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Carbon Capture: Billions of Federal Dollars Poured Into Failure [1]
['Angie Aker', 'Root', '--Ppa-Color-Scheme', '--Ppa-Color-Scheme-Active']
Date: 2022-09-27
What the fossil fuel industry hopes you won't find out is carbon capture is already a failure of an experiment, funded with taxpayer money.
The Inflation Reduction Act, hailed as the most important federal climate legislation ever, places an expensive bet on carbon capture and storage/sequestration as a means of reducing greenhouse gas emissions. The law greatly expands the 45Q tax credit program that supports existing CCS investments.
This move fulfills a long-standing goal of heavily polluting industries, which have long complained that the main obstacle to building robust, effective carbon capture facilities is the federal government’s lack of support for the technology.
This is completely at odds with reality. In fact, the Obama administration’s economic recovery package included substantial spending on carbon capture. Despite billions of dollars in support, the initiatives mostly produced a series of failures – projects that either failed to ever get off the ground or those that were quickly abandoned.
The remaining ‘success’ stories, meanwhile, can point to emissions reductions on paper that do not correspond to the overall pollution generated at these facilities.
All in all, this track record should inform our current understanding of the very serious problems with carbon capture.
Carbon Capture Has So Far Mostly Just Captured Taxpayer Money
In 2009, the American Recovery and Reinvestment Act (ARRA) offered $3.4 billion for the research and development of CCS projects (of that total nearly $1 billion went unspent). Out of 11 large-scale demonstration projects selected by the Department of Energy (DOE), 9 were funded by the ARRA and only 2 remain operational. Of the five commercial power plant projects, only one (Petra Nova) ever reached operation and Petra Nova faced serious challenges, forcing the plant to close after fewer than 4 years.
This track record should elicit serious concern; the Inflation Reduction Act increases federal tax credits for CCS technology, putting even more public dollars on the line for a technology with a failed track record. According to the Government Accountability Office (GAO), additional CCS funding could easily be wasted without additional congressional oversight and accountability: “Absent such a mechanism, DOE may be at risk of expending significant funds on CCS demonstration projects with little likelihood of success.” Future CCS projects remain heavily dependent on revenue from tax credits and oil extraction rather than electricity sales.
Food & Water Watch reviewed large-scale CCS projects affiliated with the DOE’s joint development programs supported by the ARRA and which featured prominently in the DOE’s 2010 roadmap for carbon capture. This is not a comprehensive review of all announced CCS projects or even those that received federal funding, but rather a representative review of major projects. An MIT database of carbon capture projects through September 2016 recorded 15 canceled carbon capture projects, but that list is also not exhaustive; more than 30 coal plants announced in the mid-2000s considered carbon capture.
Nonetheless, this is intended as a representative review of major projects.
According to the DOE’s 2010 roadmap, 10 projects with start dates between 2013 and 2016 were expected to make use of CCS; as of September 2022, only 2 of these facilities remain operational.
Carbon Capture Projects That Never Got Off The Ground
American Electric Power “Mountaineer”
American Electric Power (AEP) attempted to capture the CO 2 emissions from a 235-megawatt coal electric power generator in West Virginia and inject the CO 2 into geological storage near the facility. AEP withdrew from the project at the definition stage of development, after receiving over $16 million from the DOE. AEP claimed that the project would not be viable without additional federal support or legislation limiting emissions. Though the DOE was willing to shoulder half the $668 million cost of the project, AEP was unable to force ratepayers to cover the other half. If completed, the CCS-equipped unit would have represented 18 percent of the electric capacity of the power plant.
Basin Electric “Antelope Valley”
Basin Electric proposed capturing CO 2 from a 120-megawatt stream at the company’s coal power plant in North Dakota but withdrew before receiving funds because the project was unable to find a plausible plan despite $100 million in potential DOE funding. In addition to the DOE grant, the project was also guaranteed a $300 million loan through the U.S. Department of Agriculture (USDA). The project was canceled fewer than 6 months after its inception, in part because internal cost estimates found that the project would be 30 percent more expensive than the DOE projected.
