. 

[Laughter.] 

Senator DOMENICI. Anyway, I have been waiting for an occasion 

to express myself the way I’m going to here in just a little bit, and 

I thought it might be good to do it today, where you guys could 
35

come down hard on me, and when you go outside afterwards, you 

can say, ‘‘That’s really bad, what he said,’’ but——

First, I want to thank Senator Bingaman for scheduling this 

hearing on this very important topic. Make no mistake about it: we 

must recognize that the use of American coal in electricity generation is essential to our Nation’s energy independence and security. 

At present, half of our electricity is generated from coal, and the 

EIA estimates that by 2030, 57 percent of our electricity will be derived from coal. Nobody can be sitting around that’s worried about 

the products that come from burning coal, and be cavalier about 

that reality. 

With these numbers in mind, it is clear that for us to make 

progress, we must make significant advancements in clean coal 

technology. I believe it would be unwise for the United States to 

move forward without also working to get China and India as full 

partners in the capture and sequestration of carbon dioxide. That 

includes getting their financial support for these efforts. 

When the technology is proven at the scale needed to capture 

and sequester carbon dioxide, it will be critical for them to fully 

participate in the implementation of that technology. To do otherwise could negatively impact the U.S. economy and our global competitiveness. I don’t think one can see that any other way. 

The United States has led the effort, but unless China, and the 

other coal-using countries participate in this work with both 

human capital and financial resources, it is unlikely that we will 

be able to address global climate change in a reasonable, fair and 

effective manner. 

China controls the world’s third-largest coal reserves, and is expected to account for more than half of the global growth in coal 

over the next 25 years. I want to read that again. China controls 

the world’s third-largest coal reserves, and is expected to account 

for more than half the global growth in coal supply and demand 

over the next 25 years. 

In approximately 2 years, China will pass us as the world’s leader in carbon dioxide emissions. By 2025, China will emit twice as 

much carbon dioxide as the United States. Remember, it is not 

American Climate Change we are facing, it is Global Climate 

Change, and it requires global cooperation and participation for a 

global solution. 

I expect that Professors Deutch and Moniz will tell us that it 

makes a significant difference in reducing the world’s carbon emissions, but other major coal-using and -producing countries have to 

participate in finding solutions. I find The Future of Coal Report 

interesting, and I’m ready to support major research, development, 

and development projects in this area. It is clear that we need to 

gain a better understanding of how to best enhance the efficiency 

of our future, and our future coal-fired power plants, to reduce carbon dioxide emissions. 

We also need to better understand how to best capture and sequester carbon, and to deal with the technological, economical, and 

potential infrastructure and liability challenges that we face in 

large-scale carbon sequestration. 

All of these are issues that the MIT Report can help us better 

understand. Having the answer to these questions will be impor-
36

tant so we don’t put our country at economic risk or at competitive 

disadvantage. 

I believe the Report does a good job of pointing out many of the 

issues that need to be addressed to help Congress thoughtfully address coal and its future. I thank the Chairman for holding the 

hearing. I look forward to working with him and others as we move 

forward in a very, very formidable task ahead of us. 

Thank you very much. 

The CHAIRMAN. Professor Deutch, did you want to respond? 

Mr. DEUTCH. Thank you very much, Mr. Chairman, I’ll be very 

brief. 

Senator, in my opening remarks I made it very clear, and the report is quite clear, that you’re quite right, this is a global problem, 

and if there’s not a way of finding the large, emerging economies, 

like India and China, have them constrain their CO2 emissions, climate change doesn’t get better. It is a judgment question on which 

I have my own view—very, very great reservations about: should 

the United States or Europe or the developed world, in general, go 

forward—when should it go forward?—unless you have it locked up 

tight when the emerging economies will go forward. We have some 

information about what would happen if there was a lag-time. You 

must find a way to lock up the emerging economies on this question as well, or else you’re only going to be paying money, and not 

improving the climate. 

The CHAIRMAN. Senator Bunning, why don’t you go ahead? 

Senator BUNNING. Thank you very much, Mr. Chairman. Thank 

you all for being here. Since you have two of the largest coal-producing States in the United States here represented in Senator 

Thomas and myself—Kentucky and Wyoming—we have a deep and 

abiding interest in what’s going on with coal. We appreciate your 

report. 

Your report emphasizes demonstration of new technologies. One 

of the technologies I believe that is most promising is coal-to-liquid 

fuels. I have introduced legislation to provide Government incentives in the form of tax credits and planning loans for the first few 

coal-to-liquid facilities. I believe these plants, aside from easing our 

dependence on foreign oil, will help push gas, coal gasification technology into the mainstream, much like that which has been done 

in South Africa. 

Would you support this kind of a demonstration program? 

Mr. DEUTCH. Senator, our Report and our comments here are 

quite clear that synthetic fuels—gases or liquids—would certainly 

be candidates for us in these early demonstration projects, but with 

carbon capture——

Senator BUNNING. Carbon sequestration—oh, yes. 

Mr. DEUTCH. I might say in this regard that there’s an advantage——

Senator BUNNING. We have that in the bill. 

Mr. DEUTCH. But, it’s an advantage with synthetic liquids, because you’re making oxygen in the—you have to make the oxygen 

to do the synthetic fuel, so you don’t have that extra cost that you 

have in electricity generation. 
37

Senator BUNNING. I’m also one of the co-sponsors of the bill for 

the other program where we find out how we can store and place 

the carbon that we sequester. 

Mr. DEUTCH. Yes, Senator. 

Senator BUNNING. I have a question for, is it Don or Dan? 

Mr. LASHOF. Dan. 

Senator BUNNING. I know the NRDC has opposed coal-to-liquid 

technology, but I see your organization supports coal gasification 

for electricity. Is that correct, or incorrect? 

Mr. LASHOF. Well, Senator, we believe that carbon capture and 

storage is a critical technology, if coal is going to be a viable energy 

technology in the electric sector, and we support Government funding for carbon capture and disposal associated with electricity generation. 

The problem we have with coal-to-liquids is that, when we’re 

looking at the need to reduce the CO2 emissions that cause global 

warming by, on the order of 80 percent over the next 50 years, we 

need to be moving from transportation fuels that rely on petroleum 

to fuels that have fundamentally lower greenhouse gas emissions 

over the fuel cycle, from well to wheels. 

