Congressional Hearings
HEARING TO EXAMINE S. 383, THE UTILIZING SIGNIFICANT EMISSIONS WITH INNOVATIVE TECHNOLOGIES ACT, AND THE STATE OF CURRENT TECHNOLOGIES THAT REDUCE, CAPTURE, AND USE CARBON DIOXIDE
Congressional Hearings
SuDoc ClassNumber: Y 4.P 96/10
Congress: Senate
CHRG-116shrg35946
| AUTHORITYID | CHAMBER | TYPE | COMMITTEENAME |
|---|---|---|---|
| ssev00 | S | S | Committee on Environment and Public Works |
[Senate Hearing 116-5]
[From the U.S. Government Publishing Office]
S. Hrg. 116-5
HEARING TO EXAMINE S. 383, THE UTILIZING SIGNIFICANT EMISSIONS WITH
INNOVATIVE TECHNOLOGIES ACT, AND THE STATE OF CURRENT TECHNOLOGIES THAT
REDUCE, CAPTURE, AND USE CARBON DIOXIDE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 27, 2019
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma THOMAS R. CARPER, Delaware, -
SHELLEY MOORE CAPITO, West Virginia Ranking Member
KEVIN CRAMER, North Dakota BENJAMIN L. CARDIN, Maryland
MIKE BRAUN, Indiana BERNARD SANDERS, Vermont
MIKE ROUNDS, South Dakota SHELDON WHITEHOUSE, Rhode Island
DAN SULLIVAN, Alaska JEFF MERKLEY, Oregon
JOHN BOOZMAN, Arkansas KIRSTEN GILLIBRAND, New York
ROGER WICKER, Mississippi CORY A. BOOKER, New Jersey
RICHARD SHELBY, Alabama EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa TAMMY DUCKWORTH, Illinois
CHRIS VAN HOLLEN, Maryland
Richard M. Russell, Majority Staff Director
Mary Frances Repko, Minority Staff Director
C O N T E N T S
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Page
FEBRUARY 27, 2019
OPENING STATEMENTS
Barrasso, Hon. John, U.S. Senator from the State of Wyoming...... 1
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 3
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
Island......................................................... 5
Moore, Hon. Shelley, U.S. Senator from the State of Virginia..... 6
WITNESSES
Sukut, Paul, General Manager and CEO, Basin Electric Power
Cooperative.................................................... 8
Prepared statement........................................... 10
Responses to additional questions from:
Senator Barrasso......................................... 14
Senator Whitehouse....................................... 15
Oldham, Steve, CEO, Carbon Engineering........................... 17
Prepared statement........................................... 19
Responses to additional questions from:
Senator Markey........................................... 29
Senator Whitehouse....................................... 29
Waltzer, Kurt, Managing Director, Clean Air Task Force........... 41
Prepared statement........................................... 43
Responses to additional questions from Senator Whitehouse 54
HEARING TO EXAMINE S. 383, THE UTILIZING SIGNIFICANT EMISSIONS WITH
INNOVATIVE TECHNOLOGIES ACT, AND THE STATE OF CURRENT TECHNOLOGIES THAT
REDUCE, CAPTURE, AND USE CARBON DIOXIDE
----------
WEDNESDAY, FEBRUARY 27, 2019
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m. in
room 406, Dirksen Senate Building, Hon. John Barrasso (chairman
of the committee) presiding.
Present: Senators Barrasso, Carper, Inhofe, Capito, Braun,
Rounds, Sullivan, Ernst, Cardin, Whitehouse, Merkley,
Gillibrand, Booker, Markey, Duckworth, Van Hollen.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Good morning. The committee will come to
order.
Today we are here to discuss Utilizing Significant
Emissions with Innovative Technologies Act, or simply, the
USEIT Act. The USEIT Act would encourage the commercial use of
man-made carbon dioxide emissions.
The bill supports the use of carbon capture technology,
including direct air capture. The legislation also expedites
permitting for carbon dioxide pipelines in order to move the
carbon dioxide from where it is captured to where it is stored
or used.
For those of you who are not familiar with the USEIT Act,
it is a practical, common-sense piece of legislation to turn
carbon dioxide emissions into valuable products. We can use
carbon dioxide to extra oil from wells that wouldn't otherwise
be profitable through a process called enhanced oil recovery.
We can capture carbon dioxide and use it to make building
materials and carbon fiber. Captured carbon even can be used
for medical purposes.
Today we are going to hear testimony about other new and
exciting developments in the area of carbon capture
technologies. When we introduced the USEIT Act last year, we
had a group of four Senators in support, including members of
this committee, Senators Whitehouse and Senators Capito. And I
would like to introduce into the record an article published in
the National Journal last week entitled The Senate's Quite
Climate Policy Deal Maker. You look great in that picture,
Sheldon.
[Laughter.]
Senator Barrasso. The article praises Senator Whitehouse
for ``finding incremental successes working with Republican
colleagues.'' And I hope there is no objection to introducing
this.
Senator Whitehouse. I don't know. Does Senator Cardin have
any objection?
[Laughter.]
Senator Whitehouse. Well, thank you, Chairman, that is kind
of you.
Senator Barrasso. The praise is well-deserved.
This Congress, I want to again thank Senator Whitehouse and
Senator Capito for their continued partnership as we work to
get the USEIT Act to the President's desk. Support for the
USEIT Act has now grown from an initial bipartisan group of
four Senators to a larger group of 12 Senators, including seven
of my colleagues on this committee. Along with Senators
Whitehouse and Capito, I am pleased, this Congress, to have
Ranking Member Carper, Senator Cramer, Senator Duckworth,
Senator Rounds and Senator Inhofe as cosponsors of the USEIT
Act.
In addition, a bipartisan companion bill has been
introduced in the House of Representatives.
When we had a hearing on the USEIT Act last year, we heard
testimony about the many ways carbon dioxide can be transformed
from a useless by-product into a valuable commercial good.
Interest in the USEIT Act has continued to grow since last
year. This is in large part due to the bipartisan success we
had with the FUTURE Act, which was signed into law a year ago.
Senators Whitehouse, Capito and I led that legislative effort
as well. The FUTURE Act extended and expanded the tax credit
for using and storing carbon dioxide.
The Clean Air Task Force called the FUTURE Act one of the
most important bills for reducing global warming pollution in
the last two decades. The extension and expansion of the so-
called 45Q tax credit to the FUTURE Act has expended public
interest about how we capture and use carbon dioxide.
This Congress, I have continued to focus on ways to
expedite and expand the use of carbon capture. That begins with
the USEIT Act. Last Congress, we unanimously supported the
legislation out of committee by a voice vote. This Congress, we
want it signed into law. America should reduce emissions
through innovation, not punishing government regulations. The
USEIT Act advances that goal.
This is also the approach we took with the bipartisan
Nuclear Energy Innovation and Modernization Act. The bill will
make sure America remains a leader in nuclear energy
innovation. Nuclear power creates jobs and is critical if we
are going to reduce our carbon dioxide emissions. President
Trump signed the legislation into law earlier this year.
Passage of the Nuclear Energy Innovation and Modernization
Act was an important step forward. I look forward to continuing
to work with members of this committee on both sides of the
aisle to make additional progress in promoting nuclear energy
technology, including exploring solutions to nuclear waste
disposal issues.
This committee has and should continue to lead on
bipartisan and on common-sense solutions. Such solutions do not
include, in my opinion, the Green New Deal, which I believe is
unworkable and according to Doug Holtz-Eakin, the former
director of the Congressional Budget Office, would cost between
$51 trillion and $93 trillion dollars.
My ideas do include the USEIT Act, as Axios recently
reported, although the USEIT Act is not as high-profile or
sweeping as the Green New Deal resolution, also unveiled on the
same day. The bill takes a more direct, concrete aim at the
root of climate change, emissions themselves. So when we work
together, we have shown we can promote American leadership,
grow our economy and lower our emissions.
I would now like to recognize Ranking Member Carper, a
cosponsor of the USEIT Act, for his opening statement.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Thanks, Mr. Chairman.
Sheldon, I just note, that looking over your shoulder, in
this article, that the headline says, the Senate's Quiet
Climate Policy deal maker, Bernie, is looking over your
shoulder. So for what it's worth.
[Laughter.]
Senator Carper. Mr. Chairman, thank you for convening this
hearing today and for your leadership as we begin to examine
one of the many ways we can work together to find solutions
that we need to, and then craft legislation to support what I
call win-win policies that address climate change while
addressing job creation and fostering economic growth.
In today's hearing, we are going to be focusing on
technologies that reduce, capture, and use carbon dioxide as
well as bipartisan legislation that supports them. Utilizing
these significant innovations with innovative technology or
USEIT is sponsored, as we know, by the Chairman, cosponsored by
a bunch of us, including me. And let's start with the primary
reason I believe we need to act, and that is, to address carbon
dioxide emissions and climate change.
The science behind climate change is settled, from our
warming oceans to heat traps in our atmosphere. Climate change
is real. It is happening, and human activities, such as burning
fossil fuels, are greatly contributing to the problem.
Scientists have also found direct links between climate change
and recent extreme weather events such as the rash of
devastating category 5 hurricanes that our Country has
experienced, wildfires in the west, they are as big as my State
of Delaware. Again, the science is clear from these extreme
weather events, they are only going to get worse if we do
nothing.
It doesn't matter if you are from a coastal State or from a
landlocked State. I have lived in both. If you care about
public health or the environment, if you care about our economy
and our national security, the reality of climate change is
that every person living in our Country will eventually see or
experience it. Most are already affected by it today. God knows
that we are in Delaware.
As I see it, we have a couple of options. We can take up
this fight and get serious about addressing and adopting and
adapting to climate change, or we can stick our heads in the
sand and do nothing. Doing so I think threatens the future of
our children and our grandchildren. I say we fight and we fight
together, not with one another. Senator Barrasso's colleague,
his wing man from Wyoming is Mike Enzi, who is a great guy. He
is the author of the 80-20 rule that I oftentimes cite. I used
to explain why Mike Enzi, a very conservative Republican, got
so much accomplished by working with Ted Kennedy, the most
liberal Democrat we had at the time. And Mike said that, ``Ted
and I work on the 80-20 rule.'' I said, what is that, and he
said, ``We agree on 80 percent of the stuff, we disagree on 20
percent of the stuff, we focus on the 80 percent where we
agree, and we'll turn to the other 20 percent some other
time.'' I think the USEIT Act is just a great example of the
80-20 rule. So we appreciate his wisdom.
The fight, however, can also do some real good, can unleash
American innovation and job opportunities, while putting the
U.S. in the driver's seat of a global clean energy economy that
would include this kind of technology. That won't be easy. We
still need a comprehensive approach, every tool in our tool box
to address this issue.
To make that major shift toward a cleaner energy economy,
R&D and our other Federal investments, tax incentives from our
regulations and all our other policies that harness market
forces are going to be on the table, too. Fortunately, we are
not starting this fight from square one. Smart investments and
regulations made by the Obama administration, and we can go
back even as far as the George Herbert Walker Bush
administration, results in dramatic increases in the deployment
of energy efficiency, clean energy technology at a cheaper
cost.
As a result of these smart policies, more than 3 million
people went to work today in clean energy energy jobs, while
consumers pay less, not more, in energy costs now than they did
a decade ago. Which proves yet again we can have a cleaner
environment, better climate, and stronger economy.
