Projects to Capture Carbon Emissions Get New Boost Despite Dismal Record
By Jennifer Hiller and Collin Eaton, Feb. 7, 2022, WSJ
Petra Nova, once billed as the largest U.S. project to capture
carbon-dioxide emissions from a coal-fired power plant, opened
to considerable publicity in Texas in late 2016.
Less than 4 years later, owner NRG Energy Inc. shut down the
carbon-capture system, which cost $1 billion—not because the
technology wasn’t working but because the expected end use for
the carbon was no longer economically viable. The coal plant
continues to generate electricity and emit carbon.
Carbon-capture projects are attracting renewed attention from
investors and governments world-wide as concerns mount about the greenhouse-gas emissions linked to climate change. But the
initiatives have a dismal record.
More than 80% of proposed commercial carbon-capture efforts
around the world have failed, primarily because the technology
didn’t work as expected or the projects proved too expensive to
operate, according to a 2020 study by researchers at Canada’s
Carleton University, UC San Diego and other institutions.
The U.S. has spent $1.1 billion on carbon-capture demo projects
since 2009, with uneven results, according to a December report
from the Government Accountability Office. None of the 8 coal
projects selected for $684 million of the funding during that
time is operating, the researchers found. Projects to capture
carbon from heavy industries met with some success.
While some early projects have demonstrated that it's technolog-
ically possible to collect carbon from power plants and industrial
sites—or even directly out of the air—they have generally been
very expensive. Many face a fundamental problem: there is no
economic use for the carbon they capture.
Currently, the only large-scale use for captured carbon is for
pushing more oil and gas out of declining reservoirs, which in
turn leads to additional emissions when the fossil fuels are
burned for energy. In the U.S., there is no federal requirement
that companies capture carbon emissions, or carbon taxes or other
fees aimed at discouraging them from releasing the greenhouse gases
into the atmosphere.
As a result, most carbon-capture initiatives don’t save companies
money or generate profits, and they represent an added business
expense. Still, some companies are pursuing the projects to reduce
their carbon footprint under pressure from investors and activists
concerned about climate change.
A fresh round of U.S. carbon-capture projects is in the works,
bolstered by around $12.1 billion in funding in the $1 trillion
infrastructure bill signed into law last year by President Biden.
Oil, power, chemicals and biofuels companies are kicking off a wave
of new proposed carbon-capture investments, including carbon-transport pipelines in Iowa, a coal-power plant in North Dakota and a hydrogen
plant in Louisiana.
Large fossil-fuel companies including Exxon Mobil Corp. & Occidental
Petroleum Corp. are touting carbon capture as a part of their future
plans to reduce emissions—and lobbying Congress to increase a tax
credit to make the projects more economically sustainable.
Many companies and climate activists say govts need to nurture
innovative technologies to capture emissions that would otherwise
be hard to cut. Accelerating such projects, they argue, is the only
realistic way to reach the targets of the international Paris
agreement, which seeks to keep rising temperatures to well below
2 degrees Celsius from preindustrial levels to avoid the worst
impacts of climate change.
“To meet the goals of the Paris climate accords, there’s no way we
can do it without direct-air capture,” Occidental Chief Executive
Vicki Hollub said in an interview. The company, which uses carbon to
extract oil, plans to build facilities to capture it straight from the
air, but considers the potential tax-credit expansion vital to its efforts.
Exxon is proposing a project with other companies in Houston to capture
and bury the carbon from an array of industries. But it would be
difficult to launch at its proposed size without policy changes such
as a larger tax credit, said Erik Oswald, a vice president at Exxon.
Congress is considering boosting the credit for collecting carbon
emissions from smokestacks by 70% to $85 for a metric ton if the
carbon is stashed in saline geologic formations, or $60 if it is sent
down oil wells. Direct air projects would get $180 for a metric ton
if the carbon is stored, or $130 for oil.
Less generous tax credits have been on the books since 2008 but
have failed to create a real carbon-capture industry. “There’s been
little material impact on the deployment of carbon capture & storage,”
said Scott Anderson, senior director of energy at the Environmental
Defense Fund, a U.S.-based advocacy group.
The infrastructure bill included funding for pipelines and storage
to help build a missing puzzle piece: a spider’s web of infrastructure
that could gather and ship carbon from multiple sites.
“That’s a massive step forward for carbon capture and carbon storage,” said Cindy Crane, CEO of Enchant Energy Corp., which plans to retrofit
a coal-fired power plant in New Mexico with carbon-capture equipment
for around $1.3 billion. The project would also require up to roughly
$390 million in plant improvements, a pipeline and storage field.
Globally, industries will have to raise carbon-capture capacity by a
factor of 50 to 100 times over what is in the development pipeline to
achieve what the International Energy Agency estimates is needed to
reach “net-zero” carbon emissions by 2070, said John Bradford, professor of geophysics and vice president for global initiatives at the Colorado
School of Mines.
Building those projects—and keeping them running—can be costly. Petra
Nova was a joint venture of NRG and JX Nippon Oil & Gas Exploration
Corp. that captured some emissions from a coal plant near Houston and
piped them about 80 miles to an oil field, where they were used to push
more crude out of the ground. The government awarded the project around
$195 million in a proof-of-concept grant.
Petra Nova closed in 2020 after the pandemic reduced demand for fuel
and led to a collapse in oil prices, which made the oil that the
captured carbon was helping produce less economically viable. It remains
in mothball status, though NRG said it proved the technology could work
on a coal-fired plant.
“We continue to explore options to improve the economics,” said NRG spokesman Chris Rimel.
In Mississippi, a carbon-capture initiative by utility Southern Co.
has turned into a white elephant. The project known as Kemper aimed to
use locally mined lignite coal to fuel a power plant, and capture the resulting carbon emissions, which were then to be sent to oil fields
to prime crude production. The Energy Dept invested $387 million.
Forecast to cost $3 billion in 2010, Kemper’s costs spiraled above
$7 billion. Once constructed, the coal-gasification technology never
quite worked as intended, and Southern abandoned its initial plans,
burning natural gas in the power plant instead.
The company imploded coal and carbon-capture equipment that couldn’t
be dismantled for resale last October. Coal conveyors from Kemper are
now available for sale online.
“It was the end of a long, bad experiment,” said Mississippi Public Service Commissioner Brandon Presley, a Kemper critic. Presley said
he favors innovation but believes government and business should bear
the risk instead of utility ratepayers.
Presley and other regulators didn’t allow Southern to pass Kemper’s
full cost on to customers. The company, which had to assume some
$6 billion on the project’s cost, is paying for demolition of the carbon-capture part, estimated at $10 million to $20 million annually
through 2025, said a spokesman for Mississippi Power, the utility arm
behind the project.
The federal govt is now funding a $24 million feasibility study that
includes the same plant—this time for capturing and storing carbon
emissions from natural gas.
https://www.wsj.com/articles/climate-change-concerns-revive-interest-in-carbon-capture-despite-checkered-history-11644235380
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