The problem with coal-to-liquids is, even with carbon capture and 

storage, you still end up, at best, with a fuel that has about the 

same emissions, or a little bit higher emissions, than from conventional gasoline. The reason for that is that the tailpipe emissions 

are basically the same, you’re producing a hydrocarbon fuel that is 

essentially equivalent to diesel. 

Senator BUNNING. The Air Force would disagree with you. 

Mr. LASHOF. No, I don’t think so. I know the Air Force is very 

interested in using Fischer-Tropes liquids derived from coal in their 

jets, and the emissions from the jets would be about the same as—

their CO2 emissions would be essentially identical——

Senator BUNNING. They have testified before me, or have come 

to visit with me, and that is not their position. 

Mr. LASHOF. Well, and——

Senator BUNNING. Because the fuel burns cooler, it’s better for 

the engines, and with a mixture of some type of petroleum, it 

doesn’t emit near the emissions that a regular jet would emit if it 

used petroleum-based fuel. 

Mr. LASHOF. Well, I’d be happy to review their testimony 

and——

Senator BUNNING. That’s all right. 

Mr. LASHOF [continuing]. Further to the record, but the, my understanding——

Senator BUNNING. You ought to visit with them. 

Mr. LASHOF. Yes, well, we’ve talked to them, and I know that 

they also say that we should have carbon capture and storage with 

that technology. 

Senator BUNNING. Yes, they have. 

Mr. LASHOF. I think that’s very helpful. 

With respect, Senator, I think that the bill, as it was introduced, 

allows for support for the carbon capture and disposal portion, but 

does not require that that be incorporated——

Senator BUNNING. Well, we’ve changed it to require it. 
38

Mr. LASHOF. I think that’s definitely a step in the right direction. 

I certainly appreciate that. 

Senator BUNNING. Well, we appreciate all of you being here. 

My time is expired, Mr. Chairman, go right ahead. 

The CHAIRMAN. Thank you very much. 

Senator Salazar. 

Senator SALAZAR. Thank you very much, Chairman Bingaman, 

for holding this very important hearing. I would just make a comment that I, too, come from a State that is a coal-producing State—

Colorado—and I know that on our Western slope, we produce some 

of the high-quality coal that is very important to our economy. We 

share that same interest with Wyoming and Kentucky and other 

States that are coal-producing States. 

I also think that inevitably what’s going to happen is we will continue to grow in how much coal we ultimately use, simply because 

of the fact that it is so available, and I think your report shows 

that. 

I would ask you to comment, and I know you did this on your 

report—in terms of the possibilities that we have with respect to 

both IGCC, as well as with respect to carbon sequestration. This 

committee has been very supportive of moving forward with demonstration projects, IGCC—I know there are a number of projects 

out there that are already up and running, and a number that are 

being planned. 

I also would like you to comment on how it is that we can move 

the ball further forward, in terms of carbon sequestration. There’s 

legislation which Senator Bunning, and I, and others on this committee are moving forward with to try to get a good assessment of 

the geologic formations of the country, so that we can determine 

where the best places are for us to be able to do carbon sequestration. 

So, I’d like, really, a comment from the panel on two issues—one, 

how far along are we on IGCC, and is there anything that we can 

do here in the Congress to try to speed up that effort for the United 

States, and two, what more can we do in terms of the carbon sequestration programs that we’ve talked about? 

Mr. MONIZ. Senator Salazar, first of all, I’d like to respond as a 

person who spends time on the banks of the Conejos, in your part 

of the country. 

Senator SALAZAR. I will say, if I was to ask anybody here where 

that river is, you and I probably are the only ones who know where 

that river is. 

Mr. MONIZ. Twenty-five miles west of Antonito. 

Senator SALAZAR. It’s a beautiful river. 

Mr. MONIZ. The first question on IGCC: first, I do want to repeat 

something that my colleague, John Deutch said earlier, and that is 

that we feel it’s very important to explore alternative technologies, 

but with what we know today, and with some more experience, 

IGCC right now does look to be the lowest cost technology with 

capture, so the idea of moving forward with a major integrated 

demonstration of IGCC and carbon capture is one we endorse. 

We would add, in terms of what the Congress can do—we would 

note that the current plans with FutureGen are moving along too 

slowly, and I believe the Congress should provide clarity that the 
39

object of that, and other, large-scale, integrated demonstrations, is 

to demonstrate commercial viability and one should guide the 

project execution along those lines. There are various issues, in 

terms of reliance, on historical formulas, for cost-sharing, that I 

think deserve re-examination, but that would certainly help that go 

forward, while one also, hopefully, plans for a broader portfolio of 

integrated demonstration projects with capture, with other technologies. 

For example, the issues of retro-fitting pulverized coal plants 

with oxygen firing could be a very interesting and important demonstration, given our large installed base. 

Senator SALAZAR. Let me ask you, just in terms of moving forward to the point where we have commercial viability with respect 

to these demonstration projects: I know that there are a number 

of demonstration projects out there, including one that is being 

planned for Colorado, that I very much support. From your point 

of view, are those demonstration projects headed in the direction 

that we will be able to examine the commercial viability of IGCC? 

Mr. MONIZ. Well, I think first of all, of course, there is no operating large-scale coal plant with carbon capture and sequestration. 

We believe that this is a technical challenge, to demonstrate that 

integrated system of IGCC with capture. We believe there should 

be public funding to support it. The question will be in the practical implementation: is the project going to be executed in the way 

that provides, if you like, high-fidelity information, let’s say, to the 

investment community? 

Senator SALAZAR. Which is the best of the IGCC demonstration 

projects currently underway? 

Mr. MONIZ. Well, I would not cast judgment on that——

Senator SALAZAR. Give me two or three that you would recommend that some of us might go——

Mr. MONIZ. If we talk about FutureGen as the obvious candidate 

right now, with Federal support, we would say that we need to 

have fewer chefs in the kitchen—streamline it, and focus it on commercial viability. There’s some very good people involved in that 

project—I mean, Mike Mudd, who is heading that, is a terrific person. I believe we have to, for example, make sure we’re not falling 

into a trap of lots of Federal procurement rules, et cetera, that can 

compromise the value of the commercial information. 

We can discuss that in more detail. If I may just answer briefly, 

the sequestration part—I’d just say that I think in our report, I believe we provide the elements of an aggressive, appropriate road 

map to really resolve the key issues of sequestration, including site 

characterization, monitoring, verification, modeling, support for a 

regulatory regime, and demonstration of practical implementation, 

on about a 10–year time period with, what I would consider to be 

relatively modest funds. That, I think, is something that, on this 

panel, we have all agreed with. It calls for a relatively small number of focused projects, at well-characterized sites. 

