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Archive for October, 2007

E&E News reported today that investors are reluctant to fund new coal generation. They are deferring any decision because they anticipate new laws and regulations. On the one hand, pulverized coal is risky because retrofitting a plant to reduce CO2 emissions is expensive. On the other hand, investors are waiting for more certainty with the legal and liability issues around CCS. These are the two sides of the CO2 liability coin. These twin towers of doubt should cause investors to pause before backing new coal-fired generation. If after careful study one of the two still seems necessary, IGCC with CCS is the best bet. Gasification plants can use a variety of fuels, including biomass, and are more amenable to CCS. They also open up the possibility of other sources of revenue. The proposed Belle Plain polygeneration facility in Saskatchewan (GE, Bechtel, TransCanada) plans to use petroleum coke as a fuel. The gasification process will produce hydrogen, nitrogen, steam, and CO2. Thus, it’s products will be able to make electricity, fertilizer, and oil (via enhanced recovery).

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I have been procrastinating since 19 April 2007, but here are my thoughts (half a year late) on the Congressional Research Service report “Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues”. The report contains an important, yet subtle statement:

If policy makers encourage continued consumption of fossil fuels under CCS, then the need to foster the other energy options may be diminished — and vice versa. Thus decisions about CO2 pipeline infrastructure could have consequences for a broader array of energy and environmental policies.

I agree that policymakers need to develop a more coherent energy policy. The fate of CCS as a climate change mitigation measure is bound with the larger issues of energy supply and environmental stewardship.

The report notes that Congressional bills have tended to focus on carbon capture and storage, not transportation of CO2. The authors state that there is a “current perception that transporting CO2 via pipeline does not present a significant barrier to implementing large-scale CCS.” Despite this perception, the development of a more expansive CO2 pipeline network for CCS will raise new regulatory and economic challenges. “There are important unanswered questions about pipeline network requirements, economic regulation, utility cost recovery, regulatory classification of CO2 itself, and pipeline safety.”

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Democratic members of Congress have decided not to convene a conference committee to work out differences in the House and Senate versions of an energy bill. Rather, Democratic leaders appear ready to proceed with energy legislation in a more informal manner. This was predicted by a previous post. The contents of the bills were discussed here and here.

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Senator Reid (D-NV) has delayed convening a conference committee on the energy bill at least until after the Columbus Day recess. That means no conferees will be appointed until at least 15 October. The delay has led to talk among some Democrats of avoiding a conference by striking a deal among their leaders in the Senate and House.

Here is a previous post; there is another.

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