No Solvency – Storage Liability

No Solvency – Storage Liability

Storage liability undermines all of CCS

Megan, “Carbon Capture: Miracle Cure for Global Warming, or Deadly Liability?,” Alternet, http://www.alternet.org/environment/68490/?page=4

Prevents federal government investment

Cash and Maloney 12 (Cathy Cash, associate editor for electric utility week, Peter Maloney, professor of physiology at John Hopkins medical school in the biochemistry, cellular and molecular biology graduate program , “CCS hurdles remain too high to make coal practical, but DOE sees big change by 2030,” Electric Utility Week, April 12, 2012, Lexisnexis, ADP)
Industry sees high costs and unresolved liability risk from carbon dioxide storage as a major hurdle for anyone who would want to build a coal-fired plant under the CO2 emission standard proposed last week, which would require carbon capture and storage. But federal energy officials believe a technological solution to the CCS hurdles, at reasonable cost, is on the 20-year horizon. "We have enough storage and operating experience to say we can do this," said John Litynski, carbon storage technology manager at the Department of Energy's National Energy Technology Laboratory. Still, commercial-scale demonstration at a power plant appears years away, even though several small-scale CCS pilot projects have taken place, and carbon capture at a plant is seen as more financially doable when combined with sale of the CO2 for enhanced oil recovery instead of storage in a repository. Currently, a 25-MW pilot CCS project at the Barry coal plant owned by Alabama Power is expected to begin injecting carbon into a saline geologic formation at the end of April or early May. Carbon is now filling the 13-mile pipeline from the plant near Mobile. The project by the Southeast Regional Carbon Sequestration Partnership is believed to be the only such pilot ongoing in the world. The cost of the storage project is $31 million, the Electric Power Research Institute said. A large-scale project would be more expensive and raise questions of liability, according to the industry research arm. "Storage is the key challenge right now," said Jeff Phillips, EPRI senior program manager for advanced generation. "I don't know of any company out there that says it can guarantee storage of CO2 forever. I don't see a company taking on that kind of liability unless there is a [federal] mandate." Storage of carbon in deep geologic formations would require extensive monitoring and long-term liability provisions. Site characterization would also prove to be a lengthy process in order for a company to say with confidence that it could provide 30 years of storage capacity, Phillips said. Thus, power plant developers planning new coal units with CCS would have to "start looking for storage long before you plan a power plant," he said. "It's a real roadblock." At NETL, Litynski noted that while issues of monitoring and operating deep geologic storage of carbon must be addressed, storage space is available for the future generations of coal-fired plants. "I don't see any significant hurdles between now and 2020 to say we couldn't have all the issues worked out," Litynski said, noting that EPA last July provided guidance for geologic sequestration of carbon and financial responsibility for underground injection control. Costs would still be high at that point, but would come down by 2030. Storage and long-term liability costs are not expected to be prohibitive, he said. Storage could cost $5 to $10 per ton, depending on the distance the carbon travels from the plant to its geologic storage site. Long-term liability could run 5 cents a ton, he said. Jared Ciferno, director of NETL's Office of Coal & Power R&D, said by 2020 the first generation of CCS technology — such as oxy-combustion or membrane separation — could be re-engineered from small-scale projects and deployed for new fossil generation facing the carbon standard. These pollution controls could boost electricity costs for consumers as much as 60% and carry an energy penalty of about 25% on the power plant, Ciferno said. But by 2030, advanced systems to capture carbon would cut these added costs in half, he said. Cost recovery an issue The power industry still sees the costs as prohibitive and EPA's standard for future coal plants as a death knell for coal, beyond the plants that already exist. "The economics of carbon capture and sequestration are the real challenge at this point. This rule doesn't change that," said American Electric Power spokeswoman Melissa McHenry. "It would be very difficult to build new coal plants with CCS when the technology is not proven on a commercial scale." AEP, the largest US coal-burning utility, ended its two-year collaboration with DOE last July to scale up CCS technology to a commercial level because the utility could not gain utility regulators' approval to recover its costs. AEP had received up to $334 million to pilot CCS for 235 MW of its Mountaineer plant. Commercial operation was slated for 2015. "It would be huge challenge to get a utility commission to approve a new coal plant with new CCS technology," McHenry said. "You couldn't give them a price or guarantee for performance at this point." EPA's proposed emission standard of 1,000 pounds of CO2 per MWh would apply to all future fossil fuel-fired boilers, integrated gasification combined-cycle units and stationary combined-cycle turbine units that generate electricity for sale and are larger than 25 MW. The most efficient coal-fired unit emits about 1,800 pounds/MWh, thus the proposal would require CO2 controls. Existing units, which includes plants under construction, operating units that undergo modifications, simple-cycle gas-fired turbines used to meet peak demand, and units that have air permits and start construction within the next 12 months are exempted from the standard. For most power companies the proposed carbon standard does not make a significant difference in their planning. New coal plants are already very difficult to bring to market. "It is more statement than substance," Pace Global Vice President Art Holland said of the rule. The standard will limit new coal plants to those with CCS, but "more regulatory support for these CCS technologies is needed to make them economically viable," Holland said. Last week, the Edison Electric Institute immediately called for Washington to accelerate development and deployment of CCS. Federal funding has been available for some time, but projects have been sidelined for reasons of regulatory reluctance to make ratepayers shoulder the cost, which remains high even with government help. And the government-aided FutureGen project in Illinois is still unrealized after years of trouble getting enough private-sector companies to invest. Tenaska, however, continues to plan two CCS projects, Taylorville in Illinois and Trailblazer in Texas. "The main hurdle is making the projects commercial," said Greg Kunkel, Tenaska's president of environmental affairs. Taylorville is pursuing a couple of paths toward that end, and with Trailblazer, the company is working with oil companies to use the captured CO2 for enhanced oil recovery, he said. Using CO2 for EOR has been seen so far as the more viable way to make carbon-capture projects practical. Kunkel echoed other companies' concerns about the costs and the need for more incentives for CCS. The commercial viability of CCS is also the highest hurdle for NRG Energy, which is considering a 200-MW CCS demonstration project at its W.A. Parish plant in Texas. The project is using $167 million from DOE's Clean Coal Power Initiative. The company needs to expand the project and have enough CO2 to make the economics work for enhanced oil recovery. To fund a project of that size, NRG is looking for private equity funding.

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