Senator SALAZAR. Thank you, Professor. 

My time is up. 

Mr. HANNEGAN. Mr. Chairman, if I may offer a slightly different 

view to the Senator’s question regarding IGCC, we at EPRI, the 

Electric Power Research Institute, published a study just within 
40

the last year for the city of San Antonio that looked at the comparison in cost between an IGCC using Powder River Basin coal, 

against a supercritical pulverized coal plant, and we actually found 

that the costs for each are comparable within the margin of uncertainty. 

So, one of the messages out of that study, which I’d be happy to 

add to the record, if that’s desirable, is that we ought not to get 

caught up just necessarily on IGCC when it comes to carbon capture and storage. That in some cases, particularly for lignite coals, 

pulverized coal technologies are actually more affordable and just 

as effective in terms of creating a CO2 stream that can be scrubbed 

out and stored. The choice of a technology between IGCC, oxy-fuel, 

and pulverized coal is really a horse race. In that IGCC technology 

itself is not quite mature, but capturing the CO2 is. Pulverized coal 

technology is mature, but capturing the CO2 is not. So there are 

different aspects of those problems that should both be advanced 

as part of a comprehensive research program. 

Senator SALAZAR. All right. Thank you. 

The CHAIRMAN. Senator Corker. 

Senator CORKER. Mr. Chairman, thank you for this testimony, 

and thank all of you for being here. You know, our State, the State 

of Tennessee has had companies who have shown tremendous leadership in clean coal technologies, and we’re obviously very supportive of that, and hope it’ll continue. 

As I listen to the complexities that are going to be with us in the 

future—capture and sequestration, and just the unknowns that we 

have in that regard—and then we talk about the projected percentage of electricity that’s going to be generated through coal, which 

is already a huge factor here in our country now—as you look at 

these additional requirements and complications, if you will, to 

make sure that it’s environmentally friendly, how does it compare 

with this additional expense—sequestration and capture—to nuclear power? 

Mr. DEUTCH. Senator, if we had a carbon charge, or an additional 

price for the capture and sequestration as we estimate it, it would 

make nuclear power—if it works as well as it’s supposed to—cheaper, and our expectation would be in the presence of a carbon 

charge, nuclear power would become more economical than coal 

with carbon capture as a base load generation source. 

Nevertheless, the amount of nuclear power that will be used here 

and elsewhere in the world is not limitless, and will be both, for 

many reasons, will be only part of the mix, and so coal will still 

have a role to play. 

Senator CORKER. What are some of the reasons that it won’t be 

more expensive? The use of nuclear, after all this is done, and if, 

in fact there’s some policy put in place to limit carbon—why is nuclear not going to be more pervasive? 

Mr. DEUTCH. In 2003, we did a similar study at MIT in the future of nuclear power, and we looked very, very carefully at the 

rate at which nuclear power might penetrate between now and 

mid-century, that’s for the next 50 years, we didn’t try and go beyond that. 

There are a variety of reasons—including the length of time it 

takes to construct these plants, the kind of skills that are available 
41

for doing it, which would, in our judgment, limit the amount of nuclear power, you might say, to the most favorable circumstances to 

about a factor of three between now and mid-century. That’s a 

great expansion, that would be an expansion from roughly 100 bigscale plants in the United States, to 300, and we think that that’s 

about as much as you can expect from nuclear power. We’d be delighted if it was more, but right now, we’re still just talking about 

adding that first nuclear power plant. 

I might mention in the case of China, which is very aggressively 

pushing nuclear power, they’re expecting, I think, about 20 plants 

over the next 10 years; meanwhile they’re putting in 80 coal plants 

a year. So, I think we would like to move forward on nuclear, but 

we shouldn’t overestimate the speed at which it’s going to happen. 

We still need to have progress on waste management, sir. We still 

have to assure that everybody has the highest safety standards. We 

have to assure that the non-proliferation considerations are kept in 

worldwide. 

So, we’re all for nuclear power in my world, but I think we have 

to be realistic about how fast it can come in. 

Mr. HANNEGAN. Senator, I actually have a couple of charts over 

here that go directly to your question of competitiveness between 

the two fuels. 

We actually did a study about a year ago looking at the different 

generation options that face a utility CEO when they start thinking 

about siting their next plant. In fact, the premise of your question—if I could get the other one, the 2010 one, just put that up—

the chart that’s being shown now, along the bottom axis, the cost 

of carbon moves from zero dollars, where it is today, to $10, $20, 

$30 on over to $50, and you can see how—for each of the colored 

curves on the chart, the costs of factoring in carbon constraints into 

those technologies, change the levelized cost of electricity and simply divide by 10 there to get a sense of cents per kilowatt hour. 

We show that once you get even a modest carbon charge on the 

coal technologies—pulverized coal in red, and IGCC in sort of the 

purple—that nuclear line, which is the flat line at about 5.5 cents 

per kilowatt hour, really begins to be the most economic. 

That raises a point that I wanted to make, with respect to my 

colleagues’ comment that carbon capture and storage is here and 

you can do it today. You certainly can, and if you do it at $30 per 

ton, which is the figure in the MIT study, you see quickly that the 

red and the purple line curves are even above natural gas combined cycle at $6 per million cubic feet. They’re certainly beginning 

to become comparable with wind power at today’s technologies. So 

there’s no guarantee that if we were to start pricing carbon at that 

level, people would necessarily continue to build coal. They might 

actually fuel switch to other things, and I think you have to take 

that into account. 

The second chart that I have here, actually reflects what we 

think these costs will look like in 10 or 15 years’ time. If you invest 

in an aggress of about $2 billion per year in addition to over what 

you see today, research program that develops and deploys these 

new technologies, and in contrast to the previous chart, you see 

how all of those pixie sticks—if you will—collapse onto the rel-
42

atively the same low-cost, low-carbon portfolio and that’s even including the cost of capture. 

This just goes to our main point, that if you allow time for the 

RD&D to go forward, as the MIT report describes, and you don’t 

force the implementation of CO2 capture and storage immediately, 

you’ll actually get more emissions reductions later on, at a lower 

cost, and that will be better for the economy. 

