A windfall for US carbon capture and storage

A flood of additional financing became available for carbon capture, utilization, and storage (CCUS) when President Biden signed the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act on 15 November. The Department of Energy, which had requested $531 million for CCUS in its budget for the current fiscal year, suddenly finds itself charged with administering more than $10 billion over five years for demonstration projects and R&D for those programs. Of that amount, $3.5 billion is allotted to support technologies for extracting and storing carbon dioxide from the atmosphere, an activity for which the administration last year had requested all of $66 million.

The appropriations, much of which are available immediately, include $3.5 billion for direct air capture (DAC), a fledgling technology that many experts say will be needed on the gigaton scale. And even after fossil fuels have been nearly extinguished, CO₂ removal from the atmosphere will still be necessary if humans are to keep concentrations below dangerous levels. One gigaton is equivalent to a year’s emissions from the nation’s 250 million cars.

Another $3.4 billion is allocated to commercial-scale demonstration plants and large-scale pilots of technologies for capturing CO₂ from fossil-fuel power plants and industrial facilities. The measure provides another $2.5 billion for CO₂ storage demonstrations.

DOE will have its hands full. The new law instructs the agency to create an office to administer demonstrations of CCUS, advanced nuclear reactors, and clean hydrogen production. The agency is required to spend $2.5 billion on six commercial-scale carbon capture demonstrations: Two will be for coal power plants, two for natural gas plants, and two for large industrial emitters such as cement, steel, and chemical manufacturers. The infrastructure act requires DOE to issue an initial solicitation for proposals within six months.

On 6 December DOE asked industry, academia, research laboratories, and others for suggestions on potential carbon management demonstration projects and their locations. Although it doesn’t solicit specific proposals and offers no funding, the request seeks a wide range of information, including advice on potential carbon capture and DAC technologies, validation of carbon storage resources, pipeline infrastructure locations, and technologies for converting carbon into products. The comment period closes on 24 January.

Chicken and egg

Some questions are unanswered: How will DOE avoid repeating its experience with past CCUS demonstrations, most of which were abandoned? And how will the agency address the chicken-and-egg situation of companies waiting to commit to either CO₂ transport and storage infrastructure or CO₂ capture projects until the other exists or is in the works?

To help with that dilemma, the infrastructure act provides $1.5 billion for a low-interest loan program to finance shared CO₂ transport infrastructure. Also included are grants to incentivize pipeline builders to provide excess capacity for future CO₂ volumes.

Various proposals have been floated on where pipelines and connections should be located. Emissions sources in the Ohio River valley include 29 fossil-fuel power plants, 19 steel mills and aluminum smelters, 5 chemical manufacturing plants, and 2 refineries, according to a 2021 report from the Labor Energy Partnership, a joint effort of the Energy Futures Initiative and the AFL-CIO. Another concentration of industrial emissions is along the Texas and Louisiana coast, where the report identified 47 chemical plants, 31 power plants, 25 refineries, 23 natural gas processing facilities, and 21 ammonia and hydrogen producers.

ExxonMobil and other Houston-area businesses have expressed interest in forming a CCUS hub that would capture emissions from refineries and other industrial sources along the Houston Ship Channel. The CO₂ would be transported to the Gulf of Mexico, where ExxonMobil says multiple geological locations could store 500 gigatons. Denbury Inc and Gulf Coast Midstream Partners recently announced plans to develop geological carbon storage and injection operations near Houston in a property that could hold 400 million tons of CO₂. A Denbury news release says the company could begin injection at the Houston site in 2025 at an initial rate of 1.5 million tons per year.

The infrastructure act designates funding for the Environmental Protection Agency to establish a new permitting operation to accelerate applications for injection wells that are dedicated to geological storage of CO₂. The EPA has approved only two such wells to date. Nearly all the relatively small amount of CO₂ captured in the US today is injected into depleted oil fields to force out additional petroleum, a process known as enhanced oil recovery.

The CCUS and DAC programs, together with demonstrations funded in the infrastructure act for nuclear reactors, hydrogen production, and geothermal energy, are expected to cumulatively reduce CO₂ emissions by 1.4–2.5 gigatons over the next 17 years, says a report by ClearPath, a nonprofit advocacy group. In 2019, before the coronavirus pandemic, the country emitted 5.1 gigatons of CO₂, according to the US Energy Information Administration.

Scaling up

The act’s $3.5 billion for DAC is specifically to create four “regional hubs.” A hub is defined as a network of DAC projects, companies with CO₂ offtake agreements, a dedicated CO₂ transport infrastructure, subsurface storage resources, and other carbon sequestration infrastructure. Each hub must have a minimum extraction capacity of 1 million tons of CO₂ per year. That’s two orders of magnitude more than the 4000-ton annual capacity of the world’s first commercial DAC plant, built by the Swiss company Climeworks, that began operating in Iceland last September. A consortium of Carbon Engineering, based in Canada, and Occidental, a US-based firm, last year announced plans for a million-ton-scale facility in the Permian Basin in western Texas. Half of that total capacity is expected to become operational in 2024.