Despite these successes, much more is needed to stem the
tide of climate change. We are going to hear today from our
witnesses that major investments in carbon capture utilization
and sequestration technologies are in demand. The USEIT Act
helps make these investments through R&D and by lowering other
barriers preventing the widespread development and deployment
of CCUS. I am especially pleased to see that this year's
version of the bill makes additional investments in direct air
capture of carbon pollution. With the changes we have made, and
again, I am happy to join our Chairman and colleagues and
Sheldon in cosponsoring this USEIT Act.
We want to assure the broad deployment of CCUS and other
clean energy technologies. However, the U.S. must make bolder,
bigger actions than the USEIT Act. And we must embrace broad
climate policies, such as a price on carbon eventually to
really move the needle on our climate change policies.
With that said, this hearing is not the end. It is just the
beginning. I look forward to working with the Chairman and all
of our colleagues here to make sure that our Country is more
secure, both economically and with respect to the threat of
climate change. My hope is that we can do so in this Congress.
This is a good place to start. Thanks so much.
Senator Barrasso. Thank you, Senator Carper.
I would like to give my two colleagues who have supported
the USEIT Act since its initial introduction last year an
opportunity to provide some remarks. Senator Whitehouse, would
you like to say a few words?
OPENING OF HON. SHELDON WHITEHOUSE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Whitehouse. I would be delighted to, Chairman.
Thank you very much for your kind words and for your leadership
on this.
If we can get this bill passed, it will build on the
success of the FUTURE Act, the 45Q Act, which we successfully
got into the 2018 budget deal. And I want to thank our
chairman, Senator Barrasso, and Senator Capito, for their
leadership on the FUTURE Act. Pulling everybody together was a
broad and unlikely coalition, but it worked, and the bill is in
place.
It will help solve the market failure of there being no
revenue proposition for captured carbon. We gave it a revenue
proposition, and the market has responded. Occidental Energy
and Hoyt Energy have announced that they will pursue a project
to capture CO2 from two ethanol plants supported by
the 45Q Rule. Net Power, a novel natural gas electricity-
generation technology that inherently captures all its
CO2 emissions, has said it will use the credit to
build its first commercial scale plant.
So things are already moving. But nobody likes highways and
roads more than Senator Inhofe, and this USEIT Act will
basically allow for highways and roads for the CO2
to get from the place where it is captured to the place where
it can be either used or sequestered. At the moment, you can do
things like they are doing up in Saskatchewan and you can
capture carbon from the plants emissions and run it to, as the
Chairman pointed out, enhanced oil recovery sites. But that
limits the reach of this technology. And we need to expand it.
The USEIT Act will help expand it.
I want to thank Chairman Barrasso for his leadership on
both of these bills. I appreciate it very much. I want to thank
our ranking member, Senator Carper, for his very helpful
contributions to this bill and his support of it. Senator
Capito is again a key, lead player in this, and I appreciate
and thank her. Senators Duckworth, Rounds and Cramer were in my
notes to thank. But Chairman Barrasso mentioned that Senator
Inhofe is a cosponsor as well. So I want to express my
appreciation to him.
We have had very good luck when we work with Senator Inhofe
on pieces of legislation. We have a plastics bill that passed
by unanimous consent with Senator Inhofe's support. We have the
TSCA bill that passed Congress and has been a very strong,
bipartisan environmental achievement, with not just Senator
Inhofe's support, but his leadership. And Senator Inhofe is
very often very active in making sure that infrastructure bills
get done. We have had a few occasions where we have worked
together to break various logjams in the Senate to keep
infrastructure bills moving.
I think that our colleagues look at a bill that has both
Senator Whitehouse and Senator Inhofe cosponsoring it and
think, well, there is probably room for me in that bill.
[Laughter.]
Senator Whitehouse. And that, combined with Senator
Inhofe's immense legislative skills at getting things done, I
think I would give him a particular welcome to this bill.
So we have a big opportunity here. I do think that we have
shown that pricing carbon works, that the market does need to
accept that there is a real difference between carbon-intensive
power and carbon-free power. And the quicker we can reflect
that, the better we will respond to the climate crisis that is
looming over us.
So it is great to have this bipartisan opportunity. I have
companies like AgCorp and BioProcessH20 and my home State of
Rhode Island that are excited by these prospects.
I will close by saying that some years ago, I won the very
prestigious award of being the algae advocate of the year. I
know you are all deeply jealous of that accomplishment by me.
But one of the reasons I was the algae advocate of the year was
because algae actually can get into the exhaust stream once
CO2 gets captured, and it can be turned into a
variety of products, from feed to makeup to human food products
and so forth. So when we added carbon capture utilization and
sequestration, a kind word to the algae folks.
Thank you very much, Mr. Chairman.
Senator Barrasso. Thank you, Senator Whitehouse.
Senator Capito, over to you.
OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. Thank you, Mr. Chairman. That is going to
be a hard act to follow Captain Algae over there.
[Laughter.]
Senator Capito. But I am going to try. I do appreciate,
certainly, Senator Whitehouse's leadership on this, when we
introduced it last year, when we did 45Q, the FUTURE Act. It
was amazing to see the different stakeholders in the room. And
I want to thank the chairman and the ranking member for being
here, and Senator Inhofe for joining on to our second try here.
I want to thank the chairman, too, for prioritizing this
bill early in our session. I really appreciate this. We did
learn some things last year when we tried to move the bill
forward. And this year, I am happy to say that one of my
counterparts from West Virginia, David McKinley, has already
introduced a counterpart for this in the House.
So I think timely enactment of the USEIT Act is of essence.
Because last year we did pass the FUTURE Act, as Senator
Whitehouse said. The FUTURE Act expanded and improved the 45Q
tax credit for the utilization, carbon capture and storage. I
think it was a very substantive step.
But we have had some headwinds with that that prevent that
bipartisan achievement from having its full effect. First of
all, the IRS has yet to provide revised guidance, helping us to
utilize the credit. And just recently, Senators Whitehouse and
Barrasso and I sent a letter earlier to the IRS leadership
requesting that they expedite that guidance.
The January 1, 2024, deadline for projects to begin
construction is looming ever larger. And we know, and you all
know certainly, and I know our panel will tell us, these are
not inexpensive projects as you are moving forward. You are
making enormous capital commitments along with a longevity.
Predictability is absolutely critical.
Second, there remains the lack of regulatory certainty from
our Federal permitting agencies. That is where we know that
this bill comes in, providing a clear playbook for securing the
necessary permits. Senator Whitehouse talked about sort of the
belts and suspenders aspect of this bill, and the associated
infrastructure, like CO2 pipelines, will help
sponsors know what they are getting into. And it will provide
assurance that as they seek private investment that a project
won't get lost in approval purgatory.
This committee has heard substantive testimony about the
cost overruns and delays that can result when project sponsors
in any arena, and even the agencies themselves, don't know what
the approval process actually looks like. So that is why timely
enactment of the USEIT Act is so vital for making broad-based
deployment of carbon capture utilization and storage
technologies reality.
As I am sure we will hear from our witnesses today, if the
United States and the world are to bend the curve on
atmospheric carbon dioxide, CCUS has to be a part of a policy
and technological win and mix. CCUS will also serve to preserve
employment in industries like coal and construction and
manufacturing, and in the process, it will prevent major market
disruptions that could kill jobs and significantly raise costs
for energy and goods across our Nation.
So I look forward to hearing from the panel. Again, thank
you for bringing this bill up so quickly. It is an important
policy and it has a lot of good, bipartisan cosponsors and
interests. Thank you.
Senator Barrasso. Thank you, Senator Capito. Senator
Carper.
Senator Carper. I was counting the number of times I heard
the word bipartisan. I stopped counting at 20. And normally,
you would hear a lot about fighting, how we don't get along, we
don't work on anything together. And normally, at this part of
our hearings, we stop and we join hands and sing Kum By Yah.
[Laughter.]
Senator Carper. And this might be one of those moments, if
not right away, then maybe at the end of the hearing. But we
are glad you are here to add to the spirit. Thank you.
Senator Barrasso. Thank you, Senator Carper.
I am pleased now to introduce our three witnesses, Paul
Sukut, who is CEO and General Manager of Basin Electric Power
Cooperative. Basin provides power to residents of nine States,
including my home State of Wyoming. We are happy for your
willingness to testify.
We also have with us Mr. Steve Oldham, who is the CEO of
Carbon Engineering, and Mr. Kurt Waltzer, who is the Managing
Director of the Clean Air Task Force.
So welcome. I invite all of you to testify. I want to
remind the witnesses that your full written testimony will be
included and made part of the official hearing record today. We
ask that you try to keep your statement to within 5 minutes, so
we will have some time for questions. I look forward to hearing
from each of you. Would you like to begin, Mr. Sukut?
STATEMENT OF PAUL SUKUT, GENERAL MANAGER AND
CEO, BASIN ELECTRIC POWER COOPERATIVE
Mr. Sukut. Thank you, and good morning, Chairman Barrasso,
Ranking Member Carper and members of the committee.
As the Senator said, my name is Paul Sukut. I am the CEO
and General Manager of Basin Electric Power Cooperative. We are
headquartered in Bismarck, North Dakota. I have worked in the
energy industry about 40 years, about 36 with Basin Electric,
and really, I have served as CEO since 2014.
I would like to thank you for the invitation to speak this
morning about innovation in the utility industry and other
efforts to reduce emissions, particularly carbon. Basin
Electric is a generation and transmission cooperative that
provides wholesale electricity to 141 rural electric
cooperatives that serve 3 million customers across 9 States.
We have a diverse generation portfolio, consisting of over
6,000 megawatts of coal, natural gas, wind, recovered energy,
nuclear and market purchase agreements. Our generation
resources participate both in the MISO and SPP regional
transmission organizations.
Basin electric and its members have invested billions of
dollars in capital in recent years to secure its fossil-based
generation. I would refer the committee to my written testimony
for additional details on our facilities. Basin Electric is
actively engaged in assuring that these assets can continue to
operate in a carbon-constrained future, and we strongly support
common-sense carbon management regulation that recognizes
improvements already made to existing plants, and sets a
standard that is achievable with cost-effective technologies
that can be applied to the facility itself and allows
flexibility.
As utilities make decades-long planning decisions, it is
imperative to have certainty with respect to how regulations
impact our facilities, and the associated costs just to run
them. Looking further into the future, Basin Electric remains
interested in developing solutions to innovate with respect to
cost-effective clean coal technologies that capture, utilize
and sequester CO2 .
Basin Electric is the host site for the Integrated Test
Center located at our Dry Fork Station near Gillette, Wyoming.
This test facility will provide space for researchers to turn
CO2 into a marketable commodity.
In addition to the Integrated Test Center, Basin has been
involved with exploring the potential for near-zero emission
Allam Cycle technology as an option for future power
generation. Again, I would refer the committee members to my
written testimony for details on this technology, our partners
and its status.
I would like to highlight for the committee a subsidiary of
Basin Electric, the Dakota Gasification Company, which operates
the Great Plains Synfuels Plant near Beulah, North Dakota. This
one of a kind facility produces synthetic natural gas from
lignite coal, and several fertilizer and chemical coal
products. Notably, the facility is also one of the largest
CO2 sequestration projects in the world, utilizing
CO2 separated during the coal gasification process
for enhanced oil recovery in Saskatchewan, Canada.
I believe that the plant and the development of its
products continue to demonstrate what a resource we have in our
coal reserves, and what can happen with smart innovation. I
hope this is the kind of progress that we will continue to see
from the ITC and through other initiatives for value-added coal
use and CO2 capture at the Federal and State levels.
