```

[Senate Hearing 110-83]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 110-83

 NATIONAL CARBON DIOXIDE STORAGE CAPACITY ASSESSMENT ACT OF 2007, AND 
DEPARTMENT OF ENERGY CARBON CAPTURE AND STORAGE RESEARCH, DEVELOPMENT, 
                     AND DEMONSTRATION ACT OF 2007

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   on

                                 S. 731

 TO DEVELOP A METHODOLOGY FOR, AND COMPLETE, A NATIONAL ASSESSMENT OF 
 GEOLOGICAL STORAGE CAPACITY FOR CARBON DIOXIDE, AND FOR OTHER PURPOSES

                                 S. 962

 TO AMEND THE ENERGY POLICY ACT OF 2005 TO REAUTHORIZE AND IMPROVE THE 
  CARBON CAPTURE AND STORAGE RESEARCH, DEVELOPMENT, AND DEMONSTRATION 
       PROGRAM OF THE DEPARTMENT OF ENERGY AND FOR OTHER PURPOSES

                               __________

                             APRIL 16, 2007

                       Printed for the use of the
               Committee on Energy and Natural Resources

                      U.S. GOVERNMENT PRINTING OFFICE
36-492 PDF                    WASHINGTON  :  2007
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Washington, DC 20402-0001 

               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota        LARRY E. CRAIG, Idaho
RON WYDEN, Oregon                    CRAIG THOMAS, Wyoming
TIM JOHNSON, South Dakota            LISA MURKOWSKI, Alaska
MARY L. LANDRIEU, Louisiana          RICHARD BURR, North Carolina
MARIA CANTWELL, Washington           JIM DeMINT, South Carolina
KEN SALAZAR, Colorado                BOB CORKER, Tennessee
ROBERT MENENDEZ, New Jersey          JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas         GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
JON TESTER, Montana                  MEL MARTINEZ, Florida
                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
            Frank J. Macchiarola, Republican Staff Director
             Judith K. Pensabene, Republican Chief Counsel
                        Allyson Anderson, Fellow
           Kathryn Clay, Republican Professional Staff Member

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     1
Bunning, Hon. Jim, U.S. Senator from Kentucky....................     3
Coddington, Kipp, Partner, Alston & Bird LLP.....................    36
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     2
Guthrie, Dr. George, Program Director, Fossil Energy and 
  Environment Programs, Los Alamos National Laboratory...........    23
Hawkins, David G., Director, Climate Center, Natural Resources 
  Defense Council................................................    24
Myers, Dr. Mark D., Director, U.S. Geological Survey, Department 
  of the Interior................................................     5
Salazar, Hon. Ken, U.S. Senator from Colorado....................     4
Shope, Thomas D., Acting Assistant Secretary for Fossil Energy, 
  Department of Energy...........................................     8
Tester, Hon. Jon, U.S. Senator from Montana......................     3

                               APPENDIXES
                               Appendix I

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

                              Appendix II

Additional material submitted for the record.....................    67

 
 NATIONAL CARBON DIOXIDE STORAGE CAPACITY ASSESSMENT ACT OF 2007, AND 
DEPARTMENT OF ENERGY CARBON CAPTURE AND STORAGE RESEARCH, DEVELOPMENT, 
                     AND DEMONSTRATION ACT OF 2007

                              ----------                              

                         MONDAY, APRIL 16, 2007

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:30 p.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

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

    The Chairman. All right, why don't we start the hearing.
    I'd like to welcome everyone here today, and to thank the 
witnesses who are here to testify before the committee.
    This is a legislative hearing on two bills, S. 731 and S. 
962. These two bills focus on two important aspects of carbon 
capture and storage. S. 731 focuses on assessing the national 
geologic storage potential for carbon dioxide, while S. 962 
focuses on reauthorizing and improving the Carbon Capture and 
Storage Research, Development, and Demonstration Program in the 
Department of Energy.
    This topic of reducing greenhouse gases, particularly 
carbon dioxide emissions, is a topic of great concern to 
myself, I know to Senator Domenici, and other members of the 
committee, as well. Carbon capture and geologic storage holds 
promise as a measure that can be used to mitigate global 
climate change while still allowing the use of fossil fuels at 
electricity generating plants and industrial facilities.
    With discussions centered on coal use in a carbon-
constrained world, carbon capture and storage may pose the most 
immediate solution for continued use of coal, while not 
contributing further to carbon dioxide emissions and global 
warming. As carbon sequestration research and development 
continues, the need becomes even greater to understand the 
geologic storage potential that we have in the United States, 
and large-scale demonstration projects are necessary to prove 
the commercial feasibility of carbon capture technologies and 
long-term carbon storage.
    At this point, let me defer to Senator Domenici for any 
opening statement he has.

       STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Domenici. I want to thank you, Mr. Chairman, 
Senator Bingaman, first, for scheduling today's legislative 
hearing.
    We will hear testimony today from two forward-looking bills 
that will help our Nation explore potential carbon 
sequestration. Senator Bingaman and I originally introduced S. 
962, the Department of Energy Carbon Capture and Storage 
Research, Development, and Demonstration Act of 2007. And I'm 
pleased that Senator Thomas has now joined us as a cosponsor. 
Thank you for joining us, Senator.
    S. 731, introduced by Senator Salazar and others, on 
National Carbon Dioxide Storage Capacity Assessment Act of 
2007, this bill directs the U.S. Geologic Survey to take the 
important steps of assessing the feasibility of geologic sites 
across the Nation for the safe storage of carbon dioxide. 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 by firm 
coal, and the EIA estimates that, by 2030, 57 percent of our 
electricity will be derived from coal. In late March, this 
committee held a hearing on the Massachusetts Institute of 
Technology report called ``The Future of Coal.'' One of the 
many messages of that report was that we must invest in 
developing technologies to sequester carbon from coal. Our 
investment will be a kind of insurance policy, to prepare us 
for the possibility of future constraints on carbon due to 
concerns about global and climate charge. I believe we must 
make progress to make significant advancements in coal 
technology overall. Carbon sequestration in geologic formations 
is one important avenue to explore.
    In developing the technology, we must also be sure to move 
forward with our efforts to engage other nations, such as China 
and India, whose livelihood also depends largely on coal. When 
the technology is proven at the scale needed to capture and 
sequester carbon dioxide, it will be critical for the world's 
emerging economies to fully participate in the implementation 
of that technology. Our Nation's economy and our economic 
competitiveness rely upon a global solution to this challenge.
    The two bills under consideration today will move our 
Nation forward on carbon sequestration. The research of that 
will move our Nation toward--forward on carbon sequestration 
research. S. 962 will increase our investment in this area, 
including large-scale demonstration geologic. S. 731 is a 
complementary bill that directs the USGS to assess the 
feasibility and geological sites across the Nation for the safe 
storage of carbon dioxide.
    The Department of Energy and U.S. Geological Survey who 
both have made contributions and contribute to State surveyors, 
must also play a key role. I think it's clear that DOE will 
lead the research effort to develop more cost-effective 
technologies, but, the site selection, monitoring, and 
verification of these geologic formations will require 
interagency cooperation, and cooperation between the States and 
the Federal Government.
    I thank the chairman for holding the hearing on these 
bills, and I look forward to the testimony that we're going to 
hear.
    All I can say is, I hope that we are able to get out the 
size of the problem. Clearly, it is a monstrous problem to 
sequester the carbon dioxide we're talking about if we go that 
way. And looks like there's no other way of any significance 
yet.
    Thank you very much, Mr. Chairman.
    The Chairman. Well, thank you very much. Senator Tester was 
not able to be here, and asked that we include in the record a 
short statement that he wished to have included.
    [The prepared statement of Senator Tester follows:]
    Prepared Statement of Hon. Jon Tester, U.S. Senator From Montana
    Mr. Chairman, thank you for holding this important hearing today 
regarding carbon sequestration.
    Climate change is real, and I am committed to finding ways to 
reverse its effects. In Montana our glaciers are melting, our weather 
is increasingly erratic and much of the state is experiencing prolonged 
drought. Climate change is damaging to our economy and public safety 
when weather events become more catastrophic. I have become convinced 
that capturing and storing carbon from large emitters may be the most 
effective and affordable manner to reduce our emissions into the 
atmosphere.
    Coal, oil and natural gas have long provided us with relatively 
stable and affordable energy sources to keep our lights on, our cars 
running and our homes warm in the winter. The use of these sources of 
energy is projected to grow in the future and their development can 
provide jobs, affordable energy and economic growth. But if we do not 
find a way to reduce the negative effect of their emissions, the 
consequences of climate change will far outweigh the economic growth 
from their development.
    We are on the brink of affordable and technologically feasible 
carbon capture and storage on a large scale. Several demonstration 
projects storing carbon in the ground have proven successful and the 
use of carbon for enhanced oil recovery can reduce the amount of 
greenhouse gases released into the atmosphere and increase oil 
production.
    Unfortunately, because of uncertainties regarding liability, 
regulatory framework, and overall cost, carbon sequestration in large 
volumes has not been demonstrated in the private sector on the scale 
that could reverse the effects of climate change. The government has a 
unique opportunity to facilitate the development of this new technology 
in partnership with willing private interests. The two bills being 
heard before the committee today provided two valuable components 
needed to capture and store carbon.
    S. 731 directs the USGS to create a national inventory of potential 
geological storage sites for carbon. S. 962 will continue and 
strengthen the work of the Department of Energy sponsored carbon 
sequestration regional partnerships that are bringing academic 
institutions, private businesses and regulatory officials together to 
research, develop and deploy sequestration projects. The result of 
these projects will be the necessary research and data needed for 
private businesses to bring carbon sequestration onto a larger scale.
    I wanted to once again stress my support for the development of 
carbon sequestration technology in general, and specifically for these 
two pieces of legislation I co-sponsored. I believe carbon 
sequestration will help develop our available natural resources in a 
responsible and clean manner, keep our economy running strong, and find 
a way to combat climate change.

    The Chairman. Did any other members have statements they 
want to have included. Senator Bunning? We will certainly 
include that.
    [The prepared statement of Senator Bunning follows:]
   Prepared Statement of Hon. Jim Bunning, U.S. Senator From Kentucky
    I have cosponsored both of the bills we will look at today because 
I believe carbon sequestration technology will be an integral part of 
the future of coal.
    I am proud to come from a coal State that has helped power the 
American economy for over a hundred years. Half of our nation's 
electricity comes from coal. Without cheap energy from coal, Americans 
would pay much higher electric bills and our country would lose more 
manufacturing jobs and investment to foreign countries.
    But the coal industry recognizes not only their importance to the 
economy, but also their obligations to the environment.
    That is why we all agree the coal of the future will be clean coal. 
New technologies are under development that will reduce emissions and 
clean up the coal power process. Carbon sequestration will be one of 
those technologies.
    Another new technology will be coal-to-liquid fuel production. I 
believe carbon capture and sequestration will be an important part of 
developing a domestic C.T.L. industry. I hope the chairman will arrange 
a hearing on the legislation I wrote with Senator Obama so we can 
discuss the benefits and concerns with this clean coal technology.
    I believe that the U.S.G.S. mapping initiative and the D.O.E. 
regional partnership program will help prove the long term viability of 
sequestration. But I want to caution this committee that we cannot call 
for demonstration programs and mapping projects while at the same time 
asking for the government to mandate this technology. There are many 
issues we must address, such as long-term monitoring and liability, 
before going down that road.
    I believe this technology has a bright future. It has been used in 
enhanced oil recovery for nearly 50 years. With these two pieces of 
legislation I believe we can move closer to reaching this goal.
    Thank you Mr. Chairman.

    The Chairman. And anybody else who comes up with a 
statement--Senator Salazar?
    [The prepared statement of Senator Salazar follows:]
   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado
    Thank you Mr. Chairman and Ranking Member Domenici. I want to thank 
you for holding today's hearing on the S. 731 and S. 962, two bills 
that have been introduced in this Congress, and that are intended to 
start our country on the path to large-scale sequestration of carbon 
dioxide.
    The United States is the largest emitter of carbon dioxide in the 
world, and much of these emissions come from satisfying our energy 
needs. The same energy needs that fuel our homes, our cars, and our 
economy are hurting our planet. In February 2007, a report released by 
the Intergovernmental Panel on Climate Change found the levels of 
carbon dioxide and other greenhouse gases in the atmosphere resulting 
from the burning of fossil fuels have increased more than 30 percent 
since the Industrial Revolution. The increased levels of greenhouse 
gases in the atmosphere are contributing to the increased temperatures 
we are seeing today.
    In attempting to limit emissions, one promising step we can take is 
to sequester carbon dioxide. Carbon sequestration is a process where 
carbon is captured before it is released into the atmosphere, 
compressed, and stored underground in geological areas such as saline 
formations, unmineable coal seams, and oil and gas reservoirs. 
Fortunately, we have significant experience in injecting large amounts 
of carbon dioxide into geologic formations for projects to enhance the 
recovery of oil. Unfortunately, in most cases, the carbon dioxide that 
is being injected for enhanced oil recovery (EOR) is using sources of 
carbon dioxide from natural sources rather than capturing it from 
industrial sources. We simply have not been capturing carbon dioxide 
from fossil fuel power plants or other industrial sources, and safely 
sequestering it.
    My legislation, S. 731, which is a bi-partisan bill co-sponsored by 
Senators Bingaman, Brownback, Bunning, Casey, Lugar, Tester, and Webb, 
would start our country on the path to large-scale sequestration of 
carbon dioxide from industrial sources. Our legislation would 
complement and build upon the existing work of the Department of 
Energy's (DOE) Carbon Sequestration Program managed by the National 
Energy Technology Laboratory, the seven DOE regional carbon 
sequestration partnerships, and the recently released Carbon 
Sequestration Atlas of the United States and Canada.
    In order to speed the deployment of carbon sequestration, industry 
must have a comprehensive assessment of candidate formations that are 
suitable for sequestering carbon. The work done to date by the DOE 
Carbon Sequestration Program has a number of limitations that S. 731 is 
designed to address. For example, S. 731 requires:

          1. a rigorous, peer-reviewed methodology incorporating public 
        consultation be developed that assesses the suitability of the 
        candidate formations in terms of a) their capacity to store 
        carbon dioxide, b) the potential infectivity associated with 
        the different geologic settings, c) the potential volumes of 
        oil and gas that are recoverable by injection and storage of 
        industrial carbon dioxide, and d) the risk associated with the 
        potential storage formations;
          2. once the methodology is established, USGS, as our nation's 
        largest earth mapping agency, would work with DOE and the 
        Environmental Protection Agency (EPA) to enhance the existing 
        carbon sequestration mapping efforts to assess the known 
        geologic formations based on the factors included in the peer-
        reviewed methodology, i.e., a) capacity to store carbon 
        dioxide, b) rates at which carbon dioxide can be injected into 
        them, c) the potential volumes of oil and gas that are 
        recoverable, and d) the risk associated with the potential 
        storage formations; and
          3. that the national assessment of geological storage 
        capacity cover all 50 states. The DOE Regional Carbon 
        Sequestration Partnerships do not cover all fifty states, and a 
        national assessment is needed in order to provide a complete 
        picture of our country's geological disposal options.

    This comprehensive mapping effort is going to be of critical 
importance to industry as it seeks to find good disposal sites, and 
reduce costs in transporting carbon dioxide from the industrial site 
where it is being produced to the geologic formation where is will be 
safely stored.
    The timeframes called for in S. 731 are indeed aggressive, but the 
problem our world is facing from global warming is very real and 
imminent. The world's leading scientists say that we have a ten-year 
window of opportunity to take decisive action on global warming and 
avert catastrophe. Therefore, the time frames included in S. 731 are 
intended to balance the critical need for the information, with the 
time that is needed to conduct a careful methodology and assessment 
that builds upon existing data.
    Mr. Chairman, I thank you again for holding this important hearing. 
I look forward to hearing from our witnesses today on their ideas 
speeding the sequestration of carbon from industrial sources.

    The Chairman. At this point, I'll go ahead with the first 
panel.
    We have Dr. Mark Myers, who is Director of the U.S. 
Geological Survey, Department of the Interior, and Mr. Tom 
Shope, who is the acting Assistant Secretary for Fossil Energy 
in the Department of Energy. So, both these gentlemen are part 
of the administration, as we welcome them both here to give us 
their views on these two bills.
    Please--unless you had some preference for a different 
order, Dr. Myers, why don't you go ahead.

   STATEMENT OF DR. MARK D. MYERS, DIRECTOR, U.S. GEOLOGICAL 
               SURVEY, DEPARTMENT OF THE INTERIOR

    Dr. Myers. Well, Mr. Chairman and members of the committee, 
thank you for the opportunity to provide the Department of the 
Interior's views on S. 731, National Carbon Dioxide Storage 
Capacity Assessment Act of 2007.
    The administration supports the goals of the bill and 
agrees that the activities authorized by this bill would 
address a critical information need for our Nation. The 
challenges addressing carbon dioxide accumulation in the 
atmosphere are significant, and the goals of S. 731 are an 
excellent step forward toward addressing the information needs 
related to geological storage of carbon dioxide.
    Also, fuel usage, a major course of CO2 
emissions to the atmosphere, will continue in both the 
industrialized and developing countries; therefore, a variety 
of strategies are being investigated to reduce emissions and 
remove carbon dioxide from the atmosphere. Geological carbon 
sequestration is one such strategy.
    S. 731 deals specifically with the geologic storage of 
carbon dioxide. The 2005 IPCC Special Report on Carbon Dioxide 
Capture and Storage indicated that if the mission reduction 
scenario striving to stabilize global atmospheric carbon 
dioxide concentrations at targets ranging from 450- to 750-
parts-per-million volume, the global storage capacity of 
geologic formations may be able to accommodate most of the 
captured carbon dioxide. However, geologic storage capacity 
will vary on a regional and national scale, as well as by 
reservoir type, and a more refined understanding of that 
geological capacity is needed to address this knowledge gap in 
order to understand how much the overall storage capacity can 
actually be utilized.
    The usable storage capacity then needs to be evaluated 
regarding proximity to carbon dioxide sources, an important 
consideration of the economic viability of carbon sequestration 
projects.
    S. 731 directs the Secretary of the Interior, acting 
through the Director of the U.S. Geological Survey, to develop 
a methodology for conducting a national assessment of 
geological storage capacity for carbon dioxide, convene a 
review panel to evaluate the methodology, allow for a public 
comment period, and conduct a national assessment of geological 
storage capacities for carbon dioxide.
    The USGS is uniquely posed to develop geologically-based 
methodologies to develop a national capacity for geological 
carbon sequestration because of our experience with national 
and international assessments of natural resources. We envision 
a national carbon dioxide storage assessment methodology that 
would be largely analogous to the peer-reviewed methodologies 
used by the USGS for oil, gas, and coal resource assessments.
    In addition, the USGS knowledge of regional groundwater 
aquifer systems/groundwater geochemistry would allow the USGS 
to develop methods to assess potential storage in saline 
aquifers. Previous studies have isolated the existence of very 
large carbon dioxide storage capacities in saline aquifers, but 
the extent to which these capacities can be utilized remains 
unknown. The USGS can create a scientifically-based, 
multidisciplinary methodology for carbon dioxide storage 
assessment that can be consistently applied on the national 
scale.
    The USGS looks forward to coordinating and cooperating with 
the Department of Energy, the Environmental Protection Agency, 
and other Department of the Interior bureaus, State geological 
surveys, and other relevant entities that are carrying out 
carbon sequestration activities to ensure the usefulness and 
success of this assessment.
    In conclusion, the administration agrees with the goals of 
the bill to develop a standard peer-reviewed methodology to 
assess the Nation's geologic storage capacity of carbon dioxide 
and produce a national-scale assessment using this methodology. 
The activities authorized in this bill would ultimately result 
in a geological-based robust and peer-reviewed national-scale 
assessment that's consistent across regions and usable for a 
variety of purposes.
    The administration does have concerns about the timeframes 
established in the bill and the mandatory language, and we look 
forward to working with the committee to address the revisions 
necessary to the bill to ensure that we can produce the best 
possible product for this large and important undertaking.
    Thank you, Mr. Chairman, for the opportunity to present the 
testimony. I'd be pleased to answer any questions you or 
members of the committee might have.
    [The prepared statement of Dr. Myers follows:]
  Prepared Statement of Dr. Mark D. Myers, Director, U.S. Geological 
                   Survey, Department of the Interior
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to provide the Department of the Interior views on S. 731, 
``National Carbon Dioxide Storage Capacity Assessment Act of 2007.''
    The Administration supports the goals of the bill and agrees that 
the activities authorized by this bill would address a critical 
information need for our nation. We cannot, however, commit to meeting 
the timeframes established by this bill. We could support this bill if 
it were amended to address our concerns regarding the bill's mandatory 
language and statutorily prescribed timeframes. The activities 
authorized by this bill would need to compete among the 
Administration's other priorities for funding. I look forward to 
working with the committee to address these issues.
                     geologic carbon sequestration
    The challenges of addressing carbon dioxide accumulation in the 
atmosphere are significant and the goals of S. 731 are a step forward 
toward addressing information needs related to geologic storage of 
carbon dioxide. Fossil fuel usage, a major source of carbon dioxide 
emissions to the atmosphere, will continue in both industrialized and 
developing countries. Therefore, a variety of strategies are being 
investigated to reduce emissions and remove carbon dioxide from the 
atmosphere. Geologic carbon sequestration is one such strategy.
    Numerous carbon dioxide concentration stabilization targets have 
been modeled to evaluate the technical and economic feasibility of 
carbon dioxide capture and storage in the context of a mitigation 
strategy. The current atmospheric carbon dioxide concentration is 
approximately 380 parts per million volume and rising at a rate of 
approximately 2 parts per million volume annually, according to the 
most recent information from the Intergovernmental Panel on Climate 
Change (IPCC). The fraction of carbon emissions from all sources that 
must be eliminated or sequestered to impact the magnitude of climate 
change is large. For example, to stabilize carbon dioxide 
concentrations at about 550 parts per million volume, the amount of 
carbon dioxide requiring elimination or sequestration may be as much as 
70 percent. Reductions of this magnitude could involve implementation 
of several mechanisms, including geological and biological 
sequestration, fuel shifts from fossil sources to renewable biological 
sources, increased electricity generation from solar and wind systems 
and nuclear power, and increased efficiency of power generation, 
transmission, and end use. Each of these mechanisms has distinct 
geological, hydrological, ecological, economic and social implications 
that must be assessed on a wide range of scales, from molecular to 
basin scales, to allow rational policy discussions and decisions on 
implementation and deployment of technologies.
    Geological storage of carbon dioxide in porous and permeable rocks 
involves injection of carbon dioxide into a subsurface rock unit and 
displacement of the fluid or formation water that initially occupied 
the pore space. This principle operates in all types of potential 
geological storage formations such as oil and gas fields, deep saline 
water-bearing formations, or coal beds. Because the density of injected 
carbon dioxide is less than the density of formation water, carbon 
dioxide will be buoyant in pore space filled with water and rise 
vertically until it is retained beneath a nonpermeable barrier (seal). 
A critical issue for evaluation of storage capacity is the integrity 
and effectiveness of these seals.
                            views on s. 731
    S. 731 deals specifically with the geologic storage of carbon 
dioxide. The 2005 IPCC Special Report on Carbon Dioxide Capture and 
Storage indicated that, in emissions reductions scenarios striving to 
stabilize global atmospheric carbon dioxide concentrations at targets 
ranging from 450 to 750 parts per million volume, the global storage 
capacity of geologic formations may be able to accommodate most of the 
captured carbon dioxide. However, geologic storage capacity may vary on 
a regional and national scale, and a more refined understanding of 
geologic storage capacity is needed to address this knowledge gap.
    S. 731 requires the Secretary of the Interior, acting through the 
Director of the U.S. Geological Survey (USGS), to develop a methodology 
for conducting a national assessment of geological storage capacity for 
carbon dioxide, convene a review committee to evaluate the methodology, 
allow for a public comment period, and conduct a national assessment of 
geological storage capacity for carbon dioxide.
    While the USGS does not currently have experience assessing the 
national capacity of geologic sequestration of carbon dioxide, USGS 
experience with national and international assessments of natural 
resources could allow USGS to develop geologically based methodologies 
to assess the National capacity for geologic sequestration of carbon 
dioxide. We envision the national geologic carbon dioxide storage 
assessment methodology would be largely analogous to the peer-reviewed 
methodologies used in USGS oil, gas, and coal resource assessments. In 
addition, the USGS' knowledge of regional groundwater aquifer systems 
and groundwater chemistry would allow USGS to develop methods to assess 
potential storage in saline water-bearing formations (``saline 
aquifers''). Previous studies have postulated the existence of very 
large carbon dioxide storage capacities in saline aquifers, but the 
extent to which these capacities can be utilized remains unknown. The 
USGS could create a scientifically based, multidisciplinary methodology 
for geologic carbon dioxide storage assessment that can be consistently 
applied on a national scale.
    Under this bill, the USGS would coordinate and cooperate with the 
Department of Energy, the Environmental Protection Agency, other 
Department of Interior bureaus, State geological surveys and other 
relevant entities that are carrying out carbon sequestration activities 
to ensure the usefulness and success of the assessment. Many states 
already have some storage capacity data already developed, most of 
which is compiled in the National Carbon Sequestration Atlas published 
by the Department of Energy. The data for this atlas was compiled by 
the Regional Carbon Sequestration Partnerships which my colleague from 
the Department of Energy previously mentioned.
                          concerns with s. 731
    Section 3 of the bill requires that the Secretary develop a 
methodology within 270 days of enactment of the bill with subsequent 
mandatory requirements for review and comment, independent 
verification, and final publication. Additionally, Section 4 of the 
bill requires the Secretary to complete a national assessment within 
two years after the methodology is finalized. The Administration 
supports a national assessment, but the activities authorized under 
this bill must compete under the normal prioritization, budgetary, and 
funding processes. To ensure that this happens, the bill would have to 
be amended to provide flexible timeframes that will ensure that the 
national assessment will be funded consistent with other Administration 
and Congressional priorities. The bill does not provide sufficient time 
to develop the methodology and carry out the required assessment. USGS 
needs flexibility to ensure that we are able to develop the best 
product. Furthermore, to ensure appropriate flexibility in budgetary 
management, the Administration recommends that this bill be amended to 
authorize rather than require the national assessment. We would like to 
work with the committee to revise the bill to address these issues. If 
the bill is amended to satisfactorily address these concerns, the 
Administration would support it.
    In conclusion, the Administration agrees with the goals of the bill 
to develop a standard, peer reviewed methodology to assess the nation's 
geologic storage capacity of carbon dioxide and produce a national 
scale assessment using this methodology. We would also like to 
underline the importance of using a collaborative and non-duplicative 
inter-agency approach to build on the existing data, including DOE's 
National Carbon Sequestration Atlas. The activities authorized in this 
bill would ultimately result in a geologically based, robust, and peer-
reviewed national scale assessment and I look forward to working with 
the Committee on important revisions to the bill to ensure that the 
Administration would be able to support it.
    Thank you, Mr. Chairman, for the opportunity to present this 
testimony. I will be pleased to answer questions you and other Members 
of the Committee might have.

    Senator Domenici. Thank you, Doctor.
    The Chairman. Yes, thank you very much.
    Mr. Shope, why don't you go right ahead.

 STATEMENT OF THOMAS D. SHOPE, ACTING ASSISTANT SECRETARY FOR 
              FOSSIL ENERGY, DEPARTMENT OF ENERGY

    Mr. Shope. Thank you, Mr. Chairman.
    Mr. Chairman, Ranking Member Domenici, members of the 
committee, it's an honor for me to appear before you today to 
discuss the Department of Energy's sequestration program and 
Senate bills S. 731 and S. 962.
    As you know, fossil fuels must, and will, play a critical 
role in the Nation's future energy strategy, and 
sequestration--that is the capture, transportation, and 
underground storage of carbon dioxide--is one of the pathways 
DOE is pursuing to allow the continued use of fossil fuels 
while reducing CO2 emissions.
    DOE is taking a leadership role in the development of 
carbon capture and storage technologies. Successful research 
and development will provide carbon-control technologies that 
break through current technical and economic barriers, making 
widespread deployment of those technologies possible.
    Our carbon sequestration program has as its goal the 
development of technologies that will allow for the safe long-
term storage of carbon dioxide while holding any increase in 
the cost of electricity to less than 10 percent. DOE's seven 
regional carbon sequestration partnerships are developing and 
validating the technology and national infrastructure needed to 
implement carbon dioxide capture and storage in different 
regions of the Nation. The regional partnerships initiated in 
2003 began by identifying the most promising opportunities for 
carbon storage in their regions, and are currently performing 
25 geologic field tests and 11 terrestrial field tests, as well 
as other verification, permitting, and public outreach 
activities.
    Large-volume testing, scheduled to begin in fiscal year 
2008, will demonstrate CO2 capture, transportation, 
injection, and storage at a scale equivalent to future 
commercial deployments. Given the opportunities provided by the 
fiscal year 2007 operations plan, DOE will accelerate these 
activities by initiating them in 2007. These large-volume 
deployment tests are expected to provide results that will be 
used in the design of a FutureGen project, the coal-based 
powerplant of the future, which will produce both hydrogen and 
electricity, while capturing and storing CO2 
emissions.
    It is important to note that the recently published Carbon 
Sequestration Atlas of the United States and Canada, compiled 
using data from the regional partnerships, the U.S. Geological 
Survey and elsewhere, estimates carbon dioxide sink capacity 
sufficient to hold several hundred years of domestic U.S. 
emissions.
    The two bills under discussion this afternoon, S. 731 and 
S. 962, highlight Congress's recognition of the importance of 
carbon capture and storage technologies. I would like to share 
some thoughts on those provisions of the bills related to the 
Department's sequestration program.
    On S. 731, the National Carbon Dioxide Storage Capacity 
Assessment Act of 2007, DOE agrees that sound storage estimates 
are extremely important to the success of the program. DOE, 
through its sequestration program, regional partnerships, and 
other actions, has been working on this effort since 2003. 
Recently, we have made publicly available the Carbon 
Sequestration Atlas of the United States and Canada and the 
National Carbon Sequestration Database and Geographical 
Information System, or NATCARB for short. Our goal is for the 
atlas to be continually improved and updated with additional 
data from all sources, avoiding duplication of effort between 
agencies. Collaboration with the USGS strengthens our efforts. 
