US carbon cap could dismantle refining, chemical sectors - witness

20 April 2010 19:53  [Source: ICIS news]

Carbon cap threatens chemsWASHINGTON (ICIS news)--Emissions mandates on US industry before carbon capture and storage (CCS) is broadly available would force dismantling of much of the nation’s power, refining and chemicals production capacity, a Senate witness said on Tuesday.

Kurt House, a research fellow at the Massachusetts Institute of Technology (MIT), told the Senate Committee on Energy and Natural Resources that it would be mathematically impossible for the US to make significant cuts in greenhouse gas (GHG) emissions and continue to use its abundant coal and natural gas resources without wide-scale commercial deployment of carbon capture and sequestration systems.

House, who holds a doctorate in geoscience from Harvard University and specialises in carbon dioxide (CO2) and chemical processes, noted that existing US industrial infrastructure most responsible for CO2 emissions - power stations, refiners and chemical plants - represented an installed capital investment of more than $1,000bn (€740bn).

“It is arithmetically impossible to make stated cuts in our CO2 emissions without either dismantling the majority of that installed capital or by doing CCS,” House said.

House was testifying about legislation before the Senate Energy Committee designed to clarify ownership, liabilities and other issues confronting the goal of making massive underground injections of carbon dioxide captured from various industrial processes.

Separately, the US Senate is expected to begin consideration next week of a new climate bill that reportedly calls for a reduction of US emissions of CO2 and other greenhouse gases to a level 17% below the nation’s 2005 output by 2020.

“But without the large-scale deployment of CCS,” said House, “it is arithmetically impossible for us to use those reserves [of coal and natural gas] for productive purposes, while simultaneously making significant cuts in our greenhouse gas emissions.”

House said that technologies already developed by the US oil, gas and chemical industries enable CO2 sequestration, the transport of CO2 in pipelines and its safe injection and storage in geologic structures.

The obstacles to wide-scale commercial deployment, he said, included systems integration and, most importantly, securing financing for large-scale CCS investments in an uncertain regulatory environment.

Other witnesses argued that commercial deployment of carbon capture and storage could only be achieved if the US first imposed a price or cap on carbon emissions.

Speaking for the Obama administration, Energy Department Assistant Secretary James Markowsky said that climate legislation that puts a cap on carbon “will provide the largest incentive for CCS because it will create stable, long-term, market-based incentives to channel private investment in low-carbon technologies”.

Mark Brownstein, deputy director of the energy programme at the Environmental Defense Fund (EDF) told the panel that “the most important thing we can do to accelerate our nation’s transition to a low carbon, clean energy economy is to put a price on carbon through federal climate and energy legislation”.

Brownstein said that CCS “is critical to the future of coal, and indeed, over the long term, natural gas as well”.

US petrochemicals production and downstream chemical manufacturing are heavily dependent on natural gas as both a feedstock and energy fuel.

Brownstein agreed with House that all the technologies for commercial carbon capture and storage are available.

“What is missing is the market driver to cause companies to put the pieces together,” he said, “and this comes with a price on carbon.”

However, House added, "if the US CCS industry does not grow rapidly, then we will either be unable to make meaningful cuts in our CO2 emissions, or we will be forced to dismantle our country's significant installed base of CO2-emitting industrial facilities".

($1 = €0.74)

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