Mr. MONIZ. May I just add one point, Senator Corker? That is 

that I agree with what Bryan has said, but should also be cautious 

that, for example, these projections of, let’s say, nuclear power 

costs, do have assumptions built in about, for example, a reduction 

of capital costs that has not been demonstrated, as well as issues 

about how it’s financed. So, really our view is, I think, well as John 

said, our view is that we’re going to have multiple technologies deployed, they will be site-specific, regulatory-specific, choices that 

will affect cost. These are going to be—what we see today—they’re 

all going to be in the mix, if we can solve the key problems. 

The CHAIRMAN. Senator Thomas. 

Senator THOMAS. Thank you, Mr. Chairman. 

Thank you, gentlemen. I certainly appreciate your work on this. 

Mr. Deutch and Mr. Moniz. Your report calls for three to five 

large demonstration power plants, and this and that. The Energy 

Bill we passed in section 413 calls for ones in the West. Do you 

share our opinion, on the advantage of mine-mouth generation, and 

how do you think these technologies would work in the West? 

Mr. DEUTCH. We’re certain that these technologies, again choosing from the menu of available technologies, would work in the 

West. There’s a lot to be said for mine-mouth facilities. 

Once again, we’re not trying to specify technologies, we’re not 

trying to specify locations, we’re saying that the key thing is, to 

make coal usable, if there are carbon constraints, and the key step 

to take is to do the sequestration piece. The kind of technology 

you’d use on Western coals or at the mine-mouth, we don’t know 

how that’s going to turn out. 

Senator THOMAS. No. 

Mr. DEUTCH. It should go forward as the markets set. 

Senator THOMAS. Yes, well, the market’s currently setting the 

price of shipping coal to the East more than the value of the coal. 

So, that gets a little difficult. 

You emphasized the importance of not picking technological winners and losers. But, you recommend no Federal assistance be provided unless it has carbon sequestration involved. There are some 

technologies that are closer to commercial availability rather than 

that. Isn’t your study exactly warning the Government against 

moving forward with these other technologies, as well? 

Mr. DEUTCH. No, Senator, I think that the point is that we don’t 

believe that the taxpayer dollars should be used to subsidize technologies which are commercial, or very close to commercial. We believe that the technologies without carbon-captured sequestration, 

such as IGCC without carbon capture, or even supercritical pulverized coal are sufficiently close to commercialization, that private industry and private investors will go forward with those projects 

without Government assistance, assuming that the regulatory uncertainty of the carbon charge is not present. 
43

But there’s no amount of money that you can spend of the taxpayer to get rid of that regulatory uncertainty in their mind. Where 

we do see Government assistance justified is when there is technology uncertainty; you have to show and demonstrate its technical 

performance, its economic cost, and environmental acceptability. 

Then we think the assistance——

Senator THOMAS. I think there’s a real question, and I’ve talked 

about this at the White House and this and that. I don’t think anyone quarrels with the notion that down the road we’re going to see 

some alternative sources and all these kinds of things. But that’s 

a ways down the road. We’re going to have 10, 15 years of demand 

for energy. 

So, it seems to me we have to sort of balance between encouraging and giving incentives to the production of power that we’ll 

have in this shorter term, as we wait for the longer term. We get 

so wrapped up in research that we won’t be able to turn on the 

lights, if we aren’t careful. Do you agree with that, Dr. Hannegan? 

Mr. HANNEGAN. Well, there’s a certain role for both, Senator. We 

see a very valuable role for the Federal Government to be involved 

in things that are very much at the pilot scale, at the ‘‘can we do 

it’’ scale. Then, the role of the public-private partnerships, like 

FutureGen, to say, ‘‘OK, we’ve done it in the laboratory, now can 

we do it at the real-world at some scale, which is not quite commercial, but it’s larger than the bench top?’’ 

Then, the question is, at what point does that partnership segue 

way into private-only funding and commercialization of the technology? I think EPRI’s view is slightly different than that of the 

MIT report, in that we don’t see IGCC and supercritical pulverized 

coal technologies, yet, at commercial scale as reliable and affordable as, you know, I think you would like them to be for folks on 

Wall Street not to put a risk premium on the investments, for 

State regulators to see them as the low-cost alternatives when companies come to make proposals, as they have. They’ve been turned 

away in favor of a tried-and-true technology. 

So, I think there’s still some barrier there between where we see 

those coal technologies today, and where you would want them to 

be to call them fully commercializable. I mean, there’s a role for research, but there’s also a role for incentives. I think the Energy Bill 

got that right. 

Mr. MONIZ. Senator. 

Senator THOMAS. I hope so, because there’s a demand that’s 

going to be there. 

Yes, sir. 

Mr. MONIZ. I’m sorry, I just wanted to add a comment. One is 

to clarify something which, to make it absolutely clear in terms of 

the MIT report, makes it very clear that our statement about the 

issue of subsidies, of assistance only for plants with capture. I just 

want to emphasize: that applies to commercial projects or largescale integration demonstrations. It certainly does not apply to research and development, which needs to go across a very broad set 

of technologies. 

Then the issue is one of, frankly, prioritization of what is not an 

issue of taxpayers’ dollars, and we certainly do not believe that 

there are technical grounds for arguing for additional public sub-
44

sidy of plants without capture. I remind you, the taxpayers have 

paid for development of these technologies, Tampa Bay, IGCC, etc. 

So, it’s really a question of—and certainly costing too much is not 

a valid argument for public assistance. So, I think we need to be 

just very hard-nosed in our prioritization of where these public dollars go. 

Senator THOMAS. Yes, I understand it’s really saying we have to 

balance between research in the future and meeting the needs of 

the next 5 years, 10 years from now. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Domenici. 

Senator DOMENICI. I just want to depart from what would be the 

most directed kinds of questions, to discussion with any of you 

about the technology of sequestration. 

First, am I right in assuming that large-scale sequestration, including in the definition that this includes putting the CO2 away, 

permanently? Am I right in assuming that that is a very difficult 

technology to achieve, and that it may be awhile before we can get 

our hands around that and get it applied? John Deutch? 

Mr. DEUTCH. Senator, my answer to that would be, no, it is not 

a difficult technology. It is, however, extremely demanding because 

of the scale of it to implement it successfully and responsibly and 

have it work. This is not magnetic fusion. This is making sure that 

you have the process in place to capture, transport, and do it right. 

So, you need examples of that. 

Mr. MONIZ. May I add a comment, Senator? 

