David Mohler

Deputy Assistant Secretary for Coal Office of Clean Coal and Carbon Management

5th International Advanced Coal Technologies Conference

October 6, 2015

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Source: Official White House Photo by Pete Souza

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Momentum in the States

“Governors pledge to work with China on clean energy”

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States with Financial Incentives for CCS

Source : C2ES http://www.c2es.org/us-states-regions

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Large Scale Integrated Projects World Wide

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Data from Global CCS Institute

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Regional Carbon Sequestration Partnerships

Developing the Infrastructure for Wide Scale Deployment Seven Regional Partnerships

400+ distinct organizations, 43 states, 4 Canadian Provinces

•  Engage regional, state, and local governments •  Determine regional sequestration benefits

•  Baseline region for sources and sinks •  Establish monitoring and verification protocols

•  Address regulatory, environmental, and outreach issues •  Validate sequestration technology and infrastructure

Development Phase (2008-2018+) 8 large scale

injections (over 1 million tons each)

Commercial scale understanding

Regulatory, liability, ownership issues

Validation Phase (2005-2011)

20 injection tests in saline formations, depleted oil, unmineable coal seams, and basalt

Characterization Phase (2003-2005)

Search of potential storage locations and CO2 sources

Found potential for 100’s of years of storage

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ARRA Site Characterization Projects

Terralog Technologies USA Inc.; Wilmington Graben; Offshore Los Angeles; Saline, Oil, & Gas

University of Wyoming; Rock Springs Uplift / Moxa Arch; SW

Wyoming; Saline

University of Kansas Center for Research Inc.; Ozark Plateau; SW Kansas; Saline

and Oil

University of Utah; Cretaceous, Jurassic, and Pennsylvanian Sandstone; Colorado and Utah; Saline

University of Illinois; Cambro-Ordovician Strata;

IL, IN, KY, MI; Saline

University of Alabama; Black Warrior Basin; NW Alabama;

Saline

University of South Carolina Research Foundation; South

Georgia Rift Basin; South Carolina; Saline

University of Texas at Austin; Gulf of Mexico Miocene; Offshore Texas; Saline

Sandia Technologies, LLC; Triassic Newark

Basin; NY and NJ; Saline

Participant Formation Location

Sequestration Type

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Kemper County Energy Facility CCPI Demonstration

Southern Company Kemper IGCC

Kemper Site Visit May 12, 2015

Current Project Status • Plant ~98% complete

• First Lignite feed and clean syngas production from first gasifier: Oct 2015 • Operation: early 2016

Project Background • Kemper County, MS

• 582 MW (net) poly generation plant • >67% CO2 capture; ~ 3,000,000 Tonnes

CO2/year for EOR • DOE cost share $270 million CCPI-2

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Insert picture here from PUC trip if possible

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CCS Policy Parity

http://hub.globalccsinstitute.com/sites/default/files/publications/195008/costs-ccs-other-low-carbon-technologies-united-states-2015-update.pdf

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President’s FE portfolio and FY 16 budget

•  Loan Program Office: $8B in clean fossil authorities •  ARRA projects: >$4.5B commitment •  Tax credit proposal: comparable to renewable ITC’s +

PTC’s •  $2B ITC credits: 30% capital investment (incl.

infrastructure) •  Uncapped (!) STC’s (sequestration tax credits) –

scored at $3B •  New authorities, not extensions/modifications of

existing

•  FE RD&D: $564M for FY16; $400M for clean coal and CCUS

More than just FE RD&D budget

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U.S. Annual Energy Outlook, 2015 Business as usual without Clean Power Plan

15 Source: HIS Energy Strategic Horizons September 2015

•  INDCs submitted through 8/15, if fully realized by 2030, would contribute ~20% of the abatement pathway required to limit

global average temperature increases to

≤2 degrees C.

•  Fossil fuel demand will grow under INDCs, even if commitments are fully met. Natural gas +30%,

coal and oil +5%.

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Fossil Fuels as “Stranded Assets”?

Mark Carney, governor of the Bank of England, cited in the Financial Times, September 30, 2015:

In a sweeping assessment of the financial risks posed by global warming, Mr. Carney acknowledged there was a danger the assets of fossil fuel companies could be left “stranded” by tougher rules to curb climate change.

“All of the above” required

CCS technology remains critically important abundant, low-cost fossil energy is why

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New Policies can Prompt Innovation

•  U.S. recently finalized the Clean Power Plan – 111(b) New Sources – 111(d) Existing Sources

•  CCS is an option for achieving reductions under both Rules

•  Expect innovation! – Utilization – Partial capture – modular systems

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Reference

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CERC •  RD&D •  Bilateral public-private partnership

CCWG •  State Department leads, CCUS is

one of five tracks •  Counter facing projects have been

identified •  3 large-scale EOR efforts

FE Protocol •  Exchanges •  Training •  Clean Coal Industry Program

US-China Climate Agreement •  Mentioned CERC •  Identified new collaborative bilateral

CCS projects: •  Geological storage project •  Enhanced water recovery

What is the difference?

DOE with MOST NEA and MoHURD on range of clean

energy R&D

State Department with NDRC

Presidential Agreement

DOE with MOST and NEA on fossil energy

U.S. Climate Policy Development

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US Intended Nationally Determined Contribution

•  INDC: The United States intends to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%-28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%.

•  Scope and Coverage: –  The U.S. target covers all greenhouse gases included in the 2014

Inventory of United States Greenhouse Gas Emissions and Sinks: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3) using a 100-year GWP.

–  The target covers all IPCC Sectors. –  The target accounts for the land sector using a net-net approach and

uses a “production approach” for harvested wood products •  The US does not intend to use international market

mechanisms