Environmental Law

Nations Must Spend Big on Carbon Capture, International Body Says

By Dennis Pfaff and Kevin Livingston, Editors

An international advisory agency is urging the world's wealthiest countries to pony up as much as $20 billion to support testing of technologies to capture and store carbon, including the emissions from coal-fired power plants.

According to an executive summary of the new report from the International Energy Agency, a major stumbling block to the research has come in the form of rising costs over the past few years. In a statement, Nobuo Tanaka, the executive director of the agency that advises 28 of the world's largest and most industrialized countries, urged quick action:

“The window of opportunity is closing for the global community to cost-effectively address climate change. [Carbon capture and storage] technologies must play a key role, but first they must be proven in the next decade.”

The documents made available by the agency called carbon capture and storage the "only technology available to mitigate greenhouse gas emissions from large-scale fossil usage." And it noted that earlier this year the G8 countries endorsed the agency's recommendation for 20 big demonstration projects to be committed to by 2010 -- and that they be broadly deployed by 2020. So far, however, the signs aren't encouraging, according to the agency:

"Current spending and activity levels are nowhere near enough to achieve these deployment goals."

In fact, the agency noted that only four full-scale projects exist in the world, none capturing carbon dioxide from a coal-fired plant. McClatchy Newspapers, in its account of the report, also noted that none of the projects were in the United States.

The agency, in a previous report, had projected that carbon dioxide emissions from energy production could grow by 130 percent by 2050 if new policies weren't adopted. The agency estimated that about 69 percent of emissions of the gas -- which scientists believe is a primary climate change culprit -- comes are energy related.   

The report urged that carbon storage and "clean coal" technologies be developed in tandem, and that better capture methods should be integrated along with the design of new power plants.

Despite the thrust of the report -- and restructuring of a federal effort in the area called FutureGen -- there are numerous activities underway to advance carbon capture and storage. In a September announcement the U.S. Department of Energy unveiled a solicitation for $8 billion in loan guarantees to support various clean coal technologies, including carbon capture. It was part of a larger loan guarantee program that Thelen LLP attorneys had analyzed previously. 

Additionally, Congress, as part of the massive economic bailout measure approved earlier this month -- and which also extended renewable energy tax credits -- recently got into the act. The measure earmarked $1.5 billion in tax incentives for "advanced coal electricity projects" and coal gasification projects "that demonstrate the greatest potential for carbon capture and sequestration technology," according to a bill summary.

Elsewhere, the U.S. Environmental Protection Agency recently said it was proposing a new set of rules to protect underground water supplies from the effects of carbon storage. Meanwhile, according to Reuters, the nation of Australia is hoping to become a worldwide hub for the development of the technology.

The IEA report noted that the regulations governing the technology must be strengthened, noting that no country so far has yet put together the "comprehensive, detailed legal and regulatory framework" that is needed. The public also poorly understands the technology, the report asserted.

As for the financial aspects of the problem, the report said it was clear that market-based solutions would not be sufficient to fund early demonstration projects. Governments must lead by providing sufficient direct financing or incentives, and private money is also needed, the report said.

It noted that significant revenues could be gained through using carbon dioxide for enhanced oil recovery. It estimated that 200 billion barrels of oil could be gleaned via the process. 

--Dennis Pfaff of Thelen LLP

Photo: Carbon dioxide pipeline, North Dakota; U.S. Department of Energy 

Full post as published by Climate Law Update on October 21, 2008 (boomark / email).