That is that I do think it’s important, personally, that we not 

think in terms of the word permanent. I mean, permanent is good, 

but we should also keep in mind that, you know, one might have 

percent, per-century ‘‘leakages.’’ Well, that buys us an enormous 

amount of time, in terms of the CO2 budget. In the 23rd century, 

we are likely to have a very different set of options, maybe even 

fusion, in terms of carbon-free technology. So, I think it’s very important that we not fall into the trap of thinking that it must be 

‘‘proved’’ to be permanent forever. 

Mr. LASHOF. If I could——

Senator DOMENICI. Yes. 

Mr. LASHOF [continuing]. A couple things. All right, Senator 

Domenici. You know, I think it’s worth noting a couple things in 

terms of the way the technology is. 

First of all, and we haven’t mentioned, the U.S. oil industry is 

putting 30 million tons of CO2 a year underground right now for 

enhanced water recovery. They have a very good track record of 

safety in doing that over the last 20 or 30 years. Now, they haven’t 

done that with the idea of keeping the carbon underground permanently, or for a century time scale, but the incremental monitoring 

and verification requirements that are needed to ensure that that 

CO2 is staying underground are not that challenging. 

There’s also three large-scale CO2 sequestration—geologic sequestration projects going around the world, one Weyburn, Saskatchewan, one in Sleipner, as the Norway project, and one in Algeria. So, there is, at scale, some already significant experience. So, 

in my view, you know—the oil industry spent 100 years perfecting 

the technology to understand those reservoirs and get oil out of the 
45

ground. And what we’re really asking them to do is turn their seismic technology upside down and figure out how to put some CO2

back underground. 

It’s a technically challenging thing to do, but it’s not something 

that is beyond what we can do, starting right away. So, I think the 

way to move forward on this is to get experience, to actually do this 

at scale, at commercial plants. BP for one, is proposing to do this 

in California with a fully integrated system, with a power plant 

that would generate 500 megawatts. It’s using petroleum coke, 

rather than coal, but the technology is essentially the same. 

Mr. MONIZ. Senator, I’ll be brief. I wish it were as easy as my 

colleague from NRDC indicates. We have a handful of projects that 

are currently sequestering a million tons per year, or so, of CO2. One 500–megawatt coal-fire power plant, releases on the order of 

three to four times that amount. That’s one plant. Over the next 

25 years, EIA’s forecast expects to add, I’ve roughed out some numbers here, 300–gigawatts, so about 600 new coal-fired power plants 

under their base forecast. If I take that 4 million tons per year and 

I multiply it by 600 plants, I get 2.4 billion tons of carbon that has 

to go in, compared to the 30 million that the oil and gas industry 

is using today. It’s a vastly different order of magnitude and it’s 

that scale of the challenge which I think is really daunting in 

terms of bringing this technology to market. 

Senator DOMENICI. That’s how you see it, too? 

Mr. DEUTCH. No, it’s not the way I see it. First of all, I think 

that the comparison with the EOR, with Enhanced Oil Recovery, 

is a poor one for a variety of reasons. The regulatory requirements 

for doing EOR injection are done under the water; it’s completely 

different. 

The fact of the matter is, if you look at some of these—and it’s 

a subject I know a little bit about—these fields have been crunched 

up a lot. So while you learn something from these projects, the fact 

is you should get no comfort from EOR in terms of the large scale 

that we have to anticipate. You get no comfort because the 

capacity’s not there. Worldwide, you could do all the EOR, you 

aren’t going to do anything, you’re going to have to use saline 

aquifers. 

The second thing is, one of the best tables in our report is a report that looks at these three projects—Weyburn, Sleipner, and In 

Salah in Algeria—and it says, ‘‘Here’s the instrumentation that is 

present in those three sites. And, here is the instrumentation we 

think would be needed to have a proper sequestration project.’’ 

They’re vastly different, vastly different. So to get this, the instrumentation to do the monitoring, just not seismic, it is a lot of other 

instruments that you want, and the modeling and simulation to 

make sure you know what’s going on, it is a demanding job. Since 

we don’t—we want to make sure we get public confidence that this 

is working right, we’re going to do it right, and you can not work 

off of these things. You’ve got to do these projects carefully. 

Mr. MONIZ. That monitoring, that John described, must be used 

in these projects to inform the regulatory development. 

Mr. HANNEGAN. Senator, one last point, as hard as this sounds 

to go from three projects at 1 million tons each to 2.4 or so billion 

by 2030, we absolutely have to do this if we’re going to address CO2
46

emissions from the electric power sector in a significant way. It’s 

the largest contributor in the work that we’ve done at EPRI, and 

I don’t think anybody out there disagrees that it’s got to play a significant role. The sooner we’re able to prove up these technologies, 

the sooner we’re able to realize the benefits with respect to climate 

change. 

Senator DOMENICI. Thank you very much. 

The CHAIRMAN. Senator Corker had one final question, and then 

we will dismiss the panel and conclude the hearing, but go right 

ahead. 

Senator CORKER. Many of your assumptions—all of your assumptions, I think—have talked about a carbon charge. You don’t have 

to worry about winners and losers. We do, but what is the most efficient way to, if a carbon charge is implemented, to implement 

one, the most efficient way to not have unintended consequences. 

Many of the cap-and-trade policies that we look at, you know, they 

can have a lot of unintended consequences. What is the most efficient way, in your estimation, to have a carbon charge that has the 

desired outcome? 

Mr. HANNEGAN. Senator, let me be clear about the work that 

we’ve done. We don’t make any assumptions in EPRI’s analysis 

about how the cost comes about. But there is going to, inevitably, 

be an extra cost associated with capturing and storing the CO2

from a coal-fired power plant compared to just venting it into the 

atmosphere. There will always be a cost, that will be unavoidable. 

Through technology we can reduce that cost from about 50 to 80 

percent extra today, down to a much more manageable level and 

that’s what we think we can do with R&D. 

While we didn’t envision the kinds of policies that would get you 

there, you can choose from a range of things from tax incentives 

and loan guarantees and the other, sort of, assistance that we’ve 

seen in the past, to things like a cap-and-trade program. We at 

EPRI have done some work looking at—if you went a certain direction, how would you design it economically in an optimal sense—

but I think that’s probably a topic that deserves a full hearing in 

and of itself. 

