Obama CCS Task Force releases its report
Posted August 13, 2010
On February 3, 2010, President Obama established an Interagency Task Force on Carbon Capture and Storage (CCS) with the goal of developing a comprehensive and coordinated Federal strategy to speed the commercial development and deployment of carbon capture and storage technologies in line with the Administration’s goals for climate protection and a goal of bringing five to ten commercial demonstration projects online by 2016. The Task Force delivered its report this week, after six months of work which involved expert panel presentations, public meetings and, no doubt, numerous internal meetings. Back in February, we called for openness and transparency, and for the Task Force to resist reiterating the claims of special interest groups. It appears that they struck the balance, solicited wide input, and reached sound conclusions.
The main conclusions in the report should come as no surprise, but it is nonetheless important that a large joint effort like this one came to these conclusions. On the issue of technological readiness and the main impediment for CCS deployment, the Task Force concluded that:
- "The lack of comprehensive climate change legislation is the key barrier to CCS deployment";
- "A climate policy designed to reduce our Nation’s GHG emissions is the most important step for commercial deployment of low-carbon technologies such as CCS, because it will create a stable, long-term framework for private investments";
- "Technologies exist for all three components of CCS".
The Task Force rightly identified the prime factor that is hindering CCS deployment right now: the lack of comprehensive climate legislation with a price and limits on carbon pollution. This cannot be overstated. It is ironic, therefore, that some of the foremost promoters of CCS technology and the term "clean coal" also lobbied hard to block the same piece of legislation that would allow this technology to stand on its own two feet. If you sense a calculated stalling tactic and a hypocritical stance, then you are not far from the truth: the mantra of "tomorrow's technology forever" may just allow polluters to squeeze in another few years without controls or penalties.
The Task Force also hinted at what the legislation needs to look like in order to make CCS a reality. According to Administration analyses, apparently, "CCS technologies will not be widely deployed in the next two decades absent financial incentives that supplement projected carbon prices". This is in line with NRDC's (and USCAP's) position of offering selective incentives for early movers, which decline over time, to overcome the initial price tag of the technology and bring costs down to more manageable levels.
Pointing out the key role of climate legislation without suggesting interim incentives until enactment has left some disappointed - understandably. However, we have to question the prudence of directing incentives beyond today's limited ones at CCS in the absence of such legislation. CCS is a carbon control technology, and has no purpose outside a climate regime. Taxpayer dollars are better spent elsewhere if such legislation is not forthcoming. Nor should tax credits or other incentives take away from the impetus of enacting a broad bill that would cap emissions and contain the necessary incentives for CCS.
The Task Force was careful not to paint a rosy picture. "While there are no insurmountable technological, legal, institutional, regulatory or other barriers that prevent CCS from playing a role in reducing GHG emissions", it states, "early CCS projects face economic challenges related to climate policy uncertainty, first-of-a-kind technology risks, and the current high cost of CCS relative to other technologies". Speaking from experience, engineers enjoy a challenge. I have confidence that they will live up to it and deliver tomorrow's technological options that enable cheaper and widespread deployment. For today though, let's not forget that CCS can be deployed using existing options, even though one day we might view them as clumsy.
On the regulatory front, a lot of the missing pieces are about to be put into place. The EPA is currently finalizing its Underground Injection Control rule for CO2 injection, as well as its supplement to the Greenhouse Gas Reporting Rule for CO2 injection and geologic sequestration sites. Those two together will answer many of the remaining questions. A few will likely remain, including anxiety about post-closure liability for sequestration sites. On that front, we whole-heartedly agree with the Task Force's findings:
- "Existing Federal and State legal framework should be adequate for at least an initial group of five to ten commercial-scale projects";
- "Additional analysis is needed to determine the most appropriate legal or regulatory structures for addressing potential long-term liabilities associated with widespread deployment";
- "Open-ended Federal indemnification should not be used to address long-term liabilities associated with CO2 storage".
It is extremely encouraging that the Task Force did not simply echo in its recommendations the requests by some parties for open indemnification of sequestration site owners and operators after site closure. Instead, it presents opposing viewpoints and begins an analysis of the inherent tensions on this issue, deferring to 2011 for further conclusions on the issue until it has conducted further analysis. As I had outlined in a previous post on the Rockefeller-Voinovich CCS bill, we should think long and hard before handing out liability relief for closed sequestration sites. The pitfalls of doing so could be great, the need still debatable, and the nuances in the nature of the requested relief from rudimentary to non-existent.
For those following CCS in depth, the report might not have shed any new light, although it is concise, well written and a very useful volume. Those expecting the Administration to take the future of CCS in its hands and deliver a bright future at one fell swoop through this report will be disappointed - but they should have been looking at (and talking to) the U.S. Congress instead. We continue to look at Congress, and the Senate in particular, to deliver on its duty to safeguard the economy, our well being and the environement through the passage of climate legislation. Until then, CCS will have to hold its breath and make progress underwater.
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