And I believe that my colleague from the USGS has aptly put 
that forward.
    Regarding S. 962, the Carbon Capture and Storage Research, 
Development, and Demonstration Act of 2007, DOE agrees with the 
majority of the provisions, including the need to expedite and 
carry out large-scale testing of sequestration in various 
geologic formations in different parts of the country in order 
to provide information on the cost and feasibility of 
sequestration technologies.
    The regional partnerships are focused on exactly these 
issues and should begin the process of conducting large-volume 
tests by the end of this fiscal year. Most of the objectives 
and activities called for in the bill are consistent with those 
of the DOE's sequestration program, including the cost-sharing 
requirements.
    As to funding for the carbon sequestration program core 
activities and the regional partnerships, I should note that 
funding beyond the 3 years of appropriations authorized in the 
bill will be required.
    While there are other provisions of the bill that address 
technical issues that could benefit from clarification, the 
Department fully supports the objectives of the bill and the 
recognition of the important role that carbon capture and 
storage plays in mitigating carbon dioxide emissions.
    Mr. Chairman, members of the committee, this completes my 
prepared statement, and I'd be happy to answer any questions 
you may have.
    [The prepared statement of Mr. Shope follows:]
 Prepared Statement of Thomas D. Shope, Acting Assistant Secretary for 
                  Fossil Energy, Department of Energy
    Mr. Chairman, members of the Committee, it is a pleasure for me to 
appear before you today to discuss the Department of Energy's 
Sequestration Program and Senate Bills 731 and 962.
                 carbon sequestration and fossil fuels
    The availability of affordable energy is an important component of 
economic growth. The use of fossil fuels, however, can result in the 
release of emissions with potential impacts on the environment. Of 
growing significance are emissions of carbon dioxide (CO2) 
which contribute to global climate change.
    Balancing the economic value of fossil fuels with the environmental 
concerns associated with fossil fuel use is a difficult challenge. 
Carbon capture and storage technologies provide a key strategy for 
reconciling energy and environmental concerns. Geologic sequestration--
the capture, transportation to an injection site, and long-term storage 
in a variety of suitable geologic formations--is one of the pathways 
that the Department of Energy (DOE) is pursuing to allow the continued 
use of fossil fuels while reducing CO2 emissions.
    DOE is taking a leadership role in the development of carbon 
capture and storage technologies. Through its Carbon Sequestration 
Program--managed within DOE's Office of Fossil Energy and implemented 
by the National Energy Technology Laboratory (NETL)--DOE is developing 
both the technologies through which geologic carbon sequestration could 
potentially become an effective and economically viable option for 
reducing CO2 emissions. The Carbon Sequestration Program 
works in concert with other programs within the Office of Fossil Energy 
that are developing the complementary technologies that are integral to 
coal-fueled power generation with carbon capture: Advanced Integrated 
Gasification Combined Cycle, Advanced Turbines, Fuels, Fuel Cells, and 
Advanced Research. Successful research and development could enable 
carbon control technologies to overcome the various technical and 
economic barriers in order to produce cost-effective CO2 
capture and enable wide-spread deployment of these technologies.
                   doe's carbon sequestration program
    The Carbon Sequestration Program, with a Fiscal Year 2008 budget 
request of $86 million (including Sequestration R&D by federal 
employees under the Program Direction line), encompasses two main 
elements of technology development for geologic sequestration: Core R&D 
and Validation and Deployment. The Core R&D element converts technology 
needs in several focus areas into technology solutions that can then be 
validated and deployed in the field. Lessons learned from the field 
tests are fed back to the Core R&D element to guide future research and 
development. Through its Integrated Gasification Combined Cycle, Fuels, 
Sequestration, and Advanced Research programs, DOE is investigating a 
wide variety of separation techniques, including gas phase separation, 
absorption, and adsorption, as well as hybrid processes, such as 
adsorption/membrane systems. Current efforts cover not only 
improvements to state-of-the-art technologies but also the development 
of several revolutionary concepts, such as metal organic frameworks, 
ionic liquids, and enzyme based systems. The ultimate goal is to drive 
down the energy penalty associated with capture so that geologic 
sequestration can be done while keeping any increase in the cost of 
electricity to less than 10 percent.
               regional carbon sequestration partnerships
    One of the key questions regarding geologic sequestration is the 
ability to store CO2 in underground formations with long-
term stability (permanence); this requires monitoring and verification 
of the fate of the CO2, to ensure that the science is sound 
and ultimately gains public acceptance. Answering this question is the 
responsibility of DOE's Regional Carbon Sequestration Partnerships 
(RCSPs), which are developing and validating the technology, and 
national infrastructure needed to implement geologic sequestration in 
different regions of the Nation.
    Collectively, the seven RCSPs represent regions that account for 97 
percent of coal-fired CO2 emissions, 97 percent of 
industrial CO2 emissions, 97 percent of the total land mass, 
and essentially all the geologic storage sites in the U.S. potentially 
available for carbon sequestration. The RCSPs are evaluating numerous 
geologic sequestration approaches in order to determine those best 
suited for specific regions of the country. They are also developing 
the framework to validate and deploy the most promising technologies 
for geologic sequestration.
                         a three-phase approach
    The RCSP Initiative takes a three-phased approach. The first, 
Characterization Phase, was initiated in 2003 and focused on 
characterizing regional opportunities for carbon capture and storage, 
identifying regional CO2 sources and storage formations. The 
Characterization Phase was completed in 2005 and led into the current 
Validation Phase, which focuses on field tests to validate the efficacy 
of geologic sequestration technologies in a variety of storage sites 
throughout the U.S. Using the extensive data and information gathered 
during the Characterization Phase, the seven RCSPs have identified the 
most promising opportunities for field tests to validate the efficacy 
of geologic sequestration technologies in a variety of storage sites 
throughout the U.S. Using the extensive data and information gathered 
during the Characterization Phase, the seven RCSPs identified the most 
promising opportunities for carbon storage in their Regions and 
commenced geologic field tests. In addition, the RCSPs are verifying 
regional geologic sequestration capacities initiated in the first 
phase, satisfying project permitting requirements, and conducting 
public outreach and education activities.
    The third phase, or Deployment Phase for large-volume testing. 
scheduled to begin in FY 2008, will demonstrate the feasibility of CO, 
capture, transportation, injection, and storage at a scale equivalent 
to future commercial deployments. Given the opportunities provided by 
the FY 2007 Operations Plan, DOE will initiate these activities in 
2007.
    These large-volume deployment tests are expected to provide results 
that will be used in design of the FutureGen project, which will 
produce both hydrogen and electricity from a highly efficient and 
technologically sophisticated power plant while capturing and storing 
CO2 emissions. The geologic structures to be tested during 
these large-volume storage tests will serve as potential candidate 
sites for the future deployment of technologies demonstrated in the 
FutureGen Project as well as the Clean Coal Power initiative, which 
will complete a solicitation for carbon capture technologies at 
commercial scale in 2008.
    The Regional Partnerships, the National Carbon Sequestration 
Database and Geographical Information System (NATCARB), and NETL have 
created a methodology to determine the capacity for CO2 
storage in the United States and Canada and an Atlas from data 
generated by the RCSPs and other databases including the United States 
Geological Survey's (USGS) National Coal Resources Data System, QW 
Database, EROS Database. Based on data displayed in the 2006 Carbon 
Sequestration Atlas of the United States and Canada, the aggregate 
CO2 sink capacity--including saline formations, unmineable 
coal seams, and oil and natural gas formations--is estimated to hold 
several hundred years of total domestic U.S. emissions.
                        senate bills 962 and 731
    Senate bills 962 and 731 highlight Congress's recognition of the 
importance of storage technologies. I would like to share with you some 
thoughts on these recent bills, specifically related to their relevance 
to the Sequestration Program.
    On S. 731, the National Carbon Dioxide Storage Capacity Assessment 
Act of 2007, we agree that knowing the potential for storage and 
applying a good methodology to derive storage estimates is extremely 
important. DOE, through its Sequestration Program and Regional 
Partnerships and NATCARB, has been improving our knowledge base in this 
area since 2003, and released an initial U.S. Assessment this month. 
The assessment is based on methodology that has been vetted by geologic 
experts throughout the country. We welcome additional data from all 
sources, and as it becomes available, the Atlas will be improved and 
updated. We will work to avoid redundancy and duplication between the 
work conducted by the Regional Partnerships and other sources. We 
believe that collaboration with USGS strengthens our efforts. We note 
that the USGS has been involved with DOE's program over the last 
several years, including participation in a small scale CO2 
injection into the FRIO formation in Texas. I will let my colleague 
from USGS provide more detailed comments on S. 731.
    Regarding S. 962, the Carbon Capture and Storage Research, 
Development and Demonstration Act of 2007, DOE agrees with the majority 
of its provisions. We agree that there is a need to expedite and carry 
out large-scale testing of storage in a range of geologic formations in 
different parts of the country to provide information on the cost and 
feasibility of geologic sequestration technologies.
    The Regional Partnerships are focusing on these exact issues and 
will conduct large volume tests during the Phase III, Deployment Phase. 
Efforts are underway to have some of the Regional Partnerships starting 
the Phase III efforts by the end of this fiscal year with the intent to 
inject CO2 as soon as possible, with potential for some 
injections to occur by the end of FY 2008. To comply with public and 
regulatory requirements of federal and state programs responsible for 
addressing possible safety and environmental risks, carbon storage 
projects will likely require specific permits. Both DOE and the 
Regional Partnerships provided comments for the U.S. Environmental 
Protection Agency's (EPA) first Underground Injection Control program 
guidance related to permitting initial pilot projects as experimental 
technology wells, giving regulatory agencies enhanced flexibility in 
expediting these projects. We are also working closely with the EPA to 
assess requirements and procedures for permitting future commercial 
geologic sequestration deployments.
    Many of the objectives and activities called for in the Bill are 
consistent with those of the DOE Sequestration Program including cost-
sharing requirements. The Regional Partnerships initiative are 
investigating small and large-scale tests in each of the seven regions 
of the partnerships. The Regional Partnerships also contain four 
Canadian provinces in their area and several Canadian government 
agencies, thus we anticipate there may be international collaboration 
in the tests to be conducted in Phase III.
    There are a few items in the Bill that may need more clarification. 
For field validation testing activities, the Bill calls for the 
Secretary of Energy to promote deep geologic systems that may be used 
as engineered reservoirs to extract economical quantities of heat. This 
appears to be utilizing CO2 as a fluid medium for geothermal 
power. DOE's Office of Fossil Energy is unaware of the promise of this 
concept and would need further clarification. Also, the Bill allows the 
Secretary to `promulgate policies, procedures, requirements, and 
guidance to ensure that the objectives are met.' The provision should 
be clarified to determine if this provides the Secretary with the 
authority for DOE to undertake liability for large-scale testing should 
this become an issue that delays or halts large-scale testing. The bill 
should clarify that any new policies, procedures, requirements, and 
guidance should support or be consistent with existing environmental 
and public health statutes, regulations, and policies.
    The Administration is working to develop estimates for the Large-
Volume Testing for Phase III of the Regional Partnerships, in addition 
to funding for the base program of R&D in capture. The majority of 
funding for the large-volume tests would be required in the earlier 
years for drilling and injection and for infrastructure construction, 
with lesser amounts later for monitoring and verification. We note that 
funding beyond the three years of appropriations authorized in the Bill 
would be required for both the Sequestration Program core activities 
and the Regional Partnerships.
                  moving toward commercial deployment
    Carbon capture and storage can play an important role in mitigating 
carbon dioxide emissions under potential future stabilization 
scenarios. The United States has a large capacity of geologic 
formations amenable to CO2 storage. DOE's Carbon 
Sequestration Program will continue to move geologic sequestration 
technology toward readiness for commercial deployment.
    Mr. Chairman, and members of the Committee, this completes my 
prepared statement. I would be happy to answer any questions you may 
have at this time.

    The Chairman. Well, thank you both for the testimony.
    Let me ask a few questions. We'll take 5-minute rounds for 
questions.
    First, Dr. Myers, let me ask you--you say in your testimony 
that the bill, as currently drafted, doesn't provide enough 
time for this assessment--for the methodology to be developed 
and then for the assessment to be done. What are the right 
periods of time, in your opinion?
    Dr. Myers. Mr. Chairman, it will take about a year to 
develop a methodology and then to have it peer-reviewed, which, 
again, is an important, critical part of this part of the 
process. And then, about 2 to 3 years to do the full national 
assessment.
    The Chairman. So, 1 year to develop and have peer-reviewed 
the methodology, and then, what 2 to 3 years after that you 
would have the actual assessment done? Is that your----
    Dr. Myers. Completed, yes.
    The Chairman. That's your view? Okay.
    Mr. Shope, do you think that's realistic as a timeframe for 
getting these things done?
    Mr. Shope. Well, I do think that's realistic for the 
enhancement of the work that we've already undertaken. So, we, 
at the Department of Energy and through the regional 
partnerships, are beginning the process now towards these 
large-scale tests. Where the real data need is going to be for 
that detailed information is as we move forward with additional 
large-scale tests with commercialization and deployment of 
these technologies.
    The Chairman. Well, I think some of the testimony from the 
second panel deals with this issue of liability, or potential 
liability if we get into large-scale demonstration projects. Is 
that something that we need to be worried about here? Do we 
need to be dealing with that by way of legislating something, 
in the views of either one of you? Dr. Myers, did you have any 
thoughts on this?
    Dr. Myers. Mr. Chairman, I'm not an expert on liability, 
but, I think, in the early stages, the tests are in oil and gas 
fields. I would suggest that the oil and gas leases would 
probably have a great deal to say on who has the liability. And 
then, it would be either a State or a Federal lease. It would 
depend on that. But I'll defer to better experts on the law.
    The Chairman. Have you looked at this issue, Mr. Shope? Did 
you have a view?
    Mr. Shope. We're certainly looking at this issue, Mr. 
Chairman, and it is a very significant issues. And it is one 
that this committee needs to be monitoring and working with. 
Obviously, what goes hand in glove with the liability are the 
insurance provisions, and we have had discussions with 
insurance carriers, and they are, obviously, concerned about--
they like to have some definition--fixed, calculable times, and 
that's not consistent, necessarily, with what we are dealing 
with over geologic time. So, they are having difficulties in 
determining what exactly the total risk would be. As my 
colleague had mentioned, of course, we do have some experience 
through the enhanced oil recovery, through--in oil fields. That 
certainly lends itself to additional experience. However, one 
of the caveats is that the volumes that we are talking about 
under carbon capture and storage are significantly greater than 
those that are used in enhanced oil recovery. Furthermore, the 
utility sector isn't used to dealing with these provisions, as 
is the oil industry. And we are working, at DOE, of course, 
with our sister agencies, including the EPA, looking at this.
    And I'll further note that there is a movement across the 
country to deal with this on a State level. Of course, for our 
FutureGen project we do have concerns about liability, going 
forward, and both the candidate States of Texas and Illinois 
are both working with liability provisions. Texas has passed a 
provision to allow a State to take ownership of the 
CO2, and both Texas and Illinois are working on 
potential indemnification provisions to indemnify the alliance.
    So, there is movement afoot, and it is certainly going to 
be a concern, going forward.
    The Chairman. Well, I think I hear what you're saying, 
which is that there is movement afoot, but there is nothing 
concrete that you would recommend we try to legislate, at this 
point.
    Mr. Shope. That is correct, Senator. Again, I think a lot 
of the data that'll come out of these tests that we're talking 
about today will help guide those decisions.
    The Chairman. Okay. Let me stop with that.
    Senator Domenici.
    Senator Domenici. Thank you, Mr. Chairman, for yielding. 
And obviously this is going to be a very short day, but I want 
to make a couple of points, with your permission.
    Do you agree with the following statement going forth from 
this committee to those who are interested in this issue, that 
are now part of the Government and other agencies or the like, 
that those other agencies should garner from this hearing that 
we're not on a short--that we're not on a long-term lease, 
we're on a short one. If we're going to make any headway with 
CO2, we're going to make it as part of a very 
accelerated plan that's going to go into effect and get carried 
out rather quickly, and it's not going to do anyone any good to 
make things difficult or stay out of the processes. They all 
have to get in and get their 2 cents put before the lead 
committees so that we'll know where things are.
    Is that a fair statement, Mr. Chairman?
    The Chairman. Yes, that certainly is fair. It's my purpose, 
and, I believe, the purpose of most members of this committee, 
that we move out as aggressively as we can to persuade the 
Congress to do so on dealing with this issue and doing these 
demonstration programs and really determining whether this is a 
solution for our problem of capture--for the problem of 
greenhouse gas emissions from coal-burning operations.
    Senator Domenici. Thank you, Mr. Chairman. I hope we will 
note that, and it will be noted.
    I do want to ask, with reference to what's going on out 
there--might I ask--the Duke--the recently released Duke 
University study states that much of eastern Virginia, all of 
North Carolina, South Carolina, and Georgia are devoid of 
potential carbon dioxide sequestration sites. S. 731 calls for 
a survey of potential carbon dioxide storage sites. What 
implication does this have for the scale of carbon dioxide 
infrastructure? Is this scale feasible? Should S. 731 include 
the analysis of existing pipeline rights-of-way to assess 
feasibility of this approach? I ask that to either of you.
    Dr. Myers. Senator Domenici, let me just start with a few 
comments.
    One is, the atlas was a great starting product, but there's 
still a lot of questions, particularly in areas where there's 
little geologic data at the deeper horizons. And the States you 
mentioned are States where we do have very little data, 
particularly understanding the particular reservoir properties 
that might be down there, the trapping mechanisms that might be 
available in those States. So, understanding geologic carbon 
sequestration, the process of doing a full, robust national 
assessment will lead to an understanding of areas that are more 
capable than others, but also where the data gaps are and where 
the uncertainty is--level of uncertainty.
    With respect to that, until you've done that study, it's 
going to be very difficult to talk about how robust the 
pipeline infrastructure is. If we're going to be shipping 
significant quantities of CO2 over a long distance, 
that's a very large investment, and it has to be capitalized 
somehow. But, I think, first, understanding the baseline 
assessment is the first step to better clarifying, then the 
next economic steps, whether it be transporting it to sites 
that are more applicable or whether it be using alternative 
sources of sequestration in those areas.
    Mr. Shope. I don't have much more to add to that, Senator. 
Again, I--just following on--of course, it is--all pieces of 
that puzzle will need to be put into place. The infrastructure 
is usually an important component.
    Senator Domenici. That's all I have for now, Senator.
    The Chairman. I would particularly commend Senator Salazar 
and Bunning, I believe, for being the lead sponsors on this 
legislation.
    Senator Salazar.
    Senator Salazar. Thank you very much, Senator Bingaman. I 
appreciate you holding the hearing, and for your leadership on 
this issue, as well, and for Senator Domenici's leadership on 
this issue, as well.
    I think as we deal with this whole issue of global warming 
and carbon capture, this is certainly one of the most promising 
areas as we deal with the reality of having to use coal-burning 
powerplants, which is going to be a reality here in this 
country, and at the same time as we deal with the concerns 
about our environmental security. And I think having the kinds 
of assessments in the programs that we're talking about in this 
particularly legislation is a very important step forward. As 
I've said in this committee before, I think when we look at 
coal in this country, you know, we look at it in the same way 
that Saudi Arabia probably looks at its oil. We are very rich 
in coal resources. And if we can find ways of burning it and 
dealing with the environmental security issues, it will not 
only advance our notion of getting to energy independence, but 
also help the world--the rest of the world come along with us, 
including places like China and other places that are burning a 
lot of coal.
    I will note, Mr. Chairman, that it's very interesting, when 
you look at the endorsements that we have for S. 731, that it 
comes from a very interesting mix of partners. You have the 
America Public Power Association, coal companies like Arch Coal 
and Clean Air Task Force, the Colorado Association of Municipal 
Utilities, the Colorado Mining Association; but, at the same 
time, you have the Natural Resources Defense Council, the 
Massachusetts Institute of Technology, the National Academies, 
and the list goes on. But certainly, the coalition that is 
behind the legislation demonstrates the great interest that we 
have in carbon sequestration as a very promising technology.
    I also want to thank Senators Bingaman, Brownback, Bunning, 
Casey, Lugar, Tester, Webb and others who have been involved in 
sponsoring this legislation. And I look forward to us being 
able to move forward with it as soon as we possibly can.
    I have two questions, very quickly, here. First, to you, 
Dr. Myers. You responded, to the question from Senator 
Bingaman, that you thought that the methodology could be 
developed within a year, and peer-reviewed within a year, and 
that the actual assessments then could be completed 2 or 3 
years after that. So, we're talking about a timeframe here of 2 
to 3 years. Now, those timelines would be timelines that, from 
a USGS perspective, you think are appropriate ones, the ones 
that you laid out?
    Dr. Myers. Yes, I do, Senator Salazar. And, again, as my 
colleague from DOE has pointed out, that this is a 
collaborative effort, we'd expect the State geologic surveys to 
be involved, DOE, and other Federal agencies that have data. 
But you look at the immensity of the United States, and you 
look at the varying geologic conditions in these sedimentary 
basins, then the baseline understanding of those--you'll find, 
in many basins, outside the traditional oil and gas areas, 
there is very little deeper data on saline reservoirs. There's 
very little understanding of deeper trapping mechanisms that 
might be available. So, I think when we look at it 
realistically, it is a multiyear process, and it needs to be a 
collaborative effort. So, 2 to 3 years, I believe that we're 
capable of putting together a first assessment in collaboration 
with the partners, and I think it would be a good assessment. 
You would certainly continue to be reassessing, as you've got 
additional data, as the technology improved, as you were able 
to narrow down certain issues, as you acquired additional data 
in some of these key States where there might be a lot of 
uncertainty. But I think 2--again, about a 3- to 4-year 
process, in total, to get to the first robust national 
assessment is appropriate.
    Senator Salazar. Okay, thank you very much.
    And, Secretary Shope, if I can ask you a question on the 
liability issue. Your response to the earlier questions is that 
there are States that have moved forward to try to provide some 
liability protection as we move forward with carbon 
sequestration projects. Does it seem to you that that's 
something that we ought to deal with at the national level, as 
we move forward with these demonstration projects, that we're 
providing adequate liability protection for those who are 
taking risk in, sometimes, investing what I understand will be 
up to billion-dollar kinds of projects to see how carbon 
sequestration might actually work?
    Mr. Shope. Thank you, Senator. I know that you will 
probably hear, later today, from some of the other panelists 
and partnerships, that, of course that's a huge concern and 
that we need to be considering the Federal Government taking 
liability provisions--making those provisions available. At 
this time, we're not prepared to make that recommendation. 
Again, I think there is a--a wait-and-see would be appropriate, 
to some extent, because we want to see how this develops 
through the country to see--there are regional aspects, and, if 
it is going to be dealt with sufficiently on the local level, 
then we wouldn't need to impose a Federal provisions. But it is 
going to be a huge issue that we need to grapple with as we 
move forward and gain additional data that will help us make 
those determinations.
    Senator Salazar. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Thomas.
    Senator Thomas. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being with us.
    Dr. Myers, you stated in your testimony that USGS does not 
currently have the experience assessing national capacity of 
geological sequestration. I was under the impression that USGS 
had assisted in the Department of Energy's National Carbon 
Sequestration Atlas, this 90-page document. Can you clarify for 
the committee the role USGS played in putting that together?
    Dr. Myers. Senator Thomas, many of the baseline levels of 
data acquired--the coal distribution, the oil and gas field 
distribution, the reservoir properties, the geologic mapping 
that went into the assessment--are USGS products, but we were 
not the lead--and we did have some scientists involved with the 
regional partnerships--but overall, we were not, again, the 
major lead, nor was the methodology used the traditional 
methodology that we would use, or a type of methodology we 
would use, at the USGS. I believe the compilation is done by 
NETL. Is that correct? NETL--NETL. So, again, it's a very good 
first pass, but it----
    The Chairman. Could you clarify what NETL is?
    Mr. Shope. That's our National Energy Technology 
Laboratory.
    The Chairman. Okay.
    Mr. Shope. Pittsburgh, and Morgantown, West Virginia.
    The Chairman. Okay.
    Dr. Myers. And I believe we have the technical expertise to 
do it, but we're not funded on the level we would need to be to 
actually perform the baseline work of developing the national 
assessment.
    Senator Thomas. Not funded. Never heard that before.
    [Laughter.]
    Senator Thomas. Mr. Shope, we inject CO2 in the 
ground for enhanced oil recovery in my State. I've always been 
told this is a very safe and efficient process. I've also been 
told that roughly 60 percent of that injection stays put. 
There's been a lot of talk about liability with carbon 
sequestration later; however, is there a reason to be concerned 
about liability? Is carbon sequestration any different than EOR 
is, in that respect?
    Mr. Shope. Senator, we have seen no indications, at this 
point, that there is a concern for liability. We agree with 
you, the--it is analogous to enhanced oil recovery. There are, 
obviously, a few issues that we need to be looking at, and the 
major one, I probably indicated earlier, is just the sheer 
volumes of CO2 that we're dealing with. And in this 
country, I believe the figure is about 35 million tons of 
CO2 that were used for enhanced oil recovery. The 
amount of CO2 that we would be injecting from full-
scale deployment would be vastly greater than that, orders of 
magnitude higher.
    Senator Thomas. Yes.
    Mr. Shope. So, that would be the concern, Senator.
    Senator Thomas. It's been said that DOE regional 
partnerships do not have the manpower necessary to acquire data 
for mapping the storage capacity. I think we need to get on 
with seeing if sequestration actually works the way some people 
envision. Is the comprehensive mapping of CO2 
strategy capacity prerequisite to conducting small number of 
demonstration projects?
    Mr. Shope. It is not. We are currently undergoing those 
projects. We are beginning with the rollout of 25 projects, 
smaller-scale projects throughout the country, leading towards 
large-scale projects, as I testified to, which will begin, 
here. The processing of those will begin this fiscal year. I 
think where the database would come in handy, again, is to 
enhance and refine those figures as we move forward. We have 
the information we need today to do those small-scale tests, 
but, as we move forward towards large-scale deployment and 
commercialization, that information would be crucial.
    Senator Thomas. Well, I'm sure you're aware, given your 
work on fossil fuel energy, supply of money for research is not 
an endless one. If you had to choose between conducting a 
comprehensive mapping capacity or using the information that 
you already have to conduct some commercial-scale 
demonstrations, which would you choose?
    Mr. Shope. That's not a fair question to ask of us, 
Senator.
    [Laughter.]
    Senator Thomas. I think so. Sometimes we get so taken up 
with all the research and the mapping, when we already know how 
to do some of these things, and we could be doing it, as 
opposed to years and years of research. We can't do anything 
for 4 years.
    Mr. Shope. I would encourage you, again, Senator, to note 
that we are moving forward on this testing, we are moving 
forward with the small-scale tests, and the large-scale tests 
are coming forward. We have the information that we need, to 
conduct those tests and move out, and we are doing that.
    Senator Thomas. Okay, Thank you.
    The Chairman. Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    Mr. Shope, in your testimony you said DOE's budget for 
sequestration is $86 million in fiscal year 2008. Is that 
correct?
    Mr. Shope. That's correct.
    Senator Bunning. On the budget resolution, Senator Obama 
and I introduced an amendment, cosponsored by the chairman of 
this committee, to provide $200 million for the DOE to conduct 
carbon capture and sequestration demonstrations. This, too, is 
only a start. Could you discuss your funding needs for these 
demonstration programs in the long term?
    Mr. Shope. I will address that, Senator. And this relates, 
also, to Senator Thomas's remarks, and that is, this is not an 
inexpensive proposition. These tests will be expensive, going 
forward. And one only need to look at the current price for--
commodity price for CO2, at $20 a ton, on average, a 
million tons a year, you're looking at $20 million for 1 year 
of injection for a 1-million-ton project, per year. That adds 
up. Our budget is sufficient to go forward in 2007 and 2008. We 
have a total of 180 million over those 2 years to begin these 
small-scale tests and to begin the large-scale testing. Going 
forward, we're working on our figures for--right now, for 2009 
and beyond. But your comments are well taken, that this is 
going to require sufficient--a large amount of funding.
    Senator Bunning. But you can't put a number on it in the 
long term?
    Mr. Shope. Senator, we're working on those figures for our 
2009 budget proposal, at this time.
    Senator Bunning. Would you agree or disagree with the 
amendment that--in other words, the administration doesn't 
particularly care for the amendment that went on, the 
additional money for DOE?
    Mr. Shope. I--the money that we have in a--President's 
request is sufficient to move forward with what--with the tests 
that we are undertaking in 2007 and 2008. So, we are moving out 
on those tests, and we have sufficient funds to begin those 
tests.
    Senator Bunning. You mentioned the cost of buying 
CO2 on the market. How does the DOE intend to buy 
this carbon? Would it make any sense to pair your regional test 
sites with an industrial source like a coal-to-liquids plant 
that can provide you with the millions of tons of 
CO2 you will need?
    Mr. Shope. Absolutely. That's a concern, Senator. We do not 
want to impact the existing market for CO2. We need 
to be very cognizant of that fact. We will be receiving back 
from the partnerships their proposals to do these large-scale 
tests, going forward. So, we're going to receive those later 
this summer. I think the partnerships are struggling with that 
very issue right now, to figure out where can we get the 
CO2 to do these large-scale tests?
    Senator Bunning. Okay. This is my last question for you. 
While I have cosponsored both the USGS and the DOE legislation, 
because I believe they are both important projects, how can we 
be certain that we do not duplicate our efforts? Are there 
changes we need to make to these two bills to ensure that the 
USGS and the DOE work together?
    Mr. Shope. We are ready, willing, and able to work together 
with our colleagues and benefit from their expertise in the 
USGS, and we will do it.
    Senator Bunning. Well, you didn't answer my question.
    Mr. Shope. No, there is nothing that--I don't think there 
is any further revision that needs to be made to the bill, 
Senator.
    Senator Bunning. In other words, we can pass them, as 
they're presently structured.
    Mr. Shope. With respect to that--to the collaboration-and-
coordination issue, that's correct.
    Senator Bunning. All right, thank you, Mr. Chairman.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman, and for your 
leadership and for your testimony.