FutureGen 2.0 Power Plant & FutureGen 2.0 Pipeline and Storage
FutureGen originated as a Bush administration program that would spend $1 billion of public money to build a new 275-megawatt coal plant that incorporated CCS and hydrogen production at a single site in Mattoon, IL. This original vision didn’t receive the desired funding and by 2008 the DOE restructured the program away from a state-of-the-art living laboratory approach. In 2010, the DOE announced $1 billion in public funding to support yet another, different vision for FutureGen — located at an oil-fired unit in Meredosia, IL. More than a decade after the birth of the program, FutureGen remained early in development and faced rising costs, issues with project development, challenges retrofitting the plant and struggles meeting the 90 percent CO 2 capture target.
The final iteration of the FutureGen 2.0 program in Illinois aimed to capture CO 2 and other emissions from a coal plant and transport the CO 2 to a storage site 30 miles away. Following years of delay, the DOE withdrew support for the project in 2015. The power plant was unable to start construction because the plant failed to find adequate engineering and did not successfully find investors. The two components of the project (pipeline and power plant) only spent $83.8 and $116.6 million respectively from the DOE. Despite the virtually blank check provided to it, when the project was canceled most of the public money remained unspent.
Hydrogen Energy California
In 2007 a joint venture between Rio Tinto and BP was formed to build a new hydrogen CCS facility in Carson, California slated for operation in 2012. A company called SCS energy bought out and reformulated the incomplete project in late 2011. The revival of Hydrogen Energy California aimed to build and capture emissions from a small integrated gasification combined cycle coal plant for use in Enhanced Oil Recovery 4 miles from the power plant. After contributing $153.4 million, the DOE ended its agreement with Hydrogen Energy California, “after extensive budget and schedule overruns and repeatedly missed milestones.” Despite the challenges, the DOE lowered the private finance requirement for the project and made up the difference with federal funds in excess of the original agreement. This facility, which was never built, also qualified for $103.5 million in clean coal investment tax credits.
Southern Company Services “Plant Barry”
Southern Company Services withdrew before reaching a funding agreement with the DOE but proposed capturing the emissions from a 160-megawatt coal-powered generation unit located in Alabama. Two months after the DOE announced its willingness to provide $295 million for the $665 million project, Southern Company withdrew, claiming an inability to do financial due diligence in time. Now, a decade after the original plans fell through, the DOE is offering yet more funding to support another attempted CCS project at the same site.
Summit Texas Clean Energy
Summit aimed to build a new 400-megawatt integrated combined gasification coal plant in Texas, capturing emissions equivalent to a 190-megawatt power plant to use for enhanced oil recovery in the Permian Basin. The DOE contributed $117.9 million but removed further support following a DOE OIG report recommending that the DOE suspend funding for the plant. The DOE violated the original cost-sharing agreement with the company and contributed nearly 8 times the funding that had been agreed to even though the plant was never built. In 2021, the DOE sued Summit to recover $13.8 million, alleging that Summit refused to fulfill its guarantees to the agency. The facility also received $324 million in clean coal investment tax credits.
Leucadia Lake Charles
The Leucadia Lake Charles project aimed to capture 4.5 million tons of CO 2 from a new methanol (petrochemical input used to produce a range of products such as plastics, paints and furniture) plant in Louisiana. The project planned to use the CO 2 for EOR and received $12.7 million from the DOE before the project was canceled in 2015. Unlike the other, operational industrial CCS projects, Leucadia aimed to selectively remove CO 2 from a mixed gas stream, rather than purifying an already concentrated stream of CO 2 from an industrial process. The project was revived in 2015 by a former employee, promising to build a CCS facility at the same site. This new iteration secured $2 billion in conditional loan guarantees from the DOE. By early 2022, 15 years after the original proposals, the project remained nonexistent.
The Major Busts In Carbon Capture Projects
Southern Company “Kemper”
Southern Company’s notorious power plant project in Kemper, MS featured prominently in the DOE’s 2010 roadmap for its Clean Coal Power Initiative program. The plant aimed to capture 2 million metric tons of CO 2 per year, 65 percent of its total emissions. The project was awarded at least $680 million in federal grants and tax credits, including millions that Southern Company managed to redirect from another failed clean coal project in Orlando.
Set to open in 2013, Kemper pushed back its opening day for years. By 2015 the project’s overall budget had ballooned from $1.8 billion to $6.2 billion. Critical parts of the plant were torn down and rebuilt due to construction challenges, such as a misunderstanding of chemical reactions that led to the replacement of 1,500 feet of pipe. In 2015 Southern company claimed that the project was “98 percent or so complete” By 2017, regulators forced Kemper to abandon its clean coal plans completely. Problems with the plant’s construction were raised early on by a whistleblower who ultimately sued Southern Company for retaliation, but Southern Company suppressed concerns and encouraged engineers to agree to unrealistic timelines.
