By Richard Martin, Contributing Editor

In the same week that the Senate Environment and Public Works Committee released its version of the climate-change bill that they U.S. House passed last spring, Energy Secretary Stephen Chu “announced the first round of funding from $1.4 billion from the American Recovery and Reinvestment Act for … 12 projects that will capture carbon dioxide from industrial sources for storage or beneficial use.”

Though these grants total only $21.6 million – much of it going to Big Oil firms – the Dept. of Energy funding program is critical to the prospects for significant carbon capture and sequestration (CCS) in the U.S. While there remains much debate about the wisdom of pouring funds into removing CO2 from existing and future coal plants, rather than devoting funds to renewable, inherently clean sources of energy like wind and solar, any realistic assessment of the electricity needs of the next half-century concludes that coal will continue to be a major source of power. That’s why CCS is the single most crucial technology for achieving the greenhouse-gas reduction goals that the Obama Administration has set forth. And CCS is unlikely to be adopted commercially without significant financial support, and R&D, from the federal government.

The grants include $3 million to C6 Resources, a unit of Royal Dutch Shell, and capture around a million tons of CO2 per year from “facilities located in the Bay Area, Calif.,” and transport it by pipeline to be injected into a saline aquifer more than two miles underground, and $3.1 million to ConocoPhillips to develop carbon-capture technology at an “integrated gasification combined cycle (IGCC) power plant adjacent to its existing refinery in Sweeny, Texas.”

Advanced IGCC plants, which produce electricity by first gasifying coal to produce syngas (a blend of hydrogen and carbon monoxide) that’s burned into a gas turbine, are considered far better candidates for carbon-capture systems that conventional stations that burn pulverized coal. Despite advances in technology both in the burning of coal for electricity and the capture of carbon before it escapes the smokestack, there’s still considerable doubt about whether CCS systems that are both economic and deployable at the required scale will be commercially viable any time soon.

Those doubts are particularly acute for existing coal plants, which deliver some TK % of U.S. electricity. As for new coal-fired stations, a consensus is emerging that building them without some form of carbon capture in place is madness. Last week “federal regulators … dealt another setback to the proposed Desert Rock power plant, sending the plant’s permit back to the Environmental Protection Agency for a do-over,” according to the Durango Herald.     

The proposed 1,500-megawatt coal plant, near Shiprock, New Mexico, is being developed jointly by Sithe Global and the Navajo Nation-owned Diné Power Authority. The EPA last week essentially reneged on the plant’s permit, initially granted last year, saying that more attention should have been paid to the environmental consequences of building such a major coal facility. Specifically, the EPA said that the Desert Rock should be an IGCC plant equipped with a carbon-capture system.

There are reams of studies on how much adding CCS to new plants will cost power companies. One analysis, from Harvard’s Belfer Center for Science & International Affairs, says that early-stage CCS plants will produce electricity that’s about 10 cents more expensive than power from conventional plants; put another way, it will cost around $150/ton of CO2 captured. Those don’t seem insuperable costs, but it’s an investment the coal and electricity industries are unlikely to make on their own. Ultimately, a carbon price – in the form of a cap-and-trade system, or an outright carbon tax – will be required to fully incentivize the utilities and their largest customers.

In the meantime, planting trees will have to do. “At a talk entitled ‘Forest health and the community carbon connection,’” reported the Telluride News, “Kevin Gurney, a professor from Purdue University and co-winner of the 2007 Nobel Peace Prize with Al Gore, explained how forest health is critical to stemming the effects of climate change.” Fast-growing trees serve as “carbon sponges,” while dead ones release CO2 into the atmosphere. That’s bad news for areas like Grand County, Colo., where pine beetles have destroyed millions of acres of healthy forest.

Noting the ambitious plan to stores millions of tons of CO2 underground, “We have a reservoir” already, Gurney said, pointing to the forests that surround Telluride, “that’s very large, sitting right out there on the hillside.”