CBO: Carbon capture efforts aren’t going so well

July 2, 2012

Coal may be dying in the United States, but it's still the world’s preferred fuel for generating electricity — especially in China and India. And that’s why many energy experts think it’s so crucial to figure out how to capture carbon from all those coal plants and stash it deep underground. Otherwise, the thinking goes, those greenhouse gases will waft up to the atmosphere and heat the planet to calamitous levels.


Chilled-ammonia carbon capture equipment developed by Alstom is under construction at American Electric Power's power plant in New Haven, W.Va. (American Electric Power)

But there’s a problem. Carbon capture and storage (CCS) is still too expensive to be viable. And, to date, governments haven’t figured out how to nurture CCS the way they’ve helped solar or wind or biofuels get off the ground. Case in point: A new report from the Congressional Budget Office finds that Congress has authorized $6.9 billion for developing carbon capture since 2005 — but, so far, there's little to show for it.

The Obama administration has said that it would like to develop five to ten "demonstration" projects for CCS by 2016 — with a goal of making coal plants that can bury their carbon underground economically viable within a decade. According to the CBO, this is unlikely to happen. Power plants that can capture and store their carbon are initially expected to cost about 75 percent more than regular coal plants. And those costs won't come down unless there's either a huge technological breakthrough or utilities invest a lot more of their own money in building new plants. Neither appears imminent.

Part of the problem, the CBO argues, is the way in which Congress has tried to fund carbon capture. Most of that $6.9 billion is going toward large-scale demonstration projects overseen by the Department of Energy, with the hope that private utilities will start building their own plants once the technology has been proven — which, in turn, will lower costs. But, the report argues, U.S. utilities have little incentive to play along. Demand for electricity in the United States is growing sluggishly, and utilities have plenty of cheaper options these days, from renewable energy to natural gas.

As an alternate strategy, the CBO suggests, Congress could redirect the portion of that $6.9 billion that hasn't yet been spent back into basic R&D, in the hopes of spurring much-needed technological breakthroughs. Or Congress could slap a tax on carbon pollution, which might push private utilities to invest their own money in cleaner plants. (Even then, however, other sources — like wind, solar, or nuclear — might prove more attractive than carbon capture.)

Ultimately, however, the report suggests that maybe the United States should just leave CCS development to countries like China and India, where coal demand is surging, and utilities have more incentives to invest in the new technology. But it's not clear this will prove fruitful either, as both China and India are spending more on basic R&D than on trying to demonstrate that carbon capture can work on a large scale.

So will anyone ever figure out this technology? Over at MIT Technology Review, Mike Orcutt has a nice primer on the topic. All sorts of questions have been raised about carbon capture — from its high price tag to the fact that storing liquefied carbon deep underground might cause earthquakes. The prospects for CCS are looking bleaker by the day. That said, some oil and gas companies are starting to experiment with pumping carbon-dioxide underground in order to flush out hard-to-reach hydrocarbons. This process, known as "enhanced oil recovery," technically counts as CCS, and is arguably the most promising route at this point.

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