    As part of the braintrust, if you will, that exists around 
carbon capture and sequestration, we've had a lot of unintended 
consequences, I guess, as a world, around CO2 
emissions, something that we didn't know existed--you couldn't 
see it, you couldn't smell it, you didn't know it was 
happening. Do you know, are there any concerns in your 
Departments, or other places that you deal with, unintended 
consequences that might occur by putting CO2 back 
into the ground in this magnitude? I know we've done it in a 
much, much, much smaller way in oil recovery, but when 
scientists are sitting around talking, are there any unintended 
consequences for the whole world, if you will, to end up 
pumping this much CO2 into our core?
    Dr. Myers. Senator, I think, again, if you look at the two 
bills, and you look at the concurrences of the agencies, we're 
in the infancy of really understanding the full-scale effects 
and the full-scale capability to be able to geologically 
sequester carbon. Because the scale's--it's fairly 
straightforward to look at the issue with respect to an oil and 
gas field, where you have a lot of data, you know, where you 
have a tripping mechanism, on a geological scale. But when you 
get beyond those areas that have, sort of, the low-hanging 
fruit, the good datasets, you get to the areas of--if you 
inject it into saline aquifer, you know, at the scale we're 
talking about, what are the trapping mechanisms like, what are 
the geochemical reactions in the reservoir that change things? 
If you inject into coal seams, what--when they absorb into the 
coal seams, what are you releasing into the coal seam? Lots of 
questions on national capacity. In saline aquifers, how far--an 
oil and gas accumulation is a distinct accumulation, where you 
have oil unusually underlaying by water--that water lake may be 
a perfectly good place to inject CO2, but you don't 
know, necessarily, where the down-dip sealing end of that oil 
and gas field is. So, again, the capacity question comes up. 
What data do you need, to assure that you have sufficient 
capacity in that reservoir? And then, the length of time that 
you need to store it, you know, what is the national agenda? Is 
it 100 years? Is it 1,000 years? So, different reservoirs will 
transmit gases at different speeds. So, you have to look, 
again, and put some careful qualifications on what you're 
trying to accomplish. Then you have to develop a methodology 
for monitoring to make sure that those reservoirs where you're 
storing it, in fact, are sealing and stable.
    So, there's a lot of work that needs to be done. I think, 
again, these bills are recognitions of that, recognitions of 
what, the administration knows, needs to be a tremendous amount 
of scientific and engineering work that--to advance it to the 
point we can really understand the large-scale commercial 
impacts of it.
    Thank you.
    Mr. Shope. And I would just add, to Dr. Myers' comments, 
that if you look at our program that the regional carbon 
sequestration partnerships are doing, the 25 tests are geared 
to address those issues. We've specifically designed the tests 
to be done in different geological formations in different 
locations to get at those very questions: the permanence, the 
migration. All of those issues are part of our suite of tests.
    Senator Corker. We spend a lot of time in our offices just 
looking at the various technologies and certainly 
understanding, you know, trying to understand things that are 
taking place right now that are going to help us. For instance, 
with alternative cellulose, how big a player that's actually 
going to be. And most of the people that talk with us give us 
time horizons as to when they think we'll be at full scale 
using those types of things. Obviously, for us to use clean 
coal technologies, what you're doing, at some point, has to be 
at full-scale operations. And for someone who's not been around 
the oil producing States, if you will, it's hard for me to 
imagine--it's really hard for me to imagine this being a cost-
effective way of dealing with carbon. I'm supporting these 
bills, and certainly hope that that's going to be the case. But 
since you are so close to it, can you give me a--just sort of a 
gut feel as to when you think our country--because we're going 
to be passing other pieces of legislation that need to dovetail 
with this--when our country will be at a position where we'll 
actually be at a full-scale level, capturing carbon, 
sequestering carbon, and taking into account some of the 
geographical issues that we have to deal with, where, you know, 
some States just don't have, underneath them, the ability to 
store? I'd just love to have a--sort of a horizon when you 
think this is going to be something we're really using full 
scale in our country.
    Mr. Shope. Thank you for the question, Senator; and it's an 
excellent one, because when you look at the storage components 
which we're dealing with today in these bills, predominantly, 
really it's only one piece of the larger puzzle. We need to 
bring along the capture technologies as fast, if not faster, 
than the sequestration-and-storage technologies, as well, so 
that once we have developed these wonderful sinks to put carbon 
dioxide into, as we addressed earlier with Senator Bunning and 
Senator Thomas, that there is, in fact--the CO2 can 
be captured and put into those storage facilities.
    Our program is geared towards accomplishing that goal. If 
under current budget constraints and outlooks, we would be 
looking at these technologies available--the storage 
technologies to be available in the post-2012 timeframe. That 
means they're available. If we have--first commercial 
deployment of same puts you into the 2020 timeframe for wide-
scale large technology of choice; that is, that the current--
the powerplant off-the-shelf technology includes a FutureGen-
esque plant of carbon capture, storage, and--long term storage, 
you're looking at in the 2045 timeframe for large-scale 
deployment of that.
    So, those technologies will be available, and will be 
deployable, in the 2020 to 2025 timeframe, but, again, we're 
not going to see common, everyday deployment of that until 
approximately 2045.
    Senator Corker. Thank you.
    Thank you very much.
    The Chairman. Let me just advise members that I didn't plan 
to have any more questions of this panel. So, unless members 
have some burning desire to ask more questions we have another 
panel of three witnesses that we need to get to.
    Thank you both very much for your testimony, and I'll ask 
the second panel to please come forward so we can hear their 
testimony.
    Senator Domenici. Senator Bingaman.
    The Chairman. Yes?
    Senator Domenici. While the panel is assuming their 
positions, might I, for the record, just raise an issue and 
discuss it with you?
    First of all, it would appear, based upon the questions 
that have been lodged to the first witnesses, that the 
Department is moving along as expeditiously as possible, and 
they are telling us, here today, what we must do for that 
expeditious moving to reach a point where we will, in fact, be 
able to move ahead with what must be done with the 
CO2 in order to have a real program for our country.
    I wanted to express, on behalf of myself, and hopefully 
with your concurrence, the positive nature of a compliment to 
the Department, the Department's people, for moving along as 
expeditiously as they have. I think it's imperative that we do. 
And I think they have. And also, for those who are working with 
the Department that we have heard from by way of outside 
consultants and the like, I think that's good for the country 
and good for us, and I think we are showing the country that 
we're not here to lallygag, but, rather, to move with dispatch.
    I compliment you for that. We could have put this over from 
late this afternoon to another day, as is the tendency, but you 
wanted to do it, as you usually do, when it could be done, even 
if it was Friday afternoon--wanted to get it done, and I 
commend you and hope that we can get it done today and get 
ready.
    When we hear these witnesses, we will be ready to go, and I 
commend our staff to move with dispatch thereafter.
    Thank you, Mr. Chairman.
    The Chairman. Well, I certainly agree that we need to move 
ahead with these two bills, and then we need to figure out what 
else can be done to accelerate the process. Obviously, the 
timeframes that Mr. Shope was indicating are problematic, from 
my perspective; they're way too long, when you're talking about 
how long it would take to actually get to large-scale 
demonstration of carbon capture and storage. But I hope we can 
speed those up.
    This second panel: Dr. George Guthrie is program director 
for fossil energy and environment at Los Alamos National 
Laboratory--thank you for being here, Dr. Guthrie; Dr. David 
Hawkins, who's a frequent testifier before our committee, is 
director of Climate Center for the Natural Resources Defense 
Council; and Mr. Kipp Coddington is a partner with Alston & 
Bird, here in Washington. Thank you all very much for being 
here.
    Unless you have some preference otherwise, why don't you 
start, Dr. Guthrie, and we'll just go across the table, as we 
did with the previous panel.

   STATEMENT OF DR. GEORGE GUTHRIE, PROGRAM DIRECTOR, FOSSIL 
ENERGY AND ENVIRONMENT PROGRAMS, LOS ALAMOS NATIONAL LABORATORY

    Dr. Guthrie. Chairman Bingaman, Senator Domenici, and 
members of the committee, thank you for the opportunity to 
provide testimony regarding the legislation on the capture and 
geologic storage of carbon dioxide.
    My name is George Guthrie. I'm a geochemist, and I've 
worked, over 10 years, on various aspects of CO2. 
I'm currently program director for fossil energy and 
environment programs at Los Alamos.
    As you know, fossil fuels are central to the global energy 
portfolio, and they're likely to remain so for at least 
decades. Geologic sequestration of carbon dioxide offers great 
global potential to manage the carbon emissions for fossil 
fuels.
    We already have experience dealing with some aspects of 
geologic sequestration. The United States leads the world in 
the technology of CO2 injection to recover oil from 
depleted oil reservoirs--a process known as enhanced oil 
recovery, or EOR. Power-plant scale volumes of CO2 
have been handled, transported, and injected into geologic 
reservoirs for more than 30 years as part of EOR operations, 
primarily in the Permian basin of west Texas. More recently 
international efforts include the Weyburn project in Canada and 
the Sleipner project in Norway, both of which involve large-
scale CO2 injection.
    From this experience base, we know that we can handle and 
inject CO2 volumes equivalent to the output of 
powerplants. So, what questions remain to be addressed? Well, 
first, large-scale capture of CO2 at powerplants 
must be developed and understood. Second, our storage capacity 
estimates must be improved by detailed geologic studies. Third, 
large-scale injection must be demonstrated under the variety of 
conditions that we anticipate for sequestration. And, finally, 
we need to verify the long-term safety and reliability of 
storage sites, which will require a robust risk-assessment 
framework.
    Each of these issues is important, but in my remaining 
time, I'd like to elaborate on risk assessment, which was 
called out in both pieces of legislation.
    Risk assessment is particularly challenging due to the 
implementation scale, both in terms of the volumes of 
CO2 involved and in terms of the timescales 
necessary for effective storage. Consequently, risk assessments 
must be science-based.
    Some of the scientific base can come from laboratory 
experiments and theoretic studies; however, large-scale field 
studies are the only option for some of the essential data. 
These sites fall into two broad categories. This includes 
large-scale injection demonstrations and analog sites, which 
includes large natural accumulations of CO2 and 
industrial sites like EOR operations.
    Analog sites provide information on long-term conditions 
and long-term concerns, namely those that pertain to the fate 
and impact of CO2. Wellbores are an excellent 
example of this. They're a critical component of the 
containment system, they're required to place the buoyant 
CO2 below an impermeable barrier. The problem is 
that wellbores use cement that may degrade when exposed to 
CO2 and water.
    As part of our support for DOE's carbon sequestration 
program, we recently completed the first field-based study of 
this issue using samples from a mature EOR site. The result 
showed that interactions do occur, but complete degradation may 
not be an issue for some geological environments. In fact, in 
some cases, beneficial reactions may actually occur that 
improve the integrity of the wellbore. We need more studies on 
wellbores, but these results demonstrate the importance of 
field observations in developing a reliable risk-assessment 
framework.
    Some data for risk assessment must be collected from large 
demonstration projects. Consider the impacts associated with 
the injection of CO2 storage operation. In EOR, 
CO2 is injected into a reservoir, where fluids have 
been, and continue to be, removed. In contrast, a storage 
operation might involve situations where CO2 is used 
to displace pre-existing reservoir fluids, and this creates 
different physical conditions. Large-scale demonstration 
projects from a wider range of geological environments are 
critical to address issues like these that are unique to 
CO2 storage.
    In closing, I want to emphasize that moving forward with 
carbon sequestration research is a positive step for the 
Nation. We are at a point where many of the remaining questions 
can only be answered by larger field efforts. We know we can 
handle and inject CO2 safely at large volumes, but 
we need to show that CO2 capture at powerplants 
works; we need to improve our estimates on the overall storage 
capacity for geologic storage, and we need to develop the 
confidence that CO2 storage is a safe and effective 
option for the long term.
    The proposed work in the legislation is critical in moving 
geologic sequestration forward from a good concept to a 
meaningful option.
    The Chairman. Thank you very much.
    Mr. Hawkins.

   STATEMENT OF DAVID G. HAWKINS, DIRECTOR, CLIMATE CENTER, 
               NATURAL RESOURCES DEFENSE COUNCIL

    Mr. Hawkins. Thank you very much, Senator. And I appreciate 
the promotion to ``Doctor,'' but I'm just a recovering lawyer.
    [Laughter.]
    Mr. Hawkins. I direct the Climate Center at Natural 
Resources Defense Council, and it's a pleasure to be here again 
before the committee.
    NRDC supports the work that's called for in S. 731 and S. 
962, and we congratulate the lead sponsors and other sponsors 
for introducing this. Why is that? Well, because coal is so 
abundant, and because coal plants continue to be built around 
the world, capture of carbon dioxide and geologic disposal, we 
think, is essential to avoid profoundly damaging disruption of 
our climate.
    Just one scary anecdote. New coal plants that are forecast 
to be built in the next 25 years, if they are not equipped with 
CO2 capture equipment, during their lifetime they 
will emit CO2 in an amount that is 30 percent more 
than all of the CO2 released from all previous human 
use of coal. And that's associated with just 25 years of 
investment. That's a phenomenal commitment, a phenomenal 
mortgage on the future of our planet's climate if we don't do 
something. Therefore, we cannot afford to delay the use of 
carbon capture and disposal on these new coal plants.
    So, what do we know? Well, we know enough now to get 
started, but more rigorous information of the kind that will be 
provided by this legislation is important. And we also need 
rules of the road. Rules of the road can be provided by EPA. 
EPA has legal authority to write such rules, but they don't 
appear to be hurrying to do it. And we think they should be 
given direction by this Congress, and we hope that this 
committee will work with the appropriate committees in Congress 
to make sure that that does happen.
    But I want to stress that policies to limit CO2 
emissions are essential. We can have all the information in the 
world about the viability of carbon capture and disposal, but 
it isn't going to be deployed in the real world if there are no 
policies to limit CO2 emissions. If we want these 
technology to advance, and we want them to be deployed in any 
kind of a meaningful timeframe--and we certainly want them to 
be deployed before 2045--we're going to need policies to 
stimulate that. Without those policies, you're going to hear, 
10 years from now from the Department of Energy, that it'll be 
2055. So, we need that.
    But, that said, the policies and practices that are 
supported by S. 731 and S. 962 are important, because they 
would provide government support for comprehensive surveys, 
which are valuable, and initial large-scale injection projects. 
These things can help speed deployment and build confidence, in 
the industrial community and in the public, that these--that 
this is a workable part of the climate policy toolbox.
    In S. 962--just several different comments on the bills--we 
support the fact that financing under the Energy Policy Act of 
2005 should now be focused much more on actual carbon capture 
and disposal. That is what--that's where the payoff is, and 
that's where the financial incentives ought to be focused.
    A couple of additional items. We think that the bill would 
be improved if it specified that DOE, in consultation with EPA, 
would set minimum criteria for data collection. What kind of 
data should be collected from these projects? Let's get some 
minimum criteria out there so that all seven of these projects 
are collecting comparable kinds of data. Second, we think that 
the data collection requirements, as an example, should include 
assessment of risks and assessment of--and identification of 
hazards, various leakage pathways. We need to know, from these 
different sites, what the characterization of that is. Third, 
we think that DOE, in coordination with EPA, should carry out 
an integrated assessment of the results of these projects. And 
I would just say, with respect to the USGS program in S. 731, 
this is important, because these CO2 repositories 
are a natural resources, just as much as a national resource, 
just as much as oil and gas resources are, and they ought to be 
the subject of a national objective assessment.
    But, in answer to Senator Thomas's question, we do not need 
to delay these large-scale demonstration projects to await that 
comprehensive national database. The national database will be 
important for later on as we move to scale, but we can move 
forward with these large projects now, and we urge the 
enactment of both of these pieces of legislation. We'd be happy 
to work with the Committee on some suggested improvements.
    Thank you very much.
    [The prepared statement of Mr. Hawkins follows:]
   Prepared Statement of David G. Hawkins, Director, Climate Center, 
                   Natural Resources Defense Council
                                summary
    Coal use today is responsible for large and mostly avoidable 
damages to human health and our water and land. Coal use in the future, 
along with other fossil fuels, threatens to wreak havoc with the 
earth's climate system. Because coal is so abundant, capture of carbon 
dioxide from industrial coal sources and geologic disposal (CCD) is 
essential to reconcile continued coal use with avoidance of this 
profoundly damaging disruption of our climate. New coal plants forecast 
to be built in the next 25 years, if not equipped with CCD, will emit 
30 per cent more carbon dioxide in their operating lives than has been 
released from all prior human use of coal. We cannot afford to delay 
use of CCD on new coal plants.
    Fortunately, we know enough today to implement large scale CCD for 
coal plants now in the design stages. Experts have concluded that such 
operations can be conducted safely if an effective regulatory regime is 
put in place to license and monitor operations of disposal sites and 
that properly selected and operated disposal sites can retain injected 
CO2 for the required long periods of time. EPA has the legal 
authority to write such rules but direction from Congress is needed to 
assure the rules will be written in a timely manner.
    Policies to limit CO2 emissions and set performance 
standards are essential to drive use of CCD at the required scale and 
pace. Such policies should be enacted in this Congress. Well designed 
measures can phase in CCD on new coal plants with only very modest 
impacts on retail electricity prices. Government support of initial 
large-scale injection projects can help speed deployment and build 
confidence.
    Finally, CCD is only one of several tools available to cut global 
warming emissions. The fastest and cheapest method remains energy 
efficiency, with increased reliance on renewable energy resources 
providing another essential tool.
                               testimony
    Thank you for the opportunity to testify today on S. 731, the 
National Carbon Dioxide Storage Capacity Assessment Act of 2007 and S. 
962, the Department of Energy Carbon Capture and Storage Research, 
Development, and Demonstration Act of 2007. Both of these bills address 
important aspects of carbon capture and sequestration. My name is David 
Hawkins. I am director of the Climate Center at the Natural Resources 
Defense Council (NRDC). 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, 
Chicago and Beijing.
    Today, the U.S. and other developed nations around the world run 
their economies largely with industrial sources powered by fossil fuel 
and those sources release billions of tons of carbon dioxide 
(CO2) into the atmosphere every year. There is national and 
global interest today in capturing that CO2 for disposal or 
sequestration to prevent its release to the atmosphere. To distinguish 
this industrial capture system from removal of atmospheric 
CO2 by soils and vegetation, I will refer to the industrial 
system as carbon capture and disposal or CCD.
    The interest in CCD stems from a few basic facts. We now recognize 
that CO2 emissions from use of fossil fuel result in 
increased atmospheric concentrations of CO2, which along 
with other so-called greenhouse gases, trap heat, leading to an 
increase in temperatures, regionally and globally. These increased 
temperatures alter the energy balance of the planet and thus our 
climate, which is simply nature's way of managing energy flows. 
Documented changes in climate today along with those forecasted for the 
next decades, are predicted to inflict large and growing damage to 
human health, economic well-being, and natural ecosystems.
    Coal is the most abundant fossil fuel and is distributed broadly 
across the world. It has fueled the rise of industrial economies in 
Europe and the U.S. in the past two centuries and is fueling the rise 
of Asian economies today. Because of its abundance, coal is cheap and 
that makes it attractive to use in large quantities if we ignore the 
harm it causes. However, per unit of energy delivered, coal today is a 
bigger global warming polluter than any other fuel: double that of 
natural gas; 50 per cent more than oil; and, of course, enormously more 
polluting than renewable energy, energy efficiency, and, more 
controversially, nuclear power. To reduce coal's contribution to global 
warming, we must deploy and improve systems that will keep the carbon 
in coal out of the atmosphere, specifically systems that capture carbon 
dioxide (CO2) from coal-fired power plants and other 
industrial sources for safe and effective disposal in geologic 
formations.
                           the toll from coal
    Before turning to the status of CCD let me say a few words about 
coal use generally. The role of coal now and in the future is 
controversial due to the damages its production and use inflict today 
and skepticism that those damages can or will be reduced to a point 
where we should continue to rely on it as a mainstay of industrial 
economies. Coal is cheap and abundant compared to oil and natural gas. 
But the toll from coal as it is used today is enormous. From mining 
deaths and illness and devastated mountains and streams from practices 
like mountain top removal mining, to accidents at coal train crossings, 
to air emissions of acidic, toxic, and heat-trapping pollution from 
coal combustion, to water pollution from coal mining and combustion 
wastes, the conventional coal fuel cycle is among the most 
environmentally destructive activities on earth. Certain coal 
production processes are inherently harmful and while our society has 
the capacity to reduce many of today's damages, to date, we have not 
done so adequately nor have we committed to doing so. These failures 
have created well-justified opposition by many people to continued or 
increased dependence on coal to meet our energy needs.
    Our progress of reducing harms from mining, transport, and use of 
coal has been frustratingly slow and an enormous amount remains to be 
done. Today mountain tops in Appalachia are destroyed to get at the 
coal underneath and rocks, soil, debris, and waste products are dumped 
into valleys and streams, destroying them as well. Waste impoundments 
loom above communities (including, in one particularly egregious case, 
above an elementary school) and thousands of miles of streams are 
polluted. In other areas surface mine reclamation is incomplete, 
inadequately performed and poorly supervised due to regulatory gaps and 
poorly funded regulatory agencies.
    In the area of air pollution, although we have technologies to 
dramatically cut conventional pollutants from coal-fired power plants, 
in 2004 only one-third of U.S. coal capacity was equipped with 
scrubbers for sulfur dioxide control and even less capacity applied 
selective catalytic reduction (SCR) for nitrogen oxides control. And 
under the administration's so-called CAR rule, even in 2020 nearly 30 
per cent of coal capacity will still not employ scrubbers and nearly 45 
per cent will lack SCR equipment. Moreover, because this administration 
has deliberately refused to require use of available highly effective 
control technologies for the brain poison mercury, we will suffer 
decades more of cumulative dumping of this toxin into the air at rates 
several times higher than is necessary or than faithful implementation 
of the Clean Air Act would achieve. Finally, there are no controls in 
place for CO2, the global warming pollutant emitted by the 
more than 330,000 megawatts of coal-fired plants; nor are there any 
CO2 control requirements adopted today for old or new plants 
save in California.
    Mr. Chairman and members of the committee, I know the environmental 
community is criticized in some quarters for our generally negative 
view regarding coal as an energy resource. But I would ask you to 
consider the reasons for this. Our community reacts to the facts on the 
ground and those facts are far from what they should be if coal is to 
play a role as a responsible part of the 21st century energy mix. 
Rather than simply decrying the attitudes of those who question whether 
using large amounts of coal can and will be carried out in a 
responsible manner, the coal industry in particular should support 
policies to correct today's abuses and then implement those reforms. 
Were the industry to do this, there would be real reasons for my 
community and other critics of coal to consider whether their positions 
should be reconsidered.
                            the need for ccd
    Turning to CCD, my organization supports rapid deployment of such 
capture and disposal systems for sources using coal. Such support is 
not a statement about how dependent the U.S. or the world should be on 
coal and for how long. Any significant additional use of coal that 
vents its CO2 to the air is fundamentally in conflict with 
the need to keep atmospheric concentrations of CO2 from 
rising to levels that will produce dangerous disruption of the climate 
system. Given that an immediate world-wide halt to coal use is not 
plausible, analysts and advocates with a broad range of views on coal's 
role should be able to agree that, if it is safe and effective, CCD 
should be rapidly deployed to minimize CO2 emissions from 
the coal that we do use.
    Today coal use and climate protection are on a collision course. 
Without rapid deployment of CCD systems, that collision will occur 
quickly and with spectacularly bad results. The very attribute of coal 
that has made it so attractive--its abundance--magnifies the problem we 
face and requires us to act now, not a decade from now. Until now, 
coal's abundance has been an economic boon. But today, coal's 
abundance, absent corrective action, is more bane than boon.
    Since the dawn of the industrial age, human use of coal has 
released about 150 billion metric tons of carbon into the atmosphere--
about half the total carbon emissions due to fossil fuel use in human 
history. But that contribution is the tip of the carbon iceberg. 
Another 4 trillion metric tons of carbon are contained in the remaining 
global coal resources. That is a carbon pool nearly seven times greater 
than the amount in our pre-industrial atmosphere. Using that coal 
without capturing and disposing of its carbon means a climate 
catastrophe.
    And 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 
MA's forecasts, over 1800 gigawatts (GW) 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 MA'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 we decide to do it, the world could build and operate new coal 
plants so that their CO2 is returned to the ground rather 
than polluting the atmosphere. But we are losing that opportunity with 
every month of delay-10 coal plants were built the old-fashioned way 
last month somewhere in the world and 10 more old-style plants will be 
built this month, and the next and the next. Worse still, with current 
policies in place, none of the 3000 new plants projected by TEA are 
likely to capture their CO2.
    Each new coal plant that is built carries with it a huge stream of 
CO2 emissions that will likely flow for the life of the 
plant-60 years or more. Suggestions that such plants might be equipped 
with CO2 capture devices later in life might come true but 
there is little reason to count on it. As I will discuss further in a 
moment, while commercial technologies exist for pre-combustion capture 
from gasification-based power plants, most new plants are not using 
gasification designs and the few that are, are not incorporating 
capture systems. Installing capture equipment at these new plants after 
the fact is implausible for traditional coal plant designs and 
expensive for gasification processes.
    If all 3000 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% greater than the total CO2 emissions from all 
previous human use of coal. Once emitted, this CO2 pollution 
load remains in the atmosphere for centuries. Half of the 
CO2 emitted during World War I remains in the atmosphere 
today.
    In short, we face an onrushing train of new coal plants with 
impacts that must be diverted without delay. What can the U.S. do to 
help? The U.S. is forecasted to build nearly 300 of these coal plants, 
according to reports and forecasts published by the U.S. EIA. We should 
adopt a national policy that new coal plants be required to employ CCD 
without delay. By taking action ourselves, we can speed the deployment 
of CCD here at home and set an example of leadership. That leadership 
will bring us economic rewards in the new business opportunities it 
creates here and abroad and it will speed engagement by critical 
countries like China and India.
    To date our efforts have been limited to funding research, 
development, and limited demonstrations. Such funding can help in this 
effort if it is wisely invested. But government subsidies--which are 
what we are talking about--cannot substitute for the driver that a real 
market for low-carbon goods and services provides. That market will be 
created only when requirements to limit CO2 emissions are 
adopted. This year in Congress serious attention is finally being 
directed to enactment of such measures and we welcome your announcement 
that you intend to play a leadership role in this effort.
                        key questions about ccd
    I started studying CCD in detail ten years ago and the questions I 
had then are those asked today by people new to the subject. Do 
reliable systems exist to capture CO2 from power plants and 
other industrial sources? Where can we put CO2 after we have 
captured it? Will the CO2 stay where we put it or will it 
leak? How much disposal capacity is there? Are CCD systems 
``affordable''? To answer these questions, the Intergovernmental Panel 
on Climate Change (IPCC) decided four years ago to prepare a special 
report on the subject. That report was issued in September 2005 as the 
IPCC Special Report on Carbon Dioxide Capture and Storage. I was 
privileged to serve as a review editor for the report's chapter on 
geologic storage of CO2.
                         co2 capture
    The IPCC special report groups capture or separation of 
CO2 from industrial gases into four categories: post-
combustion; pre-combustion; oxyfuel combustion; and industrial 
separation. I will say a few words about the basics and status of each 
of these approaches. In a conventional pulverized coal power plant, the 
coal is combusted using normal air at atmospheric pressures. This 
combustion process produces a large volume of exhaust gas that contains 
CO2 in large amounts but in low concentrations and low 
pressures. Commercial post-combustion systems exist to capture 
CO2 from such exhaust gases using chemical ``stripping'' 
compounds and they have been applied to very small portions of flue 
gases (tens of thousands of tons from plants that emit several million 
tons of CO2 annually) from a few coal-fired power plants in 
the U.S. that sell the captured CO2 to the food and beverage 
industry. However, industry analysts 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, like 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. However, unless accelerated by a combination 
of policies, subsidies, and willingness to take increased technical 
risks, such a development program could take one or two decades before 
post-combustion systems would be accepted for broad commercial 
application.
    Pre-combustion capture is applied to coal conversion processes that 
gasify coal rather than combust it in air. In the oxygen-blown 
gasification process coal is heated under pressure with a mixture of 
pure oxygen, producing an energy-rich gas stream consisting mostly of 
hydrogen and carbon monoxide. 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. In power generation applications as practiced today this 
``syngas'' stream is cleaned of impurities and then burned in a 
combustion turbine to make electricity in a process known as Integrated 
Gasification Combined Cycle or IGCC. In the power generation business, 
IGCC is a relatively recent development--about two decades old and is 
still not widely deployed. There are two IGCC power-only plants 
operating in the U.S. today and about 14 commercial IGCC plants are 
operating, with most of the capacity in Europe. In early years of 
operation for power applications a number of IGCC projects encountered 
availability problems but those issues appear to be resolved today, 
with Tampa Electric Company reporting that its IGCC plant in Florida is 
the most dispatched and most economic unit in its generating system.
    Commercially demonstrated systems for pre-combustion capture from 
the coal gasification process involve treating the syngas to form a 
mixture of hydrogen and CO2 and then separating the 
CO2, primarily through the use of solvents. These same 
techniques are used in industrial plants to separate CO2 
from natural gas and to make chemicals such as ammonia out of gasified 
coal. However, because CO2 can be released to the air in 
unlimited amounts under today's laws, except in niche applications, 
even plants that separate CO2 do not capture it; rather they 
release it to the atmosphere. Notable exceptions include 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, and 
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.
    Today's pre-combustion capture approach is not applicable to the 
installed base of conventional pulverized coal in the U.S. and 
elsewhere. However, it is ready today for use with IGCC power plants. 
The oil giant BP has announced an IGCC project with pre-combustion 
CO2 capture at its refinery in Carson, California. When 
operational the project will gasify petroleum coke, a solid fuel that 
resembles coal more than petroleum to make electricity for sale to the 
grid. The captured CO2 will be sold to an oil field operator 
in California to enhance oil recovery. 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. Enacting laws to 
limit CO2 can change this situation, as I discuss later.