Mr. DEUTCH. Senator, my goofy economist colleagues tell me that 

the clear answer to this question is a cap and trade system. Assuming that you tell me how you’re going to allocate the allowances initially. Having been in that world, I know how hard that is. There 

are winners and losers in that and there are plenty of people I’ve 

spoken to who have strong views about their rights to have allowances and the other guys’ rights not to have allowances. So, that’s 

the first thing. 

But, I want to say that we should remember that this is a global 

problem and what will work for us is going to be a lot harder to 

do in India or China where they don’t have an internal market 

structure to make this go through. So, we have to keep in mind exactly the point you make, what works for us isn’t necessarily going 

to work for the rest of the world, especially the emerging world, 

which Senator Domenici quite points out has to be a player. So, 

this is a complicated process. 

I, personally, believe for a lot of reasons, that we would be much 

better advised to have a tax, rather than a cap-and-trade system. 
47

It might evolve over time into a cap-and-trade system, but I think 

your life would be easier if we had a tax, and in our world. 

Mr. MONIZ. I would just add a comment that, first of all, we 

should stress that the MIT report specifically avoids talking about 

how a carbon policy would be implemented, so——

Senator CORKER. It keeps you more popular. 

Mr. MONIZ. However, I will put myself in your colleagues’ camp 

of certainly feeling that a tax system, a carbon tax system is more 

straightforward, more easily implementable. I would just add one 

other point. That is, there’s a lot of merit, although it does not resolve, certainly, all of your distributional problems. Nevertheless, a 

revenue neutral tax——

Mr. DEUTCH. Yes. 

Mr. MONIZ [continuing]. Would be the thing to consider. My personal—this is purely personal—favorites would be that that revenue neutrality would come from some combination of payroll taxes 

and corporate taxes. 

Mr. LASHOF. Senator, if I can——

The CHAIRMAN. Let’s take one more view and then we’ll——

Mr. LASHOF. Senator Bingaman’s had days-long workshops on 

this topic, so we won’t go into great detail. But, I just want to state, 

for the record, that my view is that a cap-and-trade system is the 

most efficient way to do it, because it puts the emphasis on where 

it needs to be, which is the quantity of global warming pollution 

going into the atmosphere, which we need to drive down over time 

in order to prevent dangerous global warming. 

Certainly, there are issues about the impacts of that, and who 

would win and who would lose, and I think those do have to be 

carefully considered and addressed through the way in which the 

emission allowances are allocated and, probably the most efficient 

way to do that is to auction the allowances and use the revenue 

from that to potentially reduce other taxes, or to help put some of 

this new technology that’s needed to meet the cap, effectively, into 

the field. 

Again, there’s, you know, we could spend a long time talking 

about how to design that, but I think the basic concept is, if you 

want to solve global warming, you need to reduce the amount of 

global warming pollution, so, putting a cap on how much goes into 

the atmosphere and allowing trading of allowances is an efficient 

way to do that. 

Mr. HANNEGAN. Mr. Chairman, if I may make one quick point? 

If you do the R&D to get to a point where you’ve got those technologies, like we show on the chart over there, you’ll notice those 

curves are relatively flat. In other words, they’re insensitive to the 

carbon price that you’re charging. Because they’re non-emitting, 

and so, one of the things I’d argue is that, ultimately if you’re investing in the R&D, how you choose amongst those technologies—

be it coal, wind, nuclear, what have you—will now become more of 

a function of what makes sense for you at your site and for your 

utilities; you’re making investments in the electric sector. And, 

some of the design issues that have come up may, perhaps, be less 

important with a robust technology program. 
48

The CHAIRMAN. Well, thank you all very much. This is very useful testimony and we thank you for the report and the, both reports, the EPRI report as well. 

We will conclude the hearing with that. Thank you. 

[Whereupon, at 4:06 p.m., the hearing was adjourned.] 
(49)

APPENDIX 

RESPONSES TO ADDITIONAL QUESTIONS

RESPONSES OF DANIEL A. LASHOF TO QUESTIONS FROM SENATOR BINGAMAN

Question 1. You believe that carbon capture technology is available today to such 

an extent that Congress should require it on any new power plant. This raises two 

issues: 

Who should bear the risk associated with including these technologies that have 

not yet been demonstrated at the scale of a commercial power plant? 

Answer. All elements of CO2 capture, compression, transportation and storage 

have been demonstrated individually, and in some cases in combination. Even 

though capture of CO2 at a power plant at the scale required has not yet taken 

place, the technology is for all intents and purposes the same as that deployed at 

synthetic fuels plants where it is currently commercially deployed. Consequently, we 

believe that the owner(s) or operator(s) of the capture, transportation and storage 

facilities should be respectively responsible for assuring that the facility operates in 

compliance with regulations during their lifetime. After site closure and decommissioning, separate provisions may be appropriate, bearing in mind that the transient 

nature of corporations may not allow them to hold responsibility in perpetuity. 

Question 2. Who should pay the additional capital costs or energy costs of capture 

and sequestration if there is not yet a market price for greenhouse gasses? 

Answer. The additional costs should be spread over the coal-fired power-generation sector. This could be accomplished through a Low Carbon Generation Portfolio 

Standard, whereby a small and increasing portion of coal-fired generation would be 

required to meet an emissions level equivalent to an advanced CO2 capture plant. 

A credit trading program would allow generators to meet the standard in the most 

cost-effective way. 

Question 3. The study authors indicate that a regulatory framework is needed to 

oversee site selection for CO2 injection, injection operations, and for long term monitoring and management. At what level, state, federal, or a combination, do you see 

this framework being introduced? 

Answer. USEPA should regulate CCS. The agency has authority under the Safe 

Drinking Water Act, and has already issued guidances for small scale injection 

projects. However, a much more comprehensive framework is needed. We believe 

that the existing Underground injection Control Program model is a good one: 

USEPA sets federal requirements and minimum standards, allowing states to tailor 

or implement these by requesting primacy with administrative and financial support from USEPA. A common federal framework is essential to steer the regulations. Moreover, some states will have neither the ability nor the desire to regulate 

CCS. However, some issues such as pore space ownership and liability are bound 

to differ from state to state. State frameworks are therefore also necessary, as long 

as they adhere to the minimum federal standards. 

RESPONSE OF DANIEL A. LASHOF TO QUESTION FROM SENATOR SANDERS

Question 4. If the Congress adopts your suggestion that no new coal plants be 

built unless they incorporate Carbon Capture and Storage, what practical effect 

would that have on coal plants now in the permitting queue? 