Finally, a lot of discussion on carbon capture tends to
focus on the technological challenges of economically capturing
CO2 . But the other side of this equation is what you
do with CO2 once it is captured. Recently, Basin
Electric has participated with the Plains CO2
Reduction Partnership in the Department of Energy's CarbonSAFE
program, to investigate the geology in both North Dakota and
Wyoming and ultimately develop a large-scale injection test
well for CO2 sequestration. Developing a solution
for captured CO2 will inevitably require additional
build-out of pipeline infrastructure in order to come to
fruition.
For this reason, we support the Utilizing Significant
Emissions with Innovative Technologies Act and its provisions
to expedite guidance, permitting and construction of
CO2 infrastructure. As a not-for-profit electric
cooperative, Basin Electric has a fiduciary responsibility to
its members to provide electric generation at the lowest
possible cost.
The question of carbon capture is not only one of a
technology barrier, but an economic one as well. Many factors
impacting the utility industry today make capital investments,
such as new coal construction, cost prohibitive if not
impossible.
To this end, we appreciate the bipartisan support from the
members of this committee for legislation such as the 45Q
capture tax credit that was expanded last year, as well as the
USEIT Act that provide further assistance to relieve the
regulatory and financial barriers to carbon capture utilization
and sequestration, as well as other novel technologies.
In closing, Basin Electric has undergone a number of
changes as the electric industry has evolved. But I believe we
have a good story to tell with respect to CO2
reduction, and are well-positioned to serve our members now and
well into the future.
Again, thank you for the opportunity to share my thoughts.
I would be happy to answer any questions that the committee may
have.
[The prepared statement of Mr. Sukut follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you very much, Mr. Sukut.
Mr. Oldham, welcome to the committee.
STATEMENT OF STEVE OLDHAM, CEO, CARBON ENGINEERING
Mr. Oldham. Thank you. Mr. Chairman, Ranking Member Carper,
thank you very much for the opportunity to meet, and the other
distinguished members of the committee, too. Thank you for your
attention to this matter.
Senator Carper. Mr. Chairman, could we have a translator,
please?
[Laughter.]
Mr. Oldham. Is it my British accent? I will talk slowly.
[Laughter.]
Mr. Oldham. I am CEO of a company called Carbon
Engineering. We are actually based in British Columbia, Canada.
We are an innovative company. We are privately funded. And we
have been focused on developing technologies that will allow
the large-scale capture of atmospheric CO2 .
Why atmospheric CO2 ? Why do we focus on
capturing that? I am a simple guy, I would like to do a simple
metaphor to help you and everybody else understand. Think of
your kid in the bathtub. Think of the bathtub as the
atmosphere, and we fill the bath with water. We all know there
is a safe level of water that you can put in there before your
kind is under any threat whatsoever.
Now put the taps on, and leave the taps running. So the
taps running is the equivalent of CO2 emissions. We
keep building more and more water in that bathtub. Eventually,
it becomes a threat for the child and the bathtub. Eventually,
it runs over the side of the bathtub and wrecks the whole
house.
So what do we do about that? The first and most obvious
thing we do is we turn down the tap. And that is CO2
emission control. It is absolutely essential that we turn down
the tap.
But every one of us knows that even if you turn the tap
down so it is just dripping, it is just a matter of time before
the bathtub fills and it overflows and it wrecks the house. So
the other solution is to pull out the plug. And the plug allows
you to rapidly drain the bathtub, and you can put the plug back
in when it gets back to a safe level.
That is negative emissions. That is direct air capture and
that is what we do.
Senator Carper. Could you explain that to me one more time,
please?
[Laughter.]
Senator Carper. That was a great example. That is terrific.
Mr. Oldham. Thank you.
So our focus as a company has been to develop the tools
that allow very large-scale capture of CO2 directly
from the atmosphere. We have developed and demonstrated that
technology, it has been working in British Columbia since 2015.
We are now moving ahead with a plan to bring that
technology into the United States with a variety of different
partners. We have had inquiries from 38 U.S. States that would
like to set up a facility within their State. And of course, we
have recently received investment from some significant
companies here in the United States, Occidental Petroleum and
Chevron have become both shareholders and partners with Carbon
Engineering in bringing our technology to market.
The process is extremely safe. This is an example of a part
of our process. When we capture the CO2 from the
atmosphere, we make calcium carbonate. Calcium carbonate is
what you guys would know as seashells. So just as our kids play
safely on beaches with seashells all around them, this calcium
carbonate here, which is made out of atmospheric
CO2 , this is negative emissions right here in my
hand, is part of our process.
Moving forward, our company is now ready to start building
commercial-scale activities. It is critical that we have large
scale here. The CO2 problem in the atmosphere is
significant, and it has to be addressed at scale. So the
interest of Occidental, the interest of Chevron, why are they
interested? They like negative emissions, they want to focus on
de-carbonization. The use of CO2 enhanced oil
recovery is a very valuable opportunity. If you capture
CO2 from the atmosphere and you put that
CO2 underground in the process of EOR, you are
putting more carbon underground than is contained in the crude
that comes back up.
So now you have a win-win. We have a continued source of
jobs and prosperity associated with that crude. But you also
have a negative emission.
Third, what if you take that CO2 from the
atmosphere, you combine it with hydrogen and you make a
synthetic fuel? Now that synthetic fuel uses the CO2
that was burned in the atmosphere already, you put it in your
car, your vehicle, you drive that vehicle, the CO2
is put back into the atmosphere, we collect it again and we
make more fuel. So the opportunity to create a sustainable,
low-carbon fuel which is compatible with every vehicle, every
truck, every plane that exists today, is enabled by large-scale
capture of atmospheric CO2 .
That is the reason why our friends at Chevron are
interested in our business. They would like to de-carbonize
their fuel by blending our fuel with their fossil fuel. It
makes the fossil fuel more sustainable while achieving de-
carbonization at the same time.
Moving ahead as a company, the building of our plants is a
critical activity, as the Senator pointed out earlier on. These
are large capital projects, and investors in those projects
look at the market, they look at the legislation that is on the
books right now. 45Q has been an essential part of the
economics of our plants, so thank you for your work and your
leadership in bringing that in.
The USEIT Act is also important. When we have the IPCC, we
have the National Academy, we have the Royal Academy, the
United Nations, all saying that negative emissions, capturing
atmospheric CO2 is essential, it scares me that
there are less than 200 people in the world today working on
direct air capture. We need more people. We need more brilliant
minds onto this. And the USEIT Act will enable that by
providing funding for R&D.
Here at Carbon Engineer, we need more competitors. We need
more partners, we need more innovation. We hope your Act brings
more people to the table, and we thank you for your leadership.
Thank you.
[The prepared statement of Mr. Oldham follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you very much for your testimony.
Very, very interesting.
Mr. Waltzer, please.
STATEMENT OF KURT WALTZER, MANAGING
DIRECTOR, CLEAN AIR TASK FORCE
Mr. Waltzer. Senator Barrasso, Ranking Member Carper,
members of the committee, I am here on behalf of Clean Air Task
Force to express our support for the USEIT Act and urge its
prompt enactment.
The kinds of solutions proposed in this legislation is
urgent. Supporting innovation and infrastructure development
for carbon capture utilization and direct air capture as well
as other types of technologies and policies is crucial, given
the enormous challenges we are facing in addressing climate
change. To address this Herculean challenge will require
nothing less than fully de-carbonizing a $25 trillion global
energy system at the same time that we expect a 40 percent
increase in the world's energy demand.
To accomplish this task, we need a portfolio of low-carbon
technologies that are widely commercially available. Solar and
wind will certainly play an important role in de-carbonization,
but relying wholly on those technologies would be risky. In
part, this is because generating 100 percent of electricity
from just those sources will be significantly more expensive
than a more balanced portfolio of low-carbon solutions,
including nuclear and CCUS.
But more broadly, our complex energy system has some
sectors that are really not easily addressed or electrified.
These include aircraft, other certain types of industrial
processes. So in short, we really need multiple technology
shots on goal.
This is underscored in the de-carbonization scenarios
studied by the Intergovernmental Panel on Climate Change where
the vast majority of those scenarios included a substantial
amount of CCUS, as well as direct air capture. We are also
going to need a portfolio of policies, which includes policies
that provide certainty to inventors and investors by setting
clear targets through technology portfolio standards or
emission limits.
At the same time we need to also drive forward technology
innovation policies, including research and development,
support for commercial demonstrations, deployment incentives
and support for infrastructure. We need all these tools in the
tool kit if we are going to address this massive challenge.
For CCUS and direct air capture, the 45Q incentive was an
important bipartisan success supported by a broad range of
stakeholders from environmental organizations, labor unions and
industry. The USEIT Act is an important successor bill to that
effort.
If adopted, it will provide important, targeted support for
early stage R&D for demonstrations in CO2 pipeline
infrastructure development. The proposed direct air capture
prize is an important addition to our current RD&D tool kit,
and is based on a proven approach for leveraging private
capital in service to technology problems.
Supporting R&D for new products that utilize and
efficiently store carbon will provide an important catalyst to
an area that is already attracting early stage private
investment and early commercialization in niche markets.
Clarifying the eligibility of CO2 pipelines under
the FAST Act, and developing regional task forces to promote
local, State and Federal coordination will help move projects
while preserving environmental protections needed to ensure
responsible development.
Again, these policies by themselves are not going to be
sufficient to get us where we need to be. But they are
necessary.
We appreciate your leadership, Mr. Chairman, as well as
that of the bill's cosponsors on championing these policies and
on the bipartisan approach you have all taken in introducing
this legislation as well as your commitment to maintaining that
approach and addressing any future amendments. I appreciate the
opportunity to testify and look forward to answering your
questions.
[The prepared statement of Mr. Waltzer follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you very much. We are going to
proceed to a series of questions. I will start, Mr. Sukut, I
would like to start with you.
Basin Electric's leadership in carbon capture and
utilization and sequestration is impressive. I think you are
really to be commended for what you have been doing. Through
initiatives like the Integrated Test Center in Gillette and
Basin's Dry Fork Station, we are really proud to see Wyoming
has already established itself as an innovation hub. Can you
discuss why Wyoming and surrounding States are ideal, like
yours, are ideal places to do carbon capture utilization and
sequestration work?
Mr. Sukut. I think we should point out the first thing is
States like Wyoming, and of course North Dakota, have abundant
oil, gas and coal resources, natural resources. And these
resources are going to be a part of the energy future for this
Country for a long time.
But I think the most important thing to point out, and the
most relevant thing this morning to talk a little bit about is
actually the geology. Through the CarbonSAFE program, we have
got some wells drilled, one of them only less than a quarter
mile from Dry Fork Station. The geology looks very promising to
infuse carbon. We have two sites in North Dakota that are
virtually under some of our resources, our coal-based
resources.
So from that standpoint, I think we have an opportunity
here, a great opportunity here to infuse and demonstrate that
once we capture the carbon, we will be able to infuse it and
store it in the ground. But I think one of the most important
things, and I am so encouraged by sitting in front of you all
for all the leadership that you have taken in trying to get us
the legislation. I thank you for all that. Because the
leadership really does make a difference for us.
Senator Barrasso. Mr. Oldham, you can followup on that. But
I really have been interested for a long time in direct air
capture. I am pleased to see that public interest is now coming
into the fore. This is something I read about years ago in The
Economist, talking about the ways that they can be doing it and
trying to make it more cost-effective. Clearly, the technology
is there.
Why do you think we are seeing an increased interest in
direct air capture? Do you think the USEIT Act can actually
help drive public sector interest in direct air capture?
Mr. Oldham. Thank you. I see we even made a Dilbert cartoon
in the last couple of weeks. So I guess direct air capture is
really public domain now.
