US funding CO2 capture to ease natgas pricing

11 August 2008 23:50  [Source: ICIS news]

US carbon capture & sequestration commercial by 2020WASHINGTON (ICIS news)--The US Department of Energy (DOE) said on Monday it will provide $340m (€228m) to help accelerate carbon capture and sequestration (CCS) technology for coal-fired power plants in part to ease price pressure on natural gas.


The department issued invitations for private industry proposals for projects to demonstrate commercially viabile technologies to capture carbon dioxide (CO2) from coal-fired power plants and either sequester the CO2 or put it to beneficial use.


“Part of our objective is to relieve some of the upward price pressure on natural gas,” said Tom Sarkus, senior analyst at the department’s office of major demonstrations.


The US chemicals industry is heavily dependent on natural gas as a feedstock and energy source and has seen gas prices rise five fold since 1999, putting pressure on margins and forcing capacity offshore to feedstock-advantaged locations.


The likelihood of climate control legislation next year under a new presidential administration and Congress suggests that there will be increasing pressure for US electric utilities to shift from coal to natural gas as a fuel, adding to gas demand.


The proposal invitations issued by the department would enable continued use of coal “by developing the technologies that will ensure coal can be used to meet our growing energy demand in an environmentally responsible way”, said Jim Slutz, assistant secretary for fossil energy at DOE.


“This announcement brings clean, coal-derived energy, with no greenhouse gas emissions, one step closer to the commercial market and to the consumer,” Slutz said.


The department expects to fund 50% of as many as four carbon capture and sequestration demonstration plants with a combined total value of nearly $700m.


To qualify for federal cost-sharing, proposals must be for commercially viable technologies that will capture 90% of CO2 from a coal-fired energy stream and sequester or put to beneficial use at least 300,000 tonnes/year of carbon dioxide.  That advance must be made, the invitation specifies, with a less than 10% increase in electricity costs.


Applications are due at the department by 15 January and project awards will be announced in July 2009.


Ed McMahon, project manager in the major projects office, said the funded carbon capture and sequestration demonstration projects are expected to be operational in just six years.


“We are pretty confident that we will be able to achieve that 90% capture efficiency target with these projects,” McMahon said.


Sarkus said commercial roll-out of those demonstrated capture and sequestration technologies could be widespread by 2020.


($1 = €0.67)


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By: Joe Kamalick
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