    While pre-combustion capture from IGCC plants is the approach that 
is ready today for commercial application, it is not the only method 
for CO2 capture that may emerge if laws creating a market 
for CO2 capture are adopted. I have previously mentioned 
post-combustion techniques now being explored. Another approach, known 
as oxyfuel combustion, is also in the early stages of research and 
development. In the oxyfuel process, coal is burned in oxygen rather 
than air and the exhaust gases are recycled to build up CO2 
concentrations to a point where separation at reasonable cost and 
energy penalties may be feasible. Small scale 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 one or two decades before such systems might begin 
to be deployed broadly in commercial application.
    Given, the massive amount of new coal capacity scheduled for 
construction in the next two decades, we cannot afford to wait until we 
see if these alternative capture systems prove out, nor do we need to. 
Coal plants in the design process today can employ proven IGCC and 
precombustion capture systems to reduce their CO2 emissions 
by about 90 percent. Adoption of policies that set a CO2 
performance standard now for such 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. As I 
will discuss later, adoption of CO2 performance standards is 
a critical step to improve today's capture methods and to stimulate 
development of competing systems.
    I would like to say a few words about so-called ``capture-ready'' 
or ``capture-capable'' coal plants. I will admit that some years ago I 
was under the impression that some technologies like IGCC, initially 
built without capture equipment could be properly called ``capture-
ready.'' However, the implications of the rapid build-out of new coal 
plants for global warming and many conversations with engineers since 
then have educated me to a different view. An IGCC unit built without 
capture equipment can be equipped later with such equipment and at much 
lower cost than attempting to retrofit a conventional pulverized coal 
plant with today's demonstrated post-combustion systems. However, the 
costs and engineering reconfigurations of such an approach are 
substantial. More importantly, we need to begin capturing 
CO2 from new coal plants without delay in order to keep 
global warming from becoming a potentially runaway problem. Given the 
pace of new coal investments in the U.S. and globally, we simply do not 
have the time to build a coal plant today and think about capturing its 
CO2 down the road.
    Implementation of the Energy Policy Act of 2005 approach to this 
topic needs a review in my opinion. The Act provides significant 
subsidies for coal plants that do not actually capture their 
CO2 but rather merely have carbon ``capture capability.'' 
While the Act limits this term to plants using gasification processes, 
it is not being implemented in a manner that provides a meaningful 
substantive difference between an ordinary IGCC unit and one that 
genuinely has been designed with early integration of CO2 
capture in mind. Further, in its FY2008 budget request, the 
administration seeks appropriations allowing it to provide $9 billion 
in loan guarantees under Title XVII of the Act, including as much as $4 
billion in loans for ``carbon sequestration optimized coal power 
plants.'' The administration request does not define a ``carbon 
sequestration optimized'' coal power plant and it could mean almost 
anything, including, according to some industry representatives, a 
plant that simply leaves physical space for an unidentified black box. 
If that makes a power plant ``capture-ready'' Mr. Chairman, then my 
driveway is ``Ferrari-ready.'' We should not be investing today in coal 
plants at more than a billion dollars apiece with nothing more than a 
hope that some kind of capture system will turn up. We would not get on 
a plane to a destination if the pilot told us there was no landing site 
but options were being researched.
                           geologic disposal
    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 U.S. a total of 
more than 35 million tons of CO2 are injected annually in 
more than 70 projects. (Unfortunately, due to the lack of any controls 
on CO2 emissions, about 80 per cent of that CO2 
is sources from natural CO2 formations rather than captured 
from industrial sources. Historians will marvel that we persisted so 
long in pulling CO2 out of holes in the ground in order to 
move it hundreds of miles and stick in back in holes at the same time 
we were recognizing the harm being caused by emissions of the same 
molecule from nearby large industrial sources.) 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 one 
million tons per year of CO2, while a single large coal 
power plant can produce about five million tons per year. And of 
course, our experience with man-made injection projects does not extend 
for the thousand 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.
    Julio Friedmann's testimony addresses these questions at length and 
with much greater authority that I can supply so I will simply 
summarize the findings of the IPCC on these issues. In its 2005 report 
the IPCC concluded the following with respect to the question of 
whether we can safely carry out carbon injection operations on the 
required scale:

          With appropriate site selection based on available subsurface 
        information, a monitoring programme to detect problems, a 
        regulatory system and the appropriate use of remediation 
        methods to stop or control CO2 releases if they 
        arise, the local health, safety and environment risks of 
        geological storage would be comparable to the risks of current 
        activities such as natural gas storage, FOR and deep 
        underground disposal of acid gas.

    The knowledge exists to fulfill all of the conditions the IPCC 
identifies as needed to assure safety. While EPA has authority regulate 
large scale CO2 injection projects its current underground 
injection control regulations are not designed to require the 
appropriate showings for permitting a facility intended for long-term 
retention of large amounts of CO2. With adequate resources 
applied, EPA should be able to make the necessary revisions to its 
rules in two to three years. We urge this Committee to work with other 
committees of Congress to require EPA to undertake this effort this 
year.
    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:

          Observations from engineered and natural analogues as well as 
        models suggest that the fraction retained in appropriately 
        selected and managed geological reservoirs is very likely to 
        exceed 99% over 100 years and is likely to exceed 99% over 
        1,000 years.

    Despite this conclusion by recognized experts there is still reason 
to ask what are the implications of imperfect execution of large scale 
injection projects, especially in the early years before we have 
amassed more experience? Is this reason enough to delay application of 
CO2 capture systems to new power plants until we gain such 
experience from an initial round of multi-million ton ``demonstration'' 
projects? To sketch an answer to this question, my colleague Stefan 
Bachu, a geologist with the Alberta Energy and Utilities Board, and I 
wrote a paper for the Eighth International Conference on Greenhouse Gas 
Control Technologies in June 2006. The obvious and fundamental point we 
made is that without CO2 capture, new coal plants built 
during any ``delay and research'' period will put 100 per cent of their 
CO2 into the air and may do so for their operating life if 
they were ``grandfathered'' from retrofit requirements. Those releases 
need to be compared to hypothetical leaks from early injection sites.
    Our conclusions were that even with extreme, unrealistically high 
hypothetical leakage rates from early injection sites (10% per year), a 
long period to leak detection (5 years) and a prolonged period to 
correct the leak (1 year), a policy that delayed installation of 
CO2 capture at new coal plants to await further research 
would result in cumulative CO2 releases twenty times greater 
than from the hypothetical faulty injection sites, if power plants 
built during the research period were ``grandfathered'' from retrofit 
requirements. If this wave of new coal plants were all required to 
retrofit CO2 capture by no later than 2030, the cumulative 
emissions would still be four times greater than under the no delay 
scenario. I believe that any objective assessment will conclude that 
allowing new coal plants to be built without CO2 capture 
equipment on the ground that we need more large scale injection 
experience will always result in significantly greater CO2 
releases than starting CO2 capture without delay for new 
coal plants now being designed.
    The IPCC also made estimates about global storage capacity for 
CO2 in geologic formations. It concluded as follows:

          Available evidence suggests that, worldwide, it is likely 
        that there is a technical potential of at least about 2,000 
        GtCO2 (545 GtC) of storage capacity in geological 
        formations. There could be a much larger potential for 
        geological storage in saline formations, but the upper limit 
        estimates are uncertain due to lack of information and an 
        agreed methodology.

    Current CO2 emissions from the world's power plants are 
about 10 Gt (billion metric tons) per year, so the IPCC estimate 
indicates 200 years of capacity if power plant emissions did not 
increase and 100 years capacity if annual emissions doubled.
                      policy actions to speed ccd
    As I stated earlier, research and development funding is useful but 
it cannot substitute for the incentive that a genuine commercial market 
for CO2 capture and disposal systems will provide to the 
private sector. The amounts of capital that the private sector can 
spend to optimize CCD methods will almost certainly always dwarf what 
Congress 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. Congress has a model that works: 
intelligently designed policies to limit emissions cause firms to spend 
money finding 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. 
Today's scrubbers are much more effective and much less costly than 
those built in the 1980s. However, a CO2 cap and trade 
program by itself may not result in deployment of CCD 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 a 
global warming bill, a firm may decide to build a conventional coal 
plant and purchase credits from the cap and trade market rather than 
applying CCD systems to the plant. While 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. Recall that in the late 
1990's and the first few years of this century, individual firms 
thought it made economic sense to build large numbers of new gas-fired 
power plants. The problem is too many of them had the same idea and the 
resulting increase in demand for natural gas increased both the price 
and volatility of natural gas to the point where many of these 
investments are idle today.
    Moreover, delaying the start of CCD until a cap and trade system 
price is high enough to produce these investments delays the broad 
demonstration of the technology that the U.S. and other countries will 
need if we continue substantial use of coal as seem likely. The more 
affordable CCD 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 CCD 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 CCD 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 CCD. One such performance measure is a CO2 emissions 
standard that applies to new power investments. California enacted such 
a measure in SB1368 last year. 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 CCD. 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 CCD, 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 CCD while avoiding the ``first mover penalty.'' Instead 
of causing the first builder of a commercial coal plant with CCD 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. A bill introduced in the 
other body, S. 309, contains such a provision. It begins with a 
requirement that one-half of one per cent of coal-based power sales 
must meet the low-carbon performance standard starting in 2015 and the 
required percentage increases over time according to a statutory 
minimum schedule that can be increased in specified amounts by 
additional regulatory action.
    A word about costs is in order. With today's off the shelf systems, 
estimates are that the production cost of electricity at a coal plant 
with CCD could be as much as 40% higher than at a conventional plant 
that emits its CO2. But the impact on average electricity 
prices of introducing CCD now will be very much smaller due to several 
factors. First, power production costs represent about 60% of the price 
you and I pay for electricity; the rest comes from transmission and 
distribution costs. Second, coal-based power represents just over half 
of U.S. power consumption. Third, and most important, even if we start 
now, CCD would be applied to only a small fraction of U.S. coal 
capacity for some time. Thus, with the trading approach I have 
outlined, the incremental costs on the units equipped with CCD would be 
spread over the entire coal-based power sector or possibly across all 
fossil capacity depending on the choices made by Congress. Based on CCD 
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 two per cent increase in 
average U.S. retail electricity rates.
                 Specific comments on S. 731 and S. 962
                                 s. 731
    In considering a portfolio of sites for permanently disposing of 
CO2, it will be useful for operators to have a general 
overview of candidate formations before proceeding to spend funds to 
test and characterize a site further. A comprehensive assessment of 
geological capacity to store carbon dioxide in the U.S. such as that 
called for in S. 731 will be needed to enable large-scale use of CCD. 
Such a survey can provide considerable benefits for fairly modest 
costs.
    To date, the Carbon Sequestration Regional Partnerships, funded by 
DOE, have conducted some mapping of disposal capacity and other 
parameters. In particular, the sources of CO2 around the 
country have been characterized and mapped very well. However, 
limitations exist on the existing mapping of disposal sites, and 
industry does not have a usable, comprehensive product with which to 
consider and further investigate suitable sites for CO2 
disposal.
    The national carbon atlas, NATCARB, is a significant advance but it 
has not been compiled according to a uniform, peer-reviewed 
methodology, with the result that that some data classes over-
represented and others under-represented. A more rigorous methodology 
is essential to the quality of the mapping. The bill requires USGS to 
devise precisely such a methodology, subjecting it to review and public 
consultation.
    In the Regional Partnerships' mapping work, geographical and 
geological coverage has not been uniform or comprehensive. Several 
regions were not assessed. It is crucial that the capacity assessment 
covers all formations in all 50 states. This is a reasonable 
requirement, which will result in a complete picture of our geological 
disposal options.
    In regions that were examined, uncertainties in geology still exist 
in some cases, while well data and cross-sections are often absent. The 
USGS is already in possession of a sizeable portion of the data that 
would be published as part of the survey proposed by the bill, and we 
believe is a body capable of producing a product that will be 
comprehensive, scientifically rigorous and usable by industry. In doing 
so, the bill would require it to address four key parameters: the 
available volume for disposing of CO2, the rate at which it 
can be injected and how long such injection rates can be sustained, the 
associated risks with reservoirs, and an estimate of the costs that 
would be involved in carrying out the injection.
    S. 731 calls for a modest appropriation of $20 million to be 
distributed to the USGS and DOE. We believe this legislation is not a 
threat to DOE's CCD program efforts to date but a complement. We view 
the work called for by this bill as a logical continuation of work that 
has been carried out already. The bill calls for coordination between 
USGS and DOE to ensure that existing work is fed into the process in a 
meaningful way.
    A comprehensive mapping effort for the U.S. is very important if we 
are to choose good disposal sites effectively, avoid pitfalls and 
reduce survey CO2 transportation costs. Australia has 
already demonstrated the merits of this approach, as well as its 
feasibility, through the GEODISC project. We should be aiming to 
replicate and improve on their success.
                                 s. 962
    Current criteria and objectives under the Energy Policy Act of 2005 
for the Carbon Capture Research and Development Program are not 
sufficiently focused, nor do they ensure that funds are spent in a 
manner optimal for addressing pending research questions and 
accelerating the use of the technology. Reforming these requirements is 
necessary, and we welcome Senator Bingaman's initiative to do so.
    S. 962 would ensure that authorized funds are not spent only on 
research and development, but lead to actual demonstration of the 
technologies. Additionally, the general objective of the Program would 
be broadened from ``carbon dioxide capture technologies on combustion-
based systems'' to ``capture and storage technologies related to energy 
systems''. These two amendments send a much clearer signal as to what 
the program should aim to achieve. The demonstration requirement would 
provide a much stronger safeguard that any research conducted leads to 
real applications that have the potential to be commercialized and/or 
used widely. The inclusion of storage alongside capture is also of 
prime importance: one of the key needs for moving forward with carbon 
capture and storage in the energy sector is the integration of the 
capture and storage elements of the technology. Conducting large-scale 
injections of CO2 for demonstration and more comprehensive 
documentation purposes is recognized as a priority--we fully concur 
that this there is a pressing need to conduct these injections 
promptly, and to ensure that they are conducted in a way that will shed 
light in areas where uncertainties currently remain.
    We also very pleased to note the bill's provisions that prescribe 
well-thought out and specific programmatic activities. The description 
of these activities sets a much clearer direction as to how research 
should be applied. The intended role of the Regional Partnerships is 
also further focused, with emphasis being placed on injection projects 
and monitoring operations. We welcome the intent to consider a variety 
of geological formations. The objectives spelled out for the tests 
carried out by the Partnerships also help to ensure that they are 
conducted in a concerted way, and are designed and carried out in order 
to answer concrete questions. We also hope that these objectives will 
ensure the dissemination of all relevant information and lessons 
learned in a comprehensive and timely manner.
    S. 962 would ensure that at least seven large-scale injection 
projects are carried out, and that they are carried out with defined 
objectives. We believe an objective to collect additional information 
needed to assure long-term retention of injected CO2 should 
be added to the bill. We urge that the bill define ``large-scale'' to 
mean injection of more than one million metric tons of CO2 
annually. In addition, we believe it is important to provide for 
independent review and oversight of this injection program to ensure 
its benefits are maximized. The National Academy of Sciences is one 
institution that should be considered to carry out this function.
    NRDC believes that the large-scale injections should be understood 
as an integral component of a policy to move forward with near-term 
deployment of CCD. New coal-fired power plants continue to be proposed 
in the U.S. and NRDC believes any such plants should employ CCD. The 
large-scale injection projects called for in S. 962 can serve as 
repositories for the CO2 produced by such plants. Thus, 
these projects should not be thought of as short-term operations that 
will be operated for a few years and then shut down. This should be 
clarified in the bill by requiring a timeline for these projects to 
receive permits from EPA for operation as permanent repositories. We 
urge that the bill also specify that anthropogenic CO2 be 
used in the projects funded by the legislation, as opposed to the use 
of naturally occurring or recycled CO2.
    Moreover, we believe that the need for these projects is urgent 
enough to justify their prompt commencement, and therefore propose that 
they begin at the earliest possible opportunity, and not later than 
FY2009. In this regard, the bill should direct the Secretary to give 
priority to projects that can be deployed rapidly. A likely sequence 
would be to commence large-scale injection with existing high-
concentration industrial sources, followed by injection of larger 
amounts of CO2 from coal-based power plants. The bill should 
direct the Secretary to structure the program to enable this approach.
    Although we note the threefold or more increase in the 
authorization compared to EPAct 2005, we have serious concerns that the 
suggested funding levels would not suffice to carry out the large scale 
injections described in the bill, or meet the overall objectives. The 
recently published MIT coal study presents a breakdown of the cost 
components of such an injection project. These include a site survey 
and information gathering, the drilling of wells, purchase costs for 
CO2, compression, monitoring and verification, modeling and 
site closure costs. The MIT study produces annual cost estimates of 
$13-28 million per project, for projects that inject about one million 
tons of CO2 annually. In order to conduct seven projects of 
over one million tons annually, as well as carry out other supporting 
work increased funding levels on the order of $200 million per year are 
likely to be needed. We recommend the duration of program funding be 
increased to four and preferably five years.
    We also welcome the minimum industry participation requirements for 
the activities funded by S. 962. It is important to ensure that the 
private sector will have an incentive to invest in these technologies 
and that public funds lead to wide-scale diffusion and not one-off 
demonstrations.
    Finally, I want to repeat the importance of complementing the 
activities called for in these bills with prompt adoption of permitting 
and operational requirements for CO2 disposal by EPA. We 
believe Congress should pass legislation this year directing EPA to 
carry out such rulemaking without delay. We encourage this Committee to 
work with the Environment and Public Works and the Appropriations 
Committees to promote this goal.
                              conclusions
    To sum up, since we will almost certainly continue using large 
amounts of coal in the U.S. and globally in the coming decades, it is 
imperative that we act now to deploy CCD systems. Commercially 
demonstrated CO2 capture systems exist today and competing 
systems are being researched. Improvements in current systems and 
emergence of new approaches will be accelerated by requirements to 
limit CO2 emissions. Geologic disposal of large amounts of 
CO2 is viable and we know enough today to conclude that it 
can be done safely and effectively. EPA must act without delay to 
revise its regulations to provide the necessary framework for efficient 
permitting, monitoring and operational practices for large scale 
permanent CO2 repositories. The survey and capture and 
large-scale injection projects that are called for in S. 731 and S. 962 
are important steps to take and NRDC supports this work.
    Finally CCD is an important strategy to reduce CO2 
emissions from fossil fuel use but it is not the basis for a climate 
protection program by itself. Increased reliance on low-carbon energy 
resources is the key to protecting the climate. The lowest carbon 
resource of all is smarter use of energy; energy efficiency investments 
will be the backbone of any sensible climate protection strategy. 
Renewable energy will need to assume a much greater role than it does 
today. With today's use of solar, wind and biomass energy, we tap only 
a tiny fraction of the energy the sun provides every day. There is 
enormous potential to expand our reliance on these resources. We have 
no time to lose to begin cutting global warming emissions. Fortunately, 
we have technologies ready for use today that can get us started.
    Mr. Chairman, that completes my testimony, I will be happy to take 
any questions you or other committee members may have.

    The Chairman. Thank you very much.
    Mr. Coddington.

            STATEMENT OF KIPP CODDINGTON, PARTNER, 
                       ALSTON & BIRD LLP

    Mr. Coddington. Thank you, Mr. Chairman and members of the 
committee. I thank you for the opportunity to appear before you 
today to discuss the liability issues that currently stand as 
an impediment to the commercial deployment of carbon capture 
and storage technology in the United States.
    I am Kipp Coddington, a partner in the law firm of Alston & 
Bird. The firm represents a number of companies who are engaged 
in carbon-based projects worldwide, but I add that my testimony 
today is mine alone and does not represent the views of any 
individual company.
    First off, let me commend the sponsors of the legislation 
that are the topic of today's hearing. Both bills place a 
necessary priority on advancing our knowledge and understanding 
of carbon capture and storage technology, or CCS.
    Although I deem CO2 injection and geologic 
storage to be a proven technology in many contexts, conducting 
these operations more broadly domestically or in different 
classes of geologic reservoirs, particularly in the face of 
uncertain carbon management requirements, will require 
resolution of a host of challenging issues, not the least of 
which is liabilities associated with the long-term geologic 
storage of carbon dioxide. This afternoon, I'd like to discuss 
just three of those categories of liabilities with you.
    The first are liabilities associated with an uncertain 
regulatory regime. While fluid injection and retention are well 
understood and competently regulated in many contexts--for 
example, CO2-EOR and natural-gas storage--there are 
no Federal or State rules dedicated to CCS. Both Federal EPA 
and the Interstate Oil and Gas Compact Commission are working 
on those--their own regulations, but those regulations are 
expected to differ in key respects.
    The second category are liabilities associated with 
environment natural-resource damage issues. Existing 
environmental laws were not created with carbon storage in 
mind. To the extent that they could be applied to that 
practice, they tend to focus on the nature of the constituent 
of interest; here, carbon dioxide. It's my view that carbon 
injection and storage is unlikely to occur if carbon dioxide is 
deemed a waste for purposes of these laws, and I also believe 
that issue is currently unresolved, unfortunately. Those laws 
also overlook other subsurface features and attributes, such as 
mineral rights and resources, which also require attention and 
that historically have been the domain of State, not Federal, 
concern. Geologic storage has as much to do with energy and 
mineral rights as it has to do with the environment.
    The third, and final, category includes all climate-related 
liabilities. Will geologic storage be recognized under a 
possible new Federal climate law, for example? It is critical 
that geologic storage be so recognized, in my view, if the 
technology is to be widely deployed.
    Now, hope is not lost, because there are some answers to 
these problems. The most effective answer is for the Government 
to assume liability for the injected carbon dioxide at some 
fixed state, perhaps at the conclusion of injection activities, 
well-plugging, or, alternatively, at the end of a post-closure 
period. This concept is not new, as some of the prior testimony 
has heard. The State of Texas, for example, in the context of 
FutureGen, has enacted a bill that makes the State liable for 
injected plumes of CO2. The Norwegian government, 
for example, is considering a similar model, in which they're 
setting up a state-owned corporation, effectively, to manage 
geologically injected carbon dioxide.
    Now, this approach does not mean that Federal or State 
governments in the United States would be left with uncertain 
risk under a moral-hazard theory. Standards and protocols could 
be developed that preclude the injection and storage of carbon 
dioxide in inappropriate geologic conditions, for example. 
Other solutions are worth consideration, too, and I've tried to 
highlight a few of those in my more extensive written 
testimony.
    In conclusion, if geologic storage is to be widely deployed 
in the United States, liabilities will need to be addressed, 
with the Government playing a key role. Failure to do so is 
likely to impede the construction of billions of dollars of 
productive CCS-related infrastructure in the years ahead, and 
to the detriment of the carbon-based fuels that may be 
expecting that infrastructure to be there to support them.
    This concludes my testimony, Mr. Chairman and members of 
the committee, and I'd be pleased to answer any questions that 
you may have.
    Thank you.
    [The prepared statement of Mr. Coddington follows:]
Prepared Statement of Kipp Coddington, Esq., Partner, Alston & Bird LLP
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to appear before you today to discuss some possible 
solutions to the liability issues that currently stand as an impediment 
to the commercial deployment of carbon capture & storage (``CCS'') 
technology in the United States. I am Kipp Coddington, a partner in the 
law firm Alston & Bird LLP. The firm represents a number of companies 
who are engaged in the CCS and CO2-EOR industries, and 
carbon-based projects worldwide, but add that my testimony today is 
mine alone and does not represent the views of any company.
    In the interests of time, my comments today are focused on 
liability issues associated with the long-term storage of industrial 
emissions of carbon dioxide in geologic reservoirs, as opposed to those 
arising from capture and pipeline transportation.
                              introduction
    First off, let me commend the sponsors of the legislation that are 
the topic of today's hearing: S. 731, which focuses on a national 
assessment of geologic storage capacity, and S. 962, which focuses on 
R&D and the large-scale deployment of geologic storage tests in advance 
of the ``commercial deployment of technologies for [the] geologic 
containment of carbon dioxide'' (Sec. 2). Both bills place a necessary 
priority on advancing our knowledge and understanding of CCS, and 
envision a day when these technologies will be deployed throughout the 
Nation.
    I share the vision of a prosperous CCS industry in the United 
States and the associated benefits it would bring in terms of jobs, tax 
revenue, and greater energy independence (via CO2-EOR, for 
example). Geologic injection and storage operations have occurred 
safely in many locations of the United States--the Permian Basin, for 
example--and other areas of the world for many decades.
    Depending upon the outcome of the ongoing carbon management 
debates, I perceive a day in the future when facilities such as CTL, 
IGCC and the like are safely injecting CO2 under a 
regulatory regime that is rigorous, certain and with broad public 
acceptance of the practice. CCS may be the only path forward in a 
carbon-constrained world for fuels such as coal and industrial 
facilities such as power generation. For the same reason, I believe 
that it is critical that CCS be expressly recognized in any federal, 
State or regional cap-and-trade program.
    Although I deem CO2 injection and geologic storage to be 
a proven technology in many contexts, conducting geologic injection and 
long-term storage operations more broadly domestically or in different 
classes of geologic reservoirs, particularly in the face of uncertain 
carbon management requirements, will require resolution of a host of 
challenging legal, regulatory, policy, financial and technical issues.
    One of the most challenging issues is liabilities associated with 
the long-term geologic storage of carbon dioxide.
     liabilities associated with the long-term geologic storage of 
                             co2
    Numerous liabilities are associated with the long-term geologic 
storage of CO2. The existence of these liabilities should 
not be interpreted to suggest that the geologic storage of 
CO2 is unsafe. I believe that geologic storage in the proper 
subsurface reservoir is inherently safe and holds great promise for 
wider application, based upon the oil & gas industry's long experience 
with CO2-EOR and the research which has been conducted on 
CCS to date. The existence of liabilities nonetheless can and will 
impede commercial CCS projects because, today at least, CCS liabilities 
could be characterized as un-quantifiable uncertainties. The deployment 
of CCS technology will require billions of dollars in capital 
expenditures by industry, and those types of investments are not made 
in the face of un-quantifiable uncertainties. Capital expenditures will 
only be made and facilities will only get built if project liabilities 
are identified, quantified and minimized.
    Liabilities associated with the long-term geologic storage of 
CO2 may be divided into several categories, as follows.
    The first category is liabilities associated with an uncertain 
regulatory regime. While fluid injection and retention are well 
understood and competently regulated in many contexts--e.g., oil & gas 
water flooding (secondary recovery), CO2-EOR and natural gas 
storage--there is no dedicated CCS regulatory regime. The federal 
Environmental Protection Agency has issued R&D injection guidance under 
the Safe Drinking Water Act, with the primary endpoint of concern being 
protection of drinking water aquifers. The Interstate Oil & Gas Compact 
Commission, meanwhile, is working on its own State-based regulations 
for CCS. Commercial companies need regulatory certainty, and such 
regulatory certainty is lacking today for the CCS industry in the 
United States.
    The second category is liabilities associated with environmental/
natural resource damage claims. Numerous federal and State 
environmental laws could potentially be applied to companies engaged in 
the injection and long-term geologic storage of carbon dioxide for 
purposes other than CO2-EOR. Those laws typically operate by 
focusing on particular environmental features that are to be protected 
(e.g., drinking water aquifers) or by applying regulatory requirements 
based upon the label which applies to the specific constituent of 
concern--i.e., under the Resource Conservation & Recovery Act, vastly 
differently regulatory regimes apply depending upon whether a waste is 
hazardous or non-hazardous.
    These existing environmental laws could create liabilities for 
companies wishing to engage in CCS. For starters, none of them was 
enacted with CCS in mind, a situation that itself creates uncertainty 
because it deprives companies of an unambiguous legal framework to 
conduct their operations. By approaching CCS from a traditional 
environmental perspective, the laws also overlook other subsurface 
features and attributes, such as mineral rights and resources, which 
also require attention and that historically have been the domain of 
State, not federal, concern.
    Additionally, the laws' focus on the nature of the specific 
constituent means that the legal label which applies to carbon dioxide 
when it is injected into the subsurface and thereafter geologically 
stored is important. I believe that the CCS industry could be crippled 
if carbon dioxide is deemed a waste when in the subsurface. The 
CO2 which is being injected into the subsurface today is not 
deemed a waste, an approach which has spurred the environmentally safe 
injection of significant volumes of carbon dioxide through stringent, 
State-based regulations and oversight.\1\
---------------------------------------------------------------------------
    \1\ In Texas alone, for example, there are 10,000 permitted carbon 
dioxide injection wells, 8,000 of which inject carbon dioxide 
exclusively. Since the initiation of CO2 injection 
activities in the Permian Basin several decades ago, approximately 9.6 
tcf (or 550 million tons) of carbon dioxide have been stored in 
geologic reservoirs there. Source: Steve Melzer, Melzer Consulting, 
(Midland, Texas).
---------------------------------------------------------------------------
    Unfortunately, I am worried about the regulatory label which 
applies to carbon dioxide. For example, on April 2, 2007, in its 
Massachusetts v. EPA decision, the United States Supreme Court declared 
carbon dioxide an ``air pollutant'' for purposes of the federal Clean 
Air Act. Some media reporting on that case unfortunately referred to 
greenhouse gas emissions as hazardous or dangerous gases.\2\ Even if 
Massachusetts v. EPA could be distinguished in this context because it 
deals with air emissions, I worry about what the case portends for 
future public acceptance of geologic storage in the United States.\3\
---------------------------------------------------------------------------
    \2\ Arguably in conflict with Massachusetts v. EPA, the U.S. 
Department of Transportation (``DOT) regulates carbon dioxide as a non-
hazardous liquid for purposes of pipeline transportation (see 49 C.F.R. 
part 195 (2006). Does this mean that the legal status of captured 
carbon dioxide emissions from an industrial source switches from air 
pollutant to non-hazardous liquid at the moment they are compressed and 
put into a pipeline?
    \3\ The role of public acceptance of CCS technology, including 
education, is critical, and next to liability resolution, may be among 
the greatest challenges facing the U.S. CCS industry. Internationally, 
public acceptance to CCS is growing. The EU, for example, has adopted 
pro-CCS policies recently and in countries such as the UK, Norway, and 
Australia, the practice is generally well supported and understood 
(which is not to suggest that those countries do not face challenges of 
their own). The world's first CCS law was actually implemented in 
Australia. International codes are also moving in a pro-CCS direction: 
a 2006 amendment (effective February 10, 2007) to the 1996 Protocol to 
the 1972 Convention on the Prevention of Marine Pollution by Dumping of 
Waste and Other Matter now allows the sub-seabed injection of carbon 
dioxide for CCS purposes, for example.