In 2021, Southern imploded the Kemper Project, which had just years earlier been celebrated as the country’s first commercial-scale carbon capture project at a coal plant.
Petra Nova
Until May 2020, Petra Nova was the only operational carbon capture and storage (CCS) power plant in the U.S. It has been put on a pedestal as the CCS power plant poster child, even though it closed after fewer than four years of operation. Petra Nova’s story reveals that there are serious economic challenges for CCS: The facility was unable to attain profitability despite generous government support, which could have totaled up to $360 million over the planned lifetime of the project. Although some claim the project was undermined primarily by low oil prices, Petra Nova faced numerous technical setbacks, resulting in financial disappointments from the beginning. It’s also far from an environmental success story, considering that this coal-fired power plant used its carbon emissions to produce climate-polluting oil and missed its own carbon-capture targets.
Petra Nova had limited ambitions and a large price tag. When built, the W.A. Parish facility that’s home to Petra Nova had 3,700 megawatts (MW) of capacity, but the Petra Nova CCS project only captured the CO 2 from a 240 MW unit at the plant. The CO 2 was then compressed and transported from the plant through an 81-mile pipeline to be injected and used for oil recovery at the West Ranch oilfield. The plant itself and the cogeneration facility that powers it cost $600 million; the remaining $400 million covered the pipeline, the upgrades to the West Ranch oilfield, and administrative costs. (In total $4,200 per kilowatt of capacity retrofitted. )
Proponents have focused on the fact that while fully operational, Petra Nova managed to capture over 90 percent of carbon emissions. However, the plant was often offline due to technological problems. For example, Petra Nova experienced leaks from its heat exchangers and its flue gas blower developed a vibration problem from a build-up of limestone used to scrub SO2. The CO 2 utilization plan to transport captured carbon to West Ranch oilfields also faced challenges with partial or full shut-ins of the associated pipeline and West Ranch’s inability to receive the captured CO 2 .
Over three years of operation, Petra Nova’s components had 294 days’ worth of non-weather related, unplanned outages, leading to a lower overall capture rate. Petra Nova only captured 3,904,978 short tons of CO 2 over a three-year period (an average of 1,301,659 short tons per year), 81 percent of its target. In fact, the carbon capture plant only operated at an estimated 69 percent of full functionality. Capturing this carbon costs approximately $256 per short ton ($1 billion/3,904,978), excluding the operational costs of this plant. Had NRG Energy (Petra Nova’s parent company) instead invested in wind power, a similar emissions reduction would have cost $320 million, $680 million less than Petra Nova.
Technological problems also contributed to financial disappointments that began almost as soon as the plant opened. Falling oil prices led NRG Energy to take a $140 million Petra Nova-related hit in 2016. Then in late 2017, NRG Energy booked an additional $69 million loss after realizing CO 2 injection would produce less oil than originally expected. By the end of 2019, NRG Energy had reduced the value of its investment by $317 million, leading the company to renegotiate its arrangement with the joint venture. After the first quarter of 2020, NRG Energy reduced Petra Nova’s value by another $18 million.
While Petra Nova sought to reduce the costs of CCS, the project did not demonstrate substantial improvements to the economics of the technology. CCS is still so expensive that some future CCS projects plan to make more money from tax credits and oil extraction than they do from selling electricity. Additionally, there is no indication that Petra Nova helped reduce the energy needs of capture equipment. Petra Nova’s CCS system used 35 MW of electricity plus the steam from a 78 MW gas-fired generator which was built to meet the needs of the CCS facility. The “parasitic load” of the capture system was likely around 22 percent, a misleadingly low penalty as the natural gas plant powering the capture was more efficient than the coal plant.
Is This What Carbon Capture Success Looks Like?
Air Products and Chemicals
Air Products and Chemicals claims to have captured 1 million metric tons of CO 2 per year from steam-methane reformers (industrial facilities that turn natural gas into hydrogen) in Texas, beginning operations in 2013. The DOE gave the project $284 million in funding. Captured CO 2 is used for enhanced oil recovery. To meet the additional energy requirements, Air Products uses a new 21-megawatt gas turbine requiring 270MMbtu/hr of fuel to capture 128.6 short tons per hour. The lifecycle emissions (including methane leakage) of the natural gas burned to capture this CO 2 are responsible for more than one-quarter of the greenhouse gas impact of the captured CO 2 .
