Expert: Energy standard key to launching carbon sequestration

Twenty-nine states plus Washington D.C. and Puerto Rico now have renewable energy standards. But how about a technology agnostic clean-energy standard?

That clean-energy standard, says Dr. Sally Benson, director of the Global Climate and Energy Project at Stanford University, could bring carbon capture and sequestration into the marketplace. That technology, now deployed in only a few places in the world, is badly needed to reduce emissions of greenhouse gases.

“There needs to be some kind of clean energy standard, where technology is not evaluated based on its renewable (component) or fuel switching or whatever,” said Benson in an interview at the recent Vail Global Energy Forum. Such a standard would be based purely on cost and performance – including its environmental performance.

Wyoming has two carbon sequestration experiments currently underway. Adjacent to Wyoming’s largest emitter of greenhouse gases, the Jim Bridger power plant, a well has been drilled in the geological formation called the Rock Spring Uplift. Geologists theorize that deep geologic formations there could provide one of the largest reservoirs for anthropogenic (man-made) carbon dioxide in the country.

In the Powder River Basin in northeast Wyoming, a consortium that includes Stanford is seeking to understand the carbon-sequestering properties of underlying geological formations. Stanford is creating mathematical models that will help figure out the feasibility of injecting CO2 into multi-layered formations and assembling regional scale modeling. Also involved are Schlumberger, Montana State University, and North American Power Group, a Denver-area firm that hopes to build power plants. North American Power Groups has received nearly $10 million in grants from the U.S. Department of Energy to conduct the Two Elk carbon site characterization project. (Read WyoFile’s investigative report, “Stimulus for Two Elk.”)

When Benson first got involved in carbon capture and sequestration (CCS) 14 years ago, she expected technological development would be driven by the needs for carbon dioxide in depleted oil fields. The process, called enhanced oil recovery, uses CO2 to flush out residual oil.

The easiest-to-reach natural deposits of CO2 have mostly been used up or are spoken for. That creates a market for human-caused CO2, according to Benson.

But from 2002 to around 2007, “There was just this enormous jumping-in by the petroleum industry, the utilities and even the coal companies to a large degree,” said Benson. “I was really surprised.”

Specifically, she noted the involvement of the Southern Company, Duke Energy and American Public — all electrical utilities. Also Peabody Coal, which funded study of sequestration options at Washington University, which is located in St. Louis where Peabody is headquartered.

“They have been engaged,” Benson says of the coal companies. “My sense is that they were a little more engaged five years ago.”

But because of the national and global impasse about what to do about climate change, the urgency to figure out how to do carbon sequestration at a large scale has eased. Utilities, innately conservative, backed off, she said

“For better and for worse, our electrical utilities are conservative,” she said. “The good part is that we want reliable, low-cost electricity. The bad part of it is that they don’t like to take risks.”

That aversion to risk is understandable, she says. “Just to get into the game is a lot of money,” she explained, citing $3 billion for a carbon capture and sequestration coal plant. Utilities need several – maybe three or five – commercial-scale demonstrations, perhaps 100-megawatt in size, to demonstrate costs and assess risks. Without that proof, “I just think it will be viewed as too risky of a technology.”

Carbon is being sequestered in the saline deposits below the North Sea, off the coast of Norway. There’s also a project in Algeria, and another expected to launch soon in Australia.

In the United States, Benson sees carbon dioxide emissions from fertilizer or ethanol plants being tapped first. But again, the economics will be driven first by the use of CO2 in oil recovery. The rising prices of oil create an improved market for the CO2.

Technology is not the major barrier to deployment of CCS. Financing is a much larger issue – which is one reason why Benson would like to see a clean energy standard, as opposed to more standards that exclude coal.

But public perception also remains a key issue. Europe, Australia and Canada have all developed regulations governing carbon sequestration during the last five years. In the U.S., Wyoming was one of the first states to craft regulations and a legal framework to allow carbon sequestration. Yet, some issues about risk and liability remain unresolved in the U.S. and must be addressed before CO2 can be sequestered in saline aquifers.

“Say something goes wrong 100 years from now. Who would be the steward? There are a lot of ideas about how to address this,” she explains.

One idea is a shared trust fund, to be available to those organizations who have contributed into it.

“It really probably needs to be done at the federal level, because to make those kinds of shared risk pools or trust funds you need a lot of participants to make them viable.

“Personally I think it’s very important to get along with this,” she said, citing the need to reduce the still accelerating emissions of carbon dioxide into the atmosphere. It is, she added, “incredibly important to do.”