---------------------------------------------------------------------------
    The third category is liabilities associated with mineral rights 
and resources. CCS has as much to do with energy and mineral rights as 
it does with the environment, a consideration which is sometimes 
overlooked in the rush to pigeonhole CCS regulation into the framework 
of existing environmental laws. If my injected plume inadvertently 
interferes with my neighbor's natural gas storage facility, who is 
responsible and what laws apply? Similarly, who owns the pore space 
into which the CO2 is injected? Is it the mineral estate or 
the surface estate? Who owns the plume? The answers to these questions 
are critically important for commercial CCS operators.\4\
---------------------------------------------------------------------------
    \4\ To the extent that answers to these questions exist, they 
likely are rooted in State common law principles governing real 
property/mineral rights and the State oil & gas codes. These laws, 
which vary by State, have reasonably resolved a variety of comparable 
injection-related issues over the decades. Secondary recovery/water 
flooding technology, for example, faced similar liability questions 
when it first appeared on the scene many years ago but now enjoys 
widespread and safe use, with liabilities being addressed in the 
ordinary course of business. I thus suspect that the answers to at 
least some of the CCS liabilities will be found or developed through 
the legal interpretation of existing State energy/property/mineral 
resource laws or amendments to the same.
---------------------------------------------------------------------------
    The mere existence of these questions, meanwhile, raises an 
interesting issue of federalism--namely, these and related real 
property issues historically have been an exclusive matter of State 
real property law, regulatory expertise, authority and control. The 
State geologic surveys, mineral resource boards, and oil & gas 
commissions possess the reservoir data and employ the geologists and 
reservoir engineers who understand the subsurface.
    Moreover, under State real property law, mineral ownership rights 
historically were severed from the surface estate and subjected to 
multiple ownership rights by subsequent assignment to numerous parties, 
none of whom typically is the federal government (with the usual 
exception being federal lands). Would a new federal CCS regulatory 
regime federalize real property law? \5\
---------------------------------------------------------------------------
    \5\ This issue is not hypothetical. The low-carbon generation 
provisions of S. 309, for example, refer to federally approved geologic 
reservoirs.
---------------------------------------------------------------------------
    Meshing these State-based regulatory responsibilities and 
considerations with a possible federal CCS regulatory regime that is 
focused on drinking water aquifers would take great care and attention 
to develop.
    The fourth and final category includes all climate-related 
liabilities. Will CCS be recognized under existing State/regional and a 
possible future federal climate regime, such as cap-and-trade, and even 
if it is so recognized, how will it be regulated? Will geologic storage 
be covered as a means of compliance? Will the reservoir operator 
receive allowances? Will the act of geologic storage be eligible to 
generate offset credits under the cap-and-trade scheme, and if so which 
party in the CO2 value chain would be eligible to receive 
those credits? \6\ Will the new standing requirement set forth in 
Massachusetts v. EPA subject the CCS industry to billion dollar claims 
from the plaintiffs' bar on the theory that a possible 1% leakage rate 
of CO2 from a reservoir over a thousand-year period might 
contribute to degradation of Massachusetts' shoreline? Will a 
regulator, after injection operations have concluded, impose a 
constituent requirement on the stored fluid? \7\
---------------------------------------------------------------------------
    \6\ The Clean Development Mechanism's (``CDM'') Executive Board 
under the Kyoto Protocol is currently considering several CCS-related 
proposals. If approved, such projects would be able to generate 
certified emission reduction credits under the CDM Mechanism. To the 
extent that a regional (e.g., RGGI) or federal cap-and-trade program 
allowed the use of international carbon credits in some scenarios, 
those CCS-related credits (if ultimately approved internationally, and 
that's an open question) presumably could also be used in the United 
States.
    \7\ For purposes of pipeline transportation, DOT defines carbon 
dioxide as a ``fluid consisting of more than 90 percent carbon dioxide 
molecules compressed to a supercritical state.'' See 49 C.F.R. 
Sec. 195.2 (2006). This definition has served the public, industry and 
government well for many years.
---------------------------------------------------------------------------
    If CCS is to go forward commercially, I believe that it is critical 
that these and related questions be explicitly and favorably addressed 
in whatever climate laws may be developed. Failure to do so would stall 
the deployment of the technology commercially.
       why liabilities/uncertainties may impede ccs transactions
    Certain CCS projects--e.g., those dedicated exclusively to the 
long-term storage of carbon dioxide in deep saline aquifers--will be 
costly (to the tune of billions of dollars) and complex to build. Doing 
a large-scale commercial CCS deal will require complex negotiations 
among numerous sophisticated parties--the industrial source, the 
capture company, the pipeline company, the drilling contractor, the 
injection company, the reservoir operator and, for each, their bankers, 
insurers, engineering firms and consultants. Financing would have to be 
arranged, and even if a company were to do such a project off balance 
sheet, it likely would face internal financial reviews as stringent as 
what Wall Street might require. All of those companies would have to 
allocate the carbon risks among them. While I believe that such deals 
are doable, doing them in the face of the uncertain liabilities 
highlighted above would be a tall order.\8\ If the liabilities were 
clarified, I believe that many of these deals would move forward.
---------------------------------------------------------------------------
    \8\ Projects based solely on CO2-EOR could proceed even 
in the face of the current uncertainties. CO2-EOR is a 
mature, safe and proven technology that has been regulated by the 
States for decades. In the worthwhile effort to further a CCS industry 
in the United States, no action should be taken to impair 
CO2-EOR, and I am not aware of any pending regulatory 
approaches that would do so. The issue for CO2-EOR may 
instead be whether the practice would be excluded from the coming CCS 
regulatory regime. That would be an unfortunate result, as I believe 
that CO2-EOR is in fact geologic storage. The Permian Basin 
could fairly be viewed as one of the world's largest CO2 
storage sites. See note 1, supra. CO2-EOR also is a 
technology that, in part through market forces, holds the promise of 
expediting the build-out of some CCS infrastructure. This is not to 
suggest that CO2-EOR is a panacea that will enable a CCS 
industry on its own. CO2 floods are costly, technically 
challenging, and face tough project economics, even with oil at $60/
barrel.
---------------------------------------------------------------------------
    Moreover, CCS projects will last a very long time. A typical 
CO2-EOR project may last ten to thirty years; a long-term 
geologic storage facility (either post CO2-EOR or a 
reservoir dedicated for storage purpose) may be expected to last for 
substantially longer--and perhaps an eternity. Even if the potential 
liabilities associated with CCS were identified and quantified--and 
they are not, as highlighted above--I am not aware of any commercially 
responsible company that would agree to assume such liabilities for an 
eternity based upon current law and policy.
                        some possible solutions
    I believe that the best way to minimize the liability challenges 
facing CCS is for the government to assume liability for the 
geologically injected carbon dioxide at some fixed date, perhaps at the 
conclusion of injection activities, well plugging, or, alternatively, 
at the end of a post-closure period.
    This concept is not new. For example, the State of Texas, in the 
context of FutureGen, enacted legislation that made the State liable 
for injected plumes of CO2. The Norwegian government is 
considering a similar model--one which perceives a dominant role by a 
government-owned corporation in the long-term management of the 
geologically stored carbon dioxide.
    This approach does not mean that the government would be left with 
uncertain risks under a moral hazard theory. Standards and protocols 
could be developed that preclude the injection and storage of carbon 
dioxide in inappropriate geologic conditions or sensitive areas. The 
standards and protocols might also specify other conditions that must 
be met, perhaps during a defined closure period, before the government 
would assume responsibility.
    Based upon the current legal, policy, and regulatory environment, 
any solution short of the government assuming all liabilities at some 
future date would run the risk of hindering the commercial deployment 
of CCS technology.
    Other approaches could be considered, however. For example, the 
government could back-stop the private insurance markets in an effort 
to induce insurers to accept the liabilities.\9\ This solution may be 
insufficient, however, because of concerns within the insurance 
industry about taking on ``eternal'' risks, too. Even if the insurers 
would agree to insure the risks, the premiums and other attributes of 
such coverage could make CCS projects non-viable for commercial 
reasons.\10\
---------------------------------------------------------------------------
    \9\ See K. Coddington, ``A Model CCS Code: Establishing the 
Regulatory Framework & Incentives to Enable Technology Deployment'', 
5th Annual Conference on Carbon Capture & Sequestration, May 2006.
    \10\ All insurance-based solutions are complicated but worthy of 
further analysis. The Price-Anderson Act, for example, has been cited 
by many commentators as a possible model for the long-term management 
of CO2 storage liability.
---------------------------------------------------------------------------
    Another manner in which liabilities could be managed, although not 
eliminated in a way that might enable the full deployment of commercial 
CCS technology, is to do geologic storage--at least initially--where it 
makes the most sense from a geologic perspective. Location matters 
because geology varies. Oil & gas may be found where it is because of 
the existence of natural traps in those locations, for example. A quick 
jump start to the industry could be provided by mitigating liabilities 
in those regions first, while conducting R&D on storage in other 
geologic structures in other areas of the country.
    Finally, I believe that the manner in which carbon dioxide 
injection is regulated--a theme echoed throughout this testimony--will 
go a long ways towards determining the manner in which liabilities are 
addressed, managed and resolved. If CO2 injection and long-
term storage is regulated from the starting position that carbon 
dioxide is a contaminant that poses substantial environmental risks, I 
would expect to see few if any commercial CCS facilities built in the 
foreseeable future.
    Conversely, if the subject matter is regulated from the starting 
position that (i) CO2 is not a contaminant; (ii) 
CO2 injection and storage operations have occurred safely 
for many years both domestically and abroad in various contexts; (iii) 
the environmental risks are identifiable and subject to responsible 
regulation; and (iv) the States have substantial experience in dealing 
with subsurface matters and that experience should not be overlooked or 
trumped, I would expect to see a commercial CCS industry start and 
maybe even flourish. And I would expect that industry to bring the 
Nation a variety of energy, environmental, and economic benefits to all 
stakeholders, including the public.
    Congress has been in this position before. In 1980, Congress 
amended with Safe Drinking Water Act to exempt the injection of natural 
gas for purposes of storage.\11\ Congress did so on the notion that 
there was scant evidence that the practice threatened drinking water 
aquifers and that natural gas storage operators had an incentive to 
minimize, if not eliminate, reservoir leakage. I believe that similar 
arguments could be made for CCS today. Since that time, the natural gas 
storage industry has grown and the public interest served through 
competent regulation at both levels of government (e.g., the federal 
Natural Gas Act of 1938 and State-by-State laws/regulations that 
include well performance standards and related matters).
---------------------------------------------------------------------------
    \11\ 42 U.S.C. Sec. 300h(d)(1)(B)(i) (2006).
---------------------------------------------------------------------------
    With appropriate regulation of liabilities in mind, it thus might 
be worthwhile for Congress to consider whether regulation of non-
CO2-EOR CCS under the Safe Drinking Water Act's Underground 
Injection Control (``UIC'') program is necessarily the only logical 
starting point for regulation. It may be. I just do not believe that 
the analysis has been done to support such a determination.
                               conclusion
    In conclusion, I commend that Committee for its efforts to examine 
CCS, including geologic storage. S. 731 and S. 962 are critically 
important pieces of legislation because they will help to pave the way 
for the commercial CCS industry in the United States.
    Looking beyond those bills to the day when commercial players are 
engaged in the new CCS industry, policymakers will need to address 
liability issues associated with long-term geologic storage of carbon 
dioxide. Failure to do so is likely to stall, if not impede, the 
construction of billions of dollars of productive CCS-related 
infrastructure in the United States in the years ahead--and to the 
detriment of carbon-based fuels that may be expecting that 
infrastructure to be there to support them. I believe that the public 
interest would best be served if the CCS infrastructure gets built.
    This concludes my testimony, Mr. Chairman and Members of the 
Committee. I would be pleased to answer any questions that you may 
have.

    The Chairman. Well, Thank you very much.
    Thanks to all of you for your excellent testimony. Let me 
ask a few questions here.
    Let me ask Mr. Hawkins. In the summary of your testimony, 
you have an interesting comment, where you say, here, 
``Policies to limit CO2 emissions and set 
performance standards are essential to drive use of CCD at the 
required scale and pace. Such policies should be enacted in 
this Congress. Well-designed measures can phase in CCD on new 
coal plants with only very modest impacts on retail electricity 
prices.'' Could you elaborate a little bit on how you would--
you're saying ``well-designed measures,'' what would such a 
``well-designed measure'' look like?
    Mr. Hawkins. Well, we think a combination of a set of 
performance requirements and a cap-and-trade program will be 
most effective in both sending a signal throughout the economy 
that it's important to limit CO2 emissions, but 
having some targeted performance standards. And the example 
that I was referring to in the summary was modeled on a 
renewable portfolio standard, but it would be basically a low-
carbon-generation standard that would say that a certain 
fraction of electricity sales need to be met through the use of 
coal-based electricity that meets a CO2 performance 
standard. And this would address the question that Mr. Shope, 
from DOE, talked about, which is the rollout of this 
technology. It's really, I think, the wrong vision to think 
about this technology's not being here today, and, you flip a 
switch, and all of a sudden it's widely deployed in 2045. 
That's not the way it's going to happen. It's going to happen 
one powerplant at a time. And what we need to do is not build 
anymore conventional powerplants that emit their CO2 
to the atmosphere. And Congress should take a combination of 
incentives and performance standards to make that happen. We 
know enough now to start, with the next powerplant that's in 
the design stage, to start capturing its carbon and disposing 
of it. We have sufficient experience that we know we can 
dispose of it safely. What we lack are the policy incentives to 
do it. If we did so, though, we've done a calculation, with 
Princeton University, which indicated that we could accommodate 
all--we could pay the incremental costs for all of the 
forecasted new coal capacity out to 2020, and the impact on 
electricity rates nationally would be an average of about 2 
percent.
    The Chairman. Okay. Then you're suggesting that, rather 
than a renewable portfolio standard, which has been the subject 
of a lot of debate around this Congress and previous Congresses 
for many years, rather than that, we ought to be looking at a 
low-carbon-generation standard.
    Mr. Hawkins. Let me be clear, Senator, we are not saying 
that this should be done ``rather'' than a renewable portfolio 
standard, we think a renewable portfolio standard stands on its 
own merits, it's very important. We urge Congress to enact one. 
But we are saying that there is another resource that is 
important to promote, as well, because we are not stopping 
building coal plants. So, we have another resource that we need 
to pay attention to, which is keeping the carbon in coal-fired 
powerplants out of the atmosphere, and that can be addressed by 
a similar approach to a renewable portfolio standard. That is a 
tradable obligation that is a fraction of the electricity 
sales. But this is most definitely not a substitute for a 
renewable portfolio standard. We very strongly support 
enactment of a renewable portfolio standard, as well.
    The Chairman. Okay.
    Let me ask you, Mr. Coddington--your suggestion that the 
solution to this problem, or much of the solution to this 
liability problem that you outlined for us, is for the 
geologically injected carbon dioxide at some fixed date, 
perhaps at the conclusion of the injection activities and well-
plugging, to be--for the Government to assume the liability for 
that, as I understand it.
    Mr. Coddington. Correct.
    The Chairman. Are you also suggesting that the title to 
that would transfer, some way or other? I mean, how does that 
work? I mean, CO2 has a value, and is sold on the 
market today for injection in gas wells, and for other 
purposes. Are you suggesting that the Government should take 
the liability for releases of it--unanticipated releases, but 
ownership should stay where it is? Or how would that work?
    Mr. Coddington. The issue of ownership is an interesting 
one, and I don't know that I have a particular view on that. My 
focus is more on the liability issue. And I do think that if 
the responsibilities were clarified, such that, at a date 
certain, the Government would take responsibility for that 
liability, whether that would necessarily have to include title 
to the injected carbon dioxide, I don't know that that's the 
case. And, interestingly enough, that answer may vary, 
depending upon what State you're in, in terms of who actually 
owns--has title to the fluid in the subsurface. But in terms of 
enabling the deployment of the technology sooner rather than 
later, I think clarifying that simple issue would probably do 
more than anything else, in terms of trying to spur the 
commercial deployment of the technology. I think it's a huge 
impediment.
    The Chairman. Senator Domenici.
    Senator Domenici. Thank you, Senator.
    That's interesting, with reference to this last issue. Mr. 
Hawkins suggests that it not be just one, but both. I would not 
have--would not have caught that, had not you volunteered it, 
and I'm glad you did, for now everybody knows what you're 
thinking about, which is a better way to have it than to go 
along our merry way for a few months here and then find out you 
really meant something different.
    Let me just talk about a couple of things with you and let 
you go on your way. We're about ready to proceed with policies 
that have been discussed by Senator Bingaman, and each of you 
have added something. Mr. Hawkins, you have requested the most 
important legislation be added. I don't know what the members 
are going to think about that, but two or three of them are 
very large add-ons to the legislation that was being planned to 
go royally on its way through this committee and to the floor. 
And knowing where you come from, they will be hot issues by the 
time you get around to bringing them up, Mr. Chairman. I think 
that's pretty obvious to all of us, at this point.
    I'm very worried about why it is taking us so long to get 
where we are. And I think I understand, now, having heard the 
testimony of the three of you, how difficult it is to move 
along very fast.
    I wonder if you could go ahead and come back to me while I 
review a couple of things in my mind.
    The Chairman. Certainly.
    Senator Salazar.
    Senator Salazar. Thank you, Chairman Bingaman.
    Let me ask a question relative to timing here. We heard 
Assistant Secretary Shope talk about commercial-scale 
deployment of this by 2045. I was trying to think about how 
many people in this room might be around in 2045, and thought, 
that's a little too far out, and think that the two bills that 
we are considering here in this committee today hopefully will 
help us move along on a much faster track, and which is the 
reason I'm fully supportive of both pieces of legislation, one 
that will do the assessment and provide us the right 
methodology, and the second, Senator Bingaman's bill on moving 
forward with seven commercial-style demonstration projects that 
can show us how this will work. And I'd like you to comment on 
the timing of that. I know there is--you know, Xcel is a 
utility generator in a number of different States. One of the 
things that they have proposed is an IGCC plant that actually 
would do carbon storage. My understanding is--Senator Bingaman 
and my colleagues here--is that they would hope to be able to 
have that up and running, and actually being able to 
demonstrate what they can do, and have already identified a 
couple of alternative geologic formations and sites that they 
are looking at. But they're looking at this thing happening, 
not in 2045, they're looking at it happening perhaps 4, 5, 6 
years from now. So, 2011, 2012, we ought to be up and running 
with a powerplant, essentially, that captures carbon and then 
injects it back into the underground.
    And what I'm troubled by, frankly, is that we're not 
really--I mean, I know we have not done this kind of thing in 
the large scale that we propose to do it here, but we're 
dealing with a technology that's been around for a very long 
time. I mean, in all the oil fields, we know that it's a 
technology that has been used time and time again. So, I'd like 
each of you to take a minute or so and just comment about the 
timing of this and the urgency of it, and how these bills might 
help us beat that 2045 vision to make it a much quicker time.
    Dr. Guthrie, why don't we start with you and just go across 
the table.
    Dr. Guthrie. You're right that we do have a lot of 
experience with some aspects. In terms of CO2 
injection in enhanced oil recovery, we do have experience with 
that. We have much less experience injecting CO2 
into, for example, saline formations. And so, there are some 
aspects of the technology that we still need to do at large 
scale.
    However, having said that, I think that--I agree with Mr. 
Hawkins' comments earlier, in that it's not something that 
we're going to turn in 2045, but, rather, a technology that 
we'll begin to do, perhaps, in the next 5 or 10 years and then 
phase in. And so, I think we're ready to do full-scale 
operation at a specific facility and specific site today, but 
that's different from saying, Is this full-scale implementation 
for all of the CO2 emissions that we have in the 
United States?
    Senator Salazar. Mr. Hawkins.
    Mr. Hawkins. Thank you, Senator.
    Yes, individual powerplants, a scale, as Dr. Guthrie 
indicated, has been demonstrated. We can do this. We need a set 
of decisions made that will make it feasible to happen, but we 
don't need to wait for it to happen. BP is proposing a project 
in California, that's a 500-megawatt unit, that will capture 
its CO2 and inject it. You mentioned the Xcel 
proposal. I heard Mr. Shope testify a couple of weeks ago with 
the 2045 figure, and I thought I must have been mistaken, so I 
actually talked to some of the professional staff at DOE, said, 
``How can you possibly explain this 2045 date?'' And they said, 
``Well, the 2045 date is the assumption that over that period 
of time, technology for CO2 capture, along with 
other pollutants, will get so cheap that it'll be the 
technology that would be deployed by the power sector, even if 
there was no constraint on CO2 emission limits 
whatsoever, because of the cost savings associated with 
capturing the sulfur and injecting that.'' So, that's the basis 
of the 2045. It's basically--if you assume that the world does 
nothing about climate change, you can expect the power sector 
to respond in 40 years, and that, I think, says all that needs 
to be said about that.
    Senator Salazar. Mr. Coddington.
    Mr. Coddington. Yes. I think if you do the right project in 
the right area under clear liability rules, that this could 
move quite quickly. And by the ``right project in the right 
area,'' I mean that if--there are obviously regions of the 
country that have the geology that would be favorable for this, 
and, if you have the luxury of being able to site your 
facility, I think there might even be some hunger in the 
commercial market for those projects to go forward. I think 
what they're waiting for is clarity regarding regulatory rules, 
and they're looking for clarity regarding liability protection. 
I think there is a sense here that maybe that the standard 
that's being set up is that there's going to be an injection 
well in everyone's backyard, including in downtown Boston, at 
some future date, and we're going to start as if we're going to 
regulate that as the endpoint and sort of think all those 
issues through. I don't know whether, in my lifetime, there 
will ever be an injection well in downtown Boston. It very well 
may come to that. I don't think that's going to happen pretty 
soon. But I think, in some parts of the country, with the right 
technology, this could be done quite quickly. But what's needed 
is clarity regarding rules. What the rules are, what agency has 
regulatory responsibility and who's responsible?
    Senator Salazar. Thank you, Mr. Coddington.
    If I could have 30 more seconds, Mr. Chairman?
    I think what will happen is, as we move forward with these 
demonstration projects, and as the MIT witness from several 
weeks ago said in their report, there are probably 20 of these 
projects around the world, from Canada to Australia to China 
and what we have going on here in Colorado--I mean, in this 
country, including Colorado--and what will happen is, we'll see 
how this technology evolves, and then we may have a new time 
horizon that's more real, based on actual demonstration 
projects on the ground. And I think that's what these two bills 
do, is to move this program along in that direction.
    You don't need to answer this one right now, Mr. 
Coddington, but my own view on the liability issue is, we need 
to learn more about it. My hope is, we can move forward with 
these two pieces of legislation that allow us to do the 
assessment and the mapping of the demonstration projects and 
have some time to figure out how we're going to deal with the 
more complicated issue of liability. And perhaps at some other 
time, you can help us figure out how we best approach this--the 
liability issue, because I do think it's an important aspect of 
what we have to deal with.
    Thank you, Mr. Chairman.
    The Chairman. Senator Domenici, did you want to go ahead 
and complete your questions, and then Senator Corker?
    Senator Domenici. Oh, no, you go ahead, Senator.
    Senator Corker. You first.
    Senator Domenici. All right, thank you very much. I'll go, 
quickly.
    Mr. Hawkins, you just spoke of performance standards. And I 
think I heard you discuss a standard of generating electricity 
from a certain portion of low-carbon-emitting sources, then I 
heard you support a renewable portfolio standard on the Federal 
level. Where would nuclear, a form of energy that emits no 
carbon dioxide, fit into your panoply of standards--fit?
    Mr. Hawkins. Senator, we think that nuclear energy is a 
mature, proven technology. We think it has been the beneficiary 
of about four decades of Federal subsidies and incentives, and 
we don't, frankly, see a need for an additional round of 
subsidies and incentives. NRDC has no problem with nuclear 
power playing a role in this area, but we think it ought to be 
done on a level playing field, and don't see the need for 
additional incentives or requirements with respect to that 
technology, since it is a mature commercially-proven 
technology.
    The one substantive thing that I will flag is the issue of 
proliferation. We do think that if the United States were to, 
sort of, embrace a nuclear renaissance, we should not be naive 
enough to expect that we're the only country that's going to 
want to do that. And what do we do with the prospect of 70 or 
80 or 90 other countries around the world that say, ``Us, 
too''? We see the difficulty we have with Iran today. If you 
have uranium enrichment processes in a country, it's very 
difficult to avoid dispersion and diversion of the--of these 
nuclear materials. So, we think that before we embrace a large-
scale expansion of nuclear power, the world ought to develop a 
serious and effective nonproliferation regime.
    Senator Domenici. Is wind energy a mature, proven form of 
energy? And would it fit into your standard?
    Mr. Hawkins. I would say that it is a junior partner to 
nuclear as to its maturity, and certainly as to its subsidies, 
Senator.
    Senator Domenici. Current subsidies, it's coming along 
pretty well, because we set the pattern of giving them all the 
same 25 or 35, whatever it was. They all get granted. Nuclear 
costs more, so it gets bigger, but it's 25, just like a 
windmill is 25. At least, we tried to do that. And I think 
we've succeeded, so far. Nobody's yanked the chain on this, 
thus far.
    I had one other one, but I've misplaced it, and I'm sure 
the world will never know the difference.
    [Laughter.]
    Senator Domenici. And you're in good enough shape to go 
home. And my friend from Tennessee has a question and would 
like to ask it.
    The Chairman. All right.
    Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    Mr. Coddington, on the liability issues, I know Senator 
Salazar seemed to have a good point, just before he left the 
panel a minute ago, but are you concerned about liability as it 
relates to these pilot projects, the test projects? Are you 
concerned about people actually taking them on, per this new 
legislation, because of the liability?
    Mr. Coddington. I'm focused more from a commercial 
perspective, so I'm talking about commercial projects moving 
forward, either on a parallel track or maybe in an advance of 
an R&D agenda. So, I'm not speaking about the pilot projects. I 
think the pilot projects are important. My point was more that 
if the liability were to be clarified sooner rather than later, 
I think you would see commercial projects go forward sooner 
than people might expect.
    Senator Corker. I noticed, in your written testimony, you 
referred to the Norwegian model. Would you want to educate us a 
little bit as to what they are doing as it relates to the 
liability?
    Mr. Coddington. Well, they're in the early stages. And 
Norway, of course, just because of their system of government, 
that may not be the most relevant point of comparison. But they 
are looking at setting up a government corporation to 
effectively run and manage the sequestration piece of carbon 
injection. So, you could look at a U.S.-owned CO2 
storage corporation, for example. I don't know if that's the 
right approach. But there are other analogs. I mean, there's a 
Price-Anderson Act. You look at what was done with vaccines in 
the United States, where you set up a compensation fund of some 
kind. I mean, there are different forms of liability protection 
that might be more suitable to a U.S. model. But I do think 
there are answers out there.
    Senator Corker. I think we're about questioned out. I will 
ask the panel--we're going to be--I have 3 minutes and 14 
seconds. Are there any salient points that you'd like to bring 
before us before we all depart?
    Mr. Hawkins. Well, Senator, at the risk of delaying your 
departure, I will just make a couple of quick comments on 
liability. The Texas example was mentioned. The concern that we 
have with this liability is that it may backfire, it may create 
a sense of lack of confidence in the public. Texas, for 
example, has assumed liability on the part of Texas, but, at 
the same time, the Texas public officials are going around 
saying that they're going to assert sovereign immunity, which 
means that nobody has the liability. They're taking the 
liability away from the private sector, but they've put it into 
a box, where they're going to assert sovereign immunity. If 
that's the way the public thinks this is going to operate, 
that's not going to inspire confidence. There's also a market 
distortion issue.
    This is going to be a technique for managing carbon 
emissions. It's going to compete against lots of other 
techniques--perhaps nuclear power, perhaps wind, perhaps solar. 
And if the Government picks up part of the tab of this 
mitigation measure, then doesn't that distort the market? And 
so, those are things to be thought about.
    There's a difference between reliability and 
responsibility. There is a good case to be made that a 
government entity, 40, 50 years in the future, when these sites 
close, should bear a continuing responsibility. But the rules 
ought to be structured so that the full costs of operating that 
are borne by the private-sector decisionmakers that decide to 
use that technique. And we think that's entirely workable. 
It'll be factored in insurance policies, contracts. The private 
sector can handle this aspect of it, we believe.
    Senator Corker. What Senator Salazar referred to--and that 
is, letting this legislation move, going ahead and allowing 
these tests to take place, and let's learn a little bit more 
about what those liabilities are--is that sensible, or do you--
are you thinking it's a more urgent type of issue?
    Mr. Hawkins. We think that the approach you just outlined 
is entirely sensible. We're injecting 35 million tons of 
CO2 per year, with private operators, today in the 
United States. They've figured out, with contracts, insurance, 
how to handle that short-term risk. What about the long-term 
risk of very slow leakage? Well, I would submit that if anyone 
is seriously worried about the long term leakage of small 
amounts of CO2 today, they ought to be much more 
concerned about the liability associated with the 100 percent 
of emissions that are coming out of smokestacks today. Those 
emissions are going to be up there for the next 150 years. So, 
I have a hard time seeing that as a serious issue.
    Senator Corker. Thank you, Mr. Chairman.
    The Chairman. Thank you all for your testimony. I think 
it's been very useful, and we will try to take your suggestions 
to heart and move forward with this legislation.
    So, that concludes the hearing. Thank you.
    [Whereupon, at 4 p.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                              Department of Energy,
               Congressional and Intergovernmental Affairs,
                                       Washington, DC, May 9, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: On April 16, 2007, Thomas D. Shope, Acting 
Assistant Secretary, Office of Fossil Energy, testified regarding S. 
731, National Carbon Dioxide Storage Capacity Assessment Act of 2007, 
and S. 962, Department of Energy Carbon Capture and Storage Research, 
Development, and Demonstration Act of 2007.
    Enclosed are the answers to 36 questions that were submitted by 
Senators Domenici, Dorgan, Salazar and you for the hearing record. The 
remaining four questions are being prepared and will be forwarded to 
you as soon as possible.
    If we can be of further assistance, please have your staff contact 
our Congressional Hearing Coordinator, Lillian Owen, at (202) 586-2031.
