No Conference Committee

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.

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.

Norwegian Storage Pt. 2

A previous distraction discussed plans for carbon capture and storage (CCS) in Norway. Gassnova, an enterprise set up under the Ministry of Petroleum and Energy, is in charge of Norwegian CCS projects. Gassnova has just issued a feasibility study for CO2 injection into the continental shelf below the North Sea. The study concluded that CO2 captured from the Kaarsto and Mongstad gas-fired electricity generation plants can be transported via pipeline and sequestered in the Johansen and Utsira formations by 2011. Both formations will continue to be studied for the potential of sequestering even larger amounts of CO2.

This comment from the press release will probably apply to most CCS projects:

The study points out that it will be demanding in terms of time and technological aspects to establish an integrated capture, transport and storage project where all links of the chain are completed at the right time and with the right functionality.

The Flip Side of Liability

A colleague and I have been looking at the issue of potential liability for sequestered CO2. Liability might be incurred if CO2 injected into the subsurface damages a resource such as oil, natural gas, or water, or if the CO2 leaks into the atmosphere. Liability is not an insignificant issue if carbon sequestration is to be done on a large scale. If carbon sequestration is to become one of the climate stabilization wedges envisioned by Pacala and Socolow (Science 305, 968 2004), 800 GW of baseload coal-fired power plant capacty would have to sequester a total of 1 Gt of CO2 annually. Currently only 0.01 Gt is sequestered each year. To make up one climate stabilization wedge, the equivalent of 3,500 Sleipner-sized projects are needed. Some people in the energy industry are concerned that such a large undertaking might lead to large lawsuits.

My colleague brought up a good point that is often only considered separately. The potential liability for injected CO2 might be much less and much less probable than liability for continued CO2 emissions. This is no longer an abstract issue. The New York attorney general has issued subpoenas to AES, Dominion Resources, Dynegy, Peabody Energy, and Xcel Energy asking them to explain why the climate change risks associated with plans to build coal-fired power plants have not been disclosed to investors. A group of investors, state treasurers, and environmental groups have petitioned the SEC to clarify that existing regulations require publicly traded companies to assess and disclose their financial risk from climate change. In addition, state public utility commissions have begun to deny permits to construct coal-fired power plants for similar reasons.

You could flip a coin, but I would bet on CO2 emissions becoming a liability.

Energy Bill Walk Through

The U.S. Senate Energy & Natural Resources Committee has begun talks aimed at reconciling the House and Senate versions of the energy bill. The talks are merely a “walk through” to educate relevant committee staffs on the issues. A formal conference committee has not been convened. It is still unclear whether an energy bill can voted on this year–time is tight. The first issue to be “walked through” was CCS research and development funds (Title IV of the House bill).

Energy Bill

The U.S. House of Representatives and the U.S. Senate both passed energy bills this summer: H.R. 3221 in the House (Pelosi) and H.R. 6 in the Senate (Rahall). The bills will now proceed to conference committee to come up with a single piece of legislation to vote on. The members of the conference committee have not yet been chosen. Although there appears to be consensus among members of Congress that an energy bill is desirable, a pair of contentious issues might hold back a new law from being passed this autumn. Beyond other pressing issues such as appropriations, Iraq, and the housing market, differences in the House and Senate versions of the bill present an obstacle to a bill passing. The House version of the bill includes a 15% renewable portfolio standard. A similar provision was blocked in the Senate. The Senate bill has new CAFE standards. The House version does not. Both of these issues are divisive not only between parties, but also among Democrats.

Both versions of the energy bill have CCS provisions. Each contains similar versions of the “Department of Energy Carbon Capture and Storage Research, Development and Demonstration Act of 2007.” Either version would call for at least 7 large-volume sequestration tests (at least 1 million tons annually) and demonstrations of carbon capture technology. The House bill authorizes $560 million in funding over 4 years for the sequestration tests and $720 over 4 years for the capture demonstrations. The House bill has a provision requiring the EPA to establish a research program to determine procedures to protect public health and the environment from the potential effects carbon capture, injection, and sequestration. The House version also includes the “National Carbon Dioxide Storage Capacity Assessment Act of 2007,” which would require the Interior Department to study the national capacity for storing industrial CO2.

There will be more to discuss as this bill moves into conference committee.

Dark Carbon

Here is a quotation from the recent edition of Nature (499, 14-15, 6 September 2007):

This last point is really the elephant in the room for coal liquefaction. Because processing a tonne of coal produces much more CO2 than a tonne of crude oil, the environmental case rests on the hazy prospect that the CO2 can be ‘captured’ or sequestered. None of the pilots under construction will achieve that.

“The thing on everybody’s mind is CO2,” admits Kennel. “The community is trying to figure out how to capture it.” Clifford says that concerns about CO2 emissions are preventing major commercial investment in coal liquefaction, and that public money is needed if new plants are to be built.

Sasol claims that the CO2 from its plants is purer than that produced by coal-fired power stations, and it should therefore be easier to liquefy and sequester. But that will be easier said than done. And most people outside the coal industry are sceptical about the economic feasibility of coal liquefaction — even before the large and unknown costs of sequestration and storage are factored in.

With both electricity generation and coal to liquids, the future of coal as a fuel is intimately entangled with carbon sequestration.