Answer. The plants in the permitting phase would need to incorporate capture 

technologies into their design. For proposed gasification plants this would be a significant but reasonable modification. For proposed conventional pulverized coal 

plants this may require a complete redesign. Utilities and regulators would need to 

evaluate the added costs of the new design and determine whether energy efficiency 

and/or renewable energy investments would be more cost effective than continuing 

with plans to build coal-fired generation. 
50

RESPONSE OF DANIEL A. LASHOF TO QUESTION FROM SENATOR SALAZAR

Question 5. The U.S. Climate Change Technology Program Strategic Plan shows 

that capturing CO2 emissions from fossil fuel plants and disposing of it in deep geologic formations is a critical technology for preventing global warming. For this to 

become a commercially and legally viable option for mitigating greenhouse gas emissions, a robust and transparent regulatory framework for CO2 injection deep underground will need to be put in place in the immediate future. Is EPA currently devoting the resources necessary to develop this framework in a timely manner? And 

what is the timeframe in which this should be developed? 

Answer. USEPA has only dealt with small-scale injections so far. A more robust 

regulatory framework is needed for commercial scale projects. The agency is not 

moving at a pace that we consider satisfactory, nor devoting the necessary resources. Large, commercial-scale CCS projects are imminent. The development of 

regulations is likely to span several years. If we start now, we have a chance of having workable regulations by the time the first CCS plants are commissioned. We are 

already late in commencing the regulatory process. Congress should direct EPA to 

devote the resources necessary to complete the regulations in a timely fashion. 

RESPONSES OF DANIEL A. LASHOF TO QUESTIONS FROM SENATOR DOMENICI

Question 6. A recent NRDC press release on the Future of Coal in a Carbon Constrained World Report said:

The report’s examination of policies to promote immediate deployment of 

CCS systems is incomplete and it fails to address the most urgent problem 

facing U.S. policymakers: what CO2 performance requirements should be 

applied to proposed new power plants.

Mr. Lashof, am I correct to say that traditionally the Natural Resources Defense 

Council has been an ardent supporter of the environmental laws of this country? 

Answer. Absolutely—For more than three decades, NRDC has fought successfully 

to defend wilderness and wildlife and to protect clean air, clean water and a healthy 

environment. 

Question 7. Am I also correct to say that the Natural Resources Defense Council 

would expect the government to complete a full National Environmental Policy Act 

assessment before it undertakes a proposal to transport and inject the amounts of 

CO2 recommended for injection in the MIT report? 

Answer. Yes, we would expect an environmental impact assessment to be carried 

out before the injections of large volumes of CO2 in the subsurface. 

Question 8. Given your organization’s historic stance that ground disturbing activities be fully analyzed, how is it that the NRDC can conclude that Congress 

should direct all new coal fired power plants include CCS in the face of MIT’s statement that: ‘‘The central message of our study is that demonstrations of technical, 

economic, and institutional features of carbon capture and sequestration at commercial scale coal combustion and conversion plants, will give policymakers and the 

public confidence that a practical carbon mitigation control option exists’’? 

Answer. NRDC has been following CCS technology for many years now. Consensus exists among experts that, although we need to amass additional knowledge 

and clarify certain areas, no major technical barriers exist in deploying this technology in a way that safeguards human health and the environment. The barriers 

are economic and regulatory and policy related. Indeed, the MIT states in the same 

report:

Although substantial work remains to characterize and quantify these 

[trapping] mechanisms, they are understood well enough today to trust estimates of the percentage of CO2 stored over some period of time—the result 

of decades of studies in analogous hydrocarbon systems, natural gas storage 

operations, and CO2-EOR. Specifically, it is very likely that the fraction of 

stored CO2 will be greater than 99% over 100 years, and likely that the 

fraction of stored CO2 will exceed 99% for 1000 years. Moreover, some 

mechanisms appear to be self-reinforcing. Additional work will reduce the 

uncertainties associated with long-term efficacy and numerical estimates of 

storage volume capacity, but no knowledge gaps today appear to cast doubt 

on the fundamental likelihood of the feasibility of CCS.

The key words in your question and the MIT statement that you quote are ‘‘give 

policymakers and the public confidence’’. The experts have already made up their 

mind on the matter: they see no showstoppers in the way of large-scale deployment. 

They are simply recommending a handful of demonstrations with federal involve-
51

ment to illustrate this to the wider public. We second the suggestion and stress the 

urgency with which these should be carried out. 

If performed under adequate regulatory oversight and according to best practices 

(which emphasizes USEPA’s role in preparing a regulatory framework), we are confident that the risks associated with CCS are dwarfed by the risks associated with 

venting to the atmosphere 100% of the CO2, produced by coal plants for the foreseeable future. 

Question 9a. If a utility came to Congress today and said they are willing to include CCS, untested as it is, to a proposal for a new Integrated Gasification Combined Cycle (IGCC) or Supercritical Pulverized Coal (SCPC) plant would the Natural Resource Defense Counsel support full sufficiency from all federal environmental laws to get the carbon capture and sequestration technology implemented? 

Answer. No. 

Question 9b. If the answer is no: 

Given your unwillingness to provide sufficiency to speed the process of CCS and 

NRDC’s longstanding demands that the National Environmental Policy Act be 

strictly adhered to, why should Congress legislate a Carbon Sequestration standard 

without really knowing what the environmental impacts of such a standard might 

be? 

Answer. The NEPA process is site-specific. We do not believe that the safety or 

efficacy of CCS in general will be proved or disproved following NEPA review. We 

believe that a great deal is known about the potential environmental impacts of a 

CCS standard if it is implemented and overseen properly. While we have high confidence that CCS can be conducted in an environmentally sound manner, it is still 

essential to adhere to existing laws and to examine projects on a case-by-case basis 

to understand local impacts. The NEPA process is also essential in reassuring local 

and other stakeholders about the merits and safety of a project. Earning public acceptance is crucial in siting CCS projects, and attempting to avoid the NEPA process would likely lead to hostile reactions that would actually slow the process of implementing CCS. 