            Sincerely,
                                               Eric Nicoll,
                                        Acting Assistant Secretary.
[Enclosures.]
                    Questions From Senator Bingaman
    Question 1. In the advent that there are problems with large-scale 
project start up due to liability concerns, is it your opinion that the 
DOE should take on the liability of the large-scale demonstration 
projects? If the DOE is not the correct agency, which company or agency 
should take on the liability for these projects?
    Answer. The Department of Energy cannot identify the organization 
or agency that should assume this liability. This is an issue that must 
be resolved by the property and mineral rights owners at the site of 
the project. These entities could include private landowners, industry 
partners, private insurance companies, state governments, and federal 
agencies that manage the public lands and mineral resources of the 
United States.
    Question 3. In Mr. Hawkins testimony, he states that there are 
areas around the US that were not assessed, while other testimony 
provided states that those areas in the US where data is not available 
represents areas where geological storage potential is slim. Would it 
be helpful to obtain field confirmation, in the form of drill wells and 
well data, to determine whether formations are suitable for carbon 
dioxide storage in those areas?
    Answer. It would be helpful, but not necessary, to gather 
additional physical data to demonstrate that adequate capacity exists 
to store CO2 throughout the United States. This data would 
likely confirm that the storage capacity reported in the first edition 
of the Carbon Sequestration Atlas of the United States and Canada 
exists and is adequate to mitigate hundreds of years of future 
CO2 emissions. DOE suggests that resources should be used to 
implement large-scale sequestration tests that will demonstrate that 
the capacity and injectivity rates are adequate for full-scale 
development of carbon capture and storage projects in the different 
geologic formations throughout the United States. The implementation of 
these tests will result in new physical data on the storage formations 
as well as provide results from the long-term injection operations that 
will measure effects on the target formations, the feasibility of 
monitoring technologies, integrity of cap rock, and well construction 
techniques. The results of these field tests will be used to develop 
best practice manuals for future commercial projects. It is possible 
that further evaluation of geological storage capacity may reveal 
additional opportunities for CO2 storage.
    Question 5. As Mr. Coddington addressed in his testimony, will the 
recent US Supreme Court ruling that the EPA has the authority, under 
the Clean Air Act, to enact limits on carbon dioxide (CO2) 
emissions (as an air pollutant) carry over to injection of carbon 
dioxide into geologic storage sites? Will the treatment of 
CO2 as a waste pollutant versus a commodity that can be used 
for enhanced oil recovery or other uses pose a significant hindrance to 
rapid deployment of large-scale demonstration projects?
    Answer. This ruling is not expected to impact the development of 
large volume sequestration tests. Permitting of carbon dioxide 
injection projects currently falls under the jurisdiction of the Safe 
Drinking Water Act Underground Injection Control Program. The U.S. 
Environmental Protection Agency (EPA) recently released guidance to the 
regions and states clarifying that the sequestration projects being 
developed in deep saline formations should be permitted as Class V 
(experimental) injection wells. EPA has also suggested that carbon 
sequestration projects involving enhanced oil recovery or coalbed 
methane recovery should be permitted as Class II injection wells.
    Question 6a. You recommended that section 963(c)(2)(B)(vii) of the 
Energy Policy Act, as proposed to be added by S. 962, be ``clarified to 
determine if this provides the Secretary with the authority for DOE to 
undertake liability for large-scale testing should this become an issue 
that delays or halts large-scale testing.'' (a) Please identify the 
potential types of risk posed by the proposed carbon sequestration 
testing program that could give rise to liability.
    Answer. It is important to realize that although risks may exist 
they can be mitigated through proper site selection, operation, and 
closure of the storage projects. Large scale sequestration projects 
will include the usual risks associated with the construction and 
operation of a project. Employees and contractors will be working on a 
physical site. In the case of pilot scale projects, trucks carrying 
CO2 will be on site. These are not risks unique to carbon 
dioxide storage projects. The potential, but unlikely, risks associated 
with storage include potential leakage, accumulation of CO2 
at the earth's surface, or significant release to the atmosphere. The 
pathways for leakage potentially include the handling of CO2 
en route to the injection pump, problems with the well, migration 
through faults or unidentified abandoned wells, or migration through 
natural fractures in the caprock.
    Question 6b. What is the maximum amount of liability that could 
arise out of each type of risk?
    Answer. The amount of liability is greatly influenced by the 
specific features of the site. It will depend on the hazards that are 
present, the probability that an incident will occur, and the potential 
impact it will have. Therefore, it is very difficult to assess the 
maximum amount of liability that would arise from each risk.
    Question 6c. How do the nature and likelihood of the risks and the 
potential liabilities associated with the proposed carbon sequestration 
testing program compare with the potential risks and liabilities 
traditionally undertaken by the Department's contractors (including 
both indemnified and non-indemnified activities).
    Answer. As previously stated, beyond the usual risks associated 
with the construction and operation of a project, it is difficult to 
compare risks and liabilities without knowing the specific sites of the 
proposed projects.
    Question 6d. To what extent have commercial activities involving 
the geologic injection of carbon dioxide, whether for storage or 
enhanced oil recovery, given rise to liability in the past.
    Answer. We are not aware of any commercial activities involving the 
geologic injection of CO2 that have given rise to liability 
in the past.
    Question 6e. To what extent has the potential for liability 
hampered or precluded commercial geologic injection activities?
    Answer. It is important to recognize that potential liability is 
one of many factors that industry must consider when determining 
whether to develop commercial carbon sequestration activities. There 
exist no active commercial sequestration projects in the United States 
since it is not economically viable to develop these projects. The 
Department recognizes that long-term liability will be an issue that 
will need to be addressed in the future.
    Question 6f. To what extent has the Department been unable to find 
willing contractors to participate in its existing Regional 
Partnerships program because of liability concerns?
    Answer. The Department has not experienced a problem finding 
contractors willing to participate in the development of large volume 
sequestration projects with the Regional Partnerships. Several 
companies have expressed their intentions to assume the operational and 
long-term liability associated with the projects and/or work with 
states to share the responsibilities.
    Question 6g. To what extent does the Department believe it will 
need to indemnify future contractors for them to be willing to 
participate in the program proposed in S. 962?
    Answer. It is our current understanding that DOE can provide 
funding to cover insurance products during the operation of the 
projects but cannot assume any long-term liability.
    Question 6h. To what extent can contractors obtain financial 
protection against these potential liabilities from private sources, 
either now or in the foreseeable future?
    Answer. Insurance policies exist for a number of industries that 
are analogous to carbon storage projects. These include operations 
related to carbon dioxide capture, pipeline transport, and injection 
for enhanced oil recovery operation; natural gas transport and 
injection at natural gas storage facilities; as well as acid gas 
storage operations. The Regional Partnerships and other organizations 
have begun to engage the insurance industry to determine the 
information needed to develop policies to cover liability during the 
operational period of the large-scale storage projects. It is 
reasonable to assume that the contractors will be able to obtain 
policies from private insurance companies or through corporate 
insurance to protect them against potential liabilities.
    Question 6i. What, if any, authority does the Department now have 
to indemnify its contractors for potential liabilities arising from 
non-radiological hazards posed by work undertaken for the Department?
    Answer. As indicated in the previous response, the Department of 
Energy does not have the authority to indemnify its contractors against 
liabilities under awards made through cooperative agreements.
    Question 6j. What, if any, additional indemnification authority is 
the Department seeking?
    Answer. The Department is not seeking additional indemnification 
authority at this time.
                    Questions From Senator Domenici
    Question 1. We learned from a recently released Duke University 
study that much of eastern Virginia and all of North Carolina, South 
Carolina, and Georgia are devoid of potential carbon dioxide 
sequestration sites. S. 731(the National Carbon Dioxide Storage 
Capacity Assessment Act of 2007) calls for a survey of potential carbon 
dioxide storage sites.
    In your estimation, would it be wise to include an examination of 
the potential carbon dioxide pipeline rights-of-way in the analysis 
called for in S. 731?
    Answer. Significant work on CO2 pipeline right-of-ways 
has been completed by the Regional Partnerships. The Characterization 
work completed by the Regional Partnerships has included an examination 
of the existing pipelines (carbon dioxide and natural gas) and other 
rights-of-way in the United States. The geospatial data on pipelines is 
considered sensitive information and its distribution is restricted due 
to federal security requirements. The data is contained in the National 
Carbon Sequestration Database and Geographic Information System 
(NATCARB) online Atlas, but is not displayed in either the Carbon 
Sequestration Atlas or the NATCARB web-based Atlas due to these 
restrictions. Several partnerships have assessed the need to develop 
new CO2 pipelines that would connect the existing pipeline 
infrastructure and develop a system to connect sources to regional 
sinks. In addition, geospatial data on rights-of-way along transmission 
lines, railroad, and roads have been included in the NATCARB online 
Atlas as potential routes for future CO2 pipelines. Pipeline 
tools have also been developed for NATCARB through a cooperative 
agreement with Massachusetts Institute of Technology that can be used 
to design pipeline routes and estimate the construction costs of 
pipeline needs to connect sources of CO2 with regional 
sinks.
    Question 2. We learned from a recently released Duke University 
study that much of eastern Virginia and all of North Carolina, South 
Carolina, and Georgia are devoid of potential carbon dioxide 
sequestration sites. S. 731 (the National Carbon Dioxide Storage 
Capacity Assessment Act of 2007) calls for a survey of potential carbon 
dioxide storage sites.
    Would a survey and map of the existing pipeline rights-of-way help 
facilitate locating sequestration sites?
    Answer. A map of existing pipeline rights-of-way could be 
beneficial to future project developers. It is imperative that the 
pipelines be sized to accommodate existing and future power plants. It 
is also important to note that this information already exists in the 
NATCARB online Atlas but is not currently displayed due to restrictions 
on the data. With some additional effort, this map could be developed 
based on the existing rights-of-way that are included in the database.
    Question 3. We learned from a recently released Duke University 
study that much of eastern Virginia and all of North Carolina, South 
Carolina, and Georgia are devoid of potential carbon dioxide 
sequestration sites. S. 731 (the National Carbon Dioxide Storage 
Capacity Assessment Act of 2007) calls for a survey of potential carbon 
dioxide storage sites.
    Would it be wise to include a survey and map of where our current 
and planned coal-fired power plants are?
    Answer. The Department is willing to develop this map based on the 
data that has been collected by the Regional Partnerships and available 
through the National Carbon Sequestration Database and Geographic 
Information System (NATCARB) online Atlas. The Regional Partnerships 
have spent over two years collecting information on existing and future 
coal-fired power plants from federal, state, industry, and site 
surveys. In many instances, the partnerships were responsible for 
correcting the information in several databases to refine location and 
CO2 emissions data. The Regional Partnerships geographic 
information systems have CO2 emission point source data that 
accounts for over 4 billion tons of CO2 emissions in the 
United States and Canada.
    Question 4. We learned from a recently released Duke University 
study that much of eastern Virginia and all of North Carolina, South 
Carolina, and Georgia are devoid of potential carbon dioxide 
sequestration sites. S. 731 (the National Carbon Dioxide Storage 
Capacity Assessment Act of 2007) calls for a survey of potential carbon 
dioxide storage sites.
    How difficult would it be for the United States Geological Survey 
to include a pipe-line right-of-way survey and a coal-fired power plant 
location survey in the studies called for in S. 731?
    Answer. The development of a pipe-line right-of-way and coal-fired 
power plant survey would require very little effort on behalf of United 
States Geological Survey (USGS) since most of the work has already been 
completed by the Department of Energy (DOE), the Regional Partnerships, 
and the National Carbon Sequestration Database and Geographic 
Information System (NATCARB). DOE is willing to work with the USGS to 
support the development of this survey under S. 731 to ensure that the 
information used to develop these maps reflects the over two years of 
effort by the Partnerships to compile and update the data from existing 
public databases, industry partners, and site surveys.
    Question 5. We learned from a recently released Duke University 
study that much of eastern Virginia and all of North Carolina, South 
Carolina, and Georgia are devoid of potential carbon dioxide 
sequestration sites. S. 731 (the National Carbon Dioxide Storage 
Capacity Assessment Act of 2007) calls for a survey of potential carbon 
dioxide storage sites.
    Would it be possible to also include an assessment of potential 
environmental risks of running carbon dioxide pipelines from the coal-
fired power plants to the potential repositories?
    Answer. The transport of CO2 via pipeline is a common 
industry practice where approximately 1,200 miles of pipeline currently 
transport over 70 millions of tons of CO2 per year across 
portions of the Southwest, Wyoming, North Dakota, and the Southeast 
primarily for enhanced oil recovery. These pipelines are regulated by 
the U.S. Department of Transportation and have a historically low 
incidence of risk. A report on the risks of constructing a 
CO2 pipeline could be developed, but would have to focus on 
the generic risks. This would not replace the need to conduct a site 
specific environmental assessment when a company proposes to develop a 
CO2 pipeline for a commercial storage project.
    Question 6. S. 731 calls for the agencies to develop the 
methodology and to complete a national assessment of geological storage 
capacity for carbon dioxide in a saline formation, unmineable coal 
seam, or oil or gas reservoir capable of accommodating a volume of 
industrial carbon dioxide. During an earlier hearing on the MIT report, 
The Future of Coal in a Carbon Constrained World, one witness suggested 
that half of the United States coal reserves are currently considered 
unmineable.
    Can you tell me what percent of our country's coal fields were 
considered unmineable in 1900?
    Answer. We estimate are not aware of any studies of coal production 
technologies or available coal reserves in 1900. Current coal reserve 
estimates are based on coal mining technologies that were available in 
the 1970s. However, these estimates are likely to be greater than 
current estimates of unmineable coal seams due to technological 
advances in coal mining technologies.
    Question 7. S. 731 calls for the agencies to develop the 
methodology and to complete a national assessment of geological storage 
capacity for carbon dioxide in a saline formation, unmineable coal 
seam, or oil or gas reservoir capable of accommodating a volume of 
industrial carbon dioxide. During an earlier hearing on the MIT report, 
The Future of Coal in a Carbon Constrained World, one witness suggested 
that half of the United States coal reserves are currently considered 
unmineable.
    Of those considered unmineable in 1900, how many have been 
developed and mined 100 years later?
    Answer. Without the assessment asked for in the previous question, 
it is not possible to answer this question without a full study of the 
coal mining technologies available in 1900.
    Question 8. S. 731 calls for the agencies to develop the 
methodology and to complete a national assessment of geological storage 
capacity for carbon dioxide in a saline formation, unmineable coal 
seam, or oil or gas reservoir capable of accommodating a volume of 
industrial carbon dioxide. During an earlier hearing on the MIT report, 
The Future of Coal in a Carbon Constrained World, one witness suggested 
that half of the United States coal reserves are currently considered 
unmineable.
    Can you estimate what percent of our counties' coal resources will 
be considered unmineable 100 years from now?
    Answer. Without a thorough study of the issue, it is difficult to 
predict what percentage of presently unmineable coals will be 
considered mineable in 100 years. We are unaware of any such study to 
date. Moreover, the study would have to project likely advancements in 
coal mining technologies that will be made over that time; this is a 
difficult task.
    Question 9. S. 731 calls for the agencies to develop the 
methodology and to complete a national assessment of geological storage 
capacity for carbon dioxide in a saline formation, unmineable coal 
seam, or oil or gas reservoir capable of accommodating a volume of 
industrial carbon dioxide. During an earlier hearing on the MIT report, 
The Future of Coal in a Carbon Constrained World, one witness suggested 
that half of the United States coal reserves are currently considered 
unmineable.
    If we do inject large quantities of carbon dioxide into these 
unmineable coal seams, how might that affect our ability to mine them 
in the future?
    Answer. The United States has extensive coal resources. 
Theoretically, CO2 could be stored in a coal seam, which 
could then be mined eventually. However, it is important to note that 
the Regional Partnerships have been investigating the injection of 
CO2 into deep unmineable coal seams that are typically twice 
as deep as coals currently defined as unmineable. Therefore, it is very 
unlikely that these very deep coals will ever be mined.
    Question 10. There have been a number of questions and concerns 
about liability for storing carbon dioxide in long-term repositories.
    How will you assess the potential impact or risk of storing this 
carbon dioxide to other mineral deposits above or near these injection 
sites?
    Answer. The Department of Energy will be working with the large-
scale project developers to deploy a full suite of measurement 
technologies to monitor the fate of the CO2, which is 
injected into the storage formations to ensure that the CO2 
does not migrate to the overlying formations through the caprock along 
faults, fracture, or well bore penetrations. This will include using 
the following monitoring technologies, which will be used to monitor 
the CO2 in storage formations and through possible leakage 
pathways in the overlying geologic stratum: geophysical methods, water 
chemistry analyses, tracers, microgravity, soil gas analysis, remote 
sensing, and mechanical integrity testing of the injection well(s). The 
projects will be required to conduct a baseline characterization where 
the data can be used to define the potential concerns that will need to 
be monitored during the injection and closure operations.
    Question 11. There have been a number of questions and concerns 
about liability for storing carbon dioxide in long-term repositories.
    How will you assess the potential impact of storing, and potential 
leakage of, this carbon dioxide into ground water and its impact on 
water rights above or near these injection sites?
    Answer. Some of the large-scale sequestration projects selected in 
the United States will be required to assess the potential impact to 
water rights and ensure that the injection into deep saline formation 
is secure and will not impact overlying drinking water. The projects 
will be required to conduct a rigorous characterization of the project 
site to demonstrate that the storage formation has adequate capacity 
and injectivity and that overlying seals can contain the CO2 
indefinitely. DOE will work with the large-scale project developers to 
deploy a full suite of measurement technologies to monitor the fate of 
the CO2, which is injected into the storage formations to 
ensure that the CO2 does not migrate to the overlying 
formations through the caprock along faults, fracture, or well bore 
penetrations. This will include using the following monitoring 
technologies, which will be used to monitor the CO2 in 
storage formations and through possible leakage pathways in the 
overlying geologic stratum: geophysical methods, water chemistry 
analyses, tracers, microgravity, soil gas analysis, remote sensing, and 
mechanical integrity testing of the injection well(s). The projects 
will be required to conduct a baseline characterization where the data 
can be used to define the potential concerns that will need to be 
monitored during the injection and closure operations.
    Question 12. There have been a number of questions and concerns 
about liability for storing carbon dioxide in long-term repositories.
    How will you assess the potential for this carbon dioxide to 
somehow lubricate known and unknown faults in or near the injection 
sites?
    Answer. In the first stage of the large-scale storage test, the 
project will characterize the sites using well bore testing and 
geophysical surveys to identify all known and potential faults and 
fractures that might exist. The projects will be required to avoid 
active faults where the fault may not be sealed and there is an 
increased risk of leakage through the fault. Many inactive faults act 
as seals that create structural traps where oil and gas deposits 
accumulate. These may actually serve as a good site for carbon 
sequestration projects. Historically, these sites have been developed 
for oil and gas production and may be preferred opportunities to store 
large amounts of CO2. Analysis of the fault structure, 
physical integrity, and chemical composition of the caprock will be 
evaluated to ensure that the CO2 will not migrate through 
the fault. In addition, the project will be required to operate at safe 
injection pressures.
    Question 13. There have been a number of questions and concerns 
about liability for storing carbon dioxide in long-term repositories.
    How will you estimate and discuss the potential damage from 
earthquakes that could be facilitated by the lubrication of faults in 
or near the injection sites.
    Answer. As discussed in the response to question 12, the risk of 
lubricating an inactive fault that could cause earthquakes is 
negligible when the site characterization and injection operations are 
conducted appropriately.
    Question 14. The Department of Energy and the U.S. Geological 
Survey share responsibility for research related to site selection, 
monitoring, and verification of candidate carbon sequestration sites.
    Could each of you describe, in your own view, how the 
responsibilities should be divided between your agencies?
    Answer. The Department of Energy (DOE) has characterized the United 
States and Canada's potential to store CO2 emissions in deep 
geologic formations. This has been accomplished through the Regional 
Partnerships efforts working with federal, local, and industry 
partnership to assemble massive geographic information systems, which 
represent a resource that did not previously exist. DOE will continue 
this characterization effort throughout the Regional Partnership 
projects as they collect additional data, incorporate results from 
field test projects, and refine the methodology used to estimate 
storage capacity. DOE believes that considerable effort has been 
expended through the partnerships. We would like to continue this 
effort and to continue to fully engage the U.S. Geological Survey 
(USGS) as a partner as we refine the data and methodology. DOE will 
continue to develop an Atlas of the United States based on the 
refinements made to the data collected by the Partnerships. We believe 
that the USGS could help guide the next version of the methodology that 
will be used to estimate capacities in the United States. DOE would 
also seek USGS counsel on the organization of future versions of the 
Atlas. DOE believes that the USGS could provide substantial support on 
gathering data and providing information on federal lands to the 
Regional Partnerships.
    Question 15. The Department of Energy and the U.S. Geological 
Survey share responsibility for research related to site selection, 
monitoring, and verification of candidate carbon sequestration sites.
    How can the Federal government work most effectively with the State 
geological surveys?
    Answer. The Regional Partnerships are collaborating with many of 
the Geologic Surveys in the 41 States that are part of the Regional 
Partnerships Program. The Department of Energy worked collaboratively 
with the state geologic surveys to develop the skills and knowledge 
about carbon sequestration technologies so they are in a position to 
represent their state's opportunities for carbon sequestration. This 
model provides the states with the opportunity to build a carbon 
storage industry within the states since the expertise resides with the 
surveys.
                     Questions From Senator Dorgan
    Question 1. Mr. Shope, my understanding is that enhanced oil 
recovery is the major form of commercial scale CO2 
sequestration activities being pursued today. I also understand that 
underground retired oil and natural gas reservoirs and old coal seams 
are being studied as potential storage areas for CO2.
    My home state has both. We have the largest commercial scale 
demonstration project for Enhanced oil recovery (EOR) in the United 
States. We remove the Cot at the front end of a coal gasification 
process and pipe it 205 miles to the Weyburn oil fields in Alberta, 
Canada to extend the life of marginal oil wells. We also have a robust 
oil and gas field in the Williston Basin.
    How much of the research by the DOE regional partnerships is 
focused on the potential for near-term EOR and storage in used oil, 
natural gas, and coal seams?
    Answer. The Regional Partnership Characterization Phase I effort 
determined the potential of depleted oil and gas and coal seams to 
store CO2 and produce oil and gas. During Phase II, the 
Department of Energy (DOE) is supporting 9 depleted oil fields, 5 
unmineable coal seams, and 1 depleted gas field carbon storage tests to 
determine the storage potential and amount of resources that could be 
recovered. During the large-scale Deployment Phase, the DOE may support 
large-scale sequestration projects that involve EOR and/or enhanced 
coalbed methane (ECBM) as long as the storage potential in these types 
of sinks is significant to the region.
    However, since these areas are better understood and more likely to 
have commercial benefits than saline aquifers, DOE will target Federal 
funding at those research questions least likely to be pursued by 
commercial interests without Federal help. DOE is committed to 
promoting sequestration with EOR and/or ECBM in the marketplace since 
we understand that these opportunities offer near term solutions to 
mitigate carbon dioxide emissions and build the necessary 
infrastructure.
    Question 4. Technology will play a key role in the implementation 
and success of Carbon Capture and Storage technology.
    Mr. Shope, what is the Administration's long term technology 
strategy to expedite the development of commercial scale carbon capture 
and storage technologies that will help us achieve near zero emissions 
fossil fueled power plants?
    Answer. The Department of Energy's long-term strategy is to 
accelerate large-scale field tests and to fully support the FutureGen 
project, both of which in combination are aimed at addressing the 
geologic storage aspect of CO2 as well as low-cost, 
integrated capture of CO2 from fossil fueled power plants.
                     Questions From Senator Salazar
    Question 1. Did DOE utilize a common set of standards or 
methodology in the Carbon Sequestration Atlas characterization efforts? 
If so, how was the methodology developed and reviewed across the DOE 
Regional Partnerships? Was the quality of the assessments done by the 
different Partnerships the same? Did all the Partnerships have similar 
data and expertise?
    Answer. Yes, the regional partnerships used common methodology, 
which was developed by a capacity subgroup organized by the Department 
of Energy (DOE) and Regional Partnerships. This methodology was 
developed during a series of working group meetings during which the 
team reviewed and vetted the methods and assumptions made by all the 
partnerships, and concurred on an acceptable methodology across all 
partnerships. The methodology, which was used for the first edition of 
the Carbon Sequestration Atlas of the United States is available on the 
web at:

        http://www.net1.doe.gov/publications/carbon_seq/atlas/
        Appendix%20A.pdf.

    The quality of the assessments completed by the Partnerships was 
similar. The assessment required that many regions develop new 
electronic data from paper well logs and obtain data from industry 
partners, which are not available to the general public. Eventually, 
the partnerships were able to develop a consistent set of data across 
the partnerships and use their shared expertise to estimate regional 
storage capacities.
    Question 2. Is the documentation of key parameters and risk factors 
transparent enough that an outside entity could review the Atlas, and 
understand what was done and how it was done and what data were used? 
Where is this information available? Is it on a website?
    Answer. We believe that the key parameters and risk factors in the 
Atlas have been clearly documented. The key parameters are described in 
the methodologies document, which was published with the Atlas. These 
steps will be further described in the technical report that the 
Regional Partnerships are required to develop under their existing 
cooperative agreements with the Department of Energy (DOE). The 
technical reports are published at the end of each project, which will 
be submitted to DOE at the end of the Phase II cooperative agreements. 
The methodologies document can be accessed at:

        http://www.net1.doe.gov/publications/carbon_seq/atlas/
        Appendix%20A.pdf.

    Question 3. What improvements to the characterization process would 
you propose? Where would you like to see more investment?
    Answer. The Department of Energy (DOE) will be reconvening the 
capacity subgroup in the near future to begin work on refining the 
capacity assessment methodology in preparation for the next version of 
the Carbon Sequestration Atlas. As the Regional Partnerships work in 
the field to demonstrate the capacity of the regions, new wells will be 
drilled providing information on formations that was not previously 
available and results of the field tests will help to refine the 
assumption in the capacity methodology. DOE will continue to add 
industry partners, convert paper data to digital format, and further 
develop relationships with state and regional groups that can provide 
additional information on geological formations throughout the United 
States. Support of the large-scale sequestration tests is critical to 
assessing the feasibility of the storage opportunities identified 
during the initial characterization.
    Question 4. Did the Department's budget provide sufficient funding 
for a complete national assessment or was the assessment in the Atlas 
limited to selected sites?
    Answer. We believe that the Department adequately funded this 
effort, which resulted in the Carbon Sequestration Atlas released in 
the past month, wherein the assessment demonstrates that geologic 
carbon sequestration opportunities exist throughout the United States 
and Canada. The basins assessed during this characterization effort 
could store hundreds of years of future CO2 emissions while 
producing additional oil and gas, which would otherwise be 
unrecoverable. Additional effort went into characterization of specific 
target formations, such as the oil and gas field and coal seams where 
extensive data exists. Some additional characterization will be 
completed on these fields as additional data from industry partnerships 
is provided to the Partnerships. Saline formations were assessed where 
data was available. The Partnerships have been able to collect 
additional information from industry partners and piggyback drilling 
operations that have shown that other saline formations may offer 
significant opportunities for storage that would otherwise have been 
ignored. The Regional Partnerships will continue their characterization 
efforts as they gather additional data and results from their field 
tests.
    Question 5. Explain why the DOE Regional Sequestration Partnerships 
do not cover all fifty states.
    Answer. The Regional Partnerships were selected through a 
competitive solicitation in September of 2003. At the time of the 
awards, the partnership consisted of 33 states, 2 Indian Nations, and 2 
Canadian Provinces. Since then, the DOE and the Regional Partnerships 
have added 8 new states and 2 Canadian Provinces to the program. The 
Partnerships now include all the major geologic basins and potential 
sinks in the United States. As shown by the Carbon Sequestration Atlas, 
the states in the New England area are underlain principally by bedrock 
and have virtually no geologic storage potential. The National Carbon 
Sequestration Database and Geographic Information System (NATCARB) has 
included data for the Northeast CO2 point sources and right-
of-way for pipelines, transmission lines, and roadways understanding 
that these sources may need to be connected to storage sites. In 
addition, additional states can join the Regional Partnerships at any 
time. For example, New York has just recently joined (January 2007).
    Question 6. Explain what the DOE Regional Sequestration 
Partnerships have done to characterize the relative attractiveness or 
economic viability of the known potential carbon dioxide storage sites 
in the United States. If this information is available, is it on a 
website?
    Answer. The Regional Partnerships worked together to assess the 
storage capacity as represented in the Carbon Sequestration Atlas. This 
is available at the following website:

        http://www.net1.doe.gov/publications/carbon_seq/atlas

    In addition, each of the Regional Partnerships has conducted in-
depth assessments of certain target formations in their regions that 
have significant opportunities for potentially economically viable 
development. Some of this information is contained in the final report 
and products from their Characterization Phase (Phase I) projects while 
some assessments have been completed under their Validation Phase 
(Phase II) projects and will be published as part of their technical 
reports due at the end of the projects. The reports from the 
Characterization Phase can be downloaded at the following website:

        http://www.net1.doe.gov/technologies/carbon_seq/partnerships/
        phaseI/workproducts_table.html.
                                 ______
                                 
                              Department of Energy,
               Congressional and Intergovernmental Affairs,
                                      Washington, DC, May 22, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: On April 16, 2007, Thomas D. Shope, Acting 
Assistant Secretary, Office of Fossil Energy, testified regarding S. 
731, National Carbon Dioxide Storage Capacity Assessment Act of 2007, 
and S. 962, Department of Energy Carbon Capture and Storage Research, 
Development, and Demonstration Act of 2007.
    Enclosed are the answers to four questions that were submitted by 
you and Senator Dorgan to complete the hearing record.
    If we can be of further assistance, please have your staff contact 
our Congressional Hearing Coordinator, Lillian Owen, at (202) 586-2031.
            Sincerely,
                                               Eric Nicoll,
                                        Acting Assistant Secretary.
[Enclosures.]
                    Questions From Senator Bingaman
    Question 2. In your testimony you state that higher funding levels 
are necessary to get these large-scale demonstration projects started. 
What funding levels would you recommend to fast-track one or two large 
demonstration projects?
