To jumpstart CCS in the US, look to Canada and China, 1 of 3 | Global CCS Institute

To John Thompson, CCS is an acronym with more than one meaning. To anyone in the Global CCS Institute’s community it means ‘carbon capture and storage, or sequestration.’ As director of the Coal Transition Project at the Clean Air Task Force, Thompson’s career is committed to accelerating the development of technologies to help cut greenhouse gas emissions from coal. He sees other possibilities for the three-letter acronym too.

On eyeing the progress being made by Canada, Thompson quips that the US might benefit if we took the acronym to mean ‘Copy Canada’s Success.’ He contends our northern neighbor has gotten the mix of incentives, policies, and industry concentration just right, so that programs are gaining momentum, at a time when US efforts are off-again than on-again.

China offers another variant of the acronym: ‘Collaborate with China’s System.’ Thompson sees huge potential gains for the US by collaborating with China, as its huge energy sector continues to binge new coal-fired power plants. With its deep capital resources, fast construction timelines, and willingness to demo cutting edge carbon capture systems.

My introduction to Thompson’s views came in New York last fall at the Institute’s roundtable for Climate Week. Intrigued by his vision of the promise of cross border collaboration, I spoke with him more recently at greater length to learn more about his take on CCS in the US, Canada and China. I’ve broken down our conversation in three parts. This first part, below, touches on US and Canadian efforts. In Part II, due tomorrow, Thompson opines on the barrier posed by a premature focus on CCS liability. In Part III, due Wednesday, he outlines an ambitious collaboration his organisation is developing between utilities and enhanced oil recovery (EOR) players in the US with their peers in China.

There is a lot of criticism saying that CCS efforts in the US are foundering. You’ve suggested we look to the north for a better way. Why?

It’s my version of CCS: ‘Copy Canada’s Successes.’ There are three things that Canada has done well that are key to making CCS work. One is incentives — the carrot part. For example, Alberta has put C$2 billion on the table to move a number of projects that will probably sequester about five million tons annually of CO2 by 2015. Some of those are going to break ground in 2012 or even this year.

The second thing: they’ve done regulations right, in a way that provides a reason to do CCS. These aren’t final, admittedly. But they’re taking shape. In the fall, Canada issued draft federal regulations that will set, for the first time, CO2 emission limits on coal plants. These rules set emissions at the level of an uncontrolled natural gas plant — so, call it a 65 per cent reduction. The key thing is you have to meet that standard whether you’re a new or an existing plant. But if you’ve certified that you’re going to put on carbon capture and storage, you can meet the new standard in 2025. That timing is important. It sets up an achievable standard — what I call a ‘partial capture’ level — and offers enough time to actually get the planning and construction completed. That’s a really good formulation that the US could learn from.

Then the third thing that they’ve done right is what I call the ‘nucleus’ of a CCS industry: the ICO2N network, which brings together coal, oil sands, and power utilities, all of whom have a strong interest in developing CO2 capture and storage in Canada.

What makes for a CCS nucleus area?

Look, this is no different than the car business. If you wanted to start manufacturing autos 50 years ago, you needed a lot of other industries assembled around you, to give you the component parts, the engineering services, and so on. It’s not quite a perfect analogy, but with CO2 there is a similarity.

For a one‑off CCS project, that’s an approach that can be done once, practically anywhere. But if you really want to do two or three projects, you need to create a community of skills and resources that is more sustainable, to build pipeline infrastructure, develop regulatory knowhow, nurture a critical mass of specialized engineers and geologists, and so on.

It’s the combination of incentives, rules, and an industry nucleus that make up the ‘secret sauce,’ so to speak, that we need to be replicated elsewhere around the world for CCS to thrive.

Some have said the US experience has suffered for being spread too thin, with projects in the South, Midwest and Northeast. Does the concentration of resources help?

Yes. Creating a density of projects in a certain area facilitates other things, like pipeline development, or developing regulations and regulatory expertise that enable projects to move ahead.

I think the Department of Energy has put forward something like US$8 billion over the years on CCS projects in various locations. But imagine if you had focused all that money, say, in Texas, where there’s a lot of EOR. You might have seen a faster, bigger bang for your buck. Canada, for its part, is concentrating more of its efforts in its middle section, though there are other projects farther afield.

Here in the US, we have a similar nucleus in the Gulf states, where oil and CO2knowhow are deeply rooted. What’s the potential there?

[We] just hired Dr. Frank Chou, a 30-year veteran of the petrochemical industry, in Texas to facilitate what we call the Gulf States-China Initiative. Think about Louisiana, Alabama, Mississippi, Texas: they’re all places with either a lot of oil fields, a lot of EOR — or a lot of potential EOR — and a lot of expertise. You have many of the key resources in place, such as the Texas Bureau of Economic Geology. You have companies like Denbury that build pipelines. You have a billion tons of CO2 injected over the last 30 years in the Permian Basin alone. There is a lot of real, hands-on experience there, ranging from the drilling, to the pipeline, to the monitoring.

It’s interesting to look where US CCS integrated projects are happening at the highest rate. There was a lot of flurry in the Midwest, initially, over the last 10 years, but it’s really been places like Mississippi and Texas where the projects are actually breaking ground. You have the Kemper Plant in Radcliffe, Miss., Southern Co.’s 582 megawatt IGCC plant with 65 per cent capture that broke ground last December. And there’s Summit Power’s Texas Clean Energy Project, too, which looks to be on track to break ground next year.

Both of these plants are globally important. Kemper is a big deal: this isn’t a pilot-scale project. It’s the real deal, a full-scale IGCC plant, approved by the Mississippi Public Service Commission to be funded out of the utility’s rate-base. And, it’s selling the CO2 for use in EOR, via a pipeline being built by Denbury. Likewise, TCEP’s model is all about commercial viability, by converting some of the CO2 into urea and other chemical by-products, and selling the remainder of the CO2for EOR.

This ends part I of my chat with Thompson. Tomorrow he discusses how worries over liability of CO2 storage are putting the cart before the horse.


** For more on the Texas Clean Energy Project, check out my recent Q&A with Summit Power’s Laura Miller, who is championing the TCEP project.