RESPONSES OF DANIEL A. LASHOF TO QUESTIONS FROM SENATOR BUNNING

Question 10. I know the NRDC has opposed coal-to-liquid technology. But I have 

also seen your organization support coal gasification for electricity. I understand 

that your position is coal-to-liquid technology will increase CO2 emissions ‘‘well-towheels’’ or ‘‘mine-to-wheels’’ as is more appropriate and you recommend moving to 

hydrogen and ethanol transportation fuels. But I believe America can not transition 

to a zero-carbon economy overnight. And as corn prices have shown us, we can not 

fuel the entire country on corn ethanol. Coal-to-liquid technology will be a bridge 

for the next decades until we have a new, cleaner technology. For example, a coalto-liquid plant, using off-the-shelf carbon capture and sequestration technology and 

a 10 percent cellulosic biomass blend in the coal feedstock, would reduce carbon 

emissions compared to gasoline by 30 percent. This is a huge reduction. Not to mention that it will provide coal-based electricity with carbon capture technology already built in and a gasification system ready to promote cellulosic fuels. Given all 

these advantages, what will it take for you to support coal-to-liquid fuel? 

Answer. Liquefying coal to turn it into transportation fuels is an inefficient and 

extremely carbon intensive process. Without carbon sequestration it would result in 

well-to-wheel emissions that are double those of petroleum-derived fuels. Even with 

carbon sequestration, the most authoritative studies show that emissions would still 

be higher than from conventional diesel fuel or gasoline. The process is also very 

costly, and a liquid coal industry cannot develop without federal support. We consider this an unwise use of taxpayers’ money, particularly because it is incompatible 

with the need to curb greenhouse gas emissions. Analyses show that the development of a liquid coal industry would make carbon mitigation under a cap & trade 

regime much more expensive, and also start using underground CO2 storage capacity at rapid rates. We also have no evidence that developers are intending to use 

biomass feedstocks or carbon capture AND sequestration from the outset in these 

plants. There are cheaper, cleaner and easier ways to break our oil addiction than 

liquefying coal. If coal is to be used to replace gasoline, generating electricity for use 

in plug-in hybrid vehicles (PHEVs) can be far more efficient and cleaner than making liquid fuels. In fact, a ton of coal used to generate electricity used in a PHEV 

will displace more than twice as much oil as using the same coal to make liquid 

fuels, even using optimistic assumptions about the conversion efficiency of liquid 
52

1 Assumes production of 84 gallons of liquid fuel per ton of coal, based on the National Coal 

Council report. Vehicle efficiency is assumed to be 37.1 miles/gallon on liquid fuel and 3.14 

miles/kWh on electricity. 2 Assumes lifecycle greenhouse gas emission from liquid coal of 27.3 lbs/gallon and lifecycle 

greenhouse gas emissions from an IGCC power plant with CCS of 106 grams/kWh, based on 

R. Williams et al., paper presented to GHGT-8 Conference, June 2006. 

coal plants.1 The difference in CO2, emissions is even more dramatic. Liquid coal 

produced with CCS and used in a hybrid vehicle would still result in lifecycle greenhouse gas emissions of approximately 330 grams/mile, or ten times as much as the 

33 grams/mile that could be achieve by a PHEV operating on electricity generated 

in a coal-fired power plant equipped with CCS.2

NRDC does not support coal gasification as an end in itself. Rather we believe 

that coal gasification can facilitate CCS, which is an essential technology for reducing CO2 emissions from powerplants. 

Question 11. The Air Force testing program has shown that because of the properties of fischer-tropsch fuel, such as lower burn temperature and weight, jets that 

use that fuel will emit less CO2 compared to existing jet fuels. This is on top of their 

confirmation of a significant reduction of other pollutants such as sulfur and particulate matter. Are you aware of these beneficial characteristics of CTL fuel compared 

to existing fossil fuels? 

Answer. We are aware of these characteristics, but they do not take into account 

the CO2 emissions associated with these fuels over their entire life cycle. These are 

still far worse than petroleum based fuels. 

Question 12. The MIT study indicates that with new technologies, we could reduce 

the CO2 emissions of our current coal power fleet by 20%. Yet the study recommends that no government funds for used for Research for existing coal power 

plants. Given the long life-cycle of a plant and the report’s conclusion that coal will 

continue to be used well into the future, do you think it makes sense to incentivize 

technology retrofits that reduce CO2 emissions? 

Answer. The most pressing need is to ensure that no NEW plants get built without capturing their CO2 emissions from the outset. As the MIT report points out, 

retrofitting requires major overhaul and large expenses. By building conventional 

plants we risk locking ourselves into several decades’ worth of new emissions, and 

into added costs of CO2 control. In the case of very old and inefficient plants, a new 

plant might be economically preferable to a retrofit. In the case of a more recent 

build, this might not be the case. We do believe research to reduce the costs of all 

types of carbon capture should be funded, but under no circumstances should it be 

used as an excuse for postponing action and not utilizing technologies that are available to us now. 

Question 13. The report also highlights that China and India will be building hundreds of new coal-fired generation units in the coming decade using old technology. 

Regardless of whether of not these countries agree to limit CO2 emissions, they will 

have a huge need for retrofit emissions technology. The report, however, recommends no government support for developing this technology. Why do you oppose 

the government supporting emission reducing technology for use here in America 

and abroad? 

Answer. Although we do not speak for MIT, it is not our understanding that the 

report recommends that no funds be spent on retrofit technology research—on the 

contrary, the report states that:

The U.S. 2005 Energy Act contains provisions that authorize federal government assistance for IGCC or pulverized coal plants containing advanced 

technology projects with or without CCS. We believe that this assistance 

should be directed only to plants with CCS, both new plants and retrofit 

applications on existing plants.

We agree with this statement, and stress the need to fund research that leads 

to real and measurable emission reductions. In the case of CCS, sequestering CO2

is a necessary requirement. Federal money needs to be used wisely, and as a trigger 

for much larger private sector investment. 

Question 14. The MIT Study indicates that China alone will account for more than 

half of the global growth in coal supply and demand in the next 25 years. Why do 

you think China would be willing to participate in a carbon capture and sequestration scheme like the one the report proposes within the next ten years? 

Answer. As we understand it, the report proposes ‘‘negotiating a global agreement 

featuring delayed adherence to a carbon charge for developing economies’’, not a carbon capture and sequestration scheme. In other words, developed countries should 

lead by legislating comprehensive carbon policies and specific emission limits. We 
53

believe that developed countries will need to transfer their technological know-how 

to developing countries in a concerted way if emissions are to be curbed in time. 

China understands that global warming is a serious threat to its food supply and 

water supply, among other concerns. With effective leadership by the United States 

and active engagement with China we believe that China and other developing 

countries will participate appropriately in international efforts to prevent dangerous 

global warming.

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