The infrastructure bill directs DOE to begin soliciting proposals for DAC hubs within six months. The hubs are to be geographically diverse, and at least two must be located in economically distressed areas with high levels of coal, oil, and natural gas resources. “You can imagine cross-pollination between heavily industrial areas that could potentially capture CO₂ and that have storage locations,” says Jessie Stolark, public policy and member relations manager at the Carbon Capture Coalition, whose members include oil, gas, and electricity producers; environmental groups; and labor unions.

Another factor in hub location should be access to clean electricity, since operating DAC on fossil energy will likely result in a net increase in CO₂, notes Robert Socolow, an engineering professor emeritus at Princeton University. But, he adds, “if you build a large solar field to power a DAC plant … you could ask why aren’t you using that solar to close down a gas or coal power plant.” Until most fossil-fuel plants are shut down or their emissions captured, Socolow says that DAC should be pursued as R&D and kept in reserve.

Although DAC isn’t explicitly defined in the new law, Giana Amador, cofounder and policy director of the DAC advocacy group Carbon180, says the hubs are intended to support engineered chemical CO₂ extraction technologies, such as those of Carbon Engineering, Climeworks, and Global Thermostat, based in New York. Not qualifying, it appears, are the less-glamorous and more natural air-capture methods that include carbon mineralization, reforestation, and bioenergy with carbon capture and storage. (See the article by David Kramer, Physics Today, January 2020, page 44 .)

A report released in November by the Japan-based Innovation for Cool Earth Forum says that with strong and sustained policy support from governments around the world, carbon mineralization processes could remove 1 gigaton of CO₂ annually from the atmosphere by 2035 and 10 gigatons per year by 2050. Since 2014 the forum has put on an annual conference on technological innovations to mitigate climate change. The most recent report notes that unlike DAC, the chemical reactions that occur with mineralization require no energy input, and resources of the type of rock needed exist widely throughout the world.

This past November, Energy secretary Jennifer Granholm announced a “carbon negative shot” with the goal of removing gigatons of CO₂ from the atmosphere and permanently storing it for less than $100 per ton. Amador says the current cost ranges from $200 to $600 per ton. The DOE program is to encompass R&D and demonstrations of DAC and other methods of atmospheric carbon extraction.

Carbon capture

It’s unclear whether any of the three dozen US CCUS projects that have been announced, are in the planning stages, or are under construction can qualify to become demonstrations. Many of them have already been awarded DOE grants for front-end engineering and design work. One, NET Power, in November announced its delivery of CO₂-emission-free power from natural gas to the grid from a pilot plant that uses the Allam–Fetvedt cycle, which combusts natural gas with pure oxygen, instead of air, and employs supercritical CO₂ rather than steam as the working fluid to drive a turbine.

DOE’s record on CCUS demonstrations has been far from stellar. Of the nine projects the agency backed—with a total of $1.1 billion from 2010 to 2017—only three were completed successfully, according to the Government Accountability Office. The Petra Nova coal power plant in Texas is the only functional CCUS-equipped fossil energy plant in the US; it’s backed with $195 million in DOE funding. It shut down capture operations in 2020 because of declining demand for CO₂ in enhanced oil recovery.

Still operating are a hydrogen production facility in Texas run by Air Products and Chemicals, the recipient of $284 million in federal support, and an ethanol plant in Illinois operated by Archer Daniels Midland, which received at least $140 million from DOE. That plant injects the CO₂ into dedicated geological storage located nearby; Air Products’ CO₂ is used in enhanced oil recovery.

FutureGen, a 2003 demonstration of capture and geological storage, was scrapped in 2008, and then redesigned as an oxygen-combustion plant and renamed FutureGen 2.0 in 2010. After $200 million in public funding was spent, the project was suspended in 2015 when DOE concluded that it couldn’t be completed before the funding authority expired, as required by the 2009 American Recovery and Reinvestment Act. The agency had expected to contribute a total of $1 billion.

Perhaps the worst debacle was in Mississippi, with Southern Company’s Kemper coal CCUS project, to which DOE contributed at least $270 million. Originally estimated to cost $2.4 billion, its construction ballooned to $7.5 billion before it was abandoned in 2017 and the plant was converted to natural gas without carbon capture.

David Hart, senior fellow at the Information Technology and Innovation Foundation, agrees there is a risk of more failures if projects aren’t managed properly. Some past projects tried to demonstrate too many new technologies at once or to scale up too fast, he says. “With all the money pouring in, it’s important to do front-end studies and take things one step at a time rather than go for the moon all at once.”

More to come?

Absent from the infrastructure act are tax incentives that advocates say must work in tandem with the above measures to broaden adoption of CCUS. The House-passed version of the partisan Build Back Better bill proposes boosting the current credit for CO₂ capture with geological storage from $50 per ton to $85 per ton. Capture with utilization—whether for enhanced oil recovery or other purposes—would increase from $35 per ton to $60 per ton. The bill also proposes to increase the $50 per ton credit for DAC to $180 per ton. Equally important, the legislation would provide for the direct payment of credits to DAC startups that aren’t yet profitable. At press time, the Senate had yet to act on its version of the bill, which will then have to be reconciled by a House–Senate conference committee.