Additionally, the facility only captures process emissions, responsible for about two-thirds of the CO 2 released on-site when producing hydrogen. While Air Products captures approximately 1 million tons of CO 2 per year, according to the EPA, the site was responsible for 2.4 million metric tons of CO 2 equivalent emissions in 2020. Air Products does not publicly disclose the quantity of captured CO 2 to the EPA, but the project is only claiming to capture 60 percent (1 million metric tons) of the 1.65 million metric tons of CO 2 emitted from the hydrogen production. This suggests a capture rate far below the typically cited and targeted 90 percent, even ignoring the uncaptured natural gas emissions elsewhere at the facility.
Achieving higher capture rates requires substantially more energy with corresponding costs and environmental impacts. After accounting for methane leakage associated with hydrogen produced from fracked gas, CCS facilities that achieve high capture rates would still have significant greenhouse gas footprints. Natural gas-sourced hydrogen produced using CCS may only have 9 to 12 percent lower emissions than hydrogen produced without CCS. Burning hydrogen in place of natural gas, even when produced with CCS, actually has higher emissions than simply burning natural gas. Fortunately, there’s no need for natural gas-fueled hydrogen plants. Evidence suggests that truly clean hydrogen, produced using renewable electricity, could soon become cheaper than hydrogen produced from fossil fuels both with and without CCS.
Archer Daniels Midland Decatur Ethanol CCS
Archer Daniels Midland’s Decatur project, which received $141 million from the DOE and began operation in 2017, aims to sequester 1 million tons of CO 2 per year from an ethanol plant in Decatur, Illinois. The capture system dehydrates and compresses a stream of 99 percent pure CO 2 that is a byproduct of fermenting corn ethanol. According to publicly available EPA data, ADM only sequesters 521,000 metric tons of CO 2 annually, about half of what its permit allows and a slim fraction of the reported 4.4 million metric tons of total facility emissions.
ADM’s CCS facility only captures the emissions that are a byproduct of the fermentation process, leaving a wide range of uncaptured emissions from ethanol production. And this is an even smaller portion of the overall emissions from a fuel that, when burned, will emit CO 2 . Based on survey averages of natural gas and electricity use by ethanol producers, Food & Water Watch estimates that ADM’s ethanol production at this facility requires 8.2 billion cubic feet of natural gas and 260 million kWh of electricity. Emissions from these sources are equal to 1.066 million metric tons per year and equal the emissions ADM plans to capture from the fermentation process.
In 2020, ADM admitted that the technology to capture these emissions doesn’t exist and speculated that capturing stack emissions is “likely 10 years out.”
Production of ethanol only accounts for a fraction of overall emissions, fuel and feedstock transport, agricultural emissions and land use change all contribute to the life cycle greenhouse gas footprint. Incorporating these emissions, ADM’s captured carbon accounts for only one-third of the life cycle emissions of the ethanol the facility produces, resulting in a fuel with a similar emissions impact to gasoline.
Accounting for land use changes, ethanol has life cycle emissions up to 24 percent higher than fossil fuel-derived gasoline. Ethanol also increases the overall supply of gasoline available to burn, leading to increased consumption and leaving oil that can still be burned later.
Managing CO 2 also requires energy with corresponding, additional emissions. The cooling and compression of the CO 2 use electricity (with uncaptured emissions) and the chemical used for dehydration is regenerated by boiling with natural gas, another source of emissions. Carbon capture proponents often point to this plant as proof of carbon capture’s broader feasibility. However, ethanol fermentation emits a very concentrated stream of CO 2 , making it substantially easier and cheaper to scrub than emissions from power plants or other industrial sources.
What These 11 Case Studies Tell Us
Carbon capture cannot be the centerpiece of any serious climate plan. Its track record makes it appear to be a handout to fossil fuel corporations, publicly financing their attempts to keep their harmful product viable. The truth is we need to move to 100% renewable energy by 2030, and no half-baked schemes are going to replace that course of action. No matter how inconvenient that is to the oil and gas industry, it’s a fact the rest of us need to keep in sight.
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[1] Url:
https://www.foodandwaterwatch.org/2022/09/27/carbon-capture-failures/
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