[Laughter.]
Mr. Oldham. So that is very good.
I will answer the question two ways. First, I think in
public conscience, the recent reports from the various
scientific committees worldwide have raised awareness of the
issue. So there is increasing recognition of need and equally,
at the same time, the recognition that there are solutions out
there like ours. We are not the only one. Having a need and a
solution really drives interest.
Economically, for sure, 45Q has made a big difference. It
sent a very clear signal from this house that there is a desire
to see innovation in this area. It helped close the economics
for business cases that didn't close otherwise.
For businesses like ours, the challenge is always the first
couple of projects. There, the cost is higher, the schedule is
longer, the perceived risk is higher. So having some support
for those initial projects is just essential.
So to my mind, that is a large part of it, helping us over
the hump at the first few projects.
Senator Barrasso. Good. And Mr. Waltzer, in terms of this
45Q, and I am so pleased to see the Clean Air Task Force's
recent report about the real impact that the 45Q tax credit
could have on reducing emissions. We have worked hard to extend
and expand that tax credit to support carbon capture efforts.
So we want to make sure that that tax credit is used.
If carbon capture projects are developed on a scale that
you predict, is there a real need for supporting
infrastructure, and how can the Federal Government support and
expedite the development of that infrastructure that you talk
of?
Mr. Waltzer. Mr. Chairman, in short, the answer is yes,
that is needed. What our study really showed was the economic
potential of 45Q. But 45Q by itself perhaps will not get us
there. In fact, we think more is needed.
We think that just because of the way commercial contracts
are set up today for developing pipelines, you can set up a
contract between point A and point B with the amount of
CO2 that is going to flow through, but you are not
going to necessarily set up the interState pipelines that are
necessary to connect all the little sources together to get
them to where the markets are. Right now, the most developed
market is enhanced oil recovery activity.
So we are going to need the sort of support to develop that
infrastructure and develop our national CO2
pipelines. But we are also going to need the kind of solutions
that are proposed in the USEIT Act that make the process of
setting those pipelines efficient and effective, while
maintaining our current environmental protection standards.
Senator Barrasso. Thanks so very much. Senator Carper?
Senator Carper. Thank you all for your testimony. I was
especially interested in your example of the infant in the tub.
I thought that was a great example. I wrote it down. I will use
it often, never attribute it to you.
[Laughter.]
Senator Carper. Oh, I will, I will. Thank you, that was
great.
I have a couple of questions for the whole panel.
Senator Barrasso. We don't need to start the clock. So we
had a former member of this committee, Senator Joe Lieberman.
Senator Carper. I remember, he just had his birthday last
week.
Senator Barrasso. And he said, well, here is something
really smart. The first time he repeats it, he says, and I have
heard Mr. Oldham say, dah, dah, dah, dah, dah. The next time he
would say, I heard a wise man once say, dah, dah, dah, dah.
[Laughter.]
Senator Barrasso. And then the third time, he says, As I
have said time and time again.
[Laughter.]
Senator Carper. We do this all the time.
[Laughter.]
Senator Carper. I am surprised there are not more cameras
here.
This is one for Mr. Waltzer. Again, thank you all for your
testimony. Like you, Mr. Waltzer, I want to ensure that this
legislation doesn't lead to other efforts to weaken the Clean
Air Act. I also appreciate the Chairman's commitment about not
using this bill as a vehicle to weaken the Clean Air Act, and
want to thank him for accepting a number of changes that we
recommended to last year's legislation, which we think makes
this version better.
My question, if I could, Mr. Waltzer, in your opinion is
the Clean Air Act inhibiting progress in CCUS technology
development or deployment?
Mr. Waltzer. Mr. Chairman, Senator Carper, I want to make
sure I understand your question. You are asking if the Clean
Air Act is, can play a role in moving CCUS technology forward?
Senator Carper. I will repeat the question. In your
opinion, is the Clean Air Act inhibiting progress in its
current form in CCUS technology development or deployment? Is
it impeding work in this area?
Mr. Waltzer. We have looked at this question from a legal
and technical perspective, and in our view, we don't see any
impediment. By the way, programs such as New Source Review
would be applied when carbon capture equipment is installed on
the power sector. So from our assessment, no, we don't see an
impediment.
Senator Carper. All right, good. As a followup, in 2009,
Congress was debating a climate bill that amended the Clean Air
Act. In the Senate climate bill, I worked with the late Senator
Robert Byrd and other coal-State Senators to provide incentives
for the deployment of CCUS. At the time, there were several
CCUS projects in the works nationwide. Once the climate bill
died, so did most of those projects.
My question is, could the Clean Air Act and broader climate
regulatory actions be helpful, maybe even critical, for the
success of CCUS?
Mr. Waltzer. Mr. Chairman, Senator Carper, in our view,
having that kind of long-term certainty associated with
planning horizons is absolutely crucial for power companies,
for example, to plan to include and develop carbon capture and
storage in their portfolios.
As many of us have witnessed, more and more power companies
are making commitments or laying out plans for de-carbonizing
their systems. We don't see those plans coming to fruition
unless there is a strong signal that is sent to allow that kind
of investment to occur. What we will see in the interim is more
investment in incremental resources that may reduce emissions.
But we are not going to see the kind of large-scale energy
system change that we think is needed, absent that kind of
direction.
Senator Carper. My next question, and I am going to ask it
initially of Mr. Waltzer, then I will ask our other panelists
to respond as well. That question is, would you take a couple
of moments to talk further about why the development of today's
carbon capture and sequestration technology is critical to help
us meet our climate goals and also help us get closer to having
direct air capture become a reality?
Mr. Waltzer. Senator, I think today's legislation, as I
noted, is an important component. We need all of the tools in
the tool kit. We need the kind of innovative prize tools that
are being proposed in this legislation to bring new commercial
pilot scale projects to market. We need to be developing
utilization technologies that create new uses.
While those markets may not necessarily be large by
themselves, they can have important catalytic effects. We have
seen one company develop its first pilot project in India
making baking soda, and based on that, they are developing
their next generation of solvents for carbon capture. We think
that moving this kind of legislation forward on a bipartisan
basis also more broadly sends an important signal that
technology innovation is increasingly being taken seriously,
and that does have, as soft as it is, that has an actual impact
on driving more interest in investment.
Senator Carper. Good. Thanks for that. Mr. Oldham, any
brief comments, please?
Mr. Oldham. Yes. I think a recognition of the problem of
increased carbon levels is critical. This house's recognition
of that problem is critical. The funding that you put aside
will, as I said earlier on, bring more brilliant minds into
this business. I think that is essential.
For me, it is about developing the tools. If we have the
tools that allow us the flexibility to make choices, we now are
able to make choices to address decarbonization. So any
innovation that drives that, any funding mechanisms that drive
an innovation will make a big difference.
Senator Carper. Thanks. Mr. Sukut?
Mr. Sukut. I basically agree with both the other two
panelists, maybe in a different way. When I look at our
facilities and how we get there. When we put iron in the
ground, we put it in for 30 or 40 years. My sense is that sol,
the USEIT Act gives us sort of the road map to get there, 45Q
gives us the financial incentives to get there. That is so
important.
I mean, we recognize we are past the science now. We
recognize the fact that we are in a carbon-constrained world,
and how do we get there. So we need time, and we need some
flexibility. I think Kurt mentioned the time element of this.
From our perspective, those are kind of the two aspects of how
we look at it, as I would look at it as a CEO of a utility.
Senator Carper. Thank you all. Thanks.
Senator Barrasso. Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
None of the three of you will appreciate this statement,
but it is so refreshing to me that we can talk about climate
without the normal, hysterical Hollywood references that are
being made, that the world is coming to an end and such as
that. Our world is not coming to an end, and climate has always
changed and always will change. I don't think anyone will
disagree with that.
All right. Let me just mention a couple of things. First of
all, the comments that were made by Senator Whitehouse. That is
significant, because those three pieces of legislation that he
mentioned, with the exception of the Defense Authorization Act,
were the three biggest, most significant things passed that
year. And it was a great partnership that did it, and it
surprised a lot of people.
Quite frankly, I didn't get on this bill until today,
because I didn't want my appearance on this bill to chase off
any of the others that were on this thing.
[Laughter.]
Senator Inhofe. So that is where I am. Now, I am the first
to admit, my State of Oklahoma is an oil State. We have 150,000
jobs with an average salary of $104,000. We contribute $24
billion to the gross State product. It is nearly a quarter of
the State's budget, that is spent in the oil and gas industry.
Now, you think that is the reason I would be supportive of
this. It is not. Those are good things. But when you look at
the fact that, I have 20 kids and grandkids, and they are going
to be around here a lot longer than I am. And we have to run
this machine called America. And you can't do it without the
use of fossil fuels. I think we now, this is kind of a
recognition that that is a fact.
Let me ask a question of you first, Mr. Oldham. In your
testimony, you talk about the existing supply of CO2
are primarily from geological sources and they are not enough.
I would like to have you speak on the demand side of this.
Mr. Oldham. Yes, sure. So today, I believe the figure is
about 18 megatons of CO2 are used globally around
the planet, of which my understanding is about 50 megatons are
used for enhanced oil recovery. So enhanced oil recovery is
actually the largest use of CO2 around the world
today.
Speculation and the market reports estimate that increasing
the amount of CO2 up to even as high as 140 megatons
per year is justified and can be used for EOR. So this is part
of the reason why we have had some energy companies invest into
our company and start working in partnership with us.
Remember also, when you capture CO2 directly
from the air, you have split the dependence on location. So we
can build our plant just about anywhere. We no longer have to
build a CO2 collection plant where the ethanol plant
has to be, and then move the CO2 through a pipeline.
By being able to do it by pulling CO2 directly from
the air, you can do EOR and capture your CO2
locally, and then use that CO2 for EOR and get
negative emissions at the same time.
Senator Inhofe. That is great. That offsets so many of the
people who are trying to use this issue for political purposes,
and they say you just have to do away with fossil fuels
altogether. You do that, you can't do that we are talking about
doing.
I want to have one short question there to Mr. Sukut. I
know this is addressed in the opening statement by our
chairman. But in your testimony, you mentioned that your
cooperative supports reform to other parts of the Clean Air
Act, specifically the New Source Review. I would like to have
you elaborate a little bit more, if you have more to say about
that, the fact that we are looking at it.
Mr. Sukut. I would be happy to, Senator. We, I think, more
than anything, encourage the enactment or, it isn't that we
don't, are not compliant with the New Source Review. I think
the biggest problem that we have had in the past, we have had
situations where, and I will use, actually I will give you a
real-life situation, where we had one of our coal plants in
North Dakota was going to put in some equipment to actually
make it more efficient. And then at the same time, it would
have generated 22 megawatts more of electricity. But we were
impacted and not able to do it because of the NSR rules.
Actually, if you had thought about it, it was going to
reduce the amount of coal burned, we were going to increase the
amount of electricity. But the rules were written such that we
couldn't get that done. I think we just need more clarity,
Senator, in terms of with the NSR rules. We need more clarity
in terms of what we can and can't do.
If we get a road map, we are going to be compliant and we
are going to do it. But we just need clarity, because it really
stopped us from, a, we could have generated more electricity,
two, we could have burned less coal and we would have had less
emissions. So it is kind of a double-edged sword. But if you
will, that is sort of my comment in terms of the NSR rules.
Senator Inhofe. That is good. I appreciate that.