    Answer. The Administration intends to undertake four large-scale 
demonstration projects with the funding allocated in the operating plan 
in FY 2007 and requested in FY 2008 under the carbon sequestration 
program. Funding levels to support seven (as opposed to four) large 
volume sequestration tests that could be required under S. 962 would 
need to be offset with cuts made elsewhere. The funding requirements 
for each of these field tests are highly site-specific. The funding in 
the outyears would depend on the schedules for each of the large-scale 
tests.
    Question 4. After hearing all of today's testimony, it is important 
to consider how the liability surrounding large-scale CO2 
injection will impact the deployment of the projects we've been 
discussing. Would the liabilities that were discussed today be better 
handled at the Federal or State level? The testimony today sends a bit 
of a mixed message as to which level is better suited to employ 
liability management.
    Answer. Under the Federal Acquisition Regulations the Department of 
Energy is restricted from taking on the liability from projects awarded 
under cooperative agreements. Unless a change to these Federal 
regulations is made, the organizations awarded the large-scale 
sequestration tests will need to determine who will accept the 
liability associated with the development of these projects. 
Instruments exist within the insurance industry to accept the 
operational liabilities associated with CO2 storage 
projects. We also know that the states of Texas and Illinois have taken 
steps to assume the liability of the long-term storage of 
CO2 associated with the FutureGen facility.
                     Questions From Senator Dorgan
    Question 2. I believe we will continue to use coal and other fossil 
fuels along with renewables into the future. However, I also believe we 
need to find cleaner ways to use coal and other fossil fuels.
    Mr. Shope, do you support the authorization funding in the 
legislation at the levels that they have been authorized for FY08 and 
FY09? Are these adequate levels to stay on track with the 
administrations policy direction for carbon capture and storage?
    Answer. The funding levels proposed in the President's budget are 
the optimum level for the available resources; provision of additional 
resources would require cuts in other areas that the President's 
budgeting processes deemed to be higher priority. The funding levels 
are adequate for the goals identified in the FY 2008 Congressional 
Budget Request.
    Question 3. Mr. Shope, as you are aware, the clean coal program 
within the DOE Office of Fossil Energy is like a three-legged stool. 
The first leg is the basic research program which includes the carbon 
capture and storage program. The second leg is the clean coal power 
initiative demonstration program. The third leg is the FutureGen 
project. It is becoming apparent that the Administration has 
prioritized the FutureGen project to the detriment of the other two 
legs of the stool.
    How are we going to be able to stand up on the stool if programs 
that help fund carbon capture and storage are not adequately funded?
    Answer. The Department of Energy is committed to maintaining a 
balanced coal research portfolio necessary to support the goal of 
achieving near-zero atmospheric emissions coal, including carbon 
capture and storage. We will continue to work to ensure that we have a 
robust carbon sequestration program as part of a balanced research 
program.
                                 ______
                                 
     Responses of the Department of the Interior to Questions From 
                            Senator Bingaman
    Question 1. Given that you have indicated that the time frame 
specified in the bill (S. 731) for the storage capacity resource 
assessment is too constrictive for a comprehensive study, what is your 
estimate for the time needed to complete such an analysis as described 
in the bill?
    Answer. The U.S. Geological Survey (USGS) has determined that it 
would likely take at least one year to develop an assessment 
methodology for geologic carbon sequestration and submit that 
assessment methodology for independent, peer review. Once the review 
process is done, and any changes are made to the methodology, it would 
likely take at least three years to complete a national assessment of 
geologic storage capacity for carbon dioxide. During that time frame, 
the USGS would also identify significant data gaps and outstanding 
research issues that would best reduce uncertainty in subsequent 
national assessments. Most of these issues would most likely be related 
to greater understanding of the long term integrity of carbon dioxide 
storage in geologic reservoirs, especially in saline aquifers. During 
the development and implementation of the assessment methodology, the 
USGS would consult and collaborate with other organizations as 
appropriate, including the state geological surveys, the Department of 
Energy, the Environmental Protection Agency, and the land and resource 
bureaus of the Department of the Interior, to ensure to the maximum 
extent possible the efficiency, effectiveness, and coordination of 
carbon sequestration efforts across the Federal government. As noted in 
our statement for this hearing, many states already have some storage 
capacity data already developed, most of which is compiled in the 
National Carbon Sequestration Atlas published by the Department of 
Energy. The USGS would plan to use this information to inform its work 
on a resource assessment. It is also important to recognize that, if 
authorized, such a comprehensive national inventory would need to 
compete among many other science research priorities for funding, and 
this could affect the eventual timelines for completion of a full 
inventory.
    Question 2. In Mr. Hawkins testimony, he states that there are 
areas around the US that were not assessed, while other testimony 
provided states that those areas in the US where data is not available 
represents areas where geological storage potential is slim. Would it 
be helpful to obtain field confirmation, in the form of drill wells and 
well data, to determine whether formations are suitable for carbon 
dioxide storage in those areas?
    Answer. It could be useful to obtain field data for those areas to 
help determine the presence and suitability of geologic formations for 
carbon dioxide storage and sequestration. However, it may not be 
productive to perform such field work in areas that are known low 
potential areas.
    Question 3. After hearing all of today's testimony, it is important 
to consider how the liability surrounding large-scale CO2 
injection will impact the deployment of the projects we've been 
discussing. Would the liabilities that were discussed today be better 
handled at the Federal or State level? The testimony today sends a bit 
of a mixed message as to which level is better suited to employ 
liability management.
    Answer. The liability issues are outside the USGS's purview, and we 
respectfully defer to the Department of Justice as to the 
Administration's legal view of that issue.
    Question 4. As Mr. Coddington addressed in his testimony, will the 
recent US Supreme Court ruling that the EPA has the authority, under 
the Clean Air Act, to enact limits on carbon dioxide (CO2) 
emissions (as an air pollutant) carry over to injection of carbon 
dioxide into geologic storage sites? Will the treatment of 
CO2 as a waste pollutant versus a commodity that can be used 
for enhanced oil recovery or other uses pose a significant hindrance to 
rapid deployment of large-scale demonstration projects?
    Answer. As noted in the above response, discussion of the 
ramifications of recent Supreme Court decisions is outside the USGS's 
purview, and we respectfully defer to the Department of Justice as to 
the Administration's view of that issue. Similarly, speculation as to 
the impacts on deployment of projects on differing treatment of carbon 
dioxide is more appropriately addressed by entities with management or 
regulatory authority such as the Environmental Protection Agency or 
with expertise in advanced technology deployment projects, such as the 
Department of Energy.
     Responses of the Department of the Interior to Questions From 
                            Senator Domenici
    We learned from a recently released Duke University study that much 
of eastern Virginia and all of North Carolina, South Carolina, and 
Georgia are devoid of potential carbon dioxide sequestration sites. S. 
731(the National Carbon Dioxide Storage Capacity Assessment Act of 
2007) calls for a survey of potential carbon dioxide storage sites.
    Question 1. In your estimation, would it be wise to include an 
examination of the potential carbon dioxide pipeline rights-of-way in 
the analysis called for in S. 731?
    Answer. No, not in the actual resource assessment itself. A 
resource assessment, although used for a variety of purposes and 
analyses, such as infrastructure development, should be carried out 
initially as a stand-alone assessment. Subsequent to the assessment, or 
parallel to the assessment, but conducted by another organization whose 
purview includes pipeline rights-of-way, such an analysis could help 
policy makers and land and resource managers with the developmental 
stage of carbon dioxide sequestration.
    Question 2. Would a survey and map of the existing pipeline rights-
of-way help facilitate locating sequestration sites?
    Answer. Although conducting such a survey is outside the USGS's 
purview, it is logical that a survey and map of the existing pipeline 
rights-of-way could help facilitate locating sequestration sites. This 
could also aid in the economic analysis of carbon dioxide sequestration 
projects and help illustrate where there might be short-term 
opportunities for carbon dioxide sequestration projects.
    Question 3. Would it be wise to include a survey and map of where 
our current and planned coal-fired power plants are? (answer provided 
at number 4)
    Question 4. How difficult would it be for the United States 
Geological Survey to include a pipe-line right-of-way survey and a 
coal-fired power plant location survey in the studies called for in S. 
731?
    Answer. The USGS has a database of power plants provided by the 
Environmental Protection Agency (EPA) that includes coal-, gas-, oil-, 
and biomass-fired plants. If another group were to provide the 
locations of planned coal-fired power plants and the pipeline right-of-
way data in a Geographic Information Systems (GIS) format, it would not 
be difficult to incorporate this information in the studies as well. 
These data are the responsibility of others (e.g., the Federal Energy 
Regulatory Commission (FERC), the Department of Energy (DOE), EPA, 
etc.); however, USGS could incorporate the data should that data be 
provided by the appropriate organizations.
    Question 5. Would it be possible to also include an assessment of 
potential environmental risks of running carbon dioxide pipelines from 
the coal-fired power plants to the potential repositories?
    Answer. This is a secondary exercise to the resource assessment 
itself, but one that could be done by other management or regulatory 
agencies, such as those within Department of the Interior, the U.S. 
Forest Service, Department of Energy, or EPA, with responsibility for 
conducting environmental evaluations. This analysis might be run by one 
or more of these agencies in parallel to the resource assessment done 
by the USGS.

    S. 731 calls for the agencies to develop the methodology and to 
complete a national assessment of geological storage capacity for 
carbon dioxide in a saline formation, unmineable coal seam, or oil or 
gas reservoir capable of accommodating a volume of industrial carbon 
dioxide. During an earlier hearing on the MIT report, The Future of 
Coal in a Carbon Constrained World, one witness suggested that half of 
the United States coal reserves are currently considered unmineable.
    Question 1. Can you tell me what percent of our country's coal 
fields were considered unmineable in 1900?
    Answer. It is very difficult to estimate the number of unmineable 
coal beds in 1900 because what constitutes an unmineable coal bed has 
changed over time. Further, usually only mineable coal beds are 
evaluated, making any evaluation of mineable to unmineable beds very 
difficult.
    Question 2. Of those considered unmineable in 1900, how many have 
been developed and mined 100 years later?
    Answer. A single number cannot be determined. It is fair to say 
that many coal beds considered unmineable 100 years ago are now being 
mined. We are mining deeper and thinner seams than 100 years ago, 
mainly through development of mining technology.
    Question 3. Can you estimate what percent of our counties' coal 
resources will be considered unmineable 100 years from now?
    Answer. Again, this is a very difficult question to answer because 
with technological developments, one might expect to mine coal beds in 
the future that are currently unmineable.
    Question 4. If we do inject large quantities of carbon dioxide into 
these unmineable coal seams, how might that affect our ability to mine 
them in the future?
    Answer. This is an important consideration when evaluating 
potential carbon sequestration sites in coal beds. Future technological 
advances may allow for the mining of coal resources that are presently 
deemed unmineable. Storing industrial carbon dioxide in presently 
unmineable coal beds may preclude future use of those coal resources.

    There have been a number of questions and concerns about liability 
for storing carbon dioxide in long-term repositories.
    Question 1. How will you assess the potential impact or risk of 
storing this carbon dioxide to other mineral deposits above or near 
these injection sites?
    Answer. The potential exists for carbon dioxide storage, and the 
associated carbon dioxide injection infrastructure, to affect both 
surface and subsurface mineral resource deposits. The USGS Mineral 
Resources Program (MRP) data showing locations of known mineral 
deposits, together with MRP's published assessments of potential for 
undiscovered deposits, could be combined with evaluations of carbon 
dioxide storage potential to identify areas in which these risks need 
to be evaluated.
    Question 2. How will you assess the potential impact of storing, 
and potential leakage of, this carbon dioxide into ground water and its 
impact on water rights above or near these injection sites?
    Answer. Current design considerations for geologic carbon dioxide 
storage and sequestration stipulate the depth of storage to be 3000 
feet or greater and the salinity of the water in the storage formation 
to be greater than 10,000 parts per million total dissolved solids 
(according to EPA's Underground Injection Control limit for injection 
of produced water from petroleum operations). The high salinity of 
water in these prospective storage formations means that they are not 
currently part of the potable ground water supply. However, future 
desalination technologies might allow for waters with salinities as 
high as seawater (35,000 parts per million total dissolved salts) to be 
made potable. Therefore, as much information as possible on each 
formation's depths, salt concentrations, etc., will be incorporated 
into the assessment. In addition, all formations that will be assessed 
for storage capacity will have identified sealing formations, commonly 
described as aquitards or aquicludes, which isolate the prospective 
storage formation from known and future supplies of potable water. 
These seals should prevent injected carbon dioxide or saline formation 
water in the storage formation from migrating to shallower levels and 
contaminating potable groundwater supplies. A critical component of any 
assessment would be evaluating the effectiveness and sealing capacity 
of seals and developing monitoring protocols for early detection of 
leaks.
    Question 3. How will you assess the potential for this carbon 
dioxide to somehow lubricate known and unknown faults in or near the 
injection sites?
    Answer. Activation (lubrication) of faults by carbon dioxide 
injection is a critical component of the evaluation of the storage 
capacity of any potential storage site with known faulting. If faults 
are a component of known oil and gas accumulations, we will use the 
properties of the petroleum accumulations to model the stresses 
necessary to activate the faults. Storage capacities would be 
calculated for volumes of carbon dioxide that will not exceed the 
activation potential of the known faults.
    The role of ``unknown'' faults is difficult to evaluate. However, 
in assessment units with known faulting we will use geological models 
of faulting with geostatistical methods to estimate the size and 
distribution of unidentified faults. Knowledge of faulting would be 
critically dependent on the quality of subsurface information available 
to our assessment teams. In areas with publicly available, high 
resolution, 3-D seismic imaging, we will know much more about the 
distribution of faulting than in areas where we do not have access to 
seismic data or only have access to low resolution, 2-D seismic images.
    Question 4. How will you estimate and discuss the potential damage 
from earthquakes that could be facilitated by the lubrication of faults 
in or near the injection sites?
    Answer. Estimates of potential damage from earthquakes are beyond 
the scope of the proposed assessment activity. As noted in the 
discussion of potential activation of faults by carbon dioxide 
injection and storage, the estimates of storage volumes will be based 
on models of fault activation and the volumes and pressures during 
injection will be below the thresholds for fault activation. Fault 
activation is an important issue in the regulatory framework for 
underground fluid injection within the EPA Underground Injection 
Control (UIC) program. Current regulations in the UIC program require 
that pressures during injection are lower than the threshold for rock 
fracture and fault activation. Finally, USGS has considerable 
experience in evaluating and modeling the occurrence of earthquakes due 
to underground fluid injection. A large body of research was conducted 
in the early 1970's at the Rangely oil field in Colorado where 
earthquakes were caused by water injection. Based on that research 
current injection practice rarely induces minor earthquakes, and 
earthquake activity due to fluid injection, including carbon dioxide 
injection, at Rangely has not been a problem.

    The Department of Energy (DOE) and the U.S. Geological Survey share 
responsibility for research related to site selection, monitoring, and 
verification of candidate carbon sequestration sites.
    Question 1. Could each of you describe, in your own view, how the 
responsibilities should be divided between your agencies?
    Answer. The USGS and DOE have complementary missions and goals. The 
USGS is focused on geologic research and characterization and resource 
assessment, whereas DOE is more focused on technological development 
and pilot tests. There are some areas of overlap between these two end 
members, and the whole spectrum is needed in order to understand 
complex issues such as carbon dioxide sequestration. Communication and 
coordination will be important to maximize effectiveness and avoid any 
duplication of effort.
    Question 2. How can the Federal government work most effectively 
with the State geological surveys?
    Answer. The USGS and DOE, as well as other organizations, have a 
long history of working with the State Geological Surveys. In 
particular, USGS works closely with the State Geological Surveys on a 
variety of issues. In the context of geologic carbon dioxide 
sequestration, the USGS will work most effectively with the State 
geological surveys by consulting these and other relevant entities 
during both the methodology review and assessment process. These 
interactions will serve to identify existing relevant datasets, as well 
as identify knowledge gaps, and build upon these existing data so as to 
maximize the usefulness and success of the assessment.
     Responses of the Department of the Interior to Questions From 
                            Senator Salazar
    Question 1. In your testimony, you indicated that one year would be 
sufficient to develop the peer-reviewed methodology called for in S. 
731. What are the technical obstacles to coming up with a methodology 
in the time frame required in the bill? If you had more resources to 
hire or contract out help, would you be able to meet that deadline?
    Answer. It will take some time to develop a methodology because all 
of the stakeholders must be brought together in order to understand 
what work has already been done, what data are available and suitable 
for an assessment, and to understand the rules and constraints facing 
regulatory organizations such as EPA, including issues of long-term 
viability and permanence of storage projects. Additional resources 
would not necessarily speed the process. A national assessment must be 
useable to a variety of organizations, stakeholders, and policy makers. 
Further, criteria for defining and ranking storage sites must be 
developed, the definition of an assessment unit and the total carbon 
storage system within basins and regions needs to be developed, the 
definition of risk factors must be developed, and major data gaps need 
to be identified. We must review and incorporate in the methodology the 
performance of existing projects that inject carbon dioxide into oil 
fields for enhanced oil recovery, such as the Rangely field, Colorado. 
In addition, an evaluation of current sequestration pilot projects, 
such as the Frio Brine, Houston, Texas; Sleipner, Norway; Weyburn, 
Canada; and In-Salah, Algeria, must be undertaken in order to 
understand the amount of carbon dioxide they have been able to 
sequester, whether that carbon dioxide stayed sequestered or moved 
during the project, and other geological and technical obstacles or 
successes. A critical issue in developing a methodology will be 
identification of geological criteria necessary to evaluate the 
longterm integrity of sequestration sites.
    Question 2. What has the USGS done so far to assess sequestration 
capacity? What have USGS scientists published on this topic? Could the 
existing and published assessment methodologies serve as a basis for an 
initial methodology to be reviewed? Could that methodology be expanded 
upon?
    Answer. The USGS has conducted research in characterizing oil and 
gas reservoirs, coal beds, and saline water bearing formations in the 
context of geologic carbon dioxide sequestration. These USGS research 
activities provide information and understanding of how carbon dioxide 
will behave in these settings (the physical and chemical interactions 
between geologic formations and carbon dioxide). This information has 
been used to develop preliminary concepts for use in sequestration 
capacity assessments, including the environmental effects associated 
with geologic carbon dioxide sequestration.
          * * * * * * *
    USGS scientists have published a number of peer-reviewed papers and 
reports pertaining to geologic carbon dioxide sequestration in geologic 
formations. A partial list of these existing products, with the primary 
focus theme, includes:

    (a) oil and gas reservoir characterization for geologic carbon 
dioxide sequestration:

   S.T. Brennan, K.O. Dennen, and R.C. Burruss. 2006. Timing of 
        hydrocarbon emplacement in ozokerite and calcite lined 
        fractures, Teapot Dome, Wyoming. U.S. Geological Survey Open 
        File Report 2006-1214, 28 p. Available at: http://erg.usgs.gov/
        isb/pubs/ofrs/2006-1214/0FR2006-1214.pdf
   S.T. Brennan, V.A. Hughes, S.J. Friedmann, and R.C. Burruss. 
        2005. NATURAL GAS RESERVOIRS WITH HIGH CO2 
        CONCENTRATIONS AS NATURAL ANALOGS FOR CO2 STORAGE. 
        In M. Wilson, T. Morris, J. Gale, and K. Thambimuthu (eds.), 
        Proceedings of the 7th International Conference on Greenhouse 
        Gas Control Technologies, 5-9 September 2004, Vancouver, 
        Canada, Volume II, p. 1381-1387.

    (b) coal bed characterization for geologic carbon dioxide 
sequestration:

   J.J. Kolak and R.C. Burruss. 2006. Geochemical Investigation 
        of the Potential for Mobilizing Non-Methane Hydrocarbons during 
        Carbon Dioxide Storage in Deep Coal Beds. Energy & Fuels 2006, 
        20, 566-574.
   J.J. Kolak and R.C. Burruss. 2005. The Effect of Coal Rank 
        on the Physicochemical Interactions Between Coal and 
        CO2--Implications for CO2 Storage in Coal 
        Beds. In M. Wilson, T. Morris, J. Gale, and K. Thambimuthu 
        (eds.), Proceedings of the 7th International Conference on 
        Greenhouse Gas Control Technologies, 5-9 September 2004, 
        Vancouver, Canada, Volume II, p. 2233-2237.

    (c) saline water bearing formations characterization for geologic 
carbon dioxide sequestration:

   Y.K. Kharaka, D.R. Cole, S.D. Hovorka, W.D. Gunter, K.G. 
        Knauss, B.M. Freifeld. 2006. Gas-water-rock interactions in 
        Frio Formation following CO2 injection: Implications 
        for the storage of greenhouse gases in sedimentary basins. 
        Geology, v. 34; no. 7; p. 577-580.

    (d) concepts for geologic carbon dioxide storage capacity 
assessments:

   S. T. Brennan and R.C. Burruss. 2006. Specific Storage 
        Volumes: A Useful Tool for CO2 Storage Capacity 
        Assessment. Natural Resources Research, Vol. 15, No. 3, P. 165-
        182.
   R.C. Burruss. 2004. Geologic Sequestration of Carbon Dioxide 
        in the Next 10 to 50 Years: An Energy Resource Perspective. In 
        Workshop Proceedings, The 10-50 Solution: Technologies and 
        Policies for a Low-Carbon Future, Pew Center on Global Climate 
        Change, March 25-26, 2004, Washington, D.C., 7p.
   R.C. Burruss and S.T. Brennan. 2003. Geologic Sequestration 
        of Carbon Dioxide--An Energy Resource Perspective. U.S. 
        Geological Survey Fact Sheet 026-03, 2p. Available at: http://
        pubs.usgs.gov/fs/fs026-03/
   M.K. Verma. 2005, Role of Rock/Fluid Characteristics in 
        Carbon (CO2) Storage and Modeling: U.S. Geological 
        Survey Open-File Report 2005-1137, 27 p. http://pubs.usgs.gov/
        of/2005/1137/
   James L. Palandri, Yousif K. Kharaka. 2005. Ferric iron-
        bearing sediments as a mineral trap for CO2 
        sequestration: Iron reduction using sulfur-bearing waste gas. 
        Chemical Geology 217 (2005) 351-364
          * * * * * * *
    The USGS research published to date provides an objective, 
scientifically robust, peer-reviewed knowledge base that can be used as 
a basis to develop an initial methodology for review. Such a 
methodology would expand on the published USGS storage capacity 
concepts. In our view, it is essential to develop a sound assessment 
methodology, which would involve a strong peer-review and external 
vetting process of that methodology. These steps are necessary before 
commencing a national assessment of carbon dioxide storage capacity in 
geologic formations to ensure that the information resulting from the 
assessment is most useful for future decision making about 
sequestration efforts.
    Question 3. What data bases (such as for oil and gas or coal) does 
USGS now have in place that could apply to an assessment of 
sequestration capacity in the U.S.?
    Answer. The USGS has several databases--available to the public 
through the internet--that could be applied to a national storage 
capacity assessment of carbon dioxide in geologic formations. These 
databases include the USGS Organic Geochemistry Database (http://
energy.cr.usgs.gov/prov/og/), the USGS National Coal Resources Data 
System (http://energy.er.usgs.govicoal--quality/coal--databases.html), 
and the USGS Produced Waters Database (http://energy.cr.usgs.gov/prov/
prodwat/). The USGS also has available to the public through the 
internet an extensive array of geographic information system layers 
pertaining to oil and gas and coal resources that can be applied to 
such an assessment.
                                 ______
                                 
                         Natural Resources Defense Council,
                                       Washington, DC, May 7, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Dirksen Senate Building, Washington, DC.
    Dear Chairman Bingaman: Per your request, enclosed please find my 
responses to your questions from the full committee hearing on carbon 
sequestration on April 16, 2007, which will be included in the hearing 
record.
            Sincerely,
                                          David G. Hawkins,
                                          Director, Climate Center.
[Enclosure.]
                     Question From Senator Bingaman
    Question. As Mr. Coddington addressed in his testimony, will the 
recent US Supreme Court ruling that the EPA has the authority, under 
the Clean Air Act, to enact limits on carbon dioxide (CO2) 
emissions (as an air pollutant) carry over to injection of carbon 
dioxide into geologic storage sites? Will the treatment of 
CO2 as a waste pollutant versus a commodity that can that 
can be used for enhanced oil recovery or other uses pose a significant 
hindrance to rapid deployment of large-scale demonstration projects?
    Answer. We do not believe so. Injection of CO2 is 
currently governed by the Underground Injection Control Program (UIC), 
which derives from the Safe Drinking Water Act (SDWA). CO2 
has been an allowed injectant for many years now. The primary focus of 
the UIC is to protect groundwater, whereas the Supreme Court decision 
relates CO2's disruption of the climate through the so-
called greenhouse effect Under the Clean Air Act, CO2 
injection projects can and should be subject to performance standards 
and/or operational requirements to prevent leakage of CO2 
back to the atmosphere. Such requirements are practical and should not 
interfere with rapid deployment of large-scale injection projects.
                     Question From Senator Domenici
    Question. You stated in your testimony that these resources are 
just as important as oil and gas and that we should therefore go 
forward with geopolitical mapping so that we can inventory our Nation's 
assets with respect to storing carbon dioxide. Using your comparison, 
do you similarly support an oil and gas inventory of the Outer 
Continental Shelf?
    Answer. We do not support an oil and gas inventory of the Outer 
Continental Shelf (OCS). The two inventories serve very different 
purposes: the OCS inventory is clearly part of an effort to overturn 
sound congressional policy--the moratorium on drilling in those parts 
of the OCS not now being exploited. Offshore drilling comes with 
several environmental pitfalls: damage to sensitive coastal ecosystems 
from infrastructure siting, danger of oil spills, water pollution from 
waste muds, cuttings and produced water, as well as air pollution. 
Additionally, the oil/gas inventory will involve offshore seismic 
exploration, which has major impacts on marine mammals and fish. There 
are far better and cleaner ways to meet our energy demand through 
efficiency improvements or even incremental oil produced onshore 
through enhanced recovery with permanent CO2 sequestration.
    In contrast, the survey of potential CO2 repositories is 
a broad initial survey that does not pose risks to health or the 
environment. The CO2 repository assessment will primarily be 
based on existing information, complemented by drilling sampling wells. 
We do not expect seismic methods would be used, as these provide 
information on the geometry and spatial distribution of formations. 
Well logs, cores and fluid samples obtained from the wells are the 
methods that will reveal porosity, injectivity and composition, needed 
to deduce CO2 storage capacity.
                                 ______
                                 
     Responses of Mr. Coddington to Questions From Senator Bingaman
    Question 1. In Mr. Hawkins testimony, he states the there are areas 
around the US that were not assessed, while other testimony provided 
states that those areas in the US where data is not available 
represents areas where geological storage potential is slim. Would it 
be helpful to obtain field confirmation, in the form of drill wells and 
well data, to determine whether formations are suitable for carbon 
dioxide storage in those areas?
    Answer. The question assumes that geologic storage will be widely 
deployed in all regions of the country at a date certain--and perhaps 
in the near future. Under that scenario, it is certainly true that all 
potentially desirable geologic data, particularly with respect to deep 
saline formations, are not available in all regions of the country. If 
that deployment scenario is accurate, then I concur that it would be 
helpful to obtain field confirmation, in the form of drill wells and 
well data, to determine whether formations are suitable for carbon 
dioxide storage in areas of the country where geologic data may be less 
robust.
    It is possible, however, that the deployment scenario underlying 
the question may turn out to be invalid. I believe that it is possible 
that geologic storage may be deployed initially in those parts of the 
country in which the geology is already well understood and 
characterized. Those formations necessarily include, but are not 
limited to, oil & gas reservoirs. Injection into those formations 
constitutes storage, in my view, so must be part of the discussion. 
Data on such formations generally are robust, although on a case-by-
case basis--and likely as part of the site assessment for a major 
commercial project in any event--additional reservoir characterization 
data may be required.
    Thus, while I believe that it always helpful to have more data, 
particularly with respect to deep saline formations, the development of 
a geologic storage industry in the United States does not necessarily 
have to wait on the development of a national database of all 
conceivable geologic storage formations.
    Question 2. After hearing all of today's testimony, it is important 
to consider how the liability surrounding large-scale CO2 
injection will impact the deployment of the projects we've been 
discussing. Would the liabilities that were discussed today be better 
handled at the Federal or State level? The testimony today sends a bit 
of a mixed message as to which level is better suited to employ 
liability management.
    Answer. I believe that the analysis has not been done to answer the 
question of whether liabilities are better addressed at the Federal or 
State level. Various policy models are available, however, and each 
should be examined to determine which best meets the needs of the 
public, the environment, and private industry.
    My sense is that private industry, as part of the project 
evaluation process, wants to know that liabilities are being addressed 
in a responsible and fiscally sound manner. Thus, if the governmental 
policy goal is to spur commercial CCS projects, the manner in which 
liabilities are addressed may be more important than the level of 
government--State of Federal--which would be acting. A well-conceived 
and financed State liability scheme, for example, may provide more of 
an incentive for large scale commercial CCS projects than a well-
conceived but nonetheless poorly funded Federal program (or vice 
versa).
      Response of Mr. Coddington to Question From Senator Domenici
    Question 1. In your testimony you discuss the great uncertainty 
associated with long-term liability for geologic carbon storage. Do you 
believe this uncertainty is discouraging private industry from 
investing in carbon capture and storage technologies?.
    Answer. I believe that uncertainties regarding liabilities for 
geologic storage--particularly those associated with long-term storage.
    Liability of the storage sites is most definitely a function of the 
geologic nature of the reservoirs and overlying sediments. Certain 
subsurface conditions, such as those in SE New Mexico and West Texas 
are ideally suited for large-scale injection. Liability there is 
effectively zero. Liability in fractured granite or basalt, on the 
other hand, is a huge issue and fraught with questions of permanence of 
storage. Curiously perhaps, the sites with the least risk are the sites 
we know most about, the oil and gas provinces. We need to tell and 
retell that story.
    Initial projects need to be located in those regions with thick 
sedimentary rock sequences; ones very much like the regions within 
which we have explored for oil and gas. This will produce success and 
occur in regions where the public is used to drilling and injection 
activity. We can begin to branch out from there to areas currently 
perceived with higher liability. The oil and gas companies know those 
initial regions and know the injection technologies that have been 
proven to work for decades. We must include that industry and their 
regulators in the CCS development to minimize those risks and 
liabilities.
                                 ______
                                 
      Responses of Dr. Guthrie to Questions From Senator Bingaman
    Question 1. In Mr. Hawkins testimony, he states the there are areas 
around the US that were not assessed, while other testimony provided 
states that those areas in the US where data is not available 
represents areas where geological storage potential is slim. Would it 
be helpful to obtain field confirmation, in the form of drill wells and 
well data, to determine whether formations are suitable for carbon 
dioxide storage in those areas?
    Answer. Initial capacity estimates are covering the most promising 
regions with respect to storage potential. They are based largely on 
existing data and a number of assumptions, so most of the estimates 
have relatively large error bars.
    Through the efforts of the Regional Partnerships, we are building 
our understanding of the national capacity that is likely to exist. Not 
all portions of the U.S. are being covered, nor within the studied 
regions are all sites being assessed at the same level of detail. This 
reflects a prioritization by the Partnerships given the limited scope 
of the efforts--due to limitations in resources, time, and data 
(particularly on deep saline formations that have not been explored for 
other reasons).
    A more comprehensive effort could improve our estimates of both 
national and regional capacities, and this will certainly be needed to 
understand the long-term role of geologic storage in the energy 
portfolio.
    Nevertheless, current estimates support the conclusion that 
sufficient capacity is likely to exist for at least decades of large-
scale injection (i.e., insufficient information on capacity is not a 
major impediment to a decision to move forward on field studies).
    Ultimately, accurate capacity estimates will require very detailed 
field investigations, not only involving data from wells (to assess 
parameters like porosity, permeability, and injectivity) but also 
detailed geological and geophysical studies (to assess reservoir 
parameters such as heterogeneity, reservoir geometry, and potential 
release pathways).
    Question 2. After hearing all of today's testimony, it is important 
to consider how the liability surrounding large-scale CO2 
injection will impact the deployment of the projects we've been 
discussing. Would the liabilities that were discussed today be better 
handled at the Federal or State level? The testimony today sends a bit 
of a mixed message as to which level is better suited to employ 
liability management.
    Answer. From a technical perspective, there is no significant 
reason to choose one level of government over another for handling 
liability issues, albeit geologic reservoirs can cross state 
boundaries. From a business perspective, I would imagine that a common 
approach to these issues throughout the U.S. would facilitate making 
decisions based on relative technical merits of candidate sites. In 
this context, having a common approach to assessing sites will be 
important. For example, a common risk assessment framework and 
methodology would enable inter-comparison of sites on a technical 
basis. However, even given a common approach, there will be need to 
accommodate variability in regional specifics that impact liability.
    Question 3. As Mr. Coddington addressed in his testimony, will the 
recent US Supreme Court ruling that the EPA has the authority, under 
the Clean Air Act, to enact limits on carbon dioxide (CO2) 
emissions (as an air pollutant) carry over to injection of carbon 
dioxide into geologic storage sites? Will the treatment of 
CO2 as a waste pollutant versus a commodity that can be used 
for enhanced oil recovery or other uses pose a significant hindrance to 
rapid deployment of large-scale demonstration projects?
    Answer. From a technical perspective, there is no reason to argue 
that CO2 in the atmosphere or subsurface should be 
classified differently or similarly. From a technical perspective, the 
primary distinction between injecting CO2 for enhanced oil 
recovery versus for geologic storage is the need to address the long-
term nature of storage. These include understanding the long-term fate 
of CO2 and its potential impact on the engineered and 
geologic systems and the need to verify the effectiveness of storage 
using monitoring methodologies.
       Response of Dr. Guthrie to Question From Senator Domenici
    Question 1. When people talk about carbon sequestration, there's a 
lot of discussion about where to inject CO2 to start 
gathering data to see if this is workable on the large scale. Dr. 
Guthrie, from a technical standpoint, can you tell me where we should 
be focusing as a country? Should we focus on green-field sites, 
enhanced oil recovery sites? Give me your thoughts.
    Answer. Both types of sites (green-field and brown-field) can 
provide unique information needed to improve our understanding of 
geologic storage as a feasible option.
    Brown-field sites have an existing infrastructure and economic 
drivers, which facilitates deployment. Green-field sites are closer to 
some of the large point sources of CO2, and they expand our 
experience base with respect to variations in geological environments, 
which will be critical for large scale deployment.
    An additional type of field study is also required to improve our 
understanding of the long-term aspects of geological storage. 
Specifically, analog sites--where significant volumes of CO2 
were introduced in the past, either by natural process or as part of an 
engineered operation like enhanced oil recovery--provide information on 
the long-term factors in geological storage. This type of information 
cannot be obtained from newly started CO2 injection efforts.
                                 ______
                                 
       Response of Mr. Hawkins to Question From Senator Bingaman
    Question. As Mr. Coddington addressed in his testimony, will the 
recent US Supreme Court ruling that the EPA has the authority, under 
the Clean Air Act, to enact limits on carbon dioxide (CO2) 
emissions (as an air pollutant) carry over to injection of carbon 
dioxide into geologic storage sites? Will the treatment of 
CO2 as a waste pollutant versus a commodity that can that 
can be used for enhanced oil recovery or other uses pose a significant 
hindrance to rapid deployment of large-scale demonstration projects?
    Answer. We do not believe so. Injection of CO2 is 
currently governed by the Underground Injection Control Program (UIC), 
which derives from the Safe Drinking Water Act (SDWA). CO2 
has been an allowed injectant for many years now. The primary focus of 
the UIC is to protect groundwater, whereas the Supreme Court decision 
relates CO2's disruption of the climate through the so-
called greenhouse effect. Under the Clean Air Act, CO2 
injection projects can and should be subject to performance standards 
and/or operational requirements to prevent leakage of CO2 
back to the atmosphere. Such requirements are practical and should not 
interfere with rapid deployment of large-scale injection projects.
       Response of Mr. Hawkins to Question From Senator Domenici
    Question. You stated in your testimony that these resources are 
just as important as oil and gas and that we should therefore go 
forward with geopolitical mapping so that we can inventory our Nation's 
assets with respect to storing carbon dioxide. Using your comparison, 
do you similarly support an oil and gas inventory of the Outer 
Continental Shelf?
    Answer. We do not support an oil and gas inventory of the Outer 
Continental Shelf (OCS). The two inventories serve very different 
purposes: the OCS inventory is clearly part of an effort to overturn 
sound congressional policy--the moratorium on drilling in those parts 
of the OCS not now being exploited. Offshore drilling comes with 
several environmental pitfalls: damage to sensitive coastal ecosystems 
from infrastructure siting, danger of oil spills, water pollution from 
waste muds, cuttings and produced water, as well as air pollution. 
Additionally, the oil/gas inventory will involve offshore seismic 
exploration, which has major impacts on marine mammals and fish. There 
are far better and cleaner ways to meet our energy demand through 
efficiency improvements or even incremental oil produced onshore 
through enhanced recovery with permanent CO2 sequestration.
    In contrast, the survey of potential CO2 repositories is 
a broad initial survey that does not pose risks to health or the 
environment. The CO2 repository assessment will primarily be 
based on existing information, complemented by drilling sampling wells. 
We do not expect seismic methods would be used, as these provide 
information on the geometry and spatial distribution of formations. 
Well logs, cores and fluid samples obtained from the wells are the 
methods that will reveal porosity, injectivity and composition, needed 
to deduce CO2 storage capacity.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                              National Environmental Trust,
                                     Washington, DC, March 8, 2007.
Hon. Ken Salazar,
U.S. Senate, Hart Senate Office Building, Washington, DC.
    Dear Senator: Thank you for your leadership on carbon sequestration 
and for the introduction of S. 731, the National Carbon Dioxide Storage 
Capacity Assessment Act of 2007.
    We are pleased to support this legislation, which directs the U.S. 
Geological Survey to conduct a comprehensive assessment of geological 
storage capacity for carbon dioxide in all 50 states.
    It is vital for Congress to ensure that the United States 
identifies and uses the energy sources that are compatible with a 
policy to limit global warming. We consider aggressive promotion of 
energy conservation and renewable energy to be the best first choices 
in meeting new energy needs, but also understand that coal is likely to 
continue to be an important source of energy.
    Carbon capture and sequestration (CCS) is frequently heralded as 
the technology solution that will allow the United States to rely on 
coal in a carbon-constrained world. However, it is vital that we 
establish with certainty that we can safely and securely manage the 
carbon dioxide emissions resulting from coal use.
    The ``Future of Coal'' study recently released by the Massachusetts 
Institute of Technology outlines a clear path forward to develop the 
knowledge base and regulations necessary to ensure what we need to 
manage the emissions from future coal use. The study stresses that 
while CCS may be the ``critical enabling technology'' that makes 
continued reliance on coal viable, ``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 large-scale 
integrated CCS system--capture, transportation and storage.''
    Your bill is a good first step to making sure that coal emissions 
can be sequestered without causing additional risks to public health, 
the climate and the environment.
    Meeting the challenge of global warming will require forward 
thinking and innovation as well as practical solutions. Your 
demonstration of leadership to advance research and fact finding on 
this potential technology is commendable.
            Sincerely,
                                   Angela Ledford Anderson,
                                  Vice President, Climate Programs.
                                 ______
                                 
                         American Public Power Association,
                                     Washington, DC, April 3, 2007.
Hon. Ken Salazar,
Hart Senate Office Building, Washington, DC.
    Dear Senator Salazar: I am writing to express the American Public 
Power Association's (APPA) support for your bill (S. 731) designed to 
develop a methodology for, and complete a national assessment of, 
geological storage capacity for carbon dioxide.
    APPA is the national service organization representing the 
interests of the over 2,000 state and locally owned electric utilities 
nationwide that collectively serve over 44 million Americans. Given 
their nature as community-owned utilities, governed at the local level, 
and directly accountable to the citizens they serve, public power 
systems continue to demonstrate a high degree of commitment to 
environmental stewardship and to addressing environmental concerns.
    As you know, the emissions of greenhouse gases primarily from the 
combustion of fossil fuels, and the linkage of those emissions to 
global climate change is the most significant environmental policy 
issue confronting the nation today. In addition, discussion, debate, 
and concern within the scientific community as well as with the general 
public regarding the effects of these emissions on the physical 
environment and the economic consequences of programs to reduce these 
emissions is prompting action by federal, state and local policymakers.
    As Congress continues to debate climate change, one of the most 
frequently discussed technologies is that of carbon capture and 
storage. While this may be a viable option to address climate change, 
there are major challenges that must be overcome, both technically and 
in public policy, before widespread commercial-scale carbon capture and 
storage can be achieved. APPA believes your bill is a step in the right 
direction to overcoming these challenges.
    Again, thank you for your dedication and hard work on this matter 
and we look forward to working with you as your legislation moves 
forward.
            Sincerely,
                                        Alan H. Richardson,
                                                   President & CEO.
                                 ______
                                 
               Colorado Association of Municipal Utilities,
                                     Ft. Colins, CO, April 5, 2007.
Hon. Ken Salazar,
Hart Senate Office Building, Washington, DC.
    Dear Senator Salazar: It was a pleasure to meet with you and Steve 
Black last month in Washington, D.C. I know the mayors especially 
appreciate you taking the time to meet with them to discuss various 
issues important in their communities. They are among a handful of the 
29 municipally owned electric utilities CAMU represents--utilities that 
provide electric service to 20% of Colorado's population.
    During our meeting, we discussed your bill, S. 731. The bill is 
designed to develop a methodology for, and complete a national 
assessment of, geological storage capacity for carbon dioxide using the 
services of the U.S. Geological Survey. CAW supports your bill as an 
important step toward understanding how CO2 emissions can be 
captured and sequestered in a safe and environmentally sound way.
    Our state of Colorado faces a big challenge. The Colorado Energy 
Forum last year determined the state's electric utilities collectively 
have to build an additional 5,000 megawatts of generation capacity by 
2020 to ``keep the lights on.'' Currently, coal provides 75% of the 
electricity Coloradans use. Coal and natural gas very likely will be 
fuel sources used by this new generation. It's imperative that these 
important fuels continue to be in the state's generation mix. However, 
growing concern about greenhouse gas contributions to climate change 
necessitates that new technologies be developed that remove 
CO2 from fossil fuel emissions from the atmosphere. 
Capturing and sequestering CO2 is a process and technology 
that generates much interest and shows much promise. However, important 
technical questions and public policy issues need to be answered before 
widespread commercial-scale carbon capture and storage can be achieved. 
CAMU believes your bill is an important step in the right direction to 
providing answers to these questions.
    We look forward to our continued work with you and Steve on this 
and the many other important issues facing the energy industry.
            Sincerely,
                                                David Lock,
                                                Executive Director.
                                 ______
                                 
                              Platte River Power Authority,
                                    Ft. Colins, CO, April 11, 2007.
Hon. Ken Salazar,
Hart Senate Office Building, Washington, DC.
    Dear Senator Salazar: I write to convey Platte River Power 
Authority's support of S. 731.
    Platte River is the joint action agency that provides wholesale 
electric and transmission service to the municipal utilities of Fort 
Collins, Longmont, Loveland and Estes Park. Platte River is proud of 
its environmental record and has demonstrated our willingness to 
control emissions from our power plants as soon as technology becomes 
available. Our Rawhide Energy Station will be one of the first plants 
in Colorado to install equipment to control mercury emissions in 2009. 
Rawhide has consistently been the ``cleanest'' coal-fired electric 
plant in Colorado and one of the cleanest in the U.S., thanks to the 
equipment we installed to control sulfur-dioxide and nitrogen-oxide.
    Platte River and our country now face our biggest environmental 
challenge--how to reduce carbon-dioxide emissions from fossil fueled 
generation plants and other sources of CO2. Your bill, S. 
731, is an important step toward achieving that goal. The bill is 
designed to develop a methodology for, and complete a national 
assessment of, geological storage capacity for carbon dioxide using the 
services of the U.S. Geological Survey. Capturing and sequestering 
CO2 is a process and technology that shows much promise. 
However, major questions need to be answered, both technically and in 
public policy, before widespread commercial-scale carbon capture and 
storage can be achieved. Platte River believes your bill is an 
important step in the right direction to providing answers to these 
questions.
    We applaud your leadership in this area and look forward to working 
with you on this issue and the many others facing our industry.
            Sincerely,
                                               Brian Moeck,
                                                   General Manager.
                                 ______
                                 
                                Colorado Springs Utilities,
                              Colorado Springs, CO, April 11, 2007.
    Dear Senator Salazar: Colorado Springs Utilities is pleased to 
write you to offer our support for the S. 731, The National Carbon 
Dioxide Storage Capacity Assessment Act of 2007. As you know, Colorado 
Springs Utilities is the largest municipal utility in Colorado, 
supplying retail electric service to Colorado Springs and Manitou 
Springs, as well as contract power sales to the United States Air Force 
Academy, Peterson Air Force Base and Fort Carson.
    To meet the ever growing energy demands of the Pikes Peak region in 
an affordable and efficient manner, Colorado Springs Utilities 
generates almost 70% of its electricity from coal fired power plants. 
Because coal is both a cheap and abundant fuel source in the inter-
mountain West, energy derived from coal will continue to play a large 
and indispensable role in Colorado Springs generating portfolio into 
the foreseeable future.
    We fully realize that constraints on carbon emissions in the United 
States may be imminent, and recognize that we must start thinking now 
about how to operate our power plants in a carbon constrained world. 
These realities make our mission of protecting our rate payers from 
excessive price increases very difficult, but we are committed to 
working with you and the rest of Congress to craft policies that 
balance both the need to address carbon emissions with the economic 
well being of our community.
    We applaud the National Carbon Dioxide Storage Capacity Assessment 
Act of 2007 as an important first step toward managing carbon 
emissions. By calling on the United States Geological Service (USGS) to 
conduct a comprehensive inventory of the Nation's ability to store 
carbon in appropriate geologic features and other natural basins, 
starting with the requirement for USGS to develop an official 
methodology for the assessment, we are convinced that your bill will go 
a long way toward closing the knowledge gaps that surround carbon 
storage in the United States.
    Thank you for striving to help secure America's energy needs 
through coal, while thinking proactively about how to effectively and 
affordably manage carbon emissions. We appreciate the bipartisan bill 
you have introduced, and fully stand behind it.
            Sincerely,
                                                 Tom Black,
                                           Energy Services Officer.
                                 ______
                                 
                                     Environmental Defense,
                                      New York, NY, April 12, 2007.
Hon. Ken Salazar,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Re: National Carbon Dioxide Storage Capacity Assessment Act of 2007

    Dear Senator Salazar: I am writing to express Environmental 
Defense's support for the National. Carbon Dioxide Storage Capacity 
Assessment Act of 2007. Your legislation recognizes that, even while 
the Congress designs an economy-wide cap for US greenhouse gases, we 
can make progress on the technology and infrastructure that enables 
such a cap.
    The recent MIT report The Future of Coal makes clear how important 
carbon capture and storage technology is. Your legislation helps 
advance that technology by determining the location and storage 
potential of geologic formations in the US.
    Thank you again for introducing legislation that helps address the 
greatest environmental challenge that Americans face today. I look 
forward to working with you on the National Carbon Dioxide Storage 
Capacity Assessment Act and on climate change legislation as both move 
forward in the Congress.
            Yours truly,
                                                Fred Krupp,
                                                         President.
                                 ______
                                 
                                               Xcel Energy,
                                   Minneapolis, MN, April 16, 2007.
Hon. Ken Salazar,
U.S. Senator, Hart Senate Office Building, Washington, DC.
Re: S. 731

    Dear Senator Salazar: I am writing to express Xcel Energy's strong 
support for S. 731.
    Xcel Energy is the nation's fifth largest combined electric and gas 
utility, serving 3.3 million electric customers and 1.8 million gas 
customers in eight states, including Colorado, Minnesota, Wisconsin, 
Texas, North and South Dakota, Michigan and New Mexico. The company is 
the No. 1 wind provider in the nation and is rapidly expanding its 
support for solar energy. We are also a member of the Dow Jones 
sustainability index and have undertaken many innovative environmental 
initiatives, including voluntary emission reduction, renewable energy 
and advanced technology programs.
    I have committed Xcel Energy to meet our customers' energy needs in 
a reliable, cost-effective and environmentally responsible manner. At a 
time when Congress is considering a number of proposals to address 
climate change and the emissions of greenhouse gases, we have already 
begun to explore new technologies that will enable us to fulfill these 
commitments to our customers in a clean energy future. Xcel Energy is 
at this moment engaged in studying the feasibility of developing an 
integrated gasification combined cycle (IGCC) facility in Colorado. If 
approved, the facility would be the first of its kind to capture and 
sequester carbon dioxide emissions. I believe this technology holds 
great promise to allow continued use of American coal to generate 
electricity while substantially reducing emissions of greenhouse gases.
    The challenges of carbon sequestration, however, are real. S. 731 
will help our company and the industry meet those challenges by 
identifying the scope of the nation's geologic sequestration resources 
in greater detail. It is a crucial step in the deployment of clean coal 
technologies. For this reason, I strongly support S. 731 and urge its 
passage.
    Very truly yours,
                                          Richard C. Kelly,
                                       Chairman, President and CEO.
                                 ______
                                 
                               National Mining Association,
                                    Washington, DC, April 17, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Chairman Bingaman: The National Mining Association (NMA) 
wishes to convey its strong support for the Department of Energy Carbon 
Capture and Storage Research, Development and Demonstration Act (S. 
962) sponsored by you and Senator Domenici, and the National Carbon 
Dioxide Storage Capacity Assessment Act of 2007 (S. 731) sponsored by 
Senators Salazar and Bunning.
    NMA extends its thanks to you and the members of the Committee on 
Energy and Natural Resources for your bi-partisan leadership in 
introducing this important legislation. S. 962 will triple funding 
levels recently provided for carbon capture and storage (CCS) efforts, 
expediting a much-needed, large-scale testing of this highly promising 
technology. S. 731 is a constructive and much-needed initiative that 
will compliment efforts to develop CCS technology by providing 
information that America will need to safely store carbon dioxide.
    As experts from a variety of disciplines have testified in past 
weeks at congressional hearings, coal use in the U.S. and worldwide 
will increase under any foreseeable scenario because of its abundance, 
accessibility, affordability and contribution to energy security. CCS 
technologies offer a safe and economically viable approach to meeting 
the country's energy and environmental needs in the years ahead.
            Sincerely yours,
                                            Kraig R. Naasz,
                                                   President & CEO.
                                 ______
                                 
  Statement of Robert J. Finley, Director, Energy and Earth Resources 
                Center, Illinois State Geological Survey
    S. 731 addresses the important need for the U.S. to assess the 
national capacity for geological sequestration of carbon dioxide as a 
strategy to mitigate global climate change. As such, it is a critical 
step toward defining where we can safely and effectively store carbon 
dioxide (CO2) in its various forms. The emphasis on well-
defined methodology is entirely appropriate, and the comprehensive 
review provisions of this bill are certain to be supported by the 
scientific community dealing with sequestration issues. Yet, this bill 
can be further improved by reference to research that has already taken 
place within that community and that specifically addresses the 
methodology for carbon sequestration capacity assessment.
    In July 2006, U.S. Department of Energy (DOE) managers for the 
Regional Carbon Sequestration Partnerships convened a meeting at the 
Kansas Geological Survey to begin the process of developing a Carbon 
Sequestration Atlas of the United States and Canada. This Atlas was 
released in digital form in March 2007 and the printed version will be 
available in May 2007. The Atlas documented some 3,500 billion tons of 
storage capacity in the regions covered by the Partnerships. It was 
developed on the basis of regional partnership work that had begun in 
2003, and earlier, to understand the major geological reservoirs that 
may be utilized for carbon sequestration. This Atlas also builds on the 
work supported by DOE in the form of the original MIDCARB and now 
NATCARB digital databases accessible on the Internet. Methodology 
questions came up early in the preparation of this atlas and the 
current release contains careful documentation of the methodology 
adopted by a group of researchers from around the Nation with expertise 
in geology, reservoir engineering, and resource assessment. S. 731 
would be significantly strengthened by referencing the DOE work, 
including the methodology documentation, as a starting point to avoid 
the obvious potential for duplication of the effort already expended. 
Clearly, a part of what is envisioned under S. 731 has been 
accomplished, and I would urge the Committee to reference the Atlas 
work in this legislation. Collaboration by the U.S. Geological Survey 
with the participants in the Regional Partnerships should be required. 
Other work, especially work on assessing incremental hydrocarbon 
recovery in a number of U.S. geologic basins using CO2, has 
also been accomplished and should be referenced in Sec. 3(b)(4).
    I was pleased to see the reference in Sec. 3(c)(2) to state 
coordination with geological surveys. State geological surveys and 
state oil and gas regulatory bodies have been essential sources of 
information for sequestration studies to date and will continue to be 
such for any new effort under S. 731. To that end, state geological 
surveys and state oil and gas regulatory bodies should also be 
specifically cited in Sec. 3(d) with respect to the opportunity to 
review and comment on the proposed methodology for the assessment. 
Without their input the potential for this assessment to be duplicative 
of previous work is even greater.
    Finally, some words of caution are in order. The bill makes 
reference to injectivity of potential storage formations. This 
parameter is often difficult to quantify without site-specific testing. 
Likewise, risk associated with a storage formation may be volume 
dependent and/or injection rate dependent. The assessment of these 
parameters, to the extent we can know them in the near term, will be 
exceedingly difficult without collaboration with the Regional Carbon 
Sequestration Partnerships and the work these groups have done to date 
and will do in the coming months. Yet, this bill makes no reference to 
this program with respect to critical parameters, as it makes no 
reference to the work the Partnerships have done on capacity assessment 
to date. This leads me to again recommend that language be added 
requiring coordination with the Partnerships to deliver the most cost-
effective product possible for the funding authorized to be invested in 
this effort.
                                 ______
                                 
                         American Public Power Association,
                                    Washington, DC, April 18, 2007.
Hon. Jeff Bingaman,
Chairman, Senate Energy and Natural Resources Committee, Hart Senate 
        Office Building, Washington, DC.
    Dear Chairman Bingaman: I am writing to express the American Public 
Power Association's (APPA) support for your bill (S. 962) that would 
amend the Energy Policy Act of 2005 to reauthorize and improve the 
carbon capture and storage research, development, and demonstration 
program of the Department of Energy.
    As Congress continues to debate climate change, one of the most 
frequently discussed technologies is that of carbon capture and 
storage. While this may be a viable option to address climate change, 
there are major challenges that must be overcome, both technically and 
in public policy, before widespread commercial-scale carbon capture and 
storage can be achieved. APPA believes your bill is a step in the right 
direction to overcoming these challenges.
    Again, thank you for your dedication and hard work on this matter 
and we look forward to working with you as your legislation moves 
forward.
            Sincerely,
                                        Alan H. Richardson,
                                                   President & CEO.
                                 ______
                                 
  Statement of Robert J. Finley, Director, Energy and Earth Resources 
                Center, Illinois State Geological Survey
    S. 962 meets important needs of the Nation with respect to 
furthering our understanding of carbon capture and sequestration (CCS) 
to mitigate impacts of carbon dioxide (CO2) build-up in the 
atmosphere. Addressing CCS is essential if we are to have a full array 
of tools to begin addressing the emission reductions we need to make in 
a carbon managed future. I support the direction of this bill as it 
addresses the scope and funding necessary to meet these objectives. My 
purpose in offering these comments is to provide some additional 
perspective that I hope will be valuable in making this bill even more 
effective in achieving safe and effective deployment of carbon capture 
and sequestration. I offer these comments as a professional geologist 
and as principal investigator of one of the Department of Energy's 
(DOE) Regional Carbon Sequestration Partnerships.
    I would begin by commending the recognition of the Regional Carbon 
Sequestration Partnerships expressed in Sec. 2(c)(2)(A). The 
Partnerships, awarded competitively in 2003 and again in 2005 by DOE, 
have provided much of the regionally specific information that is now 
being utilized by industry. I receive several inquiries per month from 
utilities, independent power producers, organizations developing coal-
to-natural-gas and coal-to-liquids facilities, and environmental 
groups, all seeking understanding of CCS. The most relevant answers to 
their questions have come from our regional partnership research. For 
us in Illinois, the results of Partnership research were also very 
applicable in the effort to define sequestration opportunities for the 
two finalist FutureGen sites in Illinois, as I am sure results of the 
partnership program were also applicable in Texas. The reservoir 
targets in this section of S. 962 are indeed the major geologic targets 
for CO2 storage; however, I am compelled to question any 
link between CO2 storage and extraction of heat from 
geothermal systems. This is especially so since systems of ``low 
permeability or porosity'', as specified in the bill, are the opposite 
of the reservoir characteristics required for the volumes of 
CO2 that must be dealt with in a carbon-managed environment.
    Let me now turn to some very important provisions of S. 962 in Sec. 
2 (C)(3-5) on pages six and seven. The provision for not less than 
seven large-volume tests is significant. The diversity of geological 
formations that underlies different regions of the U.S. requires that 
we gain knowledge and sequestration experience in the different types 
of rock units, rock units under different stress systems in the earth's 
crust, rocks at different depths where pressure and temperature vary, 
and rocks where the fluids already present have different compositions 
and overall salinities. If we had to categorize the surface topographic 
features of the United States on a cross-country automobile trip from 
Bangor, Maine to Los Angeles, California, and had to describe them to 
an overseas visitor, we would use terms like New England, the 
Appalachian Mountains, the Midwestern prairies, the Rocky Mountains, 
the Great Basin region of Utah, the Central Valley of California, and 
the Pacific Coast. We could certainly find terms for more regions along 
the way. Similarly with subsurface environments, we need to test the 
diversity of these reservoir rocks to ensure that we have the knowledge 
to carry out the goal of making carbon sequestration effective, safe, 
and worthy of the public trust. We simply cannot do that with a 
restricted agenda of just three or four such tests. In fact, a premise 
of the current sequestration regional partnership program is indeed to 
recognize that experience in a diversity of geologic settings helps us 
meet carbon sequestration goals.
    While meeting these goals, we need to be mindful of costs. I would 
note that with respect to competitive awards, important competition has 
already occurred in one program area, the development of a regional 
partnership framework. The existing regional carbon sequestration 
partnerships were awarded competitively for both Phase I and Phase II.
    These partnerships are open to growth and routinely offer 
collaboration with new members. Our Illinois Basin partnership has 
gained seven new corporate and NGO members in the last 18 months and 
more inquiries are being received. By building on the in-place 
partnership research framework we can maintain the momentum we now 
have, add regions and new members, more widely share the expertise 
already gained, and use expanded funding to better characterize the 
regions. The results achieved to date are the results of competitive 
proposal selection and recompeting these partnerships would be costly 
in both time and money.
    Nevertheless, I would advocate additional funding for carbon 
capture and storage research, development, and demonstration at a 
higher level than authorized in this bill. The release of two 
Intergovernmental Panel on Climate Change reports since January 2007 
has underscored the issues with respect to climate change. The urgency 
that has built up in the last few months on this issue is palpable. In 
the Illinois Basin, we are compressing some of our Phase II partnership 
work into an early Phase III transition to expedite the large-scale 
sequestration testing referred to in S. 962. We are seeking partners 
and building budgets. What we are finding is that costs are high. Deep, 
safely-constructed injection and observation wells can cost $2.6 
million each, not counting staff to guide site selection, interpret 
results, and carry out concurrent environmental monitoring. Large 
compressor sets capable of delivering one-third of a million tons of 
CO2 per year at high pressure (a ``basic'' large-scale test 
volume) cost about $10 million installed, can take a year from order 
date to delivery, and require the electrical equivalent of more than 
5,000 horsepower to operate. In short, we need to add more funding in 
FY08 and FY09 than this authorization contemplates to both address 
innovative capture technology, test geological sequestration using 
CO2 volumes approaching those emitted by major stationary 
sources, and carry out excellent environmental monitoring at these 
large-scale test sites. I would suggest that funding for FY08 be 
expanded to $125 million and that FY09 funding be expanded to $160 
million. I believe these figures reflect both the scope of what is 
necessary and a financial commitment that could be effectively deployed 
using the sequestration partnership framework, the expansion of that 
framework, and new efforts, especially those that relate to research on 
innovations in carbon capture and to environmental assessments that 
help ensure public acceptance.

                                    

      
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