Mr. Waltzer, I do have a question for you, but it will have
to be in the record, because I will not have time to get to it
now. But I do want to ask Mr. Oldham, you heard me describe my
State of Oklahoma, the number of jobs, the reliance we have,
how important the fossil fuels are to our State of Oklahoma. I
would like to ask you, what specifically, for a State like
Oklahoma, what does carbon capture utilization sequester, CCUS,
mean for my State of Oklahoma and how do these technologies
help?
Mr. Oldham. Sure. So that is probably a several-point
answer, but I will try and be brief. I think the first thing is
the ability to do further enhanced oil recovery, but in an
environmentally safe way. Negative emissions and EOR combined
is really a win-win. So that is No. 1. And of course, Wyoming
has a good amount of EOR already.
Second, I think it offers an opportunity for new industry.
There are many, the Department of Energy publishes an atlas of
sequestrationsites across the United States. Wyoming has a lot
of potential sequestrationsites, saline aquifers, geological
formations. So the opportunity to store CO2
underground in a State like Wyoming and many other States is a
very real opportunity.
The third thing is the synthetic fuel. So by reducing the
carbon intensity of fuel through blending, which of course the
biofuel industry, the ethanol industry does today, it is a
great way of helping de-carbonize the fossil fuels while
continuing to enable the economy that is so essential. So I
think those are the three main areas where I think we can
benefit. What I have said to you here, sir, is also applicable
for many other States across the United States.
Senator Inhofe. OK. I appreciate that very much, appreciate
the testimony very much. Thank you.
Senator Barrasso. Thank you, Senator Inhofe. Senator
Whitehouse.
Senator Whitehouse. Thank you, Chairman. Let me just take a
minute to ask unanimous consent that letters of support from
The Nature Conservancy, the Audubon Society, a list of our
many, many, many USEIT Act supporters, running from the AFL-CIO
to the Wyoming Outdoor Council, alphabetically, and a series of
statements from some of our supporters be put into the record.
Senator Barrasso. What was the first one?
Senator Whitehouse. AFL-CIO. A to W.
Senator Barrasso. OK. I was looking where the Algae
Association would fit in there.
[The referenced information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Whitehouse. After AFL-CIO.
[Laughter.]
Senator Barrasso. Do you have the Algae Association?
Senator Whitehouse. No, I have got to get them on that.
[Laughter.]
Senator Whitehouse. First of all, very basic question. Do
any of you doubt that climate change is a serious matter
requiring urgent attention by Congress?
Mr. Waltzer. No.
Mr. Sukut. No. I mean, I think we are past the science. I
think we are to a point as a utility that we want to find ways
to capture and sequester carbon.
Mr. Oldham. No.
Senator Whitehouse. And how important do you feel carbon
pricing is as one of the solutions to the problem? In the top
ten, in the top two, top one?
Mr. Sukut. So maybe I will start with a comment and then
you can followup with a question based on my comment. I think
as a utility, we are really challenged or pressed to operate at
the lowest possible cost that we can. I think technologically
there are probably some solutions that might be a little bit,
if you are referring to a carbon tax in its essence is maybe
something a little bit cheaper than a carbon tax as far as
being onerous to our end consumers.
So I would encourage, as a utility, I would encourage the
technological advances that we can make to capture carbon,
because I think there are ways we can even do it cheaper there
than through the carbon tax.
Senator Whitehouse. Mr. Oldham.
Mr. Oldham. Let me first apologize to Senator Inhofe. I got
your State wrong. Please chalk that down to an ignorant
foreigner.
[Laughter.]
Senator Barrasso. The Chairman loved your answers.
[Laughter.]
Mr. Oldham. Again, my apologies. So I think the question
is, how do you incentivize the public to recognize a better
product, and a better product in terms of de-carbonization is a
product that has a lower carbon footprint.
Often the way that works is a combination of public
sentiment, but also government direction and regulation. So the
mechanism of government direction I am not the expert on. I
can't speak as to whether a carbon tax is the right answer or
tax credits or positive incentive or a negative incentive. It
is just not my area of expertise. But I think the signal is
essential.
Senator Whitehouse. The signal is essential.
Mr. Oldham. Yes.
Senator Whitehouse. Mr. Waltzer.
Mr. Waltzer. I think there is ample evidence that a
combination of a pull policy, something that has a clear signal
that companies know they need to invest in order to meet a
technology goal, an emissions reduction goal, or a carbon
price, combined with innovation, has been a winning
combination. We have seen that with deployment of sulfur
dioxide scrubbers, there was a lot of R&D that went into that.
And obviously a lot of tools in the Clean Air Act that
pulled that technology forward. We have seen that with solar,
for example, significant price drop between the early 1980's to
say, 2010, almost 95 percent, driven by a combination of R&D,
the kind of deployment incentives that we have now with 45Q and
the renewable portfolio standards. These policies, given how
short our timeframe is, given the need to develop technologies
that are here, not just here but globally, we have to have both
of those options on the table and move forward with them
quickly.
Senator Whitehouse. Let me ask a question specific to this
technology. And it would be, what do you think the best case
scenario is for the carbon capture industry, say by 2040? What
could we expect in terms of potential carbon removal? And what
in the way of getting there, to you, are the most exciting
technical or other opportunities? What do you see as the great
things that might open up? Let's go the other way this time, we
will start with Waltzer, Oldham and Sukut.
Mr. Waltzer. So by 2040, what we hope to see and what we
think is possible is significant deployment of carbon capture
utilization storage, not just in the U.S., but around the
world. We think, as we have seen with technologies like Net
Power, there can be substantial cost reductions on
CO2 , carbon capture at industrial facilities and
power facilities. They are targeting $10 a ton if that happens,
if you have a natural gas plant, if they can capture $10 a ton,
that is a game changer.
We also are really interested in the concept of zero carbon
fuels, and carbon capture and storage can play an important
role there. Hydrogen and ammonia, basically taking natural gas
or forming it, sequestering it.
Senator Whitehouse. I am down to 30 seconds and I have two
more witnesses. So let me jump to Mr. Oldham. Sorry, Mr.
Waltzer.
Mr. Waltzer. No problem.
Mr. Oldham. I would like to see a combination of successes.
The first would be the continued prevalence of emission control
through the types of activities that you have heard discussed
here. The second would be a recognition that there are some
industries that it is extremely challenging to de-carbonize,
and instead, you set up a carbon offset program by doing
something like direct air capture to reduce CO2 .
Senator Whitehouse. How big could this be?
Mr. Oldham. How big?
Senator Whitehouse. Yes. There are only 200 people working
in this area right now. Could that be 200,000? Could that be
20,000?
Mr. Oldham. So each of our plants does about a megaton of
CO2 capture per year. So a large number of plants is
required to make a dent in this problem. I believe there is no
reason why you can't roll out these plants worldwide. Our
business model is to license our technology to any partner who
is interested. So we would like to see literally hundreds of
our plants put worldwide, because this is a global problem, it
is everybody's problem.
Senator Whitehouse. Well, my time is expired, so let me
just leave a question for the record. Because I have truncated
your answer and we ran out of time before you could have a
chance, Mr. Sukut. So if you could, again, what are the coolest
things that you think are out there in this industry? And what
do you think the prospects are, and how can we help you achieve
those best case prospects?
Senator Barrasso. You would like written response to that?
Senator Whitehouse. Yes. I think response to the record
makes sense. We can go on with other colleagues who are
waiting.
Senator Barrasso. All right. Before heading to Senator
Capito, I have a list of letters supporting this as well in
alphabetical order, from the Carbon Utilization Research
Council to the Western Governors Association. And without
objection, we will submit these as well.
[The referenced information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Senator Capito.
Senator Capito. Thank you, Mr. Chairman.
Mr. Sukut, you mentioned in your statements about research
and development. We have talked about enhanced oil recovery as
a use. Mr. Oldham talked about a new synthetic fuel that could
be used with the recycling of the carbon. Is it your intention
or is the intention--how advanced would you say the research is
in this area in terms of other kinds of uses of carbon, and
where do you see this in the next 10 to 15 years?
Mr. Sukut. So just let me start by saying, I think we are
probably, in the technology curve, we are probably back here a
little bit. But let me say this. In taking a look at the
Integrated Test Center in Wyoming that we have, we have the six
participants now. I see a lot of excitement in some of the
things they think they can do to extract and turn it into
useable product, like a cement enhancer, ethanol. I think it
could be limitless, especially with the timeframe that we have
here in terms of years, saying to 2035 or 2040.
Look what this Country did with sulfur. Thirty-five year
ago, we were struggling with removing SO2 from the air. Today
it is not tough at all to get to over 99 percent. All of our
plants are able to do it, and they do it very routinely. So I
think with a timeline like that, this Country has been able to
do it before, and I think we can do it again with
CO2 .
So I think it is limitless. I know I am not giving you as
direct an answer as you want, but I really feel that.
Senator Capito. Mr. Oldham, do you have any comments on
that?
Mr. Oldham. I think this technology is at different phases
of implementation. Our technology is ready to go to market now.
Senator Capito. Is this for the synthetic fuel?
Mr. Oldham. No, well, for both. We have done it to capture
CO2 , and then you can make the synthetic fuel.
Senator Capito. Right.
Mr. Oldham. So it is ready to go to market now, because we
use pieces of equipment from things like the clean power
industry, the water treatment industry, the I&R industry. So in
our case, we think, well, we know we are ready to go to market
now, and the large energy companies that are working with us
agree.
But you can always improve the process. The sulfur example
is a great example. It is an iterative process to make it
better and better. But it is a spectrum. There are some
technologies that are absolutely fully ready for implementation
now.
Senator Capito. So let me ask Mr. Sukut again, on the
regulatory thing, do you agree that interState CO2
pipelines would be more challenging than international
pipelines? Apparently, we have had some issues in Wyoming and
other places where we can't do interState carbon pipelines.
Mr. Sukut. I think there are some challenges. We have seen
some challenges with pipelines via some of the landowners and
some of the other things that have happened in this Country. I
think all you have to do is look at the natural gas market and
see, there are pockets there where natural gas can go to eight
bucks where Nymex is trading at two, just because of its
infrastructure. There is a lot of natural gas out there.
Senator Capito. Right.
Mr. Sukut. So yes, I think that there are some issues. I
think we could use some help with it. I think the USEIT Act is
a huge step in that direction, I really do, and I applaud you,
all of you, for taking that step, to be honest with you.
Senator Capito. There has been a lot of pushback on
pipelines. We are experiencing that in West Virginia right now,
with the natural gas pipelines.
In terms of, this is a little offshoot question, but in
terms of the general public's perception of a carbon
CO2 pipeline, does that present any other inherent
dangers, besides a regular ethane, methane pipeline?
Mr. Sukut. No, it doesn't at all. In fact, we have a
CO2 pipeline in service. We have had it in service
for 20 years.
Senator Capito. Right.
Mr. Sukut. We send CO2 every day to the Canadian
oil fields. We add a sort of an odor, it is called mercaptan,
it is added to natural gas.
Senator Capito. To protect it. Yes.
Mr. Sukut. Absolutely not, doesn't pose any kind of greater
threat.
Senator Capito. So I also have a large coal industry, as
you all probably know, being from West Virginia. My interest
here is obviously on the economic front, but on the
environmental front as well. Globally, we know that a lot more
countries are using coal in other areas to pull people out of
poverty and bring up the economic viabilities.
Are you finding globally that this technology is something
that is--you mentioned you wanted to have plants all over the
world. For the heavy coal-intense areas now, where are you
seeing this acceptability?
Mr. Oldham. It is a great question. So why people are
interested in our technology is because we can offset the hard
to de-carbonize industries that are essential for economy or
essential for any other reasons, for jobs and so on. So our
technology, because it sounds independent and does negative
emissions in parallel with other industries, airline industry
is another great example, really hard to de-carbonize, the coal
industry, hard to de-carbonize.
So by doing things like a negative emissions plant which
can be located at any location, you can put them anywhere, you
have another industry, but you allow that first industry to
keep going, but you are still de-carbonizing it.
Senator Capito. Thank you.
Senator Barrasso. Thank you, Senator Capito. Senator
Cardin? Oh, Senator Whitehouse, yes.
Senator Whitehouse. When I gave my thank-yous to my
cosponsors on this bill, Senator Duckworth was not in the room.
She is now in the room, so I just want to add my gratitude
personally to her for her support. Thank you.
Senator Barrasso. Senator Cardin.
Senator Cardin. Thank you, Mr. Chairman. I want to thank
you and I want to thank Senator Whitehouse for working together
to deal with a practical, bipartisan way to reduce carbon
through carbon capture. To me, this is how we should be working
to try to make progress wherever we can make progress. I thank
you. It is science-driven decisionmaking.
In my State of Maryland, the geological survey has been
working on carbon capture and sequestration for many, many
years. They are targeting entities such as unused gas wells,
geologic rift zones and deep saline aquifers. So we are very
much engaged in this process, because we think there is a major
return.
But I would also point out there is no one answer to
dealing with the carbon issue. Senator Van Hollen and Senator
Carper and I, and also Senator Gillibrand, represent the
Chesapeake Bay watershed. So we understand, and Senator Capito
who was here, is also part of that region.
We recognize the challenge that we have in the Chesapeake
Bay. So we look at carbon capture as one way of helping deal
with the issue. We also look at our energy policy as an
important point on dealing with carbon emissions. We look at
farming practices, we look at shoreline development and dealing
with storm runoff issues. All these are important.
One area where we have been able to get bipartisan support
is to restore wetlands. Wetlands are a natural way of capturing
carbon. So as we lose wetlands, and we lose wetlands every
year, we are making the carbon issue more severe in this
Country.
So when we got to the nutria eradication issue, which was a
bipartisan effort, this committee was very much engaged in it,
we were able, effectively, to eliminate the nutria population
on the eastern shore, which has saved, literally, a large
portion of Blackwater National Wildlife Refuge, it is saved
today with wetlands because we got rid of the nutria
population. That is helping on our carbon emissions.
So my question to Mr. Waltzer is, do you agree that carbon
capture is important, but we need to have a coordinated effort
on so many different directions if we are going to make a
consequential difference on the carbon emissions that are
occurring today? What would your priorities be?
Mr. Waltzer. Senator Cardin, I think there is no question
that we have to have a broad set of technology tools available
to us to de-carbonize our planet. Our priorities are pretty
simple. We need to have a set of policies that drive innovation
across renewables, carbon capture and nuclear.
We need to make sure that those technologies get to the
point where they are widely commercially available, to be not
just used here in the U.S., but around the world. And that tool
kit is going to be a combination of certainty that comes from
technology portfolio standards or emission limits or carbon
pricing combined with a robust set of innovation policies, like
we are talking about today with the USEIT Act.
It seems like a pretty simple formula. But it is a profound
formula, and one that we need to move on on all fronts quickly
if we are going to address this in a timeframe that matters.
Senator Cardin. Another area that we were able to work in a
bipartisan manner dealt with certain tax incentives for
renewable energy sources. That also has a dramatic impact on
reducing carbon emissions. I just mention the different areas
that we need to work on in a coordinated way to deal with the
realities of carbon pollution and what it is doing to our
atmosphere and what it is doing to our environment.
So on a scale of where we need to put our attention, where
should we be placing our attentions?
Mr. Waltzer. I think our priorities need to be focused on
insuring that renewable energy continues to develop as a
solution. Right now it is only providing less than 1 percent of
the world's primary energy production. That is not enough. We
can do much more. But we are currently getting over 80 percent
of our primary energy production from fossil fuels. That is not
likely to go away by mid-century. So we are going to need a
robust application of carbon capture utilization and storage.
And we get about 5 percent globally from nuclear power. We
are beginning to see some evidence that that can get back to a
place where it can play an important role in providing those
solutions. And we need all of those tools in the tool kit. So I
think we have to be ambitious and move forward on all fronts.
Senator Cardin. Thank you. Thank you, Mr. Chairman.
Senator Barrasso. Thank you so much. Senator Braun?
Senator Braun. Thank you. Indiana is a State among others
that is disproportionately dependent on coal, and most of our
fossil fuel reserves are in coal. My opinion is, in the long
run, the cleanest, least expensive fuel is going to win out in
the marketplace. We are slowly transitioning.
I want to direct these questions at Mr. Sukut, if you could
start off. Is there anything on the horizon that can take coal
and have it emit more cleanly? I would also like a comment
about recapture on fossil fuels once you burn them. Is that
basically the same? And does one have an advantage over the
other?
But we are closing coal plants down, probably starting out
any new regeneration with natural gas. But just curious if
there is anything on the horizon for a State like Indiana that
is so dependent on coal, to fix it in the short run and then
maybe lengthen the life of these plants in a clean way.
Mr. Sukut. Thank you for the question, Senator. Yes, I
think there is. I think there are some promising technologies
out there that work. For example, Amine, and I am not a
scientist, I am a finance CPA, so don't ask me any scientific
questions here, because I can't answer them.
But I do know this: the Amine process works, it does. I
think the most important thing is, we really do kind of need an
all of the above energy resources, inclusive of coal. If we can
clean coal up, if we can take the CO2 out, we
already know we can take sulfur, mercury, NOX out, it would
operate a lot just like wind. You would have a clean source.
Now, as time goes along, for example, in North Dakota, wind
works very well for us. In fact, this year over 25 percent of
the energy produced at Basin Electric is going to come from
wind. Because wind works up in North Dakota, it really does.
And as time goes along, new coal, as you know, Senator, has not
come online for about 10 years. Dry Fork Station is one of the
last ones that came on, and that was 2010.
So if you think about it, the older coal plants, they will
retire, and as they retire, you are going to see less and less
coal. But I think what we do need to do is the newer plants
continue to work on, for example, the Amine technology is one I
can think of right off hand, to capture carbon and infuse it.
Because we know we have ways to do that, and we have caverns
that we know we can store it at.
So from that standpoint, I would encourage that we continue
to re-use that natural resource to the extent we can utilize
those kinds of technologies.
Senator Braun. Anything other than Amine that you can think
of?
Mr. Sukut. The science guys would be better at talking
about this than I would.
Senator Braun. Go ahead.
Mr. Waltzer. I think it is important to note a couple of
things with coal and CCUS. The first commercial demonstration
of applying CCUS was done on a coal plant, the Petra Nova
project, outside Houston. It is worth to note that project came
in on time and on budget. It is very well managed, operating
very well.
More broadly, when we step back, we think about this issue
as global. And we see a thousand gigawatts of coal plants in
China, most are new and are going to be emitting for the next
50 years. It is absolutely crucial to develop this technology
so it can be applied, not just in the U.S., but around the
world.
The third point is, we have talked with power companies
that have expressed an interest in using 45Q to move forward on
projects. I think as Senator Capito alluded to, we are waiting
for the starting gun to happen, when the Treasury will put out
its guidance, and that can't happen too soon. We have that
short window of commenced construction, which can be a
challenge for power plants. But we do think that utilizing CCUS
with coal plants is an important tool.
Senator Braun. Thank you. Mr. Oldham?
Mr. Oldham. Yes, thank you. One of the beauties of the
technology that we have developed is the fact that it allows
you to do purely negative emissions. Capture CO2
from the atmosphere, bury it under the ground permanently, at a
location that makes sense. And there are many, many locations
across the United States.
What that allows you to do is make a choice. You can
continue to operate a coal plant and it can continue to have
emissions. But at the same time you build one of our plants or
a similar technology, to completely offset those emissions. So
you have immediately gone carbon-neutral. But you haven't
affected the economics of that plant and the industries that
depend on it.
So in my view, that is one of the critical reasons why
direct air capture technology should be increased in funding.
It gives you choices. You can continue with the airline
industry, you can continue with the coal industry, but doing so
in a carbon-neutral or even carbon-negative way.
Mr. Sukut. One last technology that we have participated
with, Allete, it is a Minnesota-based investor-owned, is the
Allam cycle. And I referred to it in my written testimony.
Actually, that is a coal-based, but is zero-emissions. The
byproduct of that, it uses compressed CO2 to run a
turbine. And really, the byproduct of that is water, so it is
completely clean. But yet another technology that is on the
horizon, and it is down the road a little way. We are trying to
get to the demonstration stage with it.
Senator Braun. Thank you.
Senator Barrasso. Thank you, Senator Braun. Appreciate it.
Senator Duckworth?
Senator Duckworth. Thank you, Mr. Chairman. Gentlemen,
welcome, and Mr. Sukut, a special welcome to you. Your daughter
is one of my wonderful staff members, and I exploit her labor
on a daily basis. She is quite wonderful, I am glad to have her
on staff.
Mr. Sukut. Thank you, Senator. We are very proud and thank
you to, for employing her gainfully. We appreciate that.
[Laughter.]
Senator Duckworth. You are most welcome.
Across Illinois and our Country, we are already
experiencing the harmful effects of climate change. Growing
seasons are changing, heat waves are increasing, extreme floods
are becoming more frequent and severe. This all that we are
talking about today.
Simply put, climate change is no longer a threat. It is
here, the climate has changed. I believe that we must seek
solutions to cutting carbon pollution that strengthen our
economy and advance new industries and create quality American
jobs. The bipartisan USEIT Act, combined with the action
Congress took last year that extended and reformed the 45Q tax
credit, will help to make sure we accomplish these goals.
Senator Whitehouse mentioned this. I look forward to working
with my colleagues on this committee to advance and further
improve this promising legislation.
Mr. Waltzer, Illinois has some of the best saline storage
locations in the Country. Last Congress, Chairman Barrasso and
Senator Whitehouse worked with me on adding language to the
USEIT Act that requires the Department of Energy to author a
report to make recommendations to project developers on how
best to use saline formation for carbon sequestration. Can you
share why this report would be important to the future of
permanent carbon sequestration?
Mr. Waltzer. Absolutely, Senator Duckworth, for three
reasons. First, given the scale of what we need to do in terms
of eliminating carbon emissions on the planet, saline is going
to be our biggest target. There is really no substitute. We
need to move forward on enhanced oil recovery and utilization.
But if we are really going to make the cuts we need to make,
that is where we are going to store the carbon.
Second, there are innovations that are occurring, for
example, being able to produce water, particularly in arid
areas. So it is not just a storage space, it is potentially a
place where we can also develop useful products.
And third, it is the resource that is most abundant. That
is why ADM is doing that project in Illinois in saline, because
there is some EOR potential, but it is completely dwarfed by
the availability of saline resources. We have more saline
resources in North America than we have EOR or any other
target. So if we are not developing this resource and we are
not being thoughtful, then we are putting ourselves at a
significant disadvantage.
Senator Duckworth. Thank you. So you mentioned ADM. They
are one of the world's largest food processors, and this is a
one of a kind project in Decatur, Illinois. It captures carbon
dioxide, which is created as a by-product at a corn processing
facility, and stores it safely almost a mile and a half
underground in the Mount Simon Sandstone. A lot of attention is
spent discussing on how CCUS can be applied to the power
sector. I believe the USEIT Act will help spur industrial
capture projects like the one in my back yard.
Mr. Waltzer, you mentioned ADM's project. Can you talk a
little bit about how decarbonizing projects like ADM can teach
us lessons about how we can decarbonize the industrial sector?
Mr. Waltzer. Absolutely. It is a very important project. It
is a first of a kind. Industry is one of those hard to reach
places in terms of decarbonizing. CCUS is almost certainly
going to be necessary to decarbonize the industrial sector.
Fortunately, there are plants like the ADM plant that are
ready-made, in a sense. They have a low-cost CO2
supply, they have pure CO2 streams, and there are
many of these types of facilities, from ethanol, from hydrogen
or ammonia production, other sources that we can quickly move
forward on. And we expect 45Q to really move first in those
areas.
So we think it is both absolutely necessary and an area
that we expect to see a fair amount of activity on in terms of
utilizing incentives like 45Q and the USEIT Act.
Senator Duckworth. Thank you.
Mr. Sukut, I know you said that you are a finance guy and
not a scientist, but I would think that a report that would
come out of something like the USEIT Act, that would make
recommendations to project developers on how best to use
information for carbon sequestration would be something useful.
Can you talk a little bit to that? In Illinois, for example,
wind power has created 100,000 jobs in 10 years. I see that
there is potential on the economic front for some great
benefits here as well.
Mr. Sukut. Absolutely, Senator. I think when we put iron in
the ground, we put it in, as I said, for 30 or 40 years. To the
extent that we can get more information and we can use it in
terms of making sure that it is critical and can be used, and
the fact that it gives us the information that we can go
forward with, that is one of the most critical things in the
utility industry, quite frankly.
So I would think it is absolutely critical that we have
information like this in the USEIT Act. So I would very
strongly encourage it to be part of the Act.
Senator Duckworth. Thank you. Mr. Oldham, I just have a
minute left. Did you want to add anything to the discussion so
far?
Mr. Oldham. I think one of the things, you are absolutely
correct, that renewable energy and the driver, that is a
critical part of developing jobs. One of the key things to
remember is the importance of not just reducing emissions but
also reducing the CO2 already in the atmosphere.
Senator Carper has an excellent bathtub analogy that I think he
uses.
[Laughter.]
Senator Carper. I have been using it for years.
Mr. Oldham. Continued focus on CO2 removal, and
you are quite correct, saline aquifers are a fantastic place to
store CO2 , and Illinois a great place to do so.
Senator Duckworth. Thank you. I yield back, Mr. Chairman.
Senator Barrasso. Thank you so much. Senator Sullivan?
Senator Sullivan. Thank you, Mr. Chairman. You learn a lot
in these hearings. I am not sure I was expecting to hear the
exploitation of labor happening--I am just kidding.
[Laughter.]
Senator Sullivan. That is just a joke.
But let me ask really all of you gentlemen, one of the
issues, when we are all looking at the issue of bringing on new
technologies in the energy space is our regulatory and
permitting processes at the Federal level. One of the things
that I have been very concerned about is the time it takes to
deploy just basic infrastructure in our Country, whether it is
roads or bridges or pipelines. And as all of you know, it takes
forever, about 8 years on average, to permit a bridge in
America, if you can believe that. Same with a pipeline.
Highways, it is well over a decade.
This is a problem that I say cuts across partisan issues. I
had a bill las year we are going to reintroduce called the
Rebuild America Now Act, which is looking at reforming the NEPA
process, not to cut corners. But I don't think anyone thinks
nine to 10 years to permit a pipeline is a good idea for our
Country.
What are the big areas of permitting roadblocks that you
have seen in your experience, and how can we address it here in
the Congress? I will open that up to any and all.
Mr. Sukut. I can start, because this is sort of one of my
things, too, quite frankly. So in some of the things with NEPA,
one of the areas that we see a lot of roadblocks is the EA, or
the environmental assessment or the EIA. Those things take
months and months and months.
Really, if we had some more certainty when we headed into
them, and the rules that we could get over the hump. Because a
lot of times, the actual work doesn't really take that long.
But there is just so many regulations. And really, we are not
trying to bypass the environmental assessment at all.
Senator Sullivan. No.
Mr. Sukut. That is not what we are trying to do. Please
don't get that impression. But it takes so much time to get
some of this done.
So I will give you one example. We are not an RUS borrower
any more. We used to be. We were putting in a 200-megawatt wind
farm. We had to go through an environmental assessment. We
finally went to outside financing, just because we couldn't get
all of the work done because we had to do an EIS instead of an
EA. It took us so long to get it done, I think the thing was
fully depreciated by the time we got the go-ahead from RUS.
Senator Sullivan. How many years did it take?
Mr. Sukut. Well, we ran two and a half years. The wind farm
was completed and we had run it two and a half years before we
finally got the go-ahead, oh, you can go get the RUS money now.
Well, too late, we had to do conventional financing.
So yes, Senator, absolutely.
Senator Sullivan. We want to work with all of you on this.
Because again, the original idea NEPA and EIS was to make sure
there was public input with the EISs. Well, the irony is now,
the EISs now are in the thousands of pages. They cost millions
of dollars. They stop development. And nobody reads them,
because they are too big. So the idea of public input has been
turned on its head. Usually an EIS comes out, it is several
thousand pages and nobody has any idea what is in it and nobody
reads it. I think we can do better as a Country.
Mr. Sukut. That and it costs money.
Senator Sullivan. It costs a lot of money and it stalls
projects and jobs.
Let me just ask one kind of final question. I think there
is this really, really exciting area in the world of energy and
technology, that relates to some of our traditional resources
that we have and the marriage of technology.
Let me just give you an example, natural gas. So our
Country is now the largest producer of natural gas in the
world. I happen to think that is a really good thing. We
actually are the largest producer of oil in the world. I
actually think that is a really good thing. We are actually the
largest producer of renewables in the world. That is also a
good thing. All of the above, energy.
But in terms of gas, because it is low carbon, and when you
burn it really high, you can actually almost zero out any
emissions, the marriage of technology and a hundred to two
hundred years of supply of natural gas in America creates
enormous opportunities. Some of you might be familiar, I was
out in the Silicon Valley area not too long ago. Bloom Energy
is doing all kinds of really exciting work with natural gas and
fuel cell opportunities.
What do you see as some of the opportunities that relates
to integrating some of our current, abundant resources, in
particular I want to ask about natural gas, and technology, or
renewables, for example. There is a lot of experiments going on
with wind power and solar power. It is intermittent, and when
you don't have the wind, you find up natural gas turbines that
can create power generation. I think it is a very exciting area
and I would love any of your views on that.
Mr. Oldham. Just a quick comment. Our direct capture plants
use natural gas. They can be powered by natural gas or
renewable electricity or both. And the reasons are exactly what
you say, it is a prevalent resource, it is effective.
Senator Sullivan. Low carbon when you burn it high.
Mr. Oldham. We also capture all of the CO2
emissions from using natural gas and it becomes part of our
product at the end of the day. So yes, I agree, natural gas is
a tremendous resource.
Senator Sullivan. So becoming the world's largest producer
of natural gas in terms of jobs, energy security, national
security, but also in terms of the environment in the future is
pretty exciting, wouldn't you say?
Mr. Oldham. Certainly when you combine it with a technology
like ours, absolutely, yes.
Mr. Waltzer. I would say that there is enormous potential
to use low-cost gas to actually drive forward low carbon
technologies. There is also a caution that we have to do that
by managing things like upstream methane emissions and insuring
the coal life cycle chain of the gas is truly low carbon.
But a couple of areas on the technology side that are most
interesting to us, anyway, we have talked before about the Net
Power technology that is potentially a breakthrough technology
to supply zero carbon power, fueled by natural gas, at very low
cost. The other area that we think is particularly interesting
is generation of hydrogen or ammonia from zero carbon gas. You
can even repurpose conventional gas turbines to burn hydrogen
or ammonia. They are looking at that in the Netherlands right
now. But that can also apply to the industrial sector and the
transportation sector.
It does have enormous potential, but it also is going to
require some diligence on all the elements that are necessary
to insure it is truly low carbon.
Senator Sullivan. Thank you. Thank you, Mr. Chairman.
Senator Barrasso. Thank you very much. Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman, and thank all
of you for being here today.
I like this legislation, because it seems to be a
bipartisan acknowledgment that we have to make public
investments in order to reduce carbon pollution emissions, in
order to address the risks of climate change. Do all of you
gentlemen agree with that statement? Is that a yes? I see all
of you nodding.
Mr. Sukut. Yes.
Mr. Oldham. Absolutely.
Mr. Waltzer. Yes.
Senator Van Hollen. All right. Now, as you have all
testified, there are a number of ways to do that. We have tax
credits in the area of solar, we have had tax credits in the
area of wind. A number of us have bills that would put a price
on carbon.
I would like all of you, if you could, to respond to an
article that was written in Forbes just a few years ago. It was
by Jeffrey Rissman and Robbie Orvis. One of them is the Energy
Innovations head of modeling and energy policy. The other is
the Energy Innovations policy design projects manager. Here is
what they said. ``While many technologies can reduce power
sector emissions, carbon capture and storage has gained support
in Congress. But it is the most expensive option available.''
They go on to say, ``Our analysis shows coal plants
equipped with CCS are nearly three times more expensive than
on-shore wind power and more than twice as expensive as solar
photovoltaics. Although these costs will decline with research
and development, the potential for cost improvement is limited.
Coal with CCS will always need significant subsidies to compete
economically with wind and solar.''
Now, the reason I support this legislation is I think that
we are at a dangerous point and that we need to put all hands
on deck. We need to turn off the faucets, as you said, Mr.
Oldham, and pull out the plug. So I support this.
But could you just discuss briefly the cost comparisons
with respect to public subsidy, with respect to technologies,
both today and what you see going forward?
Mr. Oldham. Yes, I think that is a really challenging
question, because it is a multi-faceted one.
I think the way to look at it is to baseline what we think
the cost of a ton of carbon is. And the cost of a ton of carbon
has an impact in a variety of different ways. A large amount of
carbon has a very significant cost.
So for us, the way that we look at our business is to drive
our cost per ton of carbon down as low as we can. We do so by
using technology that exists today, measurable performance. And
we have driven it down to around about $100 per ton.
So the question then becomes, is that a reasonable cost per
ton of carbon. Now, the carbon that I am talking about is
atmospheric carbon. It is not emitted carbon. So emitted carbon
is easier to capture, because it is more prevalent in the
source. CO2 in the atmosphere, 400 parts per
million. So my carbon is more expensive to capture, but it is
also essential per the bathtub analogy we discussed earlier on.
So for us, about $100 per ton of CO2 . A few
years ago, the National Academy of Scientists published a
report that said the cost of a ton of carbon from the
atmosphere would be about $600. We are now at $100. So your
point about innovation driving down the cost point, it is
already happening and it will continue.
Mr. Waltzer. So in a limited way I agree with that
statement. Reducing current generation technology through
incremental improvements on the kind of technologies we are
applying to coal plants today, I don't think they are going to
get radically lower. But there are next generation technologies
and carbon capture and storage that can take us to that golden
zone of trying to be cost competitive with carbon-intensive
alternatives.
And so I think it is important to move forward to try and
obtain that goal. The risk is if we don't do that, then we are
relying on fewer technologies. We support significant
deployment, additional significant deployment of renewables,
but they are variable source technologies, and there is a point
at which you have to over-build the system in order to pay for
it, even if on an incremental basis they are cost effective.
Senator Van Hollen. I am sorry to interrupt. Do you
envision that you are going to require a significant public
subsidy for the foreseeable future to address, to provide for
carbon capture technology?
Mr. Waltzer. I would say the kind of support that is needed
to move the technology forward isn't that different than the
kind of support that was needed to move wind and solar
technologies down the cost curve. I don't think we really want
any technology to be on a perpetual subsidy. We want them all
to become as affordable as possible as soon as possible.
Senator Van Hollen. Absolutely.
But if I could, Mr. Sukut, you mentioned, I think in
response to Senator Whitehouse, that the cost of doing this
relative to a carbon fee, you saw this technology being a lower
cost, if I understood your answer.
Mr. Sukut. And I do, Senator. In fact, I would offer this
up, I actually, again, I go back to our integrated test
facility in Wyoming. One or two of those test guys are actually
offering up that it would be less than $40 a ton, because I
think it is, and I absolutely agree with it, it is cheaper to
extract from the existing flue than it is from the air, it
really is.
So less than $40, in terms of our Dry Fork Station, I don't
mean to be overly practical here, but that is such a new plant
that it runs way cheaper and more efficiently also. So we have
a lot more cost groom there in order to be able to still
compete in the market. And the technology will improve a little
bit. So I think they will come together some.
But I think we have room to run those facilities, and if we
can capture it in a way that is more economic, I think we have
a good, good chance here to do this.
Senator Van Hollen. I appreciate that. I see my time is
out. It is that last part, if it is economical, right. That is
the focus.
Senator Barrasso. Senator Whitehouse.
Senator Whitehouse. Mr. Chairman, if I could just interject
one point on it. The way I see this is that, let's say
hypothetically there were a $50 per ton carbon price. That puts
a huge economic incentive into the hands of every entity that
is paying that $50 per ton carbon price to instead pay $49 per
ton to have the carbon removed, or $48 or $10, depending on
whatever the price is.
And the fact that we have this artificial failure to price
carbon emissions in our marketplace I think is discouraging to
this industry. If we went to a proper market system in which
the externalities are in the price of the product, then
anything cheaper than that becomes something that becomes
quickly marketable. I don't consider that a subsidy. I consider
the subsidy as not having that in the market system.
So I just wanted to add that point, and I appreciate
Senator Van Hollen's concern.
Senator Barrasso. Senator Van Hollen.
Senator Van Hollen. If I could just, I agree with Senator
Whitehouse. Look, a price on carbon in my view is the most
economic way to do this. Subsidies, or the flip side of it,
right. Because on one hand, a price on carbon, you are letting
the market set the price by requiring people to be more
efficient. The other side is you provide subsidies for
different kinds of technologies.
I would prefer the market approach, because I think that
allows all players to compete on a more even playing field.
There are some different pieces of legislation to do that.
But in the meantime, I support efforts like this. Thank
you.
Senator Barrasso. Well, thank you, Senator Van Hollen. Just
to interject, Senators Whitehouse, Carper and Duckworth are all
cosponsoring the legislation. If you would like to, that would
make it four Republicans and four Democrats from this
committee.
Senator Van Hollen. I would be happy to do that.
Senator Barrasso. Thank you so much. Senator Merkley.
Senator Merkley. Thank you very much. I appreciate this
conversation. I have felt that so much goal and gas is being
burned around the world, that if we can find a way to extract
carbon dioxide efficiently, economically, that it can make a
big difference. We have to move quickly.
I am struck by the fact that in the industrialized era, we
have increased the amount of carbon dioxide in the atmosphere
by 50 percent. And most of that has happened in my lifetime.
And we are on an upward accelerating, an upward curve. So I
think we have to explore every possible option.
Meanwhile, though, I remain somewhat skeptical. Worth
investing and exploring, but somewhat skeptical. And here is
why I am skeptical. I think about Xcel Energy doing their
request for proposals where they came back with proposals at
two cents per kilowatt hour for wind, three cents for solar,
both of which were below the cost of burning coal at an already
depreciated coal plant.
Now, the cost, whatever the cost, there is at least some
cost, whether it is $100 or it can be driven down to $50 or
$40. And a number of the technologies require a significant
amount of extra energy inputs and extra water. I used to have,
somewhere in my office, I think I could find it, a hockey puck
made out of carbon dioxide that was captured by some technology
some 10 years.
Give me a sense of why I should be a little more
optimistic, at least in power generation, that burning fossil
fuels with carbon capture can compete when it is at cost to an
industry that is already falling above the line, if you will,
of where solar and wind are now, and they will continue to drop
over the next 10 years as a still-evolving technology. Just a
brief comment.
Mr. Waltzer. Sure. Again, solar and wind are important
technologies and we need them to be deployed globally. The
reason why we need carbon capture and storage and a broader
assortment of low-carbon technologies options is first. There
is at some point a level where because of the variability and
because we don't have seasonal storage, the levelized costs of
electricity of those technologies really don't reflect the full
system costs. They can get substantially larger if we are
approaching 80 to 100 percent. So we need load-following
technologies, in addition to those technologies.
In addition, there are technologies that are in pilot
development that are really rethinking the way of doing carbon
capture. Net Power is one that is often cited, but it is part
of a broader class of technologies that use CO2 as a
fluid within the turbine. It is thermodynamically very
different. They are targeting $10 a ton as the objective of
that cost.
Mr. Merkley. So I am going to have you stop there, simply
because my time is so short. But this is exactly the way I look
at it. It is worth exploring these future technologies. I again
remain skeptical. The cost of battery storage is coming down.
Demand response systems can help address the supply and demand.
But there is another issue that I am concerned about. That
is, we have extensive leakage in our gas pipeline system. A
number of the stretches of the system have a 4 percent or more
factor, at which point you have methane, which unburned, is far
more potent as a heat trapping gas than is carbon dioxide. Over
a period of 20 years, 80 times more heat trapped per pound.
So I wrestle with whether it makes, even if you can get the
carbon dioxide out of the smokestack where you are burning gas,
are you sustaining a system in which leaky methane is doing a
lot of damage? And that is a much harder problem, well, I won't
say it is a hard problem, it is an additional big part of the
picture. So should I not be worried about sustaining a system
of pipelines that are leaking methane into the air?
Mr. Waltzer. You should be worried about the fugitive
methane emissions that are a significant source of greenhouse
gas emissions. And those are controllable. We were strong
supporters of the earlier Administration's rule to reduce
methane emissions from both new sources, and we think it should
have gone further to look at existing sources. We are working
with, we worked with the government of Mexico and are working
with Argentina and Colombia on developing exactly those kinds
of rules and regulations to reduce methane emissions.
But that is something we need to do irrespective of whether
or not we use gas and the way that we are talking about for a
low carbon source. That is just something that has to happen.
If we do expand its use into those areas, we need to double
ensure that those upstream methane emissions are managed. But
it is not really an either-or, it is an and, in our view.
Senator Merkley. My time is expiring. Thank you. Those are
a couple of my concerns. I am also concerned that we need to
look at every strategy to remove carbon. If, for example, the
best dollar effect is in supporting modified agricultural
practices that maybe produce improved crop yields and store
carbon in the soil, let's look at that. If we are looking at
forest practices that reduce the amount of forest fires and
allow trees to grow and store more carbon, let's look at that.
Let's look at this from every angle.
Thank you all.
Senator Barrasso. Senator Carper.
Senator Carper. Thanks, Mr. Chairman. Before we close, I
just want to mention one other thing. First of all, just thanks
a lot for coming. Jim and I love music, and every now and then
I like to work some lyrics into our hearings. One of those sets
of lyrics is ``Hope in a Hopeless World.'' Great song, if you
have never heard it. It is a great song.
It actually kind of reminds me of this hearing, the hope. A
lot of people don't see much hope for our world, but there is
some hope. And you have given us some reasons to be hopeful.
I hope we have given you some reasons to be hopeful, given
the kind of bipartisan cooperation we have, led by our
chairman, Sheldon and others on the committee.
The other lyric I was reminded of today was, you have heard
of doing a one hit wonder, there was this guy named Thomas
Dolby who was a one hit wonder. But he had a great hit, the
song was ``Blinded by Science.'' Maybe we can have a remake of
the song, at least for our purposes, it could be ``Guided by
Science,'' not blinded, but guided by science.
What you are giving us is some areas where we can agree and
provide some hope, and also be guided by science in a way that
can do good things for our planet and create economic
opportunity. That is the goal, the holy grail, that is the holy
grail for me and I think it is for our Chairman and others.
So we thank you. I would like to ask unanimous consent, Mr.
Chairman, if I could, to submit for the record letters and
documents related to the USEIT Act and the technologies we
discussed today.
Senator Barrasso. They will be accepted in alphabetical
order, without objection.
[The referenced information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thank you so much. Thank you all.
Senator Barrasso. No further questions. Thanks so much for
being here. Some of the other members of the committee may
actually put some written questions to you, so I hope that you
will submit answers quickly. The committee hearing will be open
for 2 weeks.
I just really want to thank you for your testimony. It was
very helpful. Senator Van Hollen, thank you for cosponsoring
this wonderful, bipartisan piece of legislation. The hearing is
adjourned.
[Whereupon, at 1:48 p.m., the committee was adjourned.]
[all]
| MEMBERNAME | BIOGUIDEID | GPOID | CHAMBER | PARTY | ROLE | STATE | CONGRESS | AUTHORITYID |
|---|---|---|---|---|---|---|---|---|
| Sanders, Bernard | S000033 | 8270 | S | I | COMMMEMBER | VT | 116 | 1010 |
| Shelby, Richard C. | S000320 | 8277 | S | R | COMMMEMBER | AL | 116 | 1049 |
| Wicker, Roger F. | W000437 | 8263 | S | R | COMMMEMBER | MS | 116 | 1226 |
| Capito, Shelley Moore | C001047 | 8223 | S | R | COMMMEMBER | WV | 116 | 1676 |
| Boozman, John | B001236 | 8247 | S | R | COMMMEMBER | AR | 116 | 1687 |
| Van Hollen, Chris | V000128 | 7983 | S | D | COMMMEMBER | MD | 116 | 1729 |
| Cardin, Benjamin L. | C000141 | 8287 | S | D | COMMMEMBER | MD | 116 | 174 |
| Carper, Thomas R. | C000174 | 8283 | S | D | COMMMEMBER | DE | 116 | 179 |
| Whitehouse, Sheldon | W000802 | 8264 | S | D | COMMMEMBER | RI | 116 | 1823 |
| Gillibrand, Kirsten E. | G000555 | 8336 | S | D | COMMMEMBER | NY | 116 | 1866 |
| Barrasso, John | B001261 | 8300 | S | R | COMMMEMBER | WY | 116 | 1881 |
| Merkley, Jeff | M001176 | 8238 | S | D | COMMMEMBER | OR | 116 | 1900 |
| Duckworth, Tammy | D000622 | S | D | COMMMEMBER | IL | 116 | 2123 | |
| Cramer, Kevin | C001096 | S | R | COMMMEMBER | ND | 116 | 2144 | |
| Booker, Cory A. | B001288 | S | D | COMMMEMBER | NJ | 116 | 2194 | |
| Ernst, Joni | E000295 | S | R | COMMMEMBER | IA | 116 | 2283 | |
| Rounds, Mike | R000605 | S | R | COMMMEMBER | SD | 116 | 2288 | |
| Sullivan, Dan | S001198 | S | R | COMMMEMBER | AK | 116 | 2290 | |
| Braun, Mike | B001310 | S | R | COMMMEMBER | IN | 116 | 2462 | |
| Inhofe, James M. | I000024 | 8322 | S | R | COMMMEMBER | OK | 116 | 583 |
| Markey, Edward J. | M000133 | 7972 | S | D | COMMMEMBER